On December 16, 2009, the Chief Financial Officer for the District transmitted a revised revenue forecast to the Mayor and the District Council. Citing lost real estate and other taxes, Dr. Gandhi now projects that the District will have a $17 million income and spending gap in the current fiscal year (2010) and that the hole to be filled next year (2011) has grown by another $104 million, to just over $400 million. Revenue numbers for 2012 and 2013 have also been adjusted downward. Agencies are currently drafting their 2011 budget requests and we understand that they have been instructed to find 10% in savings.
The prospect of more budget cuts is frightening for advocates concerned about anti-poverty issues. During times of financial crisis, the District has a track record of cutting deepest into services for our most vulnerable neighbors. The most recent round of budget balancing that occurred this summer resulted in big cuts to social services, including TANF, local rental supplement, homeless services, domestic violence services, civil legal services funding, etc. See our blog on this issue and the report of the D.C. Fiscal Policy Institute.
The Mayor and the District Council are facing a set of very hard choices. Four hundred million dollars is more than 10% of the discretionary budget and will be impossible to fill without pain throughout the District. Communities living in poverty are facing historic challenges and have already borne the brunt of the cuts to date. A fair and equitable budget will
- Preserve essential and effective programs and target funds at areas of greatest need, such as hunger and shelter. (Half the people who live below poverty struggle each month for adequate nutrition, including thousands of children.)
- Include increased taxes and fees for those who can afford to contribute more. Income inequality is profound in the District. The District has among the largest gaps between rich and poor in the nation and the recession is likely to make the gap worse. Rather than cut programs for those at the bottom of the economy, a modest increase in taxes on the most well off could prevent program cuts.
The Mayor sends his budget to the Council on April 1 and the Council will vote by the end of June. The recession has hit communities living in poverty the most. As the economy moves out of recession, the burden can be shared in a more equitable manner.