Mayor Adrian Fenty and his successor Vincent Gray have set out to reverse the $18 million deficit the D.C. government has accumulated.
Both have stressed the need to avoid tax hikes. The revised budget Fenty released on Nov. 23 did not include tax increases for Washington, D.C. residents, and instead included budget cuts for many city services.
In a press release, D.C. Councilman Jack Evans reiterated the importance of preventing overtaxation of District residents.
“The mayor-elect is very aware of the tax burden faced by our residents and small businesses, and [he] recognizes that we cannot balance the budget on their backs,” Evans said.
According to the DCist website, the proposed budget calls for a revenue increase of $27.4 million through the consolidation of several accounts into the city’s general fund.
Budget cuts in the proposal affected every office or department, including a $6 million drop in Department of Transportation services, the elimination of the Office of Planning’s Historic Homeowner Grant program and a $5.8 million slash in Department of Human Services funding.
Georgetown will also be hit by some of the cuts suggested by the proposal. The budget calls for decreasing Health Initiative Contracts with the Hilltop as well as with The George Washington University, which will save a total of $123,000.
A public hearing on the budget will take place today.
In a speech last Monday, mayor-elect Vincent Gray discussed the budget deficit and possible solutions to the gaps.
“The reality is that it could be a number of years before the District’s economy fully rebounds,” Gray said. “The District will not raise significant revenue unless we target one or more of the major tax categories. All options will have to be on the table if we’re going to fix this gap in our operating budget.”
Still, Gray made promises to only bump up taxes as a last resort.
“I know that too many District families and businesses are hurting from the recession as much as or even more than the District government,” Gray said. “So I will not ask District residents or businesses to pay one single dollar in tax increases without first assuring them that we have scrubbed the budget and found every last dollar in savings first.”
The District has a history of financial instability. In 1994, Ellen O’Connor, then the District’s chief financial officer, estimated that the city would run out of money within two years.
To combat the drain in funds, District officials worked with then-Speaker of the House Newt Gingrich to forge a plan for rescuing the area from fiscal crisis. The city’s economic situation only slightly improved following budget cuts and re-focused priorities.