HEARING STATEMENT ON THE DISTRICT OF COLUMBIA FY’05 LOCAL BUDGET REQUEST SENATOR MIKE DeWINE, CHAIRMAN MAY 19, 2004
Good morning. This hearing will come to order. Today we will hear testimony regarding the District of Columbia’s fiscal year 2005 local budget request. D.C. Mayor Anthony Williams, D.C. Council Chairman Linda Cropp, and the District’s Chief Financial Officer Natwar Gandhi will present the city’s budget and will discuss the District’s requests for Federal resources.
I would like to note that last year, the Senate passed a bill by unanimous consent which would give the District autonomy over its local budget, eliminating the need for the D.C. local budget to be passed on the annual appropriations bill. By de-coupling the local budget from the Federal appropriations process, we will avoid delaying the City’s local funds from being available whenever the D.C. Appropriations bill is not passed before the end of the fiscal year.
Senator Stevens, chairman of the full Appropriations Committee; Senator Byrd, ranking member of the full Committee; Senator Landrieu, ranking member of this Subcommittee; and I all co-sponsored this bill. Unfortunately, the House has not considered a companion measure. So today, we will not only hear city leaders present the priorities for the Federal payment, but we also will receive the City’s local budget for our consideration and inclusion in the D.C. Appropriations bill.
As we consider the local budget, I would like to congratulate City leaders on the vote of confidence they recently received from Wall Street. In a time when many local jurisdictions’ bonds are being down-graded, the City’s bonds were upgraded two steps from “BBB+“ to “A.”
Despite this good news about the City’s SHORT-term financial performance, I am well aware that the City faces a long-term economic structural imbalance. This imbalance represents a gap between the District’s ability to raise revenue at reasonable tax rates and its ability to provide services of reasonable quality to its residents.
I recognize that the structural imbalance is driven by expenditure requirements and revenue restrictions, which are mostly beyond the control of the District’s leadership. Clearly, the City’s revenue capacity would be larger without constraints on its taxing authority, such as its inability to tax federal property or the income of non-residents.
I agree that the City faces a troubling problem in the long-term. I plan to hold a separate hearing next month to begin to discuss ways that the City can address this problem. At that hearing, we will hear from business leaders, local officials, and economists about ways to close this gap and ensure the long-term economic health of our Nation’s capital and the seat of our Federal government.
I believe that the Federal government must recognize the costs it places on the City and the burden it places on the City’s infrastructure, all the while limiting the ability of the City to raise revenue. Indeed, many of the problems facing the City result from it being the seat of the Federal Government. As Chairman of this Subcommittee, I will work to explore and develop ways to avoid a financial catastrophe for the District.
And now, I look forward to hearing what the District’s priorities are for Federal funding and how the city has used the funds we recently provided in the FY’04 Appropriations bill.
Clearly, there are many worthy activities which will place demands on the always-limited resources in the DC Appropriations Bill. But I look forward to working with these city leaders to fund a number of the city’s initiatives and to continue to make life better for all who live, work, and visit this Capital City.
As usual, witnesses will be limited to 5 minutes for their oral remarks. Copies of all written statements will be placed in the Record in their entirety.
