Meltdown in the District of Columbia

July 16, 1994

The fiscal calamity that has been stalking the District of Columbia for years finally struck. Congress, which oversees the city's affairs, has ordered officials to slash up to $150 million from the municipal budget or risk losing the huge federal payment on which Washington depends to balance its books. Action in both the House and Senate represented a stunning vote of no-confidence in the administration of Mayor Sharon Pratt Kelly.

The House vote was the kind of congressional comeuppance both supporters and critics of the district government long warned was inevitable unless the city put its fiscal house in order. Even the district's strongest advocate, Rep. Julian C. Dixon, D-Calif., complained that Mayor Kelly's failure to respond to requests for spending cuts in the $3.4 billion budget had made it impossible for him to reach a compromise with House Republicans.

Mr. Dixon vented a common frustration among House members with the Kelly administration's ostrich-like attitude toward getting the budget under control: "I cannot receive any cooperation from the District on it," he fumed. "We will just have to show them where the votes are."

Because this is an election year, neither Mayor Kelly nor the City Council has wanted to take the lead in imposing fiscal austerity. During her four years in office, Mayor Kelly has resorted to what many consider questionable accounting schemes -- critics charge she once counted "fifth-quarter property taxes" in order to balance the city's books. Yet she insists the problem is that Congress isn't giving the district enough money. Meanwhile, City Council members fear that voting to cut programs, as Congress is demanding, could cost them support in the September primary election.

Ordering $150 million in spending cuts represents the House's most direct intervention into district affairs since home rule was adopted in 1974. The Senate's action to force $95 million in cuts mirrors the House's frustration. Congress compensates the district for taxes it is unable to collect on federal land and other tax-exempt activities.

A General Accounting Office study charged the Kelly administration spent hundreds of millions of dollars more than its revenue flow in recent years and warned that Washington could be forced to seek a federal bailout. Mayor Kelly seems paralyzed by election year politics to the point that she played virtually no role in negotiating with Congress over its authorization bill for next year's city budget. Clearly, the district is in crisis. Unfortunately, its elected leaders are looking more like part of the problem than part of the solution.

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