jonetta rose barras: DC Council sidesteps financial responsibility

The DC Council held its encore vote Tuesday on the $15.5 billion fiscal year 2020 budget and financial plan, with members providing unanimous support; they also approved revisions to the current fiscal 2019 budget. The 13 legislators don’t deserve a standing ovation, however — although some of them surely sang their own praises while advocates and special-interest groups served as the backup chorus.

“I am proud of this budget and the work that has been done to better support the priorities and needs of District residents,” Council Chairman Phil Mendelson said in a prepared statement released hours after the vote.

“There is no such thing as a perfect budget, but I am proud of the historic investments my colleagues and I made in the people of our city,” at-large Council member Robert White also said after the vote.

The responsibility of elected officials isn’t just to the favored few. Rather, they are charged with guaranteeing sound and solid fiscal policy while ensuring the present and future financial health of the entire city. Congress may have created an independent chief financial officer (CFO), but that certainly doesn’t mitigate the duty of the legislature. Upon review, the approved budget decisions suggest the council members failed miserably to meet their obligation to the public.

Mendelson and his colleagues may deserve some credit for allocating more money for public education and birth-to-3 programs than Mayor Muriel Bowser had proposed. “Putting our students in the best position to succeed requires a greater commitment to funding education,” said David Grosso, who chairs the Committee on Education. “I am proud of the budget we have passed today. It fully invests in [my committee’s] efforts over the past two years to reduce exclusionary discipline, combat sexual assault and abuse in our schools, and improve the academic success of our most vulnerable students.”

Council members also pushed back against an attempt by one of their own to slash funding for the United Medical Center in Ward 8. Legislators rejected Mayor Muriel Bowser’s ridiculous proposal to fund an all-free Circulator system. They rolled in additional funds for violence prevention and direct trauma services.

Nevertheless, they essentially rubber-stamped the mayor’s budget, replete with unsustainable spending increases and tax hikes. In a 7-6 vote, they also ended up agreeing with the mayor’s controversial plan to relocate Banneker Academic High School to the site of the former Shaw Junior High School on Rhode Island Avenue NW — although two weeks earlier they had opposed the move. Hoping to accommodate parents and advocates who wanted to build Shaw Middle School on that site, the members subsequently accepted an amendment offered by Ward 6’s Charles Allen and Ward 1’s Brianne Nadeau to locate a new Shaw Middle School at Banneker’s current location on Euclid Street NW. The debate and subsequent vote around that proposal exposed a continuing ugly side to the dynamics among members, tinged with both race and class.

As they closed their budget deliberations, council members seemingly morphed into the three monkeys — hear no evil, see no evil, speak no evil. They certainly ignored the hue and cry from members of the press, including myself, and public policy experts. Legislators even dismissed the warnings of the auditor, who actually was hired by them and works under their supervision. “Revenue growth at 3 percent and expenditure growth at 8 percent cannot be sustained,” DC Auditor Kathy Patterson told the council in March when she testified at a budget hearing.

Interestingly, earlier this year after the mayor had publicly released her budget, a senior District government official predicted all of this. “All the council is going to do is tinker around the edges,” the official told me. “They are making all of that noise, but they are not going to do anything. They are basically going to pass the mayor’s budget.”

So, they have — recklessness and all. They may have tinkered with the budget enough to upset the Bowser administration over the past few weeks, prompting a social media campaign by the mayor and her aides to reverse changes to funding for affordable housing and workforce training; the council ended up making some modest revisions with this week’s vote.

That was just a distraction, however. Legislators didn’t address the fundamental problems with Bowser’s 2020 budget proposal. They supported her decision to increase taxes in a budget document without providing any real opportunity for residents and businesses to weigh in through a public hearing focused on just that issue. They failed to block Bowser’s hike of the  deed and recordation taxes on the sale of commercial property. What’s more, they supported the mayor’s backdoor veto of legislation previously approved by the council to decrease the tax rate on commercial property. If that were not enough, council members levied a tax of their own; they raised from 7 percent to 8 percent the sales tax on sodas and other sugary drinks.

“Relying on short-term revenue fixes to pay for spending increases doesn’t bode well for fair and competitive tax policy,” Yesmin Sayin Taylor, executive director of the DC Policy Center, wrote in a commentary published by The DC Line.

Council Chairman Phil Mendelson could have injected some fiscal discipline into the process, demanding that legislators trim spending increases proposed by the mayor, while focusing on three or four top priorities including education, housing and public safety. He could have given each member a specific spending limit and insisted they hit that mark. And he could have made clear that he expected the council to honor the tax cuts that the business community deserves and that had been promised. Instead, he seemed to have abandoned the helm, declaring every committee a fiefdom unto itself with no one really in charge of the whole.

Equally disturbing, rather than pay for repairs to public housing out of spending proposed by the mayor, Mendelson took the legislature on a raiding expedition. He has snatched $49 million from the reserves held by Events DC, an independent agency that serves as “the official convention and sports authority” for DC. Use of those funds, according to Events DC and the CFO, is supposed to be limited only to paying the debt to bond holders.

Let me just say, I like Events DC and I am a real fan of its director, Greg O’Dell. But it has far too much money with which to play. Apparently, council members didn’t pay much attention to this issue until its spending spree fell short of revenues.

Long before now, the council could have introduced legislation capping how much Events DC can hold in reserve beyond what is needed to pay bond holders. While its money is our money — the public’s money — the agency seems to be spending an awful lot on enriching the already rich, like Ted Leonsis. Consider that Events DC used $65 million to build the Entertainment and Sports Arena in Ward 8 as a practice facility for the Washington Wizards and venue for the Washington Mystics, both of which are owned by Leonsis.

Still, that little budget maneuver by Mendelson isn’t the responsible way to change fiscal policy. It also could jeopardize certification of the budget; the CFO has announced he has some problems with pulling funds from Events DC.

Moreover, it came at the same time Patterson, the city’s auditor, was decrying so-called Special Purpose Revenue Funds, of which there were more than 200 between 2013 and 2017. Some were created by the CFO, others by the mayor through the council. “For example, the mayor requested the creation of the State Athletic Activities, Programs, and Office Fund in the FY 2014 Budget Support Act (BSA) of 2013, the Walter Reed Reinvestment Fund in 2015, and the Vision Zero Pedestrian and Bicycle Safety Fund in the FY 2016 BSA of 2015,” the auditor’s report says. “Each Fund created requires additional government operations, including annual revenue estimates, certifications, budgeting, monitoring, and reporting.”   

The considerable amount of money in special purpose funds is mostly hidden from public view. Who knew Events DC had more than $300 million in a reserve account? Often SPRF money is not used as intended, according to the auditor. In other words, there is little to no accountability.  

Mendelson and the council haven’t improved the situation. In fact, they have made matters worse, demonstrating that when it comes to being fiscally irresponsible, two can play that game: the executive branch and the legislative branch. District taxpayers are likely going to be caught paying the price, however.

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jonetta rose barras is a DC-based freelance writer and host of The Barras Report television show. She can be reached at thebarrasreport@gmail.com.