jonetta rose barras: How do you spell relief for DC?

Last week started on a hopeful note for the DC government and its more than 700,000 residents, with the city seemingly on track in addressing the public health emergency and potentially covering the financial costs. That’s not the way it ended, however. 

The number of positive test cases and deaths related to the coronavirus escalated; then, on Friday, a visibly affected Mayor Muriel Bowser announced the deputy director of her Office of Legal Counsel, George Valentine, was among them. (This week, the mayor reported there were 586 confirmed cases of COVID-19 and 11 deaths in the District as of Wednesday morning.)

“It’s pretty scary stuff. I am hoping people will heed the warning and do the social distancing that is being required,” said DC Council Chairman Pro Tempore Kenyan McDuffie, who has attended several of the mayor’s coronavirus public briefings.

Local leaders also learned last week that the Republican-controlled U.S. Senate refused to treat DC as a state in its $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act. So instead of receiving $1.2 billion allocated to each state under the bill, the District is expected to receive about $500 million. Senate Minority Leader Charles Schumer, D-N.Y., said Republican negotiators had argued that treating DC as a state would be “a deal breaker.”

I was not surprised by what transpired. After all, in 2011, when President Barack Obama was negotiating with House Speaker John Boehner, R-Ohio, in hopes of averting a government shutdown, DC became a part of that deal, too. Boehner and the tea party caucus within the GOP demanded that low-income women in the city be prevented from receiving any government-assisted abortions. They got what they wanted.

Nearly a decade later, Republicans continue to place a low value on the lives of District residents — except, of course, as pawns in their games of political one-upmanship.

Some might see President Donald Trump’s declaration of DC as a major disaster area as a counter to the congressional dissin’. It is not.

The designation allows the city to be reimbursed through the Federal Emergency Management Agency for money spent on certain items like equipment and supplies for first responders, particularly hospitals. It also will boost the amount of recipients’ weekly unemployment benefits, and it will permit independent contractors to apply for the checks.

Short-term relief shouldn’t be confused with significant and sustained recovery, however. Though necessary to protect public health, the massive six-week shutdown is bringing devastation to the local DC economy, making it clear that long-term solutions will be needed. 

Using cash on hand, lines of credit or even bankruptcy, big companies may be able to make a quick pivot out of the emergency. “Will Marriott come back? Will the Hilton come back? Yes,” said at-large Council member Elissa Silverman.

Small businesses not so much. “Many restaurants do not have cash reserves or the kind of credit to survive this,” said McDuffie. “A lot of the small businesses are mostly mom and pop shops.”

John Falcicchio, acting deputy mayor for planning and economic development, told me in an email earlier this week that the mayor “has directed our agencies to work swiftly to implement programs that provide relief to our local businesses, nonprofits, independent contractors, and self-employed individuals.”

Last week, Falcicchio held a conference call for some local businesses. A couple of the people who participated said they were impressed. 

“He listened. He seemed to understand what the issues were. But I am not sure yet what direction he and the mayor will take,” said one business owner who spoke on the condition of anonymity. 

“Recovery will be a community-wide effort, and the Bowser administration will be here to help,” Falcicchio wrote in his email. 

Truth be told, even before COVID-19, DC was already seeing a decline in retail, evident by closures downtown and in neighborhood commercial corridors. The virus has complicated that landscape with high-end stores boarding their display windows, a visual reminder of the difficulty in predicting who will and who won’t reopen.

If District elected leaders and managers are smart, they’ll use the crisis as a transformational platform. They’ll step up with an imaginative, bold, comprehensive and proactive approach to mending holes and creating new opportunities post-lockdown. The city could use coronavirus stimulus money to target its economic development, launching a deliberate and aggressive retention campaign and enlisting residents to engage in “offline” spending in local stores and restaurants to help create or sustain physical jobs in DC. 

The city is overly dependent on hospitality and tourism, according to municipal managers, government officials and business owners with whom I spoke last week. It must deliberately diversify the economy in the nation’s capital. Could DC officials seriously and methodically push to develop a solid tech hub, incentivize a film studio to attract more movie productions, or leverage its current theater and visual arts community to instigate national interest?

Yes, doing it successfully would be a challenge. “We’re talking about people flying the airplane while rebuilding it,” said DC Auditor Kathy Patterson.

Obviously while the transformation is occurring, there must be extreme sensitivity to the city’s hard-earned triple-A credit rating, which is not just a point of pride but critical to DC’s ability to secure low-cost financing for capital improvement projects and other programs.

“We want to help,” McDuffie said. But there is a limit to how much DC can afford to do. Using another airplane analogy to explain the need to stabilize the government’s finances, he added that “District [elected] leaders plan to ensure we put on our oxygen masks first.”

Last Friday, the mayor, council members and others were on a conference call with DC Chief Financial Officer Jeffrey DeWitt. His presentation — which included an analysis of cash flow projections — suggested that the city could lose more than $750 million in revenue through August from the impact of the coronavirus-related shutdowns. A marked but insufficient cash influx would occur in September. “Those are preliminary numbers. He’s running some models,” cautioned McDuffie.

DeWitt is expected to issue his revised economic forecast by April 24. However, he seems to have quashed talk among legislators about delaying repayment of funds drawn from the city’s reserve accounts. By law that money must be repaid within two years. He worries about the city’s liquidity and the potential damage to its credit rating.

Already, the CFO’s office has started reviewing the fiscal status of government agencies, attempting to determine current levels of underspending, according to Patterson. She said that within her own office she is reviewing contracts and new hiring that could be delayed. Unspent funds could be reprogrammed to offset potential revenue shortfalls. In May, Bowser is expected to present a revised 2020 budget as well as her proposal for 2021.

It’s unclear what options are on the table, but officials should consider scaling back some of the spending increases of the past three to five years. For example, they could reduce the Housing Production Trust Fund allocation to the prior yearly amount of $100 million. 

They could opt to delay employee salary increases and approval of funded labor union contracts. “It’s not easy to cut people’s jobs and cut people’s pay,” said Patterson, who as a council member helped deal with DC’s financial crises in the 1990s and after the 9/11 terrorist attack. 

She recalled that in the 1990s, then-DC Council Chairman David Clarke proposed delaying negotiated union pay raises. Mayor Marion Barry opposed the plan. The legislature moved forward anyway; the city saved $54 million. Some council members also took cuts in their salaries.

Comparable measures are required once again.

“The situation is very dire. It only makes sense to put as many options as possible on the table, given the expected revenue drop,” said McDuffie. However, he declined to endorse rollbacks in spending for certain programs or labor contract delays. “I don’t want to convey any sentiments that the council is going to start picking winners and losers.”

If the mayor and council members aren’t prepared to make tough decisions, however, there will be more losers than winners. 

At the very least, they should pledge to engage in zero-based budgeting for fiscal year 2021, drilling down to the unit level to determine more realistically the cost for services at each agency. To be honest, it’s a step that was already needed. 

“What happened to the expenditure commission?” Patterson asked during our conversation. 

The council in this year’s Budget Support Act funded the creation of such a group, whose prime mission would be to “provide the vision for an expenditure regime that could withstand economic downturns without jeopardizing core government services.” Members of the commission were to be appointed by the mayor and the council. That hasn’t happened.

“If we had done something [with that], we would be in a perfect place,” added Patterson.

Can the choir say amen?

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jonetta rose barras is an author and freelance journalist, covering national and local issues including politics, childhood trauma, public education, economic development and urban public policies. She can be reached at thebarrasreport@gmail.com.