The District of Columbia
Protecting the District's Fiscal Stability
Although the District of Columbia has been able to weather the country's economic downturn better than many other states and large cities, our fiscal stability has been and continues to be tenuous. The District is facing a significant gap between expected revenues and expenses for FY 2012 – and has for several years been forced to spend down the District's reserves to dangerously low levels in order to cover budget deficits.
To protect the city's fiscal health in both the short and long terms and to preserve its excellent bond ratings, Mayor Gray has committed to a structurally balanced budget – even if doing so requires difficult choices.
For the first time in years, the District is not spending from its critical reserve funds to balance its budget: Although the previous administration had balanced budgets by spending down the District’s savings account by hundreds of millions of dollars, Mayor Gray has protected the city’s top-tier credit rating by making hard choices to balance the budget structurally – including spending cuts and employee furloughs as well as modest revenue increases. He worked with the Council to establish a budget that not only protects the city’s reserve fund, but also begins to replenish it – and he accomplished this despite inheriting a massive (approximately $325 million) budget gap.
Mayor Gray is implementing ways to make the District government more fiscally efficient now and in the future: Mayor Gray has created a Capital Improvement Plan to manage capital projects strategically, consolidated capital-improvement and management functions from multiple agencies into a new Department of General Services to reduce redundancies and inefficiencies across the government, and instituted the One City Performance Review process, which is engaging in an extensive top-to-bottom review of the District’s government and budget to find more ways to save money for taxpayers while still delivering quality city services.
The Gray Administration has reduced spending pressures rather than neglecting them: Mayor Gray created a task force that identifies spending pressures caused by unexpected cost increases and immediately seeks ways to remediate them. The efforts of this task force have kept spending pressures to a lower amount at this point in the fiscal year than any other year in the post-Control Board era.