Mayor Fenty’s Proposed Cuts Fall too Heavily on the Poor
A major element in Mayor Fenty’s proposal for closing DC’s recently announced budget shortfall includes budget cuts that fall heavily on programs affecting DC’s low-income residents – the very residents that are struggling the most during this economic downturn.
Cuts to programs affecting low-income residents total $52 million – more than half of the $99 million in proposed cuts. Yet these programs only make up about 30 percent of DC’s budget. In addition, the low-income cuts are more than three times as large as the cuts to any other area of the budget (see figure 1).
What’s on the chopping block? Rental assistance, neighborhood economic development, adoption subsidies, and financial assistance to grandparents taking care of grandchildren, just to name a few. Some of the deepest cuts were made to DC’s Temporary Assistance to Needy Families (TANF) program – a program that provides financial assistance to low-income families with children – and to adult literacy and workforce development, areas of the budget that have long been overlooked and underfunded in the District. With the large increase in DC’s unemployed residents – nearly 15,000 in just one year – and the increased demand for public assistance, cuts to these programs will be particularly painful for DC’s neediest families.
It’s a tough job to balance a budget in the midst of an economic downturn. DC’s revenue collections are down, but because of the economic downturn, the need for assistance is rising. So how can officials create a balanced budget that doesn’t rely disproportionately on cuts to programs for low-income residents?
Part of the solution is using DC’s rainy day fund – a $330 million fund that can be used for budget shortfalls – and fixing the onerous payback rules which require us to replenish what we take out within two years. The Mayor has proposed using $125 million of the rainy day fund, but hasn’t addressed the payback rules.
Another part of the solution is raising revenues. DC’s budget shortfalls are almost entirely a result of falling revenues from the economic downturn – not from increased spending. The Mayor’s proposal only includes one $7 million revenue increase. This solves just five percent of the FY 2010 budget gap. A fairer approach would be to balance revenue increases with expenditure cuts.
Relying on these principles can help DC officials create a balanced budget that protects the safety net for DC’s most vulnerable residents.
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[...] Fiscal Policy Institute weighs in on the Fenty budget plan: The cuts, Jenny Reed writes, ‘fall heavily on programs affecting DC’s low-income residents – the very [...]
The best way to raise revenue is to tax those who live in DC, but say that they are not citizens of this fair city.
I have worked to get signatures for various petitions and know from experience that there are many who live and work here for well over the time necessary to be deemed a citizen, yet they choose not to so declare and thus avoid paying local taxes for any jurisdiction.
This is a huge loss of revenue. I know when I have done my taxes and had to try to get tax records that DC does not keep records, i.e., they do not require employers in the District to say who they are paying and what is being withheld for local taxes. I have known some people who lived here all of their life and never paid taxes.
This is the answer to the budget shortfall or a good part of it as the people I am talking about do make some dough and I do not mean for donuts.
Bruce Stout
[...] and literacy programs). Meanwhile, no serious actions to raise revenue have been proposed. [Learn more here.] This imbalanced approach would send thousands of lives into crisis. By scaling back investment in [...]
It sounds like you’re creating problems for yourself by trying to solve this issue instead of looking at why there is a real problem in the first place