Supplemental Budget Update and Hearings of Note!
District Dime readers, it’s already been a busy Tuesday. We want to update you on Mayor Gray’s proposed fiscal year 2012 supplemental budget, and let you know about upcoming important budget hearings.
Mayor Gray’s Fiscal Year 2012 Proposed Supplemental Budget
This morning, Mayor Gray delivered a new fiscal year 2012 supplemental proposal to the DC Council. The Council already was scheduled to vote on an earlier version of the supplemental budget legislation today. Gray’s replacement made several changes, including using $1.1 million to delay for one year legislation that eliminated a tax break for out-of-state bonds.
In the end, the Council passed a slimmed down supplemental budget that only funded two items—$7 million for DC public charter schools and $8 million for Unemployment Compensation, both of which Chief Financial Officer Natwar Gandhi advised needed to be done quickly so the District was not in violation of law. The Council did not restore the out-of-state bonds tax break, but it still worth discussing why bringing back this tax exemption even for one year is problematic.
Last year, DC ended its status as one of the last holdouts to offer a tax break to residents who invest in state and municipal projects out of state. DC and the other holdout, Indiana, eliminated the tax break for new investments while allowing current investors in these bonds to keep the tax exemption. Right now, no state offers a blanket tax break to residents who buy out-of-state bonds. Gray’s supplemental proposal would have delayed the bond tax break by one year and leave us as the only state to offer such a benefit.
DCFPI urges the DC Council to keep its plan to eliminate the tax break for all new investments this year and not use these additional dollars to become the lone outlier among states.
The Council declined to act at this time on several of Gray’s funding proposals, although it may revisit some of them later this year. Perhaps most notable, the mayor had proposed using $19.9 million of the fiscal year 2012 additional revenue to repay DC government employees for four furlough days in fiscal year 2011. Today there was a question whether the cost of repayment includes DC employees whose jobs are funded with federal dollars, so the cost may be higher. As we noted yesterday, DCFPI continues to urge the mayor and council to use part of the $240 million fiscal year 2011 surplus money to pay for the fiscal year 2011 furloughs, which would free up fiscal year 2012 revenues for other purposes. If the furloughs ultimately are repaid, with fiscal year 2102 funds, DCFPI supports a compromise that’s been discussed among some members to repay two furlough days and put the other money toward other critical needs that move the District forward, like financing affordable housing construction.
Another proposal in the mayor’s supplemental that was not funded by the Council would have added $2 million to workforce training in the Office of the State Superintendent for Education’s budget. It was unclear from Gray’s transmittal letter accompanying his budget legislation what the monies would go toward.
Important Budget Hearings
Both education and human services have budget hearings this week. Check out the details below.
Deputy Mayor for Education
District of Columbia Public Charter School Board
Office of the State Superintendent of Education
District of Columbia Public Schools (Government Witnesses Only)
Wednesday, April 18, 2012, 10:00am
John A. Wilson Building Room 500
Department of Human Services
Thursday, April 19, 2012, 11:00 AM
John A. Wilson Building Room 123