What’s in the Final FY 2012 Budget?| July 5th, 2011 | PDF of this report
On June 14, the DC Council took the final vote on the budget for the 2012 fiscal year, which starts in October of this year. The proposed general fund budget — the portion supported with local taxes and fees — is $6.36 billion. When federal funds also are considered, the FY 2012 budget is $9.6 billion.
The FY 2012 general fund budget is about $119 million higher than the approved FY 2011 budget, after adjusting for inflation — an increase of 1.9 percent. (Unless otherwise noted, all figures in this analysis are adjusted for inflation to equal FY 2012 dollars.) Yet this modest boost in local spending is needed to replace federal stimulus dollars that were available for 2011 but will not be in 2012, to address rising enrollment in public schools and Medicaid, and for some staff and maintenance expenses that were shifted from the capital budget to the operating budget. When these are taken into account, funding for most services in the FY 2012 budget is less than the amount available for FY 2011.
This report reviews the key elements of the FY2012 budget. As Mayor Gray worked to develop a budget proposal, the city faced a substantial gap — $322 million — between expected resources and the costs of maintaining city services. This review finds that several steps were taken to address DC’s shortfall, including spending reductions, revenue increases, and government staff reductions.
Despite including notable revenue increases, the FY 2012 budget includes sizable budget cuts and leaves many areas of the District government far smaller than just a few years ago. The District’s budget has been hit hard over the last four years as a result of the Great Recession — tax collections fell by $520 million over FY 2008-FY 2011 — leading to hundreds of millions of dollars in cuts to programs and services. And while FY 2012 represents the first time in four years where the District had an increase in the revenue forecast —a welcome sign that some parts of DC are starting to recover — total revenue collections will still be well below collections before the recession hit. Moreover, federal Recovery Act funds and District reserve funds — both of which were used to keep important programs and services whole over the last three years — have largely expired or are unavailable for use in 2012.
The FY 2012 budget continues the trend since the recession began of making investments in education, but makes cuts to all other areas of the budget, particularly human services. A DCFPI analysis of DC’s expenditures from FY 2008-FY2012 shows that only education, debt payments and related financing expenses have grown over that time period. Funding for every other area of government has dropped by a range of 4 percent to 23 percent. The FY 2012 budget keeps in place many cuts that have been made since 2008 — in areas ranging from libraries to child care — in addition to calling for significant additional reductions in human support services at a time when a huge number of DC residents are still out of work and unable to provide for themselves and their families.
 The general fund budget includes the “local funds budget” – programs supported by the general pool of taxes and fees collected by the District — as well as services supported by “special purpose” revenues or “dedicated taxes.”