Testimony of Ed Lazere, Executive Director, At the Public Hearing on Bill 19-993, the Local Budget Autonomy Act of 2012

Chairman Mendelson and other members of the committee, thank you for the opportunity to testify today.  My name isEd Lazere, and I am the executive director of the DC Fiscal Policy Institute.  DCFPI engages in research and public education on the fiscal and economic health of the District of Columbia, with a particular emphasis on policies that affect low- and moderate-income residents. 

I am here today to offer my strong support for this bill, which would establish a referendum amending the District’s Home Rule Charter to allow the District to spend its local revenue without waiting for a formal congressional appropriation.  The DC Fiscal Policy Institute believes that the District of Columbia ‘ its leaders and residents ‘ should have as much autonomy over our local budget as possible.  The referendum, if adopted would in several way increase local control and certainty over the annual budget. 

One of the worst aspects of federal oversight of the District of Columbia is the way Congress deals with DC’s budget.  Our programs and services are funded almost entirely with locally raised taxes or with federal funds that all states and cities receive.  The Mayor and DC Council spend months each year developing a spending plan.  Yet it is Congress that gives the ultimate stamp of approval because DC’s budget is wrapped up in the federal appropriation.  The process requires the District to prepare a budget tied to a congressional time table, rather than our own, and then requires the city to wait for Congress to approve it, which may or may not occur by October 1 each year. 

This treatment is unique even in the context of congressional oversight of the District.  In general, the District is allowed to pass any law it wants at any time, and that law goes into effect after a 30-day review period if Congress does not act to modify or stop it. 

The referendum, introduced by all 12 DC Council members, would allow the DC budget to be treated like any other legislation ‘ it could be introduced whenever the Council felt was appropriate and would then have a 30-day congressional review period.  The budget would go into effect after the review period if Congress does not act on it.  This would be a tremendous step toward budget autonomy. 

My concern with the current budget process is not that Congress makes too many changes to the DC budget.  In fact, it typically makes no modifications to the spending plans adopted by the Mayor and DC Council each year, although Congress sometimes says where the city cannot spend funds, such as publicly-funded abortions.  The limited oversight reflects a respect for DC’s ability to manage its own affairs and is a sign that Congress does not really want to get into the details of city spending. 

Nevertheless, the current system for congressional approval of the budget still creates problems.  First, the Council is able to vote on the budget only once, while most bills in DC have two votes, offering a chance to review and improve upon initial votes. Also, the DC budget has to be approved in May, even though the fiscal year starts in October, meaning that a lot can change between the time the budget is adopted and implemented.  Both of these rules stem from the need to give Congress time to review the approved budget.  Beyond that, every time Congress and the President face challenges to approving the federal budget, there is always the risk that DC’s budget will get held up unnecessarily, too. 

The referendum maintains a healthy federal role in DC’s budget, and in fact establishes the same role that Congress has in every other piece of DC legislation.  The referendum’s approach, focused  on passive approval by Congress, also is a better reflection of the actual level of congressional involvement in the city’s budget in recent years. 

Budget autonomy would bring greater certainty to DC budget planning and other benefits as well.  It would allow, for example, DC to start its fiscal year in July, closer to the time the budget is adopted, and let the budget for each school year to fall into one fiscal year rather than two.  And it would allow two votes on the budget, rather than one, which would allow policymakers and the public more opportunity to refine the budget in a way that best meets the city’s priorities. 

Thank you for the opportunity to testify.