On May 26, the DC Council passed the final budget for the 2011 fiscal year, which begins in October of this year. The proposed general fund budget ‘ the portion supported with local taxes and fees ‘ is $6.16 billion. When federal funds also are considered, the FY 2011 budget is $9.5 billion.
The FY 2011 general fund budget is about $80 million higher than the approved FY 2010 budget, after adjusting for inflation ‘ an increase of about one percent. (Unless otherwise noted, all figures in this analysis are adjusted for inflation to equal FY 2011 dollars.) Yet this modest boost in local spending is needed to replace federal stimulus dollars that were available for 2010 but will not be in 2011, as well as to address rising expenses in some parts of the budget such as special education. When these are taken into account, funding for most services in the FY 2011 budget is less than the amount available for FY 2010.
The coming fiscal year represents the third year the District has faced budget problems caused by the recession, which has reduced the city’s revenue collections at a time when a record number of residents are out of work and in need of assistance. DC’s revenue collections fell by roughly $500 million between 2008 and 2009 and have been stagnant since then. Base revenues for 2011 (before considering any proposed increases) are approximately $100 million lower than in 2010.
This report reviews the key elements of the FY2011 budget. As Mayor Fenty worked to develop a budget proposal, the city faced a substantial gap between expected resources and the costs of city services. This review finds that several steps were taken to address DC’s shortfall, including spending reductions, revenue increases, and use of surplus funds in certain budget accounts. Nevertheless, the FY 2011 budget is a lean one; it reflects very few funding increases and a wide array of cuts ‘ including public safety, public works, and social services.
Moreover, the proposed general fund budget for FY 2011 is roughly $600 million lower than in FY 2008, after adjusting for inflation. The proposed budget for next year 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 services.
To read the complete report, click here.
This analysis is also part of an online “Budget Toolkit” developed each year by the DC Fiscal Policy Institute, which can be found at www.dcfpi.org.
 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.”