Jaffe Report: The DC Council is Flush With Cash. Time to Follow the Money. - NBC4 Washington
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Jaffe Report: The DC Council is Flush With Cash. Time to Follow the Money.

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    Harry Jaffe, a longtime chronicler of the people and politics of Washington, D.C., writes a column for NBC Washington's First Read DMV blog.

    The District of Columbia is flush with cash.

    The city around the monuments is more financially comfortable than any time in the Home Rule era, according to bean counters in the D.C. Council and chief financial officer’s shop.

    "We’re in great shape," Vincent Gray tells me. The former council chair, former mayor and current Ward 7 council member should know.

    If Donald Trump continues his threats to "drain the swamp," he will be taking on a city with funds to fight back.

    Chief Financial Officer Jeff DeWitt’s latest revenue estimates reported D.C. ran a surplus of $221 million in 2016. "I’ve never seen this large an upward revision," said D.C. Council budget director Jennifer Budoff.

    DeWitt also estimated higher revenues in the range of $66 million for the following five fiscal years.

    There’s more:

    The District has north of $2 billion in its fund balance. Its rainy day funds have cash reserves north of $1 billion, which could carry the city for two months. Its pension and health funds for retirees are fully funded. Bond ratings have gone from junk status to AAA.

    "DC is among the more financially stable major cities of the country," says former CFO Natwar Ghandi, "if not the most financially stable." Especially when you compare it to Boston, L.A. and Chicago, cities that are raising taxes, assessing new fees and cutting services.

    With all this cash floating around, it’s time to start following the money.

    Mayor Muriel Bowser is crafting budgets to support her run for a second term. Packed with rookies, the D.C. Council will slice and dice her spending plan. Six first-term members with little experience in balancing a budget will have millions to throw at new programs.

    Can you say "Council high on cash?"

    Sorting through the numbers in the CFO’s December 30 report, I settled on the $66.6 million in extra revenue expected for FY 2017. Last year’s $221 million surplus must be applied to past spending. The anticipated extra cash for 2018 to 2020 must be applied to tax relief, which will eventually make D.C. one of the most attractive places to live and do business.

    That leaves the $66.6 million for this year in play for our batch of current political leaders to spend as they wish, for one-time expenditures. A million here, a million there is plenty of cash.

    Their predilections are telling.

    "We anticipate that they will be used to address items like WMATA funding needs, temporary housing for homeless individuals, to address housing costs," and "other programs," the mayor’s budget director, Matt Brown responded by email.

    Whew! Nada for tax abatement, police or jobs, but, hey, it’s only $66 million.

    Chairman Phil Mendelson is on the same page, kind of. He would devote as much as $50 million to purchasing new subway cars.

    "It’s a good example of one-time expenditure with a long-term benefit," he tells me. He would put some into building affordable housing. He prefers "spending or holding rather than expanding recurring services."

    Now comes Vincent Gray, suddenly the law-and-order candidate. He would stash half into tax relief and give the rest to cops. "We need hiring incentives for new officers," he says, "and we need bonuses to keep the best officers from leaving or retiring."

    Kind of a hiring bonus akin to pro athletes?

    "Exactly," says Gray, who many believe is eyeing a mayoral run to avenge his 2012 loss to Bowser.

    Elissa Silverman, at-large member and leader among progressives, worries about the Trump effect.

    "I would use that money to for any actions by the new Congress or president that might threaten our safety net," she says, such as threats to the immigrant community or unraveling of Obama’s health care program.

    On the upside, Silverman would devote some of the $66.6 million to on-the-job training programs for DC residents in hotels, hospitals and restaurants. The D.C. Central Kitchen needs $4 million for a new kitchen training facility. And if there’s cash on the table?

    "I would retrofit all public buildings with child care centers," she says.

    Jack Evans, the most veteran member, recalls the District going broke in the 1990s. "I would resist any new commitments," he says. "It’s best to use the money for maintaining what we have. Or reducing taxes. This is not sexy stuff."

    Speaking of not sexy, Ed Lazere of the Fiscal Policy Institute and incoming at-large member Robert White would apply any extra cash to affordable housing.

    For my money, David Grosso has it right.

    "More wraparound services for schools," the at-large member offers. "Social workers, college counselors, mental health professionals."

    Talk about unsexy.

    "After four years chairing the council’s education committee," he says, "I think we have to be more deliberate about how we approach each neighborhood’s schools, if we want to close the achievement gap. Some schools east of the Anacostia are dealing with students with tremendous amounts of trauma. They need basic services."

    The cynic might advise Bowser to cut out the middleman and send $100 checks to each D.C. resident. The math works. But that’s not going to happen.

    So let’s keep track of the $66.6 million and hope it goes to public education and public safety, in that order. If they fail, the District’s flush times might come to an end.