DC's budget surplus last year totaled $287 million and the District’s total cash reserve is $2.4 billion, according to a report from the District's Chief Financial Officer. It’s a lot of money, and the candidates for the top job on the DC Council have different ideas on what to do with it.
Ed Lazere, a candidate for Council chairman, wants to spend some of the money on affordable housing and homeless shelters.
Council Chairman Phil Mendelson, who is running for re-election, says the numbers aren’t as rosy as they seem.
“There is no extra money to spend,” Mendelson said in a statement.
Half of the reserves — $1.2 billion — is DC’s rainy day fund. That’s enough money to fund the DC government for 54 days, six days shy of the 60 days recommended by the Governmental Accounting Standards Board, according to Mendelson’s office.
Documents from the council’s budget office show that of the remaining cash reserve, $570 million will pay for debt service and $504 million is committed to spending in future fiscal years, including for the Housing Production Trust Fund, which pays for affordable housing programs, and future payments resulting from collective bargaining agreements with teachers, firefighters and other public employees.
The next biggest chunk of the $2.4 billion reserve is $341 million, mostly from “special purpose revenue funds” — things like fees on phone bills to fund 911 and fees on utility bills for investments in renewable energy.
Additional money is also set aside for Metro ($35 million), the soccer stadium ($21 million) and legal settlements ($11 million).
Lazere, who will face Mendelson in the June 19 Democratic primary, says $1.2 billion for 54 days of reserve spending “is plenty.” Lazere proposes spending an extra $100 million to double the size of the Housing Production Trust Fund to $200 million a year.
He would also use some of the reserves to renovate shelters for homeless adults who are single. Lazere says these people have been left behind while DC focuses on new shelters to replace the DC General shelter. That would cost around $9 million.
"At a time when the city is so prosperous and the needs are so great in part because of our prosperity — [such as] the loss of affordable housing — it's wrong or immoral to save every penny you’ve got rather than spend it on people who need help," Lazere said.
Mendelson says those priorities are already being funded adequately.
“We are spending some of our so-called ‘surplus’ on programs related to affordable housing,” he wrote in an email. “Almost a fourth of the General Fund Balance is comprised of dollars to be spent over the four-year financial plan period, and much of this is dedicated to the Housing Production Trust Fund as well as other initiatives like the local rent supplement program.”
The dark days of the 1990s, when Congress established the Financial Control Board to oversee DC’s spending, are a distant memory. The District has balanced its budget for two decades. This year’s candidates for Council chairman offer voters a stark contrast in how to approach DC’s fiscal health.