Mayor Orders Agency Cuts

Mayor Adrian M. Fenty last week issued an executive order to reduce funding for executive branch agencies by $52.2 million. The move comes after the District of Columbia Council stalled on his plan to balance a budget that is short $131 million for fiscal 2009.

“This administration must move forward in ensuring the district is fiscally sound,” Fenty said. “This is simply the first step in bridging the city’s financial gap.”

The mayor’s order does not include independent agencies whose budgets can only be reduced with legislative action. His original plan included eliminating 200 vacant jobs, cutting agency spending by $60 million, and using a $17 million fiscal 2008 surplus to close the projected gap.

The council has yet to reschedule a vote to consider the mayor’s proposal, and is seeking more information about the revenue projections that chief financial officer Natwar Gandhi released in mid-September.

The shortfall stems from an expected slowdown of income tax revenues, mostly from reductions in capital gains tax collections, which make up nearly 13% of total income tax revenues for the city. Some council members argue it could be worse because data collected dates from before the turmoil on Wall Street escalated in mid-September with the bankruptcy of Lehman Brothers.

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