The Mayor’s proposed fiscal year 2011 budget attempts to fill an enormous hole.  As a result of continued lower tax receipts, overspending in 2010 and the end of certain stimulus funds, there is a $500 million gap in the District’s $6.14 billion budget.

The Mayor has made a “no tax” pledge, so revenue options are limited.  In addition, neither the Mayor nor the Council seem to have the courage to dip into the rainy day fund despite the fact that it was set aside to help with precisely these circumstances.  Instead, the Mayor chose to balance the budget through cuts to agencies, restructuring of the City’s debt (which will cost more over the long term) and the prospect of new federal stimulus funds.  He has also proposed new revenue items which tend to be regressive in nature.

Program cuts fall disproportionately on low-income residents, including:

• $4 million reduction in child care vouchers;
• $2 million cut in Grandparent Care giver program;
• $1.8 million in Access to Justice (civil legal assistance) funds;
• $7 million in adult education;
• Elimination of 29 direct care workers in the Department of Mental Health;
• Continuation of tens of millions in cuts to homeless services, housing vouchers and the housing production trust fund imposed in 2010;
• Continuation of drastic cuts to public libraries from 2010; (see http://www.dcfpi.org/wp-content/uploads/2010/04/4-5-10budgetfirstlook.pdf for more information on the budget)

Disturbingly, the Mayor did increase income taxes, but only for the very lowest income tax payers.  He proposed a reduction in the Earned Income Tax Credit which provides a critical tax break to low-income working families.