Monica Bell, Liman Fellow

Mayor Gray released his proposed Fiscal Year 2012 budget on
April 1.  The budget takes a more balanced approach overall than recent budgets by calling for several means of revenue enhancement, including raising the marginal tax rate on families with taxable income of over $200,000 per year by 0.4%, establishing combined reporting for multistate corporations, increasing the parking tax from 12% to 18% to make it more similar to other large cities’ parking taxes, and increasing the alcohol tax, among others.   However, 67.2% -- 2 of every 3 dollars – of the cuts proposed by the Mayor are directed toward the already ailing health, housing, and human services budgets, even though the budgets for those services only make up about one-fifth of the District’s current expenditures. The proposed budget would weaken several programs, including Temporary Assistance for Needy Families (TANF), Interim Disability Assistance (IDA), Emergency Rental Assistance Program (ERAP), the DC Healthcare Alliance, Housing Vouchers, and Homeless Services, which keep many of our clients here at Legal Aid from suffering the very worst consequences of poverty.

TANF:  The proposal would, over the next three fiscal years, cut cash assistance to almost 7,000 families who have been on the program longer than 60 months.  As we have explained in previous posts, the FY 2011 budget already cut benefits to this same group, many of whom have the most barriers to working. To illustrate, a family of three who was receiving $428 per month (the maximum benefit) before April 1, 2011 is now receiving $342 per month; this amount would drop to $257 per month beginning October 1, 2011, to $150 per month by October 1, 2012, and would be eliminated completely by October 1, 2013.  The Mayor believes that this cut would help end the alleged “cycle of poverty” and incentivize people to work.  There are many problems with his approach.  First, research overwhelmingly indicates that while time limits certainly lower welfare rolls, they are not an effective employment tool.  Second, the current D.C. TANF program fails at several critical aspects of a successful welfare-to-work program, including assessment, connection with supportive services, job training, and job location.  Time limits in places with strong welfare-to-work programs are problematic enough; time limits in a jurisdiction with a deficient welfare-to-work program are both unproductive and cruel.  

IDA:  The funding for IDA, which offers benefits to individuals with disabilities while their applications for Supplemental Security Income (SSI) are pending, would be cut by up to 75% under the Mayor’s proposal.  The program – which gives recipients just $247 per month -- currently serves 1500 District residents and has a waiting list of over 600 people; the program caseload would be cut to about 600 by the end of FY 2012 if this massive budget cut is approved.  The budget would essentially eliminate IDA over time. 

DC Healthcare Alliance:  The proposal would cut funding for the Alliance by $11.7 million. The CFO anticipates that the Alliance would save this money through a measure in the Budget Support Act that would increase the frequency that people on the Alliance must recertify their eligibility.  Currently, Alliance members must recertify once per year.  The proposed Act would require face-to-face recertification every six months. This change would likely lead to inaccurate disqualification of District residents who are eligible for Alliance benefits. 

ERAP:  The proposed budget would slash funding for ERAP by $5 million, to just $2.7 million for FY 12.  In contrast, the FY 2009 ERAP budget was $8 million.  This cut will likely increase homelessness and the problems that tend to accompany it, such as truancy and crime. ERAP is often the last resort for families who are at risk of being evicted from their housing, and this massive cut will mean that fewer families will be able to remain in housing. 

Homeless Services:  Even as the District’s largest shelter has had to start turning away homeless families due to lack of funding, and even as the problem of homelessness is likely to increase because of cuts to TANF, IDA, and ERAP, the Mayor is proposing that the budget for services to the homeless population be decreased.  The proposed budget would cut the already cash-strapped homeless services budget by approximately $11 million. 

In addition to the above-mentioned cuts, Legal Aid is also concerned about cuts and shifts in budget priorities with respect to housing vouchers, affordable housing development, and mental health services for children in foster care, among others. 

As a member of the Invest in DC coalition, Legal Aid is pleased that the Mayor proposed at least a small set of revenue enhancements.  We recognize that this is a tough budget season in which difficult choices must be made.  However, the proposed budget would undermine – and, in some cases, destroy – programs that ensure the economic security of the most vulnerable District families.  That is not an acceptable choice.  We call on Mayor Gray and the Council to think more creatively about how to protect the safety net, such as by adopting the Invest in DC coalition’s recommendation to end DC’s tax exemption for interest paid on out-of-state bonds and by subjecting more nonessential services like pet grooming and health club membership to the sales tax. 

The Council is currently holding hearings regarding each agency’s budget; the hearings started on April 7 and will continue through May 6.  The hearing before the Committee of the Whole is on May 7.  The final vote for the Budget Request Act will take place on May 24, and the final vote on the Budget Support Act is on June 7.  Please testify at hearings and reach out to Council members in this timeframe to let them know that you support the preservation of critical safety net programs. 

For more information on the District’s FY 2012 budget, see:

• Official website for the Mayor’s FY 2012 budget (you can download the budget books here)
• Budget Request Act
• Budget Support Act
• Schedule of agency budget hearings
• DC Fiscal Policy Institute, Mayor’s Proposed FY 2012 Budget Takes a Balanced Approach on Revenue, but Not on Budget Cuts: Budget Cuts Disproportionately Fall on Programs that Help Keep Families Stable and Healthy