(WASHINGTON, DC) – Mayor Vincent C. Gray today released his Fiscal Year 2012 Proposed Budget and Financial Plan, featuring a combination of cost savings and revenue enhancements that will cover the $322.1 million deficit between expected income and expenses for the fiscal year that begins October 1, 2011.
“This budget reflects my focus on the government’s top priorities: fiscal stability, quality education, jobs and economic development, and public safety,” Mayor Gray said. “It reflects the input of public servants and residents who have helped us to make some tough choices. I’m proud that my budget team has done an excellent job of balancing twin challenges with this spending plan – ensuring our city’s fiscal stability and ensuring that we continue to provide our residents essential services.”
The financial plan closes the $322.1 million gap through a combination of:
• $187 million in expenditure cuts from the Chief Financial Officer’s Fiscal Year 2012 Current Services Funding Level budget (58 percent of the total budget gap);
• $127.2 million in tax increases (39 percent of the total budget gap); and
• $7.9 million in additional revenue from leasing, expanded sales and advertising.
The budget is structurally balanced without dipping into reserve fund balances – meaning that, for the first time in four years, the District government will pay for its annual expenditures with annual revenue. It also falls within the District’s 12 percent cap on tax-supported debt in the General Fund.
The Mayor emphasized that balancing the budget without dipping further into fund balances was necessary for the District’s fiscal stability. Failure to make financially responsible decisions to “rightsize” the structural gap in the District’s budget could result in:
• A downgrade in the District’s bond ratings;
• Increased congressional interference in District affairs; or
• Loss of Home Rule and the return to a Financial Control Board.
Mayor Gray said he wants residents and community stakeholders to understand what he is proposing because the numbers directly impact their lives. Beginning April 6, he and administration officials will take his budget message directly to the citizens and apprise them of how they might be affected. A series of town hall and neighborhood budget briefings will be held. In addition, the budget and related materials will be posted at http://budget.dc.gov/.
“I was encouraged by the more than 3,000 responses to an online budget survey we posted two weeks ago,” said Mayor Gray. “I will continue to engage residents to explain what’s in my budget proposal and prepare them for any necessary reductions and revenue increases.”
The Mayor will present his budget at the Council’s Committee of the Whole public briefing on Wednesday, April 6. The Council Committee Public Hearings will take place from April 7 through May 6, with final passage of the Budget Support Act scheduled for June 7.
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