WASHINGTON – Revised revenue estimates released by Chief Financial Officer Dr. Natwar M. Gandhi show an additional $105 million for the District’s coffers in Fiscal Year 2012, Mayor Vincent C. Gray announced today. The increase in commercial property taxes, which is critical to driving the economy of the District of Columbia, points to the beginning of an economic recovery for the District.
“This is also good news for the upcoming budget I will release on April 1st,” Mayor Gray said. “At one point, our structural gap was around $545 million. However, in addition to the revenue increase, we are seeing a corresponding reduction in our baseline expenditure growth rates of $118 million in areas like unemployment and Medicaid.”
The increase in revenue will cover $73.7 million of the District’s structural gap identified by Mayor Gray, reducing it from $395.8 million to $322.1 million. The issues impacting the District’s structural gap of $395.8 originally included:
• The use of $198 million of non-recurring fund balance in Fiscal Year 2011, of which approximately $133.8 million was spent on expenditures that were labeled "one-time", but are traditionally recurring;
• $47.7 million in pay for full-time equivalent positions (FTEs) and operating maintenance funds that were placed in the capital budget, but more appropriately belong in the operating budget;
• $79.8 million in Enhanced-FMAP Stimulus funds in the Department of Health Care Finance that do not continue into fiscal year 2012;
• $18 million of Edujobs Stimulus funding for D.C. Public Schools and D.C. Public Charter Schools that does not continue into fiscal year 2012; and
• $52.3 million of funds to cover $31.7 million for special education spending pressures in D.C. Public Schools and a required $20.6 million match to D.C. Public Charter Schools.
“This is obviously a far more manageable scenario,” Mayor Gray said. “Make no mistake, the District of Columbia still faces very difficult choices in the Fiscal Year 2012 budget that will require a shared sacrifice by everyone in the District to solve a $322.1 million structural gap, but the rebound in the District's revenue leaves me confident that, if we can manage the challenges that face us in Fiscal Year 2012, we will be on the road to a full, lasting recovery in the District.”
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