Sign On to the Letter: Protect Safety Net Programs from Budget Cuts

This week, D.C. Mayor Adrian Fenty will be finalizing plans to address the District’s new $340 million revenue shortfall. We need to send him a message right now that he should protect key services — especially the safety net — as he works to balance the budget. In particular, we need to urge the Mayor to tap DC’s rainy day fund and to raise revenues — as more than half the states have done this year.

Here’s how you can help:

1. Sign on to the letter below by close-of-business Tuesday (See details below.)
2. Call-in or e-mail the Mayor later this week. We will post details of an action alert later this week.
   

Sign-on letter details:

Please review the letter and sign on by close-of-business on Tuesday, July 7. Also, please forward this message to other organizations or networks of organizations. To sign on, please e-mail info@coalitionforcommunityinvestment.org. Include organizational name is signing on as a group. Please include individual name and the ward of residence if signing on as an individual.

TEXT OF SIGN-ON LETTER

July 6, 2009

The Honorable Adrian M. Fenty
Executive Office of the Mayor
1350 Pennsylvania Avenue, NW
Suite 316
Washington, DC 20004

Dear Mayor Fenty:

We, the undersigned organizations and individuals, are concerned about the potential impact of the recently announced revenue shortfall on services that DC residents rely upon. We encourage you to work with the DC Council to develop a plan that balances the budget while maintaining key investments that support residents, build strong neighborhoods, and invest in the future health and vitality of the District.

Addressing the new revenue shortfall will require the District’s leaders to make increasingly difficult budget decisions. Falling revenue collections already required $800 million in budget-saving measures in the FY 2010 budget, including cuts in virtually every DC agency. The new shortfall — totaling $340 million in FY 2009 and FY 2010 — means that an even wider range of gap-closing options will need to be considered.

In particular, we urge you and the DC Council to take steps to replace a portion of the city’s falling revenues, including using DC’s rainy day reserves and adopting revenue increases. This would be consistent with the actions taken in other states, most of which have tapped rainy day funds or adopted revenue increases this year, or both.

The following steps can help balance the District’s budget while limiting the impact on DC residents.

• Use Half of the Rainy Day Fund: Some 27 states have tapped their reserves recently, but the District has not. Using half of DC’s $330 million in rainy day reserves would cover roughly half of the $340 million shortfall for FY 2009 and FY 2010, while leaving some of the reserve for future years. The Mayor and Council also should start working now with Congress to eliminate numerous federal rules that make DC’s reserve far more restrictive than the rainy day funds in nearly every state, including a requirement to repay withdrawals in a very short time frame — two years.
• Tap Other Revenue Sources: The District’s budget includes a number of special-purpose funds that are financed by dedicated fees and taxes. Many of these funds currently have surpluses that should be used to help cover the budget shortfall. All dedicated funds should be considered, including the Ballpark Revenue fund and the Washington Convention Center Authority.
• Raise New Revenues: Fully half of all U.S. states have enacted revenue increases this year and 12 more are considering increases. The District should consider tax changes based on a number of factors, including those that would improve tax fairness or that would spread the costs partly to non-residents — such as imposing a sales tax on tickets to live performances. Tax changes should be structured to protect residents who are least able to absorb the additional burden and should instead fall as much as possible on those most able to pay.
• Preserve Safety Net Programs: DC’s unemployment rate is at the highest level in 25 years, and demand for public assistance benefits has risen significantly over the past year. Given the rise in need, the District should avoid cutting services that help with basic necessities like housing, healthcare, and food assistance. Cutbacks in safety net programs can prove to be "penny wise and pound foolish" by increasing hardship, reducing residents' buying power, and creating the need for more costly emergency services.
  

We welcome the opportunity to discuss these recommendations with you in more detail. Thank you.