Monday, September 19, 2011

Budget-related news

Photo from Wikimedia Commons
  • September revenue estimate:   On September 16, CFO Natwar Gandhi released the latest revenue estimate (PDF); the FY 2011 revenue was revised upward by $89 million.   The increase does not extend to FY 2012 and for FYs 2013 to 2015, revenue is estimates to decline from the June projection.

    Gandhi also sent a letter about the contingent budget (PDF).   Gandhi reiterated his caution against the contingent budget, a provision in the FY 2012 budget request act enabling budgeting outside the normal budget process.   Gandhi argues that the city must maintain flexibility in the "current uncertain economic environment."

  • Balancing the FY 2012 budget:   According the Council Chair Kwame Brown, balancing the FY 2012 budget, which starts October 1, is one of the most pressing priorities facing the City Council this fall.

    The DC Council will be taking up an amendment in the nature of a substitute of B19-408, " Fiscal Year 2012 Budget Support Act of 2011" (Word, .doc) on September 20 at the legislative meeting.

    DC Fiscal Policy Institute says this about this technical change:

    Though much of it is technical in nature, one possible addition may be more than procedural: Some council members want to reverse previous votes to tax income from out –of-state municipal bonds. That’s not a small matter, and it deserves serious consideration. If a majority of the Council wants to “grandfather” the tax exemption for current bondholders, that will cost $13 million in reduced revenue for FY 2012 and more in later years.

    The budget must balance, so the removal of the bond tax must be replaced with another revenue source. As of today, no proposals have been circulated. One possibility for restoring this tax break for current bondholders would be to offset the revenue loss by creating a new income tax bracket for individuals with incomes above $350,000. This idea was floated in July but not voted upon. Another possible proposal would be to pay for the tax break with unanticipated revenues that may be announced by Chief Financial Officer Natwar Gandhi in his September revenue forecast.

    You can watch what happens with the three FY 2012 pieces of legislation (above plus Revised FY 2012 Budget Support Technical Clarification Emerg Amend Act of 2011 DRAFT 2011-09-16 and Revised FY 2012 Budget Support Technical EDR) live on Channel 13 online.

  • FY 2013 budget:   The FY 2013 budget (October 1, 2012 – September 30, 2013) process starts October 6 with OBP's annual kickoff event.   In December, the DC Council will determine format and other requirements, including the date Mayor Gray must transmit his proposal to the council.
  • Budget workshops:   Learn about the capital budget on October 12 and advocating to agencies October 14.   Details about these two new workshops will be available soon.