Norton to Work with Issa on His Proposal to Give D.C. More Local Budget Freedom

Norton to Work with Issa on His Proposal to Give D.C. More Local Budget Freedom

May 12, 2011

WASHINGTON, DC -- Congresswoman Eleanor Holmes Norton (D-DC) said that she appreciated Oversight and Government Reform Committee Chairman Darrell Issa's (R-CA) statement today at a hearing on the District of Columbia's local budget that he would develop legislation to allow the District to set its own fiscal year, and to allow Congress to approve the District's local budget by the start of that fiscal year with a process separate from the appropriations process. After the hearing, Norton thanked the chairman and told him she wanted to work closely with him to quickly move legislation so that the District of Columbia government would never again face a shutdown over a federal spending fight. Norton has a similar bill pending in the committee to allow the District to spend its local funds whenever there is a delay in the federal government or a shutdown. However, she also has long sought to give the District the authority to set its own fiscal year to avoid the cost and many inefficiencies of being tied to the October 1 federal fiscal year. Almost every state and city begins its fiscal year July 1, considerably in advance of the start of the school year.

"We are only five months away from the end of this fiscal year, and another shutdown standoff is possible," Norton said. "The District of Columbia deserves the right to spend its own local funds without congressional approval, as my budget autonomy bill would provide, but Chairman Issa's proposal would appear to significantly improve the District's ability to manage its finances and operations. The fact that the District of Columbia government would have shut down if the federal government had shut down during the fiscal year 2011 federal spending fight, despite the city's more than nearly two decade-long history of locally-balanced budgets and its strong credit ratings, combined with the testimony from today's witnesses, may have finally convinced House Republicans that the District needs more autonomy over its local tax dollars."

At the hearing today, a witness invited by Republicans, municipal bond analyst Matt Fabian, testified that giving the District more authority over its local funds would be rewarded by the credit markets with lower borrowing costs for the District, because it would remove the uncertainty caused by the federal appropriations process. Mayor Vincent Gray, Council Chairman Kwame Brown, D.C. Chief Financial Officer Natwar M. Gandhi and Dr. Alice Rivlin, a Senior Fellow at the Brookings Institution and a former chair of the D.C. control board, all agreed with Mr. Fabian's assessment that giving the District more control over its local tax dollars would significantly benefit the District by reducing costs and increasing efficiency. "Allowing the District to set its own fiscal year, instead of using the federal fiscal year, would be an important step for home rule and budget management," Norton said. Almost every state and city uses a July-June fiscal year so that their budgets are set well before the start of the school year, the largest cost in the D.C. budget except for Medicaid.

The chairman's proposal has some drawbacks. For example, Congress would have two annual opportunities to interfere with the District's local budget-when it approves the local budget and when it approves the limited special federal funds that the District would continue to receive through the regular appropriations process. However, even under Congresswoman Norton's budget autonomy bill, Congress would still have the authority under the Constitution to continue to attach riders, and to legislate for the District on any issue at any time.

"Considering the House Republican attacks on the District's home rule this Congress, many District residents contacted us about their concern that the hearing would lead to more congressional interference in local affairs. However, after committee members heard that the District's remarkable fiscal story placed the city in a category virtually by itself for fiscal conservatism and responsibility, the result may be more home rule for the District."