SUMMARY OF BUDGET REQUEST The budget that is now before the Committee includes a Federal payment of $301 million as well as $8,100,000 to reimburse the District for water and sewer services to the Federal government; $52,070,000 for the Federal contribution to the retirement funds for police officers, firefighters, teachers and judges; and $166,057,000 in loans from the Federal Treasury to finance the District's construction program. In addition the budget includes a request for an advance Federal payment of $320 million for fiscal year 1982. This, I believe, requires additional authorizing legislation. The request for District of Columbia funds totals $1,691,454,600 and includes $1,501,939,900 in operating expenses and $189,514,700 for capital outlay. The operating budget of $1.5 billion is 8.5 percent above the $1.4 billion appropriation enacted to date for 1980. In addition to these amounts, the District estimates it will receive Federal grants totalling $347,982,700, and other grants and reimbursements of $145,477,700, which will provide it with a total budget of $2,184,915,000 and 40,716 positions for fiscal year 1981. With that, Mr. Mayor, I will call on you first for any statement you would like to make in an overview. Mayor BARRY. Thank you. STATEMENT OF MAYOR BARRY Mayor BARRY. Thank you, Mr. Chairman, members of the subcommittee. I am happy to have the opportunity to discuss with you today the District's fiscal year 1981 budget. This is a great opportunity to formally express my delight in your accepting the chairmanship of this subcommittee. I am also very happy to see present Mr. Stokes, who has certainly been conscientious, and a hardworking member of this committee. That does not necessarily benefit his constituents in Ohio but he has hung in here anyway. Mr. Pursell certainly has been very helpful and understanding in the process. PREPARED STATEMENT Mr. Chairman, members of the committee, I have a rather lengthy prepared statement. I would like to just ask that the statement be entered for the record and I will make some high point statements. [The prepared statement follows:] MR. CHAIRMAN AND MEMBERS OF THE SUBCOMMITTEE, I AM HAPPY TO HAVE THE OPPORTUNITY TO DISCUSS WITH YOU TODAY THE DISTRICT'S FISCAL YEAR 1981 APPRO PRIATED BUDGET. I ALSO WISH TO CONGRATULATE YOU ON BECOMING CHAIRMAN OF THE SUBCOMMITTEE ON DISTRICT OF COLUMBIA APPROPRIATIONS. TO A POSITIVE, HEALTHY WORKING RELATIONSHIP WITH YOU. THE FISCAL YEAR 1981 APPROPRIATED OPERATING BUDGET TOTALS $1.5 BILLION. YEAR 1980 BUDGET. THIS IS AN INCREASE OF 8.5 PERCENT OVER THE CONGRESSIONALLY ADOPTED FISCAL I AM LOOKING FORWARD IN D.C. FUNDS. THE FISCAL YEAR 1981 CAPITAL IMPROVEMENTS BUDGET TOTALS $189.5 MILLION MR. CHAIRMAN, WHEN THE FISCAL YEAR 1981 BUDGET DEVELOPMENT PROCESS BEGAN IN MARCH OF 1979, SEVERAL IMPORTANT FACTORS WHICH WOULD SIGNIFICANTLY IMPACT THIS BUDGET WERE NOT KNOWN. NOR WAS IT POSSIBLE TO PREDICT THAT TWO ADVERSE COURT DECISIONS WOULD CAUSE THE DISTRICT TO LOSE A SUBSTANTIAL AMOUNT OF REVENUE. OUR ESTIMATES. THE FIRST DECISION RESULTED IN A LOSS OF $23 MILLION EXPECTED TO BE AVAILABLE IT WAS NOT POSSIBLE TO KNOW THAT THE COST OF ENERGY WOULD ESCALATE AT SUCH A RAPID RATE. THE 8.5 PERCENT GROWTH IN THE FY 1981 OPERATING BUDGET OVER FY 1980 DOES NOT CAPTURE THE DOUBLE-DIGIT RATE OF INFLATION WHICH CURRENTLY PLAGUES OUR ECONOMY. OVERALL OUR REVENUE PROJECTIONS HAVE HAD TO BE REVISED DOWNWARD DUE TO THE PRESENT ECONOMIC SITUATION. THESE FACTORS HAVE SIGNIFICANTLY IMPACTED THE BUDGET REQUEST BEFORE YOU TODAY. A COMPREHENSIVE PLAN TO ADDRESS OUR CURRENT BUDGET NEEDS HAS BEEN DEVELOPED AND SENT FORWARD TO THE D.C. COUNCIL FOR ACTION. ONCE THE LOCAL ACTION HAS BEEN COMPLETED (EARLY IN MAY), WE WILL BE FORWARDING AN AMENDMENT WHICH DETAILS THE CHANGES FOR YOUR CONSIDERATION. IN ADDITION TO THESE FACTORS, WE ARE ALSO CONCERNED ABOUT REPORTS WHICH INDICATE THE STATE PORTION OF REVENUE SHARING FUNDS WILL BE CUT IN AN EFFORT TO BALANCE THE FEDERAL BUDGET. SHOULD THIS OCCUR, THE DISTRICT WILL LOSE AN ADDITIONAL $9.5 MILLION PLANNED TO FUND THE FY 1981 BUDGET. FOR THE RECORD, MR. CHAIRMAN, IT IS IMPORTANT TO NOTE THAT THE D.C. GOVERNMENT HAS BEGUN AND WILL CONTINUE TO RAISE IMPORTANT QUESTIONS ABOUT THE LEVEL OF SERVICE WE CAN AFFORD TO PROVIDE. WE BEGAN OUR PLAN BY CUTTING BACK IN THE WORKFORCE. WE INTEND TO TAKE THESE ISSUES TO THE RESIDENTS OF THE DISTRICT OF COLUMBIA SO THAT THE DILEMMA OF RISING COSTS OF SERVICE DELIVERY CAN BE CLEARLY UNDERSTOOD. WE ARE NOT CERTAIN, MR. CHAIRMAN, THAT WE CAN CONTINUE PROVIDING THE LEVEL OR RANGE OF SERVICES THAT CITIZENS EXPECT. THIS ISSUE WILL BE KEY AS WE BEGIN CITIZEN REVIEW OF OUR FISCAL YEAR 1982 BUDGET. MANY OF THE CONCERNS THAT WE HAVE BEFORE US ARE ATTRIBUTABLE TO THE UNIQUENESS OF THE DISTRICT OF COLUMBIA. IS THE NATION'S CAPITAL. AS YOU WELL KNOW, MR. CHAIRMAN, THE FACT THAT THE TIONS, HOWEVER, THE GENERAL PERCEPTION THAT THE DISTRICT'S EMPLOYMENT LEVEL IS NOT ONLY IS THE DISTRICT UNIQUE BECAUSE IT THIS IS NOT MEANT TO BE A DEFENSE FOR COMPARATIVE QUES - 3 EXCESSIVE IS SOMEWHAT MISGUIDED. ALTHOUGH I KNOW YOU ARE AWARE OF THESE FACTS, FOR THE RECORD, MR. CHAIRMAN, I WOULD LIKE TO POINT OUT THAT FUNCTIONS SUCH AS STREET REPAIR, LIBRARY SERVICES AND PUBLIC SAFETY ACTIVITIES ARE GENERALLY PERFORMED BY CITIES. HOWEVER, YOU DO NOT GENERALLY FIND CITIES PERFORMING COUNTY FUNCTIONS SUCH AS OPERATING A PUBLIC HOSPITAL LIKE D.C. GENERAL, AT A COST OF $30 MILLION IN CITY SUBSIDY (EXCLUDING MEDICAID AND MEDICARE INCOME); OR STATE FUNCTIONS SUCH AS MAINTAINING A STATE PRISON SYSTEM WHICH COSTS $47 MILLION, MOTOR VEHICLE REGISTRATION WHICH COSTS $2.7 MILLION, OR ADMINISTERING A PUBLIC ASSISTANCE PROGRAM SUCH AS AID FOR FAMILIES WITH DEPENDENT CHILDREN ADDITIONALLY, IN THE AND MEDICAID AT A COST OF $107.9 MILLION IN LOCAL FUNDS. METRO SO THAT PUBLIC TRANSPORTATION COSTS REMAIN AFFORDABLE. HOWEVER, THE QUESTIONS REGARDING THE LEVEL OF EMPLOYMENT ARE LEGITIMATE. PRESENTLY, THE ONLY RELEVANT QUESTIONS ARE: CAN WE AFFORD TO CONTINUE PROVIDING AND, WHAT LEVEL OF THE WORKFORCE CAN A NUMBER OF BASIC SERVICES NOW PROVIDED? BE REDUCED BEFORE THE IMPACTS ARE FELT IN THE AREA OF SERVICE DELIVERY? WE OFTEN TALK ABOUT THE FEDERAL PRESENCE AND ITS ATTENDANT COSTS, AND IT HAS BEEN POINTED OUT THAT THERE ARE ALSO BENEFITS ASSOCIATED WITH THE FEDERAL PRESENCE. THAT CANNOT BE DENIED. HOWEVER, MANY OF THE PROBLEMS CURRENTLY FACING THE DISTRICT GOVERNMENT HAVE THEIR ROOTS IN THE HISTORY OF THIS GOVERN MENT, AND THE FACT THAT UNTIL RECENT YEARS, IT HAS BEEN VIEWED AS A FEDERAL AGENCY. WE ARE HAMPERED TODAY BY THE PAST MISTAKE OF ESTABLISHING A PAY-AS YOU GO PENSION SYSTEM. ACTIONS BY FORMER PRESIDENTS JOHNSON AND NIXON TO INCREASE THE BASE OF THE BUDGET BY THE ADDITION OF 2,000 POLICEMEN DIRECTLY RELATED TO OUR CURRENT EMPLOYMENT LEVEL. ARE THE 18-MONTH BUDGET PLANNING PROCESS CONTINUES TO BE A HINDERANCE TO OUR EFFORTS. PAST FINANCIAL MANAGEMENT PRACTICES, WHICH VIOLATED GENERAL ACCEPTED IS ABOMINABLE. I KNOW THAT MR. NATCHER AND THE COMMITTEE HAVE BEEN VIGILANT IN THEIR EFFORTS TO HOLD THE DISTRICT ACCOUNTABLE FOR MANAGING IT RESOURCES. OBVIOUSLY, IT WAS NOT POSSIBLE FOR THE COMMITTEE TO KNOW EVERY DETAIL OF THE GOVERNMENT'S OPERATION. NEVERTHELESS, WE CANNOT VIEW CURRENT CIRCUMSTANCES IN ISOLATION. IT IS QUITE CLEAR, MR. CHAIRMAN, THAT THE DISTRICT GOVERNMENT IS THE VICTIM OF A NUMBER OF PAST PRACTICES MANY OF WHICH WERE NOT IN OUR CONTROL. IT IS MY INTENTION, MR. CHAIRMAN, TO BE TRUTHFUL AND CONCISE ABOUT THE DISTRICT'S FINANCIAL STATUS AS LONG AS I AM MAYOR. I TAKE SERIOUSLY MY RESPONSI BILITY AS STEWARD OF THE PUBLIC TRUST. I INTEND TO FULFILL MY FINANCIAL CIRCUMSTANCES. THE BUDGET BEFORE YOU TODAY, MR. CHAIRMAN, DOES NOT REFLECT ADJUSTMENTS WE HAVE HAD TO MAKE IN RESPONSE TO OUR CHANGED CIRCUMSTANCES IN FISCAL YEAR 1980. THE DISTRICT COUNCIL IS CURRENTLY REVIEWING PROPOSALS I SUBMITTED TO ADDRESS FY 1980 NEEDS. AGAIN, ONCE WE HAVE COMPLETED ACTION AT THE LOCAL LEVEL WE WILL BE FORWARDING A BUDGET AMENDMENT WHICH DETAILS THE CHANGES FOR YOUR CONSIDERATION. THE THEME FOR FISCAL YEAR 1981 IS "NEW DIRECTIONS." THE BUDGET BEFORE YOU TODAY REPRESENTS OUR EFFORT TO MAKE THE MOST OF SOME VERY FORMIDABLE AND CRITICAL CHOICES. FOR THE FIRST TIME IN RECENT HISTORY OUR LIMITED RESOURCES |