The District’s Budget Situation Improves

In a scheduled press conference today accompanied by the District’s Chief Financial Officer Natwar Gandhi, Mayor Gray announced that the city has collected revenues over recent weeks that have exceeded 2012 budget projections by approximately $105 million. According to the mayor, this unanticipated revenue increase — largely attributed to increased commercial real estate tax revenues – is “good news,” but “we still have a tremendous problem” with the District’s 2012 budget. The 2012 budget shortfall was previously estimated to be in the range of $600 million.

Below are some additional fiscal takeaways from the press conference:

· According to Gandhi, the District is now “one of the most sought after commercial [real estate] markets in the country, if not the world.”

· Gandhi cautioned that the improved budget situation could be reversed by two risk factors: The likely contraction of federal government procurements resulting from the federal government’s ongoing fiscal challenges and the possibility of a federal government shut-down in the event the current congressional budget resolution impasse is not resolved. Under the terms of the Home Rule Act, the District continues to be treated like a federal agency for budget purposes. Consequently, the federal government shut-down would have a direct impact on the District’s operations, potentially leading to a District shutdown as well.

· Mayor Gray was asked by a reporter about the likelihood of a proposed combined reporting tax and Gray said that his administration would be making a decision on that issue as part of its budget proposal, expected to be released on April 1.

· Taking into account the additional revenue, Gandhi estimated that the current 2012 shortfall is now in the range of $322 million.

· When asked whether the $105 million revenue boost would eliminate the need for tax increases, the mayor said that “everything is still on the table.”

Mayor Gray announced that his State of the District address would take place on March 28th at 6:00 PM.

Kevin Wrege

Founder & President

Pulse Issues & Advocacy LLC

Office: 202-625-1787

Mobile: 202-253-4929

4410 Massachusetts Ave., NW, #150

Washington, DC 20016


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