There’s a perception, fueled by my opponent, that the District is one of the most fiscally sound cities in the nation. To be certain, the city has come along way since the junk bond days, but we still have far to go (compare DC’s A+ to Arlington’s much higher AAA rating).
Over the past few years, my opponent has given away millions upon millions to developers, sports teams, and other private special interests, and entered into some very bad deals. How can the city afford to do this?
It can’t.
But we’ve done so by placing these costs on the city’s credit card, dedicating future tax revenues to paying off the debt rather than funding city programs and services.
In fact, according to D.C. Chief Financial Officer Natwar Gandhi, the District’s per capita debt for 2008 is estimated at $10,902, the highest of any major U.S. municipality. One out of ten dollars spent in the District, and rising, is going toward paying off the debt. For quite some time, Mr. Gandhi has cautioned that going over a 10% debt ratio raises red flags to Wall Street and places the city’s bond rating in jeopardy. In response, Council Chairman Vincent Gray has proposed legislation to establish a 12% hard cap (legally, the ratio can currently rise to 17%).
What this all means is that due to frivolous spending, it will be more difficult for the city to take on major projects that can make a difference, such as establishing a community college system, expanding metro capacity, or true neighborhood development projects along the lines of the O Street Market.
Let’s look at some of the financial blunders in recent years, championed by my opponent, that have placed us in a tight position:
A $611 million+ (now estimated at over $750 million) lopsided baseball stadium deal, paid for by you, the taxpayer. And when the team withholds millions in rent and threatens $100,000 a day in damages, my opponent defends the Lerners. I’ll defend the city, and I’ll put funding neighborhood parks before more ballparks.
$850 million to build a new convention center, which barely brings in more visitors than the previous building that was half its size. We are still paying debt service of $36 million on this project each year. I’ll reclaim this lost opportunity for neighborhood revitalization by filling the empty retail spaces, helping struggling small businesses, and addressing the surrounding vacant property that remains even five years later.
A $50 million gift to the Verizon Center, supposedly for “upgrades” to luxury boxes, including one for the D.C. Council. Although the then MCI Center was built with $200 million in private, not government, funding, that did not stop the after-the-fact subsidy. No more giveaways.
$50 million stolen from the Office of Tax and Revenue. As far back as 2004, the D.C. Auditor alerted the Council to massive discrepancies, but there was no oversight, no action taken. Even after the theft came to light, my opponent continued to push for a substantial pay raise for the CFO. I will restore oversight and accountability by hiring more auditors and inspectors. I’ll ask more critical questions and follow-up to demand fixes until they are implemented.
A $10 million earmark to Ford’s Theatre, a federal property. Next thing you know, we will be paying for renovation of the Washington Monument. That won’t happen on my watch.
Back in 2004, the Council, under my opponent’s leadership, even approved $40 million in public financing for expansion of the private Corcoran Gallery of Art over the objections of then Councilmember Fenty, who objected to the speculative nature of the tax revenue that would purportedly pay off the debt.
Other examples of financial mismanagement continue all around us. For example:
As law abiding citizens pay rising property taxes, for years, absentee owners of nuisance properties have avoided the significantly higher property rate imposed on vacant homes and storefronts. Some even receive the homestead deduction. I’ll make sure the costs of nuisance properties are placed on irresponsible owners, not the neighborhoods.
The District continues to allow rampant no-bidding or pseudo-bidding in economic development deals, and makes intentionally hurried emergency decisions, such as the West End folly, to give away precious public fire station and library properties due to lax financial stewardship. I’ll support reforms to protect public property and establish an open bidding process.
The D.C. Auditor recently found that controls over the District’s cash advance fund were “extremely lax and, in some areas, nonexistent, allowing employees use the fund as a personal piggy bank, and potentially giving out millions in unauthorized funds.
This election provides you, the voters, with a choice. Will we continue down this path, or get more responsible, more critical, with our money? It’s time to shift our focus from always saying “yes, how much,” to sound neighborhood development.
Posted in Financial Undersight, main
