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S. Hrg. 103-913 \^ DISTRICT OF COLUMBIA APPROPRIATIONS FOR nSCAL YEAR 1995 Y4.AP 6/l:Di)3/995/PT.2 ^-tvilMvjO District of Colunbia Appropriations... 3EFORE A SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE ONE HUNDRED THIRD CONGRESS SECOND SESSION ON H.R. 4649 AN ACT MAKING APPROPRIATIONS FOR THE GOVERNMENT OF THE DISTRICT OF COLUMBIA AND OTHER ACTIVITIES CHARGEABLE IN WHOLE OR IN PART AGAINST THE REVENUES OF SAID DISTRICT FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 1995, AND FOR OTHER PURPOSES Board of Education Council of the District of Columbia Courts Office of the Mayor Printed for the use of the Committee on Appropriations ^^ / f S. Hrg. 103-913 DISTRICT OF COLUMBIA APPROPRIATIONS FOR nSCAL YEAR 1995 M.AP 6/l:D63/995/PT,2 ^INGS district of Colunbii Appropriations... 3EFORE A SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE ONE HUNDRED THIRD CONGRESS SECOND SESSION ON H.R. 4649 AN ACT MAKING APPROPRIATIONS FOR THE GOVERNMENT OF THE DISTRICT OF COLUMBIA AND OTHER ACTIVITIES CHARGEABLE IN WHOLE OR IN PART AGAINST THE REVENUES OF SAID DISTRICT FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 1995, AND FOR OTHER PURPOSES Board of Education Council of the District of Columbia Courts Office of the Mayor Printed for the use of the Committee on Appropriations I *'0 '^1} U.S. GOVERNMENT PRINTING OFFICE 77-197cc WASHINGTON : 1995 ForsalebytheU.S.GovernmentPrintingOffice SuperintendentofDocuments,CongressionalSalesOffice,Washington,DC 20402 ISBN 0-16-046593-1 COMMITTEE ON APPROPRIATIONS ROBERT C BYRD, West Virginia, Chairman DANIEL K. INOUYE, Hawaii MARK O. HATFIELD, Oregon ERNEST F. ROLLINGS, South CaroUna TED STEVENS. Alaska J. BENNETT JOHNSTON, Louisiana THAD COCHRAN, Mississippi PATRICK J. LEAHY, Vermont ALFONSE M. D'AMATO, New York JIM SASSER, Tennessee ARLEN SPECTER, Pennsylvania DENNIS DeCONCINI, Arizona PETE V. DOMENICI, New Mexico DALE BUMPERS, Arkansas DON NICKLES, Oklahoma FRANK R. LAUTENBERG, New Jersey PHIL GRAMM, Texas TOM HARKIN, Iowa CHRISTOPHER S. BOND, Missouri BARBARA A. MIKULSKI, Maryland SLADE GORTON, Washington HARRY REID, Nevada MITCH McCONNELL, Kentucky J. ROBERT KERREY, Nebraska CONNIE MACK, Florida HERB KOHL, Wisconsin CONRAD BURNS, Montana PATTY MURRAY, Washington DIANNE FEINSTEIN, CaUfomia James H. English, StaffDirector Mary S. Dewald, ChiefClerk J. Keith Kennedy, Minority StaffDirector Subcommittee on the District of Columbia HERB KOHL, Wisconsin, Chairman PATTY MURRAY, Washington CONRAD BURNS, Montana DIANNE FEINSTEIN, CaUfornia CONNIE MACK, Florida ROBERT C. BYRD, West Virginia MARK O. HATFIELD, Oregon (ex officio) (ex officio) Professional Staff B. Timothy Leeth LuLA Joyce Mark Van de Water (Minority) (II) CONTENTS Wednesday, May 25, 1994 District ofColumbia: Page Office ofthe Mayor 1 Council ofthe District ofColumbia 14 Wednesday, June 15, 1994 DistrictofColumbia: Courts 259 Board ofEducation 293 (III) i ! DISTRICT OF COLUMBIA APPROPRIATIONS FOR FISCAL YEAR 1995 WEDNESDAY, MAY 25, 1994 U.S. Senate, Subcommittee of the Committee on Appropriations, Washington, DC. The subcommittee met at 2:39 p.m., in room SD-138, Dirksen Senate Office Building, Hon. Herb Kohl (chairman) presiding. Present: Senators Kohl, Feinstein, and Burns. DISTRICT OF COLUMBIA Office of the Mayor statement ofhon. sharon prattkelly, mayor accompanied by: ellen o'connor, chief financlu. officer hon. david clarke, chairman, council of the district of columbia opening remarks Senator Kohl. This committee will come to order. It is a pleasure today to welcome Mayor Sharon Pratt Kelly and Council Chairman David Clarke to the beginning of our hearings on the D.C. budget for fiscal year 1995. DIFFICULT TIME FOR GOVERNMENT The past year has been a very difficult time for governments at all levels as they have struggled to balance public demands for services and taxpayer demands to reduce spending. The D.C. government has certainly not been immune from these pressures, nor, ofcourse, has the Federal Government. We have difficult questions today and I hope that you will not take them, and others will not characterize them, in an accusatory manner. We are simply looking for information and insight as well as answers to specific inquiries. CITY HAS BALANCED ITS BUDGET I want to make clear at the outset that I believe that the Mayor and the Council Chairman and the District government have done something at which we at the Federal level have been unsuccessful. This city has balanced its budget in 13 of the last 15 years. No one in the Federal Government can claim to have done that even once during this period. (1) CONCERNS REGARDING FUTURE COSTS Concerns have been raised about the accuracy of the city's budget figures. I am also concerned about accuracy. I will accept, for purposes of this hearing, your representations, and those of your independent auditors, that those figures are fairly stated, based on applicable accounting standards. I want to express my concern about the efficiency ofthe District and controlling future costs. The problems and concerns we are talking about now did not begin during your term as Mayor. The roots go back to pre-home rule days when the District of Columbia was like any other Federal agency. They involve the very organizational culture of Government in Washington. I am concerned about the implications of deferred retirement benefits. I am concerned about the implications of the need for short-term cash borrowing, but I am also concerned about the cir- cumstances that have led us to this point and what steps need now to be taken so that the future will be able to avoid a recurrence. ROLE OF THE FEDERAL GOVERNMENT I also want to make clear that I think that the Federal Govern- ment must play a crucial role in ensuring the long-term health, both physical and fiscal, of Washington, DC. As part of that role, there needs to be a candid exchange of ideas and information be- tween our committees in Congress and the D.C. government about the city's financial condition, without the assumption that someone is being blamed for something. NO FEDERAL TAKEOVER OF CITY Finally, I will make clear that these concerns are not about whether the District of Columbia can or should govern itself As I noted, you have balanced 13 of 15 budgets, while we in the Federal Government have not balanced one. So by that standard, whose governance should be more in question? I do not favor a Federal takeover. I do not favor a receivership. But I do favor working cooperatively and doing everything that I can, within the limited financial resources of the Federal Govern- ment and this subcommittee's jurisdiction, to help you and this city achieve your goals. COMMENTS FROM COMMITTEE MEMBERS So with that statement, I will turn now to Senator Burns and any other Senators, Senator Feinstein, for statements that may be made prior to calling on you, Madame Mayor and Chairman Clarke. Senator Burns. Senator Burns. Thank you very much, Mr. Chairman. Welcome Mayor and your Council members. I have no opening statement. I would rather hear from the witnesses. Let us get on with the hearing and what they have got to say. Thank you very much and welcome. Thank you for coming today. Senator KOHL. Thank you. Senator Burns. Senator Feinstein. Senator Feinstein. As a former mayor, I will listen to the Mayor. SUBMITTED STATEMENT OF SENATOR CONNIE MACK Senator KOHL. Senator Mack requested that his statement be made a part ofthe record, which will be inserted at this point without objection. [The statement follows:] Statementof Senator Connie Mack Like many ofmy colleagues, I am becoming increasingly concerned about the de- teriorating fiscal condition ofthe District ofColumbia. The Mayor explains the Dis- trict ofColumbia's fiscal problems by noting that the District government is experi- encing increasing social services demands, while at the same time there has been a reduction in the tax base. This reduction in the tax base has been attributed to the recession middle class flight. Even ifthese are the relevant factors it still would not explain the inability ofthe District to make reasonable budget estimates regarding the increased demands or shrinking tax base. Neither of these trends are new and should be provided for in any budget. This controversy over the budget stands as only one example ofthe rampant inef- ficiency that the residents of the District of Columbia are forced to endure. It ap- pears that instead ofsolving problems the elected officials ofthe District are looking to assign blame to others. With few exceptions the District's budget is formulated and controlled by the District not Congress or anybody else. Year after year we are told that statehood is the magic answer, and ifCongress would only give the District more autonomy then all these problems would be solved. This simply isn't true. The District, not Congress, is responsible for the current budget fiasco. To my knowledge not a single budget projection was made by a member ofCongress. Though I share some concern with the current state of self determination of residents of the District, I will never accept the argument that statehood will solve many ofthe fiscal and social ills that affect this city. Tell me how statehood is going to increase District revenues or stop middle class flight? Every year we are told that ifthe District were able to tap commuter tax revenues then everything wouldbe alright, again thatjust isn't true. The creation ofa commuter tax would be seen by me and many ofmy colleagues as quid pro quo exchange for a reduction in the federal payments, thus offsetting to a significant degree any short term revenue gain such a tax would create. Any additional increases in taxes are bound to cause businesses and middle class residents to relocate across the District lines into the Maryland or Virginia suburbs. Let's face it, the residents and businesses of the District of Columbia are simply over taxed. The answers to the long term problems of the District of Columbia is not more government and more taxes, but less government and more personal ac- countability. The Mayor mentioned that many of these increasing budgetary demands are being caused by an increased demand in social services. I have not seen or heard ofany major initiatives by this government to reform or redefine the role ofgovern- ment in providing social services to citizens. The answer for this government is al- ways more money and more taxes. Many states, and it would seem for the first time in nearly two decades the national government, are looking at ways to reform welfare and other social programs. This increased attention to welfare is driven by two major factors. First, these programs have become to costly and secondly, we have seen how they have served to only entrap people in destructive cycles of poverty. I would like to suggest to the Mayor and Chairman that ifthey truly wanted to reduce the escalating cost of these programs that they would move swiftly to create welfare that truly assisted people in their efforts to improve their lives. Another example ofthe inability ofthe District to provide services to its residents can be found less than a mile from here at the District ofColumbia Public Schools' headquarters. Despite, having one ofthe highest per pupil expenditures ofanyjuris- diction in the country the District consistently rates at the bottom ofmost statistical measurements of educational achievement. Money is clearly not the answer. A re- cent audit conducted by the District's own auditor found DCPS' auditing procedure to be incompetent. DCPS has been unable to produce basic information regarding employees and funding. I realize that school officials are expected to testify tomor- row and will reserve any additional comments and questions until then. I merely wanted to use them as an example ofhow more money isn't the answer. With DCPS as well as the District government as a whole, we need real solutions instead ofmore excuses. Senator KOHL. All right. So we would be pleased to take your opening statements and then we will commence questioning. Mayor Kelly. NO FEDERAL BAILOUT Mayor KELLY. Good afternoon, Mr. Chairman. Good afternoon, Senator Bums and Senator Feinstein. It is a real privilege to be here with you, and I am here, as you well know with our Chairman of the D.C. Council, David Clarke, as well as the District's Chief Financial Officer, Ellen O'Connor. I guess what would be most useful in terms of opening remarks on my part would be to address some of the concerns that I know I have heard expressed, both directly and maybe more indirectly through the media. And I would like to do that if I might. No. 1, the District of Columbia, certainly not through me, has never asked for a Federal bailout. The District of Columbia certainly does not view it in her own interest to ask for a Federal bailout and nor do I view it in the interest of this country to have a Federal bailout. That is not an utterance of mine. I do not think it is in our interest. And what I do think is in our interest is for all of us to try to continue to follow the recommendations of the Rivlin Commission so that we can truly reinvent Government, re- fine and streamline Government, both locally and federally in a way that will allow the District of Columbia to become much more self-sufficient. CLOSING BUDGET GAPS Since taking office, I have had to deal with, as has this entire government, $2 billion in budget gaps. And the way we have dealt with it has been primarily through cuts. Almost all of those cuts were recommended by, again, the Rivlin Commission. The first of which was to downsize our government by 6,348 positions. And those 6,348 positions came entirely out of the executive branch of Government which was not easy in the middle ofa very deep recession and in a community that by and large had depended upon government as a major employer. For the executive branch of Govern- ment, those 6,348 positions represent a 17-percent reduction in our work force. SCHOOL SYSTEM REDUCTIONS Second, we took on reforms in the school system. It is not within the direct purview of the Mayor or the Council. The reforms there were also tough. We insisted that 10 schools be closed and 883 positions were cut there in addition to the ones that we cut in the executive branch. HOSPITAL REDUCTIONS Third, we took on D.C. General Hospital. It also is not in the direct control ofthe Mayor, but we took that on as well and over 200 positions in addition were cut there, as well as additional initiatives taking place as we speak to reform D.C. General Hospital.