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Issa Supports Giving D.C. More Freedom Over Funds

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WASHINGTON (AP) — The chairman of the House committee that oversees the District of Columbia said Thursday that he’s open to giving district leaders more freedom to spend their local tax dollars, a prospect that pleased D.C. officials pushing for years for greater budget autonomy.

Congress must approve the district’s budget. That means services for the 600,000 residents of the nation’s capital hang in the balance anytime funding for the federal government is at risk of running out.

U.S. Rep. Darrell Issa, R-Calif., the chairman of the Committee on Oversight and Government Reform, said at a subcommittee hearing Thursday that he was not prepared to grant full budget autonomy to the district, but he said he wanted to streamline the approval process so the district’s local funds aren’t tied to the federal budget debate.

Issa told D.C. Mayor Vincent Gray after the hearing that he did not want district leaders to have to worry about slowdowns on Capitol Hill affecting city services. He told reporters he planned to work with Del. Eleanor Holmes Norton, D-D.C., to introduce a bill that would allow the district to spend its local funds months earlier than when the federal budget is approved.

“I think there’s a justification to let the district do what a city does,” Issa said. “A city plans its own budget, uses its own funds and typically goes to a state capital hoping to get more.”

Such a bill would allow the district to reset its fiscal year, allowing city government to function more smoothly. The district is currently tied to the federal fiscal year, which starts on Oct. 1 — weeks after the beginning of the school year.

Norton said she was eager to work with Issa to get the bill passed and described his proposal as “a very significant breakthrough” in what had been hostile relations between the district and the new Republican-led House.

“This is something affirmative and positive. We’ve been entirely on the defensive until now,” Norton said. “These are the first Republicans that I’ve found difficulty finding common ground to work on at least something with.”

She met later Thursday with President Barack Obama alongside the Congressional Black Caucus and said in a statement afterward that Obama assured her he would “do everything he could to protect D.C.’s home rule.”

While the Appropriations Committee routinely holds hearings on the D.C. budget, it’s unusual for the Oversight and Government Reform Committee to do so. Some advocates for D.C. autonomy said they feared Thursday’s subcommittee hearing would be another example of congressional meddling in local affairs. In announcing the hearing, the panel mentioned that poor fiscal management could lead to the return of the federal control board that managed the district’s finances from 1995 to 2001.

But there were no questions about the control board, and D.C. Chief Financial Officer Natwar Gandhi said there was no chance the district would commit the financial misdeeds that would reactivate the panel. The district is required to present a balanced budget to Congress every year, part of a system of checks and balances that was imposed after the crisis that led to the control board.

The atmosphere at the hearing was mostly collegial. Gray said afterward that he was encouraged by Issa’s proposal.

“I thought it was a good discussion, and I appreciated the opportunity to talk about those things that are important to our city, especially our ability to manage ourselves at the local level,” Gray said.

The mayor told the subcommittee that the potential federal shutdown this spring was a drain on city resources and that district leaders spent “scores of hours” preparing for it.

“We never should have been caught up in this,” Gray said.

The district collects about $5.5 billion a year in income, property and sales taxes, among other levies. While those funds account for little more than half of the district’s annual budget, most critical city services are funded by local dollars.

Gandhi assured Issa that the district could come up with a contingency plan to use only local funds in the event that federal funding is cut off for weeks or even months.

Two outside experts also told the panel that the district is in better fiscal shape than most states and cities.

The district faces a $322 million budget gap for its coming fiscal year, which Gray has proposed closing with a mix of cuts and new taxes. Several council members, including Chairman Kwame Brown, have balked at the prospect of raising taxes on the city’s wealthiest residents.

(Copyright 2011 by The Associated Press. All Rights Reserved.)

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