Springtime in DC may conjure up images of cherry blossoms and tourists in your mind. But to us, spring marks the start of the city’s annual budget process. Boring, you say? Well, maybe a bit. But if you use DC parks or libraries, drive on DC streets or send a child to a DC school, you should care about the DC budget as much as we do.

Mayor Fenty released his proposed fiscal year 2009 budget in March, and the DC Council is now busy modifying it to their tastes. This year’s budget is tight, because the economy is slowing and so are tax collections. There are no big budget winners this year — but no big losers, either. That doesn’t mean there aren’t any interesting stories, though.

For example, Fenty says this budget will add a lot to DC public schools, but no one has been able to find that money in the budget. The mayor also touts lots of new money for housing, yet some key housing programs actually are losing funding. (As you’ll see, it's not really his fault.)

And then there's Ward 8 Councilmember Marion Barry, who has worked aggressively to keep the issue of poverty in the spotlight. He led a two-day hearing on poverty with Ward 6 Councilmember Wells and convened a “Poverty Reduction Coalition” of community activists, social service providers and advocates which issued a report with lots of budget recommendations. Try as they might, it’s hard to call the mayor's proposal an anti-poverty budget. In the two years since Fenty has been in charge, public works has seen the largest budget growth.

Finally, get ready for a drag-out fight between the mayor and the DC Council on business tax cuts. Fenty proposed scaling back an ambitious tax cut passed by the council because he said it wasn’t affordable right now. (We agree.) The council is pushing back, but finding more money for tax cuts will be hard, especially if that means taking money away from critical programs and services.

So just where will the dollars go next year?
The DC budget is divided into seven broad areas. Looking at proposed funding changes for these tells a lot about the priorities.

Education
The mayor’s budget press release says that funding for DC public schools will increase $39 million to hire more social workers and more art, music and PE teachers. It is difficult to confirm any of this in the budget itself, however. With just a 5 percent increase in the per-pupil funding level — and a 3 percent decline in expected DCPS enrollment — where will the money come from? Also missing from the budget is mention of the cost savings from school consolidation and where that money will go.  

Overall, the mayor proposes $1.45 billion in local funds for education agencies: schools, libraries and the University of the District of Columbia. That’s a 2.5 percent decrease from 2008, after adjusting for inflation. The largest funding increase would be charter schools, from $328 million to $366 million, due to continued enrollment growth.

Housing
The proposed housing budget includes notable increases, such as $19 million for permanent housing and social services for chronically homeless residents (called “housing first”).

Yet other programs would see no increase, including down payment assistance to first-time homebuyers and rent subsidies for the poorest residents.

And there's a large drop for the Housing Production Trust Fund – DC’s main source for affordable housing production. That’s because the Trust Fund is tied to DC’s deed taxes, which are plummeting. The decline means that the city may not even have enough to fund existing projects.

Overall, the housing budget for 2009 is lower than this year's. But it’s a lot higher than in 2006, a sign that that the commitment to affordable housing is growing.

Health and Human Services
At $1.6 billion in local funding, this is the biggest part of the DC budget. It includes the Departments of Health, Human Services, Child and Family Services (foster care and adoption), and Parks and Recreation.

Fenty proposed some modest enhancements here: payments for primary health; mental health services for children; and assistance to help disabled residents move from institutions to independent living. There is a proposed increase in DC’s meager cash assistance benefits for poor families with children, but it’s just enough to keep pace with inflation.

Overall, 2009 is not a human services budget, with funding that is relatively unchanged from 2008 and just 1.4 percent higher than in 2007, after adjusting for inflation.

Public Works
The proposed budget for these agencies – including Public Works, Motor Vehicles and Transportation – is $613 million, hardly changed from the current year. Nevertheless public works funding has grown 10 percent annually since fiscal year 2007, the largest increase among the city’s major program areas.

Public Safety
The mayor proposes hiring an additional 100 police officers – continuing toward the goal of 4,200 – as well as improving EMS services recommended by the David Rosenbaum task force, providing HIV/AIDS testing for jail inmates and expanding DC’s smoke detector program.

Overall, the mayor’s total 2009 budget for public safety – just over $1 billion – is 2 percent lower than in 2008 after adjusting for inflation. Much of the decrease come from certain savings, such as $11 million saved by relocating of the First District Headquarters and Violent Crimes Branch to Bowen Elementary after it closes.

Earmarks
The proposed 2009 budget includes a substantial number of “earmarks” – appropriations for specific private organizations. We found about $40 million in earmarked funds, including a $10 million appropriation for Ford’s Theatre. There are others as well, such as $2 million to THEARC, and $150,000 to Cool Capital Challenge. While the earmarks may serve worthwhile purposes, earmarking funds in this way raises concerns because it is not a transparent and competitive way to allocate public resources.

The Biggest Loser: Budget Transparency
If you are civic-minded and care about how our tax dollars are being spent, good luck trying to figure it out what’s in the budget. Mayor Fenty's team tried to improve the readability of the budget this year, but they fell way short. Many councilmembers are griping that it’s less readable now.

Why is this? Any elected official will tell you that the budget is the key indicator of the city’s real priorities. A transparent budget – one that clearly identifies where dollars are spent and how that translates into services provided – is critical to having a real discussion of budget priorities and to holding public officials accountable for the delivery of public services.

Since prior efforts have failed, we recommend a Budget Transparency Task Force, one that includes DC residents, to make recommendations for a citizen-friendly document next time around.

Tax Issues
The proposed budget includes some fee increases that have proven controversial. One is to raise the fee on phone bills that supports 911 and 311 services by 25 cents per month. At-Large Councilmember Phil Mendelson vows to stop it. A proposal to double the charge for using a DC ambulance also is raising eyebrows because it may be hard on low-income residents.

Fenty proposed some tax reductions, too. He wants to expand the DC Earned Income Tax Credit for low-income working families, making DC’s the largest state-level EITC in the nation.

The biggest tax debate this year is over small business property taxes. The council passed a law in January to trigger a rate reduction under certain conditions. Surprising to all, it triggered a nearly $100 million tax cut just a month later. Fenty argues that now is not the right time for large tax cuts, so he proposed shrinking it to $15 million. Chairman Gray says he’ll fight for more, and the big downtown buildings say they want a piece, too.

Cutting taxes further would mean less money for education, health care, parks and other services. Will the DC Council really put business tax cuts ahead of these things?

What Happens Next?
The final budget vote is May 13. What will happen is still anyone's guess. The answer will depend on what the council hears from residents. If you haven't contacted your councilmember lately, now may be the time.

Ed Lazere, Clark, Kerstetter and Reed are the staff of the DC Fiscal Policy Institute (www.dcfpi.org), which conducts research on tax and budget issues that affect low- and moderate-income DC residents.