D.C. is looking at a $45 million surplus for the current fiscal year before the numbers turn negative in the face of uncertainty over the federal budget, according to new revenue estimates generated by Chief Financial Officer Natwar Gandhi.
D.C. Councilman Jack Evans, chairman of the finance and revenue committee, said the welcome surplus for fiscal 2012 doesn’t last long. In fiscal 2013, Gandhi is projecting a $69 million deficit — and the budget hole grows to more than $100 million by 2015.
Gandhi briefed Evans on the new projections Wednesday. Mayor Vincent Gray and Council Chairman Kwame Brown also will be briefed (if they haven’t already) before the projections are publicly released in the form of Gandhi’s quarterly letter to District leaders.
That letter will explain why the CFO is betting on a surplus in FY 2012 (and what could screw it up before the end of the fiscal year). While we don’t have the specifics yet, there are existing documents that note the upward trend. The monthly D.C. Economic Indicators report for December, for example, predicts a 5.9 percent increase in overall revenue in 2012 — most coming from upticks in individual income, sales and real property tax revenue.
The indicators report projects a 6.5 percent decline in deed tax revenue in 2012, a sign of a slowing commercial real estate market, following a 40.3 percent jump in 2011.
“I think the good news is once again the economy in the District remains robust,” Evans said. “The estimates are clearly increasing. For the short term we’re in good shape. In the long term it depends on the Congress’s ability to get things done.”
Evans also got a shot in at the District’s neighbors, both of which have unfunded pension liabilities in the billions of dollars: “We’re one of the strongest financial entities in the country, and unlike Maryland and Virginia our unfunded pension liability is zero,” he said. “If I didn’t fund the pension this year, I’d have a surplus of $700 million.”
