[Senate Hearing 106-395]
[From the U.S. Government Publishing Office]
S. Hrg. 106-395
DISTRICT OF COLUMBIA APPROPRIATIONS FOR FISCAL YEAR 2000
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HEARINGS
before a
SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE
ONE HUNDRED SIXTH CONGRESS
FIRST SESSION
on
H.R. 2587, 3064, 3194/S. 1283
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,
2000, AND FOR OTHER PURPOSES
__________
Council of the District of Columbia
Office of the Mayor
Financial Responsibility and Management Assistance Authority
__________
Printed for the use of the Committee on Appropriations
Available via the World Wide Web: http://www.access.gpo.gov/congress/
senate
______
U.S. GOVERNMENT PRINTING OFFICE
54-209 CC WASHINGTON : 2000
_______________________________________________________________________
For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC
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ISBN 0-16-060307-2
COMMITTEE ON APPROPRIATIONS
TED STEVENS, Alaska, Chairman
THAD COCHRAN, Mississippi ROBERT C. BYRD, West Virginia
ARLEN SPECTER, Pennsylvania DANIEL K. INOUYE, Hawaii
PETE V. DOMENICI, New Mexico ERNEST F. HOLLINGS, South Carolina
CHRISTOPHER S. BOND, Missouri PATRICK J. LEAHY, Vermont
SLADE GORTON, Washington FRANK R. LAUTENBERG, New Jersey
MITCH McCONNELL, Kentucky TOM HARKIN, Iowa
CONRAD BURNS, Montana BARBARA A. MIKULSKI, Maryland
RICHARD C. SHELBY, Alabama HARRY REID, Nevada
JUDD GREGG, New Hampshire HERB KOHL, Wisconsin
ROBERT F. BENNETT, Utah PATTY MURRAY, Washington
BEN NIGHTHORSE CAMPBELL, Colorado BYRON L. DORGAN, North Dakota
LARRY CRAIG, Idaho DIANNE FEINSTEIN, California
KAY BAILEY HUTCHISON, Texas RICHARD J. DURBIN, Illinois
JON KYL, Arizona
Steven J. Cortese, Staff Director
Lisa Sutherland, Deputy Staff Director
James H. English, Minority Staff Director
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Subcommittee on the District of Columbia
KAY BAILEY HUTCHISON, Texas, Chairman
JON KYL, Arizona RICHARD J. DURBIN, Illinois
TED STEVENS, Alaska, (ex officio) ROBERT C. BYRD, West Virginia (ex
officio)
Professional Staff
Mary Beth Nethercutt
Terry Sauvain (Minority)
Administrative Support
Liz Blevins (Minority)
C O N T E N T S
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Wednesday, June 9, 1999
Page
Council of the District of Columbia.............................. 1
Financial Responsibility and Management Assistance Authority..... 1
Office of the Mayor.............................................. 1
DISTRICT OF COLUMBIA APPROPRIATIONS FOR FISCAL YEAR 2000
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WEDNESDAY, JUNE 9, 1999
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 9:38 a.m., in room SD-192, Dirksen
Senate Office Building, Hon. Kay Bailey Hutchison (chairman)
presiding.
Present: Senators Hutchison and Durbin.
DISTRICT OF COLUMBIA
Office of the Mayor
STATEMENT OF HON. ANTHONY A. WILLIAMS, MAYOR
Council of the District of Columbia
STATEMENT OF LINDA W. CROPP, CHAIRMAN
Financial Responsibility and Management Assistance Authority
STATEMENT OF DR. DARIUS MANS, MEMBER
OPENING STATEMENT OF KAY BAILEY HUTCHISON
Senator Hutchison. I would like to call this meeting to
order. I am very pleased to get the budget from the District
and see the good working relationship that seems to be going
forward between the Control Board and the District.
Let me start with a brief opening statement and then, if
Senator Durbin or Senator Kyl arrive, I will ask them also, and
then I will look forward to having opening statements from each
of you.
Of course, this is the hearing to review the District's
consensus budget for fiscal year 2000 and to examine the new
tax cut package. We recognize that both the consensus budget
and the tax cut package are the result of long and I am sure
strenuous debate between the Mayor and the District Council,
and I am pleased that all of you are in agreement. I look
forward to hearing a few more of the details of some of those
issues.
fiscal year 1998 surplus
At the end of fiscal year 1998, the District boasted an
annual surplus of $445 million. That surplus allowed the
District to eliminate its deficit and realize a $112 million
positive fund balance. Certainly it is a very good thing that
the balance is now over 6 percent of the year's gross budget.
By the end of fiscal year 1999, it will be $282 million, which
is another good sign.
bond rating
I hope that we continue to see improvements in the bond
ratings because, of course, the debt for the District is still
high, and I would hope that any restructuring would have the
improved bond ratings to lower the costs of debt.
However, I would have to say that, while the economic
condition really is good, still there are many problems that
confront the District and the elected leadership. The school
system, particularly the special education system, is still
largely dysfunctional, and there are three agencies under
receivership or court supervision. The District continues to
lose some of its tax base to surrounding suburbs, which are
booming, and I think, while the District is on the road to
recovery, we still need to do more.
federal funds
More Federal spending, however, is not the answer. I will
say that in the Appropriations Committee on the Senate side,
while every other subcommittee budget took a cut from the
President's budget, the District did not. The District was
fully funded at the President's budget request, and we are
going to stick to that number, which I think should be a good
number.
in-state college tuition
I think the management that I have seen in the District is
really creative, and I am very pleased to see that. I want you
to know that I have introduced two pieces of legislation that
will directly affect the District. One is to give college
students in the District the ability to pay as an in-state
resident of the colleges and universities in Maryland and
Virginia, in fact, throughout the country. Budget constraints
are probably going to put limitations on that, but I would
still like to see it go forward as a pilot project, so that a
District student who qualifies will have the chance to pay in-
state tuition in Virginia and Maryland by scholarships that
would make up the difference.
community revitalization tax credit
Second, I have introduced the community revitalization tax
credit, which would offer tax credits to business owners that
are located in enterprise zones toward the cost of renovating
buildings and upgrading the value of property. That will not be
in the District bill, but I hope to get it in the overall tax
cut bill that we hope will go through Congress. I believe
upgrading property will create better and safer neighborhoods,
and I applaud you for the efforts you are making also in your
budget along that line.
So I think that we have come a very long way since I became
a member of this committee and I applaud the leadership of the
District, both the new Mayor, Mrs. Cropp as the Chairman of the
Council, and Dr. Mans representing Mrs. Rivlin and the Control
Board. I think this is a team effort that is working. I do have
some questions about some of the specifics, but I think in the
bigger picture there really is light at the end of this tunnel,
and I am very pleased with the hard work that has gone into
this effort on the part of all of you.
So with that, Senator Durbin is on his way, but I want to
continue with the hearing, so I would call on you, Mayor
Williams, to--right on cue.
If you are ready to make your opening statement.
Senator Durbin. Go ahead, I will waive that.
Senator Hutchison. Then I would call on you first, Mayor
Williams, and welcome you to this committee for the first time
that I have been able to chair it. I have really enjoyed our
previous ability to work together and look forward to the
future.
statement of mayor anthony a. Williams
Mayor Williams. Thank you. Thank you, Chairman Hutchison
and Senator Durbin and members of the committee. I want to
thank you for the opportunity to testify before you and, more
broadly, for the opportunity to work with you to make our
Nation's capital the best city in our country.
Indeed, I am very proud of the progress. I will say,
incidentally, that I have submitted my full statement for the
record, so I am just going to paraphrase and characterize my
statement in the interest of time.
I am proud of the progress that we have made over the last
5 months, and I am committed to doing even more. Ultimately,
however, the success of our efforts will depend on the short-
term fixes, getting points on the board, and on long-term
planning and strategic investments in our infrastructure.
stabilized revenue stream
Over the last few years, through the work of our elected
leadership, through the work of our Financial Authority, and I
would say through the work of our financial sector in the CFO's
office, we have stopped the financial bleeding and stabilized
the revenue stream. Through cooperation and hard work, we have
put the District temporarily, I would say, on a sound footing.
However, the fiscal health of the District needs to be
pointed in a long-term corrective position. The people of the
District deserve innovative initiatives reflecting the results
of the election. So the time has come for us to make the
crucial decisions that will put us in a competitive position
for the next millennium, decisions about what the government
can and cannot do, should and should not do, decisions that
will determine to a large extent whether our city ultimately
succeeds or fails.
I believe that this budget has taken these tough decisions
head-on and will put the District on a path to a stable future,
ensuring for years to come that Washington will be a source of
pride for all Americans. Most importantly, it strengthens our
investments in crucial areas such as supporting children,
improving government services, rebuilding the human service
network, and, as the chairman was saying, expanding our
economy.
annie e. casey foundation report
At this point I would like to turn briefly to discuss these
different areas and how they affect our budget. In education,
for example, the Annie E. Casey Foundation recently released a
report that measured the wellbeing of children. The District
rated worst in the Nation in every category but one, from
infant mortality to the rate of teenage births, to statistics
chronicling child poverty. Clearly, we have serious work to do.
per pupil funding formula
In education, in fiscal year 2000 the District of Columbia
public schools will begin using a per-pupil funding formula as
described in the School Reform Act of 1995. Under this formula,
the proposed amount of $526 million represents an increase of
$67 million, and State education costs of $74 million over
fiscal year 1999.
institute of public safety and justice
Regarding higher education, $500,000 is provided for fiscal
year 2000 to establish the Institute of Public Safety and
Justice at the University of the District of Columbia.
udc campus
The University of the District of Columbia campus
desperately needs an overhaul, in excess of $125 million. The
proposed move of the university across the river unfortunately
diverted the attention away from the necessary review of its
mission and status. The question is whether we go down the same
track, allowing it to continue unfocused, or invest so that it
survives and thrives?
This week, I would add, the New York Times has run a series
of stories on the request by former Yale University President
Benno Schmidt that recommended the dramatic overhaul of the
City University of New York system. Once a jewel in the crown
of public education, the university has fallen off track. The
public officials in charge of its oversight realize that in its
present form it was failing the needs of its constituents.
Their willingness to take on entrenched interests and refocus
that mission for the future to save the institution I believe
should be a model for UDC.
children and youth investment
Another area, the children and youth investment partnership
that we have created will distribute $15 million for out-of-
school programs. This approach allows services to be competed
for by community organizations and government agencies. This is
part of a new paradigm we want to push of public-private
partnerships that is a core principle of my administration.
making government efficient
A second focus is the whole area of making our government
more efficient. The areas we are focusing on there, briefly,
are managed competition, work force investment strategies, and
the savings to be derived. The simple point to be made,
Senator, is that what we are doing is a two-pronged approach.
On one level it is to do an assessment of work force in each of
our service areas, to make sure that our workers have the very
best teams as a group facing the competition we all must face,
to invest in our workers with investment in our non-union
employees, investment in our union employees, and working
conditions and systems and enablers. All these things to allow
them to do a job, to compete, but to recognize that to face
that competition, we must introduce what we call managed
competition throughout our government.
I am not a pessimist but an optimist. I happen to believe
that if we invest in our workers, if we give them the
consulting tools with which to bid and compete, we will find,
as we found in Philadelphia, as we found in Indianapolis, as we
found in many, many States, that our workers will not only
survive that competition, they will prevail in that
competition. They will end up being proud of their jobs because
they will be doing a better job for our people at less cost.
management report
I am also very proud of the fact that, as part of the
anthology, if you will, of this budget we have included a
management report of our overall progress to build a
performance management system in our city. As you know, our
city has had a troubled history, I will put it that way, with
this committee in terms of management reporting. We believe
that we have established a very good baseline with the
investments that our city and the Authority have made in our
government operations. This will give this committee, the
Council and the Financial Authority, and all the folks involved
in supervision and oversight, a great tool kit to use to judge
where we have started, where we want to go, and our progress
along the way to get there. So I am very proud of the
management report that we have submitted as part of this
proposal.
health care system
Briefly, in terms of improving the human service network,
the key feature is our health care system. As evidenced by the
troubles that we have seen with one of our hospitals, Greater
Southeast, we have a number of problems with our health care
delivery system right now. Right now it is very, very costly.
Right now it is not serving all of our residents, and right now
we have a situation where supply and demand are mismatched.
We have a situation where many of our hospitals are
struggling. As we work with Greater Southeast to put it on a
sound financial footing and to get it out of what I call the
financial emergency room, the Financial Authority, the Mayor,
and the Council, recognized that we had to look at a longer
term strategy of balancing our needs and balancing our
interests. That was important so that we could move to a model
where our health care dollars were following our patients and
our citizens and their choices, as opposed to strictly
following the needs of our institutions.
We do not believe, I do not believe, that in the first year
we can expect our institutions to change overnight to a new
competitive service delivery model. But we do believe that,
while allowing our institutions to be put on a sound
competitive footing, they have to compete. We cannot ensure the
survival of all of our institutions against any thought of
competition. I do not think our hospital association expects
that. I do not think our clinics expect that. Our patients do
not expect that.
That is the motto under which we are proceeding, and I
think it holds great hope. I think Greater Southeast has been a
wakeup call for us in the work that we need to do.
receiverships
Madame Chair, you have mentioned our situation with our
receivers. We consider one of our most important objectives to
be to rebuild the human service network. One of the real
tragedies over the last 10 years is that much of our human
service network has been dismantled. It has been lost to
receivership, it has been lost in mismanagement, it has been
lost to underfunding, it has been lost to a lack of
competitiveness.
We are determined--and I mention this in a number of areas
in my testimony--we are determined to rebuild this human
service network as part of our legacy for the future and as
part of being the great city we must be.
expanding the economy
The fourth focus of our budget is on expanding the economy
and, very briefly, the components include: neighborhood
revitalization and an investment by the Mayor and the Council
in public works, in nuisance management and elimination, in
coordinating public works and public safety. In other words, to
make a more customer-friendly, more business-friendly, and a
cleaner city recognizing that our neighborhoods are a
foundation for bringing back the kind of city that we want.
tax cut plan
Tax cuts are a big part of this economic revitalization
program. The democratic process sometimes is bumpy. The
democratic process is often not very pretty. But we have come
to a consensus on a tax cut plan that we believe addresses my
need and my objective to focus our tax reduction on the needs
of small business and business in general and to match that tax
reduction with overall economic development aims and the
broader need stated by all the elected officials, and
particularly the Council, to make sure that our District is
competitive from a tax vantage point with o