[Senate Hearing 109-941]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 109-941
 
EXAMINING THE CHALLENGES THE DISTRICT WILL FACE TODAY, TOMORROW, AND IN 
                               THE FUTURE

=======================================================================

                                HEARING

                               before the

                  OVERSIGHT OF GOVERNMENT MANAGEMENT,
                 THE FEDERAL WORKFORCE AND THE DISTRICT
                        OF COLUMBIA SUBCOMMITTEE

                                 of the

                              COMMITTEE ON
                         HOMELAND SECURITY AND
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 18, 2006

                               __________

        Available via http://www.access.gpo.gov/congress/senate

       Printed for the use of the Committee on Homeland Security
                        and Governmental Affairs


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29-511 PDF                 WASHINGTON DC:  2006
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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                   SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska                  JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio            CARL LEVIN, Michigan
NORM COLEMAN, Minnesota              DANIEL K. AKAKA, Hawaii
TOM COBURN, Oklahoma                 THOMAS R. CARPER, Delaware
LINCOLN D. CHAFEE, Rhode Island      MARK DAYTON, Minnesota
ROBERT F. BENNETT, Utah              FRANK LAUTENBERG, New Jersey
PETE V. DOMENICI, New Mexico         MARK PRYOR, Arkansas
JOHN W. WARNER, Virginia

           Michael D. Bopp, Staff Director and Chief Counsel
             Michael L. Alexander, Minority Staff Director
                  Trina Driessnack Tyrer, Chief Clerk


   OVERSIGHT OF GOVERNMENT MANAGEMENT, THE FEDERAL WORKFORCE AND THE 
                   DISTRICT OF COLUMBIA SUBCOMMITTEE

                  GEORGE V. VOINOVICH, Ohio, Chairman
TED STEVENS, Alaska                  DANIEL K. AKAKA, Hawaii
NORM COLEMAN, Minnesota              CARL LEVIN, Michigan
TOM COBURN, Oklahoma                 THOMAS R. CARPER, Delaware
LINCOLN D. CHAFEE, Rhode Island      MARK DAYTON, Minnesota
ROBERT F. BENNETT, Utah              FRANK LAUTENBERG, New Jersey
PETE V. DOMENICI, New Mexico         MARK PRYOR, Arkansas
JOHN W. WARNER, Virginia

                   Andrew Richardson, Staff Director
              Richard J. Kessler, Minority Staff Director
            Nanci E. Langley, Minority Deputy Staff Director
                      Emily Marthaler, Chief Clerk
      







                              C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Voinovich............................................     1
    Senator Akaka................................................     3

                               WITNESSES
                         Tuesday, July 18, 2006
                               WITNESSES

Hon. Anthony A. Williams, Mayor, District of Columbia............     6
Natwar M. Gandhi, Chief Financial Officer, District of Columbia..     9
Clifford B. Janey, Superintendent and Chief State School Officer, 
  District of Columbia Public Schools............................    12
Alice M. Rivlin, Director, Greater Washington Research Program, 
  The Brookings Institution......................................    14

                     Alphabetical List of Witnesses

Gandhi, Natwar M.:
    Testimony....................................................     9
    Prepared statement with attachments I6041....................
Janey, Clifford B.:
    Testimony....................................................    12
    Prepared statement...........................................    56
Rivlin, Alice M.:
    Testimony....................................................    14
    Prepared statement...........................................    63
Williams, Hon. Anthony A.:
    Testimony....................................................     6
    Prepared statement...........................................    31


EXAMINING THE CHALLENGES THE DISTRICT WILL FACE TODAY, TOMORROW, AND IN 
                               THE FUTURE

                              ----------                              


                         TUESDAY, JULY 18, 2006

                                   U.S. Senate,    
              Subcommittee on Oversight of Government      
                     Management, the Federal Workforce,    
                            and the District of Columbia,  
                            of the Committee on Homeland Security  
                                          and Governmental Affairs,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 10:08 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. George V. 
Voinovich, Chairman of the Subcommittee, presiding.
    Present: Senators Voinovich and Akaka.

             OPENING STATEMENT OF SENATOR VOINOVICH

    Senator Voinovich. Good morning. This meeting will come to 
order. I want to thank you all for coming. Today, the 
Subcommittee on the Oversight of Government Management, the 
Federal Workforce, and the District of Columbia is holding a 
hearing entitled ``Examining the Challenges the District Will 
Face Today, Tomorrow, and in the Future.''
    The purpose of this hearing is to examine the overall 
health of the District of Columbia. Mayor Williams, I would 
like this hearing to explore the successes and challenges you 
have experienced during your terms in office. It is hard to 
believe that 8 years has gone by. I would like you and your 
colleagues to outline for us the challenges the next Mayor will 
have to confront.
    As a former Mayor of Cleveland, I understand what it is 
like to be handed a city that is in economic distress. When I 
became mayor in 1979, the city of Cleveland was in default. 
Through much hard work and unprecedented help from the private 
sector, we were able to rebuild the city's government and 
restore Cleveland's finances.
    Mayor Williams, I imagine you are proud of the city's 
overall economic performance. Since you took office in 1999, 
many parts of the city have experienced a strong economic 
revival. Many neighborhoods that were once stricken with 
poverty and crime are now showing signs of new life. For 
example, Chinatown has undergone a dramatic transformation. It 
is now a thriving entertainment and retail district where 
residents live, work, and enjoy themselves. It is a model for 
urban renewal for other parts of the District.
    Another example of urban renewal is taking place on the 
Anacostia waterfront. Earlier this year, I was able to tour the 
redevelopment, which is part of an extensive public-private 
partnership among 20 local and Federal agencies called the 
Anacostia Waterfront Initiative.
    As many of you know, I have introduced a bill, which I hope 
the Committee will soon consider, that will transfer nearly 200 
acres of land, mostly along the Anacostia River, from the 
Federal Government to the District Government. I am confident 
that this land can be better used by the District and further 
the economic revival in this area.
    These are just two examples, but I will give you another 
example, where I live. I have been in the Easter Market area 
for 8 years. It is just amazing, the profound improvement that 
has been made in that area, particularly in public improvements 
that have been made with Eastern Market. There is just an 
unbelievable change that has occurred there in that 
neighborhood.
    In addition, the city's financial/fiscal situation has 
dramatically improved over the past decade. In fact, as Dr. 
Gandhi notes in his testimony, it is the fastest financial 
turnaround of any comparable city facing similar fiscal 
challenges. At the same time, the GAO has noted that the 
District faces a long-term structural fiscal imbalance which 
still must be addressed.
    However, positive economic developments in the District are 
tempered by continuing bad news in some other areas. The 
District's public education system continues to fail its 
residents. According to the Census Bureau, in 2003 and 2004, 
the per pupil spending in the District of Columbia was about 
$12,800 per pupil, which is one of the highest spending rates 
in the Nation. This high spending is not, however, translating 
into higher achievement. The student dropout rate is also a 
major challenge confronting the District and the Nation. I am 
not just picking on you, Dr. Janey. One of the greatest 
problems facing America today is the urban school system. We 
cannot keep going the way we are with half of our kids in these 
districts dropping out of school. It just is something that 
this Nation better wake up to, and rather fast. If it is not 
addressed, we risk social upheaval and the loss of our Nation's 
greatest resource--its human capital. The greatest resource is 
our people, and we are not developing them fully so that they 
can make a contribution, take care of themselves, their 
families, and make a contribution to society.
    The city will never attract a strong middle class which 
would strengthen its tax base until the District can improve 
underperforming schools and provide all of its students with an 
excellent education.
    Again, I just want to say I am from Cleveland. I have told 
the Cleveland community--we were an all-American city three 
times. When I was mayor, I said we will never be an all-
American city until we have an all-American school system.
    I am pleased to see, Superintendent, that you have 
developed a strategic plan to improve the District of Columbia 
Public Schools. I look forward to a more detailed discussion of 
what this plain entails and how you will measure success, and I 
offer whatever assistance I can. I am sure the Members of this 
Subcommittee will do the same.
    One of the most worthwhile things I have done during my 
time in the Senate was to sponsor the creation of the District 
of Columbia Tuition Assistance Grant Program. Since the 
program's inception, the District has seen a 28-percent 
increase in college attendance, with more than half of these 
students being the first in their family to attend college.
    I am very encouraged also, Mayor Williams, to see that you 
have taken full advantage of the public-private partnerships 
such as the District of Columbia College Access Program. CAP is 
a nonprofit organization headed up by Don Graham, president and 
CEO of the Washington Post. The organization is funded by 
Washington area corporations and provides counseling and 
financial assistance to District students who might otherwise 
never have the opportunity to go to college. Programs like this 
are a step in the right direction.
    Finally, in recent days, we have read many stories 
regarding the spike in violent crime in the District. As 
reports have stated, there have been 15 murders in the District 
since July 1, and two robberies have taken place on the 
National Mall. If not brought under control, this increase in 
violent crime could have serious consequences for the 
District's tourism industry, which is a significant source of 
revenue for the city, as well as the willingness of residents 
to live here long term. Mayor Williams, I am sure that we are 
going to hear some thoughts from you about how that situation 
should be taken care of.
    In short, the District and its citizens continue to face 
many challenges in education, public safety, and long-term 
finances. The new mayor will certainly have his or her hands 
full. But I would like to say that, from my perspective looking 
at what has happened in the District, I have seen dramatic 
changes. I do not want to finish on a negative note. You have 
really come a long way, Mayor. During the time that you have 
been mayor, you have put in a good team that has helped you. 
The citizens of the District should be proud of what all of you 
have been able to accomplish together, understanding that there 
are always more things that need to be taken care of. It is 
constant.
    I would now like to yield to the Ranking Member of this 
Subcommittee, my good friend, Senator Akaka, who has worked 
with me conscientiously to try and stay on top of what is 
happening in the District in terms of our oversight 
responsibilities.

               OPENING STATEMENT OF SENATOR AKAKA

    Senator Akaka. Thank you. Mr. Chairman, thank you for 
holding today's hearing to give us an opportunity to find out 
what is happening in the District today and to address its 
future.
    Over the past decade, the District has gone through a 
number of changes. In 1995, Congress established the DC Control 
Board to oversee the District's fiscal management because of 
long-standing budget deficits, questionable internal oversight 
of city funds, and a failure to provide residents with adequate 
public services.
    Management of the District was returned to local officials 
in the year 2001 after the city balanced four consecutive 
budgets. Since then, Congress has sought to conduct oversight 
over the District while respecting ``Home Rule.''
    A key player in the District's recovery is Mayor Williams, 
first as Chief Financial Officer, and now as Mayor. It is 
imperative that the improved financial management practices put 
into place by Mayor Williams are sustained.
    While DC governance has improved dramatically over the past 
few years, areas of concern still remain. As a former teacher 
and principal, I believe public education can help many of 
society's problems. That is why I am concerned with low test 
scores and wasted funding in the DC Public Schools (DCPS). 
Moreover, this spring, the U.S. Department of Education named 
DCPS as a high-risk grantee, citing inadequate financial 
accountability and poor management of Federal funds.
    It is imperative that DCPS avoid providing fodder for the 
movement that is, in effect, working to abandon our public 
school system in favor of school vouchers. Just last week, the 
Senate Appropriations Committee approved an expansion of the DC 
School Voucher Program. I would like to see Congress move away 
from school vouchers and renew our commitment to public 
schools.
    Superintendent Janey, you must help us ensure that DCPS is 
a good steward of taxpayer dollars and provides DC youth with a 
top-notch education, particularly for those who cannot afford 
to attend private schools without voucher assistance.
    Another serious and quite public issue facing the District 
is crime. As the Nation's capital, DC is one of the world's 
primary tourist destinations. Its museums and national 
monuments are enjoyed by millions of people every year. 
Guaranteeing the safety of visitors and residents alike must be 
a priority for the DC Government. I am hopeful that the renewed 
commitment by the Mayor and Police Chief Ramsey to keep the 
District a safe and thriving city will yield positive results.
    That brings me back to my push for improved educational 
opportunities for DC youth. Without significant resources and 
commitment, District youths may be denied the benefits of 
strong educational programs. Educational opportunities equal 
economic opportunities.
    Mr. Chairman, thank you again for holding this hearing. I 
welcome our witnesses and look forward to their thoughtful 
testimony on where DC stands today and how the District can be 
improved in the future.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Akaka follows:]
                  PREPARED STATEMENT OF SENATOR AKAKA
    Thank you, Mr. Chairman. Today's hearing is a chance for the 
Subcommittee to look towards the future of the District of Columbia.
    Over the past decade, the District has gone through a number of 
changes. In 1995, Congress established the DC Control Board to oversee 
the District's fiscal management because of long-standing budget 
deficits, questionable internal oversight of city funds, and a failure 
to provide residents with adequate public services. Management of the 
District was returned to local officials in 2001 after the city 
balanced four consecutive budgets. Since then, Congress has sought to 
conduct oversight of the District while respecting Home Rule.
    A key player in the District's recovery is Mayor Williams--first as 
Chief Financial Officer and now as Mayor. It is imperative that the 
improved financial management practices put in place by Mayor Williams 
are sustained.
    While DC governance has improved dramatically over the past few 
years, areas of concern remain.
    As a former teacher and principal, I believe public education can 
help many of society's problems. That's why I'm concerned with low test 
scores and wasted funding in the DC Public Schools (DCPS). Moreover, 
this Spring, the U.S. Department of Education named DCPS as a high-risk 
grantee--citing inadequate financial accountability and poor management 
of Federal funds. It is imperative that DCPS avoid providing fodder for 
the movement that is--in effect--working to abandon our public school 
system in favor of school vouchers. Just last week, the Senate 
Appropriations Committee approved an expansion of the DC school voucher 
program. I would like to see Congress move away from school vouchers 
and renew our commitment to public schools.
    Superintendent Janey, you must help us ensure that DCPS is a good 
steward of taxpayer dollars and provides DC youth with a top notch 
education, particularly for those who cannot afford to attend private 
schools without voucher assistance.
    Another serious and quite public issue facing the District is 
crime. As the Nation's capital, DC is one of the world's primary 
tourist destinations. Its museums and national monuments are enjoyed by 
million of people annually. Guaranteeing the safety of these visitors 
and residents alike must be a priority for the DC government. I am 
hopeful that the renewed commitment by the Mayor and Police Chief 
Ramsey to keep the District a safe and thriving city will yield 
positive results.
    That brings me back to my push for improved educational 
opportunities for DC youth. Without significant resources and 
commitment, District youths may be denied the benefits of strong 
educational programs. Educational opportunities equal economic 
opportunities.
    Mr. Chairman, thank you for holding this timely hearing. I welcome 
our witnesses and look forward to their thoughts on where DC stands 
today and how the District can be improved in the future.

    Senator Voinovich. Thank you, Senator Akaka.
    We have an excellent panel joining us today. First we have 
Mayor Williams. I appreciate the relationship that we have had, 
and I recall spending a lot of time with you when you first 
came in. I apologize for not spending more time with you as you 
have gone through the years as Mayor.
    We are also very pleased to have Dr. Natwar Gandhi, the 
Chief Financial Officer of the District of Columbia. Dr. 
Gandhi, we are pleased to have you here.
    Dr. Clifford Janey, the Superintendent of the District 
School System.
    And, finally, we have Alice Rivlin, the Director of the 
Greater Washington Research Program at The Brookings 
Institution. From 1998 to 2000, Dr. Rivlin chaired the District 
of Columbia Financial Management Assistance Authority, more 
commonly known as the ``Control Board.'' She is also former 
Vice Chairman of the Federal Reserve Board and a former 
Director of the Office of Budget and Management. Dr. Rivlin, 
thank you for your service to our country and to this city. We 
thank you for joining us today, and I look forward to an 
informative discussion.
    As you know, it is the custom of this Subcommittee to swear 
in the witnesses. If you will stand, I will administer the 
oath. Do you swear that the testimony you are about to give 
this Subcommittee is the truth, the whole truth, and nothing 
but the truth, so help you, God?
    Mayor Williams. I do.
    Mr. Gandhi. I do.
    Mr. Janey. I do.
    Ms. Rivlin. I do.
    Senator Voinovich. As is the custom in the Subcommittee, if 
the witnesses could limit their testimony to 5 minutes, I would 
be most appreciative.
    Mayor Williams, we are looking forward to your testimony.

 TESTIMONY OF HON. ANTHONY A. WILLIAMS,\1\ MAYOR, DISTRICT OF 
                            COLUMBIA

    Mayor Williams. Good morning, Mr. Chairman and Ranking 
Member Akaka, and other distinguished Members who may join us. 
I want to thank you for inviting me and my fellow panelists to 
testify before you today. I will abbreviate my comments, Mr. 
Chairman, not because I believe that there are abbreviated 
successes in my administration, but because I want to honor the 
time. I am not going to talk a lot about one of our key 
successes, all of us working as a team together, and that is, 
financial stability and integrity, because I think that Natwar 
Gandhi, whom I am proud to say I first appointed as Deputy 
Chief Financial Officer during my term as CFO, can speak very 
comprehensively and eloquently on that point, although I would 
underscore his point to the Subcommittee, which is that I 
believe that the District for a number of different reasons has 
proceeded faster and farther than other similarly situated 
jurisdictions in financial duress. And I am very proud of that 
record.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mayor Williams appears in the 
Appendix on page 29.
---------------------------------------------------------------------------
    I am also proud, Mr. Chairman, of the District's record in 
the health area and, as a matter of fact, in the human services 
area. This was a very painful effort on my part--I think I 
suffered substantially politically for it--the transformation 
of the DC General Hospital to the DC Alliance. This conversion 
put the District in a wonderful position. All that torment I 
think was for a good purpose because the District continues now 
to be the only jurisdiction in the United States offering 
health insurance coverage to all residents up to 200 percent of 
poverty. Now other jurisdictions are looking to the District 
model in order to address the needs of their uninsured 
population.
    Additionally, this year we are adding dental coverage 
within the Medicaid program for adults. I am expecting within a 
few days now a draft report of a task force that I have looked 
at on the expenditure of $200 million of securitized tobacco 
funds and how we can best use that money. Is it building a 
National Capital Medical Center or is it taking this money and 
deploying it primarily to neighborhood-based clinics? So that 
is something that is coming up and that is a major challenge 
for our city.
    In the human service area, I am proud to say that all five 
of the receiverships imposed by Federal and local courts that 
were in place at the beginning of my administration have been 
terminated. These included public housing, child welfare, 
medical and mental health services, a public mental health 
system, and educational services at Oak Hill.
    Having said this, there are still major challenges in this 
area: In the area of mental health to ensure that while we move 
our mental health services into the community, we maintain not 
only adequate but the optimum care for our residents in an 
institutional setting. We have a new Director of Mental Health 
from Baltimore, whom I believe is in an excellent position to 
do that for us.
    In the mental retardation MRDDA, Mental Disability and 
Retardation Department, we have a person that we have put in 
place, Kathy Smith, whom I believe in conjunction with the 
court will not only keep that agency out of receivership, but 
will allow us to advance the goals of providing quality care to 
patients with mental disabilities.
    And, finally, educational services at Oak Hill, where, in 
addition to building a new detention center that actually 
rehabilitates juveniles, we are actually, under Vince 
Schiraldi, undergoing, I think, a massive comprehensive effort 
to improve that department as well. But there is an enormous 
amount of work to be done there.
    In the basic service improvement area, I would argue that 
my successes--I am really paraphrasing here, Mr. Chairman. My 
remarks in total are submitted for the record. But I would say 
in the basic service area, a lot of my progress I think can be 
attributed to the fact that at the beginning of my 
administration--and I am not just saying this because you are 
Chairman of the Subcommittee--I talked to individuals who I 
thought had been good mayors of their cities, and I slavishly 
duplicated what I thought they had done well. I talked to you, 
Mr. Chairman, as you know; Ed Rendell, who I thought was a 
great Mayor of Philadelphia; Dennis Archer, the Mayor of 
Phoenix, who had, for example, a good call center in his city.
    So, for example, when I became Mayor in 1999, residents had 
to navigate a bewildering, confusing maze of offices, phone 
numbers, people, in order to make the simplest request. One of 
the first changes we made was to institute a single point of 
contact phone number. This is 727-1000. We have now had over 
1,000,000 callers to that number.
    Another departure was to create a robust and comprehensive 
website. It is now believed that the District, if we were 
considered a State, would have more online services on our 
website than any other State in the country. And this is a 
website that sometimes receives 200,000 to 300,000 hits a day.
    An example of this basic service improvement is a 
substantial turnaround at the Department of Motor Vehicles. 
When your neighborhood organizations, who are your fiercest 
critics--and I am sure that both you and Senator Akaka can 
appreciate this. When they all sit down and vote the Department 
of Motor Vehicles the most improved government agency, you know 
you have made progress, because this is a very hard audience to 
convince.
    In the education area, you have talked about the Tuition 
Assistance Program, and I think this is a marquee Federal 
initiative. I think the Congress should be proud of its role in 
this initiative, particularly the role that the Tuition 
Assistance Program has played, as you have mentioned, Mr. 
Chairman, in the huge increase of college matriculation in the 
District, but also in the role that the tuition assistance 
plays in conjunction and in concert with the College Access 
Program. This is precisely the kind of success that I think you 
and the Congress have called for, and it is precisely the kind 
of public-private partnership that allows us to leverage scarce 
government resources for maximum public gain.
    In the area of economic development--or one other area in 
education is our effort, Mr. Chairman, to improve our library 
system for the 21st Century, and I would love to talk about 
that. This is not only about building a new central library, 
but using a new central library in our city as a cornerstone, 
one, of improving libraries throughout the city; and two, even 
more importantly and fundamentally, getting at and attacking 
the chronic problem of literacy in our city where 37 percent of 
our citizens are struggling at a third or fourth grade level of 
literacy.
    In the area of economic development, I am proud of the $45 
billion of investment that has come to our city, but I will say 
that a challenge remains, particularly in the area of jobs and 
in the area of housing. I will talk about jobs in a second as 
we talk about a challenge in education. But in the area of 
housing, we have gone from around two or three units of housing 
planned or under production to over 30,000 now, and half of 
them are affordable. We have, I think, on a per capita basis 
one of the most robust, aggressive efforts to build new 
affordable housing and fund that affordable housing in the 
country. But I have to say, Mr. Chairman, I believe that for 
cities like mine--and they're scattered across our country--the 
most important way to preserve affordable housing in our cities 
is to preserve the affordable housing we have. There are 
countless expiring contracts. Many of them are Section 8. Many 
of them are other arrangements under programs with HUD that are 
expiring that, without the intervention of our cities, 
hopefully in partnership with our States and the Federal 
Government, would be lost to affordable housing.
    Another big part of our affordable housing challenge is 
providing rental housing for our working families. I convened 
and Alice Rivlin chaired a housing task force. We have 
attempted in our most recent budget to fund major components of 
that housing task force in an effort to get at the need for 
housing for our people.
    I was most troubled, when Dr. Rivlin came to speak to me, 
about her report that many of the families who are struggling 
for housing are poor families. But they are not the stereotype 
of poor families sitting around watching TV. These are poor 
families who are working. They are working trying to support 
their families, and they still cannot afford a home. And as you 
have said, Mr. Chairman, our cities will never be great 
American cities unless they are cities for every income class. 
We cannot just have cities that are for the very rich and the 
very poor.
    Which leads me to the situation of public safety. The good 
news on public safety, Mr. Chairman, we are at a low in crime 
of some 20 years. Crime has decreased substantially during my 
time here in the city, particularly my time here as Mayor. But 
we have had a recent spike in crime that, if left unattended 
and if left uncorrected, I believe can undo much of the work 
that we have done to improve the reputation of the District 
and, even more importantly, and substantially undergirding all 
that, improve the experience of our residents and visitors. And 
I have asked the chief and he has declared a crime emergency, 
not to alarm everybody but to take proactive measures to get 
more officers on the street. We are going to be meeting with 
the Council today seeking the Council's authorization of a 
series of steps to not only get additional police on the 
street, I believe we can get another 350 police on the street 
by moving to a 6-day week on an emergency basis: Expanding on a 
selective basis the use of closed-circuit cameras in 
neighborhood commercial areas; creating a rebuttable 
assumption; allowing us to detain adults and juveniles who are 
charged with violent robbers; allowing us to better share 
information about juveniles--not juveniles who are convicted of 
shoplifting or doing something relatively minor, which many of 
us did as juveniles--I cannot speak for anybody else, but 
certainly for myself.
    I am talking about juveniles who are involved in violent 
activity. Our police should be able to have that information so 
that when we detain or arrest a juvenile, we are able to use 
that information. And certainly we're able to use that 
information in some of the rehabilitative programs that we have 
to have in place.
    Which leads me to education. One of my biggest regrets is 
that we have not come farther in our city.
    Senator Voinovich. Mayor, I have given you 10 minutes.
    Mayor Williams. OK. If I could just wrap up, Mr. Chairman. 
I know I have a lot to say, and I am sorry I have taken too 
long. Voting rights is a big concern in our city, and if you 
and the Subcommittee can be supportive of our effort to give 
Congresswoman Norton a vote, I would certainly and my citizens 
would certainly appreciate that.
    Thank you.
    Senator Voinovich. Thank you, Mayor, and you will have an 
opportunity to talk during the question period.
    Dr. Gandhi.

  TESTIMONY OF NATWAR M. GANDHI,\1\ CHIEF FINANCIAL OFFICER, 
                      DISTRICT OF COLUMBIA

    Mr. Gandhi. Thank you, Mr. Chairman. Good morning, Mr. 
Chairman, Senator Akaka. I am Natwar M. Gandhi, Chief Financial 
Officer for the District of Columbia. In my brief remarks, I 
will summarize, first, the fiscal recovery over the past 
decade. I will also address our capital spending needs. And, 
finally, I will address our ongoing commitment to remain 
fiscally balanced in the future, despite facing significant 
challenges.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Gandhi appears in the Appendix on 
page 39.
---------------------------------------------------------------------------
    The chart \2\ that appears as an attachment to my testimony 
and that appears here before you, sir, is a history of the 
remarkable fiscal comeback achieved by the District over the 
past decade. Our fiscal low point occurred in 1996, when the 
general fund balance hit a negative $518 million. Through the 
efforts of Mayor Williams, the District Council, and the 
Control Board, we were able repeatedly to balance the 
District's budget for nine consecutive balanced years. The 
Control Board was deactivated in 2001. Between 1996 and 2001, 
there was about a $1 billion increase in the fund balance to a 
positive $562 million by the end of fiscal year 2001.
---------------------------------------------------------------------------
    \2\ The chart referred to by Mr. Gandhi appears in the Appendix on 
page 52.
---------------------------------------------------------------------------
    The real test for the District was the challenge of 
sustaining fiscal stability in the post-control period. As you 
can see, at the end of 2005, the general fund balance had risen 
another $1 billion, to $1.6 billion. Of the $2.1 billion 
increase in general fund balance between 1996 and 2005, the 
amount of gain since the control period ended was about equal 
to the gain during the control period, demonstrating the 
commitment of the District's leadership to ongoing fiscal 
restraint.
    The measure of this success is reflected in the District's 
bond rating. All three rating agencies recognized the improved 
creditworthiness of our bonds by raising the District's bond 
ratings from ``junk bond'' status to ``A'' status--the highest 
level ever achieved by the District.
    How did we do this? A great deal of the increase in fund 
balance was driven by the growth in local revenues, resulting 
from the strong regional economy. That was the easy part. 
Credit for making the difficult decisions must go to Mayor 
Williams, the Council, and the Control Board. The Congress also 
transferred to the Federal budget some of the functions 
normally provided by State governments. The Mayor and the 
Council demonstrated their commitment to prudent fiscal 
stewardship by controlling spending.
    The Office of the Chief Financial Officer, which was 
created in its current form by the Congress, was given the task 
of strengthening our tax administration in order to collect 
every dollar that was due to the District, and we have made 
significant improvement in that area. Over the past 10 years, 
we have collected an additional $1.6 billion despite declining 
tax rates.
    On the revenue side, the role of forecasting revenues--a 
difficult and essential part of budgeting--was also the 
responsibility of the Chief Financial Officer. In every year 
for the past decade, our actual revenues have met or exceeded 
our forecasts, demonstrating the careful, conservative approach 
that we have taken to estimate revenues.
    Mr. Chairman, despite efforts to fund the District's 
capital needs--and we have profound needs--I must point out to 
the Subcommittee that this government continues to struggle to 
function with a structural imbalance that you have yourself 
noted, sir. This means that the District's revenue capacity, 
under the national norms, falls far short of the cost of 
delivering services. The reasons lie in a large population in 
need; high regional costs for labor, land, and other resources; 
and accumulated infrastructure deficiencies.
    The District is unique in many ways. It has the economy and 
the needs of a city plus the added public responsibilities of a 
State, county, and school district. We cannot tax nonresident 
workers, who account for two-thirds of income earned in the 
city. Over one-third of all assessed property value in the 
District--about $43 billion--is exempt from taxation, and the 
District cannot tax its largest employer--the Federal 
Government. Not only that, but 10 of the District's 13 largest 
employers are also exempt from taxation.
    So the District faces unique expenditure requirements. 
State-like services provided by the District Government to its 
residents amount to about $1.2 billion per year.
    What is the result? The accumulated unfunded needs of the 
past and present show up as real problems for residents and 
visitors in the form of: Crowded Metro cars, stalled trains, 
potholes in the street, crumbling swimming pools, libraries, 
and school buildings. The average age of school buildings is 
more than 60 years. And there are many other concerns that we 
have.
    So how do we resolve this? The District has made great 
strides in fiscal management and in providing better services, 
but two difficult consequences of the structural imbalance 
between the District's revenue base and its spending 
requirements remain: One, a high per capita tax burden with 
some of the highest tax burden in the region and in the 
country; and, two, the highest per capita borrowing. The 
District's tax burden on households ranks in the upper one-
third when compared to the largest cities in the country.
    As to the borrowing, the District's per capita borrowing 
reflects the city's effort to sustain infrastructure generally 
provided by multiple jurisdictions. The District's per capita 
debt burden now exceeds $8,000, the highest of any major city 
in the Nation, fully 20 percent above New York City, the second 
highest. Furthermore, with additional borrowing anticipated in 
the next 4-year capital plan, it is projected to increase to 
over $13,000 per person. Clearly, we cannot borrow our way out 
of the structural imbalance.
    So what are our challenges, sir? Challenges that add to the 
structural imbalance that we already experience. First, the 
revenue challenge is made even greater in the District by 
Federal prohibitions against taxing incomes earned by 
nonresident workers and incomes earned by certain professional 
services.
    Second, the District has a large urban population that 
needs help. Like other cities, the District is accountable for 
greater efforts to help the less advantaged in the city's 
population. Unlike other cities, however, the District does not 
have a State or suburbs that share in its overwhelming costs.
    In conclusion, Mr. Chairman, the leadership provided by the 
Mayor and the Council allowed the District to return to fiscal 
health. I would like to thank this Subcommittee for its 
diligent and continuous oversight work on the District's 
finances during this sustained recovery period. We look forward 
to continuing to work with you, sir, to ensure that the 
Nation's capital remains fiscally strong and ready to meet 
challenges of the future.
    Next January, the District will have a new Mayor, a new 
Council Chair, and we will have a number of new Council 
members. Though our current financial position is strong, the 
new leadership will face the need for ongoing vigilance to 
protect the gains that were hard won. Until the District's tax 
base is widened, given our needs and the ongoing structural 
imbalance, we are still in a precarious position. Like many 
American families who are just a paycheck or two away from 
financial hardship, the District continues in a critical 
struggle for financial security.
    We are committed to continuing to make the hard decisions 
in order to balance our budgets. Clearly, the District needs 
Federal assistance to provide adequate infrastructure 
improvements to secure the safety of the city's residents and 
the millions of Americans who visit our Nation's capital every 
year.
    Thank you, sir.
    Senator Voinovich. Thank you, Dr. Gandhi. Dr. Janey.

  TESTIMONY OF CLIFFORD B. JANEY,\1\ SUPERINTENDENT AND CHIEF 
   STATE SCHOOL OFFICER, DISTRICT OF COLUMBIA PUBLIC SCHOOLS

    Mr. Janey. Thank you. Thank you very much, Mr. Chairman. I 
am Clifford Janey, Superintendent and Chief State School 
Officer of the District of Columbia Public Schools. I am 
pleased to be here today to discuss public education in the 
District of Columbia, past and present, and to share my views 
on what challenges and opportunities lay ahead for a future 
mayoral administration.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Janey appears in the Appendix on 
page 54.
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    First, I would like to take sincerely this opportunity to 
acknowledge Mayor Anthony A. Williams for his leadership and 
support. I thank him greatly for his commitment to improving 
education and increasing opportunities for children and 
families of the District of Columbia. It has been a pleasure 
working with him, and I look forward to developing an equally 
respectful and productive relationship with our next mayor.
    I cannot underscore more the importance of a strong 
relationship among city leaders to the success of widespread 
education reform and the ability of that reform to be effective 
and sustained. As many of you know, not too long ago our city 
did not enjoy such support and cooperation among those invested 
with the responsibility and accountability for public 
education.
    Just a little less than a decade ago, public education in 
the District was characterized by instability, chaos, lack of 
direction, and other less than flattering descriptors. For 
example, over the last several years, the District grappled 
with the following challenges: Federal takeover of the city and 
a congressionally appointed educational board of trustees, new 
and untested school board structure, a revolving door of 
superintendents, recurring deficits, declining student 
enrollment, explosion of public charter schools, poor student 
performance, and the like.
    Thankfully, our work is no longer entangled in this web of 
worries, but I share these examples as an illustration of what 
unstable leadership and the lack of clear responsibility and 
accountability for educational decisionmaking has bred as we 
face changes in the city's leadership at the mayor, council, 
and board level. We will have a new board president come this 
January. I ask all of us to be mindful of our past mistakes and 
to look to the tremendous progress we recently have experienced 
as a blueprint for moving forward.
    When I became superintendent almost 2 years ago, it was 
with the unqualified and unified support of the Board of 
Education, Mayor Williams, the DC Council, the city 
administrator, and key community stakeholders. This support has 
proven extremely crucial as we continue to tackle long-standing 
challenges and implement a reform agenda that is designed to 
transform DCPS into the world-class education system that the 
District of Columbia and its residents so richly deserve.
    We are making progress in creating a foundation for 
academic success in the District of Columbia Public Schools. 
Last fall, we implemented new and more rigorous academic 
standards in reading/language arts and mathematics. Standards 
in science and social studies were adopted earlier this year, 
and we will be implementing during the upcoming year more of 
these standards.
    It is important to note that while many States typically 
take 4 to 8 years and sometimes 4 to 6 years to develop and 
adopt new learning standards, we successfully adopted in four 
different subject areas in less than 2 years.
    It is worth noting some other indicators of progress. The 
number of schools meeting, adequate yearly progress (AYP), in 
both reading and mathematics at the District level, using the 
Stanford 9, increased from 63 schools to 72 in school year 
2004-05. Student attendance also increased from 85 to 89 
percent District-wide. Additionally, English language learners 
dramatically improved their proficiency in both reading and 
mathematics, rising from 30.8 percent to 50.4 percent in 
reading, and from 50.8 percent to 56.4 percent in mathematics. 
We have a number of our schools that have been recently 
identified as high-performing, some 20. They partner with 
schools that are doing less than acceptable performance.
    We are also taking note of the work that we have done at 
the national level with respect to NAEP. We have made some 
progress there. We certainly have a long way to go.
    We are continuing to work with our students in terms of 
postsecondary experience. The number of students taking 
advanced placement courses has increased, and certainly the 
number of students earning scores of 3, 4, or 5 have also 
increased. Additionally, the number of students who are males, 
their performance has increased, scoring 3, 4, or 5.
    To support the academic progress, in the past year we have 
been fortifying our business systems. Recently, DCPS became the 
first school district in the country to partner with a 
municipality--and they sit right next to me on my right--in 
operating a state-of-the-art procurement system. It is now 
automated. We went live on March 24 and April 27. This means 
from the initial requisition to the approval to the receipt of 
goods takes within a week. It used to be 3 to 4 months. So 
schools and departments can order goods now electronically. We 
know where all the accountability steps are. In fact, if it is 
sitting on someone's desk, there is an escalator provision that 
kicks it up to the next approval level so that we are not 
interrupting services in terms of academic performance.
    We are mindful of the need to have an efficient business 
system, given the fiscal realities we face, and because of 
those fiscal realities, we have successfully sought and 
continue to participate in some effective partnerships that 
will help us reach our goals.
    I want to summarize the last couple of pages, and, of 
course, my testimony is before you, and it has been entered 
into the record. But let me just highlight some things that 
have happened in the last couple of years.
    We are encouraged by another recent partnership. The 
Wallace Foundation took a look at a number of municipalities 
throughout the country and selected three--Boston, Chicago, and 
Washington, DC--for consideration of a major investment in our 
city through our youth. We will be in receipt of $8 million 
over the next 3 years targeting out-of-school time for our 
middle-school students, so what happens after school, what 
happens during recess breaks, what happens during our summer 
periods. We are aligning our work together so that what we do 
within the school district with respect to the new rigorous 
learning standards will also be part of the work of CBOs who 
are involved with our after-school programs for youth.
    We are about at the national average in terms of our 
graduation rate, but as you know so well, it is not so much 
what the percentage is; it is also about who is graduating in 
terms of race and ethnicity and whether or not those students 
are college and work ready, because there is a gap between the 
graduation rate and those who are college and work ready, and 
that is why it is significant to have very formidable, rigorous 
learning standards in all of our subject areas and an 
assessment to go along with that.
    I would finally add that with respect to some of the 
expectations for a relationship with the new mayor, new council 
chair, and certainly our new board president coming in, let me 
just cite the following as I conclude: Congress has passed a 
new fiscal year for DCPS. We look to collaborate with you and 
others to make that one that is most successful. We would like 
consideration of having a multi-year budgeting process that 
would align our work with the 3-year plans that we are 
obligated to do under No Child Left Behind.
    Dr. Gandhi have been in discussion about realigning the 
reporting structure currently for the school district CFO and 
the work that he does. I would like to see that happen in terms 
of benchmarking our performance over the next 2 or 3 years so 
that we will be in a position of readiness to assume that 
responsibility, given some of the progress points we have made, 
particularly balancing our budget in the last couple of years 
and having a fund balance in 2005 of about $12,000.
    We are moving forward to more clearly delineate our State 
and local functions. I am sure you have become conversant with 
that particular point, given some of the reporting in the local 
media.
    So I stand before you committed to make this change.
    Senator Voinovich. Thank you. Dr. Rivlin.

 TESTIMONY OF ALICE M. RIVLIN,\1\ DIRECTOR, GREATER WASHINGTON 
          RESEARCH PROGRAM, THE BROOKINGS INSTITUTION

    Ms. Rivlin. Thank you, Mr. Chairman. I will summarize my 
statement very briefly and hope that the entire statement can 
appear in the record.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Rivlin appears in the Appendix on 
page 61.
---------------------------------------------------------------------------
    Senator Voinovich. It will be.
    Ms. Rivlin. I think my claim to being on this panel is that 
I chaired the now infamous Control Board, which is no more, and 
which made a considerable contribution to the financial and 
managerial turnaround that has been alluded to.
    I want to mention that one legacy of the Control Board era 
is the Office of the Chief Financial Officer itself, ably led 
by Dr. Gandhi. I believe that the contribution to fiscal 
discipline that can be made by a strong, independent CFO has 
been amply demonstrated by the District's fiscal turnaround. 
The Congress and the District Government should ensure that the 
role of the independent CFO continues in the years ahead.
    I will not discuss the fiscal transformation of the 
District, which has been ably discussed and which is 
impressive.
    Let me mention that the turnaround in budgeting and 
accounting systems, a less glamorous and dramatic subject, has 
also been impressive. The city did not used to even be able to 
close its books on time. Now nobody notices at the end of the 
closure period, and we get a clean audit routinely.
    The efforts on this subject have been partly the CFO, 
partly the Mayor's office, partly the Office of the Chief 
Technology Officer, Suzanne Peck, who has done wonders in this 
city to improve the systems. This is not glamorous work, 
creating budgeting, accounting, and statistical systems for the 
city, but it will benefit the city in the years to come.
    Another major turnaround has been the re-creation of the 
city's Planning Office. When Mayor Williams took over, the 
Planning Office was practically nonexistent. It has been built 
back up into a nationally respected, professional organization 
that can help the city plan for years to come. And the creation 
of the Anacostia Waterfront Corporation to lead the 
redevelopment of the waterfront is another institutional 
improvement which I think is extremely important.
    The Mayor has talked about economic development and its 
successes and also mentioned the downside of the city's 
burgeoning development, which has been the rapid increase in 
real estate prices, housing, and rents all over the city. That 
helps with the fiscal picture, but it is very difficult for 
low- and moderate-income people and creates a problem which we 
must focus on.
    The management has been turned around in many but not all 
departments, as the Mayor has mentioned. Something needs to be 
done there. But the Mayor has attracted two very strong city 
managers, John Koskinen and Robert Bobb, who have helped turn 
this from a badly governed city to a much better one.
    Finally, an accomplishment I would like to mention is the 
perception of the city, nationally and internationally. The 
Mayor and the Council and others have worked very hard to make 
clear that we have turned things around here, and the result 
has been that businesses that would not look at the District of 
Columbia a few years ago are now eager to invest here, put 
stores here, and that has been a very important contribution.
    Challenges. First is Dr. Janey's issue of education--not 
his issue alone, but clearly one that is high on the agenda for 
new city leaders going forward. It sometimes sounds, though, as 
there are no good schools in the District of Columbia. That is 
definitely not true. My granddaughter goes to one of them, and 
it is terrific. And Banneker School Without Walls and other 
public schools are doing extremely well, as are many of the 
charter schools which serve low-income and disadvantaged young 
people and are scoring, many of them, extremely well.
    We have an arsenal of tools here in the District that ought 
to be working together. The traditional public schools, the 
vibrant charter school movement, and the voucher system--those 
can all be part of improving the quality of the District of 
Columbia's publicly supported education.
    I believe we also need a high-quality community college in 
the District of Columbia. We do not have one. It should either 
be part of the University of the District of Columbia or be set 
up separately. But it is an urgent need, as is improvement of 
the city's adult education and job training programs.
    The Mayor mentioned, in connection with affordable housing, 
the task force that I co-chaired recommending that the city 
redouble its effort. The city has done a lot, but we are 
fighting a losing battle because rents and prices are going up 
so fast. And I have been very gratified with the Mayor's and 
the Council's response.
    I agree with the Mayor that the decision that we all 
participated in that was so painful, to close DC General 
Hospital and create the Health Alliance, was the right one. We 
do not need another hospital now. We have lots of hospital 
beds. We need to devote increased resources to primary care and 
disease management, substance abuse treatment, and the 
detection and treatment of HIV/AIDS in the city.
    This is a city starkly divided by race and income, as many 
cities are. But we have an opportunity in this city to reduce 
the starkness of that divide if we work with all of the tools 
available bringing the two sides of the city together.
    Another challenge on which some progress has been made, but 
more needs to be done, is reform and coordination of the city's 
programs, collocation of city services in the same building, 
and other evidences of good management of the city's resources. 
And we need to cooperate better with the whole region.
    Finally, very briefly, Mr. Chairman, what can the Congress 
do? What can you and your colleagues do? I think four things.
    First, you should find a way to give the citizens of the 
District of Columbia the right to vote for a representative in 
the House and the Senate, and I mean a voting representative 
not just delegate status.
    Second, the Congress can and should approve legislation 
that would provide enough Federal compensation to the district 
to close the $1 billion or so structural deficit that the 
Government Accountability Office and others have identified in 
the District's fiscal structure. Congresswoman Norton has 
introduced a bill that would make a compensatory contribution 
to the District. I believe this legislation should be enacted.
    Third, the Congress should permit the locally funded 
portion of the city's annual budget, our own money, once it is 
approved by the mayor and the mouncil, to go into effect at the 
start of the fiscal year without needing congressional 
approval.
    And, finally, Mr. Chairman, the Congress should actively 
support regional efforts to improve transportation, air and 
water quality, access to affordable housing, and other things 
on which this vibrant region and the District of Columbia must 
cooperate.
    Mr. Chairman, I appreciate this opportunity. Thank you very 
much.
    Senator Voinovich. Thank you very much.
    Senator Akaka, most of our witnesses have spoken for 10 
minutes, but I thought that it was very worthwhile to get their 
best presentations.
    I would like to again thank you all for being here. Mayor, 
you have done a good job. You should feel very proud. I hope 
that this is not the last time that we will see you before this 
Subcommittee. Maybe some other role that you may take on may 
cause you to be invited back to the Subcommittee.
    I think of the schools, Dr. Janey, and as you know, I have 
been close to the DC TAG and the DC CAP programs. The 
District's school system should be the best in the country. The 
District's school system should be a model for the country. It 
should be a school system that is worthy of the Shining City on 
the Hill. Perhaps it is time that we joined the resources of 
the public and private sectors to try and really look at a 
District that has the problems that you have. You have about 
60,000 students today. You have charter schools and you have 
your good schools. There has to be something done pretty quick 
to look at and dissect what it is and what needs to be done and 
how we can make it possible that we can improve our urban 
districts. I would like to talk to your more about that.
    Mayor, you seem to know a lot about health care. I have 
been working with The Brookings Institute and with The Heritage 
Foundation now for a couple of years on the Health Partnership 
Act. Hank Aaron at The Brookings Institute has been working 
with Stuart Butler at The Heritage Foundation, and they have 
come up with some suggestions. I have introduced legislation to 
move forward with a State initiative that would try out 
different systems around the country. I would like to send some 
of that information to you. I would be interested from your 
perspective on whether you think it makes sense.
    You have made some really good progress in many areas in 
the District, and I am sure you have identified areas where you 
need to make more progress. Mayor Williams, I would like your 
comments on if you think you have institutionalized the 
transformation. Dr. Rivlin, one thing that always bothers me is 
that we have an administration that comes in, they get the job 
done. But when people leave all of their hard work goes with 
them. Does the city have the workforce and the core 
competencies that are necessary? Do they have the trained 
workforce? In the Federal Government a lot of folks are 
retiring or taking an early retirement. I wonder if the 
District has addressed this issue? I feel strongly that you are 
only as good as your team, Mayor Williams?
    Mayor Williams. Well, I would speak to a couple of things 
on that, one kind of internal, Mr. Chairman, and the other 
external.
    On the internal point, a couple of things. One is I have 
made it a point as Mayor to appoint the very best people. I 
know this sounds like Mom and apple pie, but I really have 
tried to do this, to appoint the very best people regardless of 
politics. A great example is when John Koskinen left, who I 
thought had been a great city administrator, I was talking with 
him about the appointment of the successor we appointed. In 
consultation with him, I agreed that my best appointment would 
be Robert Bobb. I did not know Mr. Bobb from Adam, had never 
met Mr. Bobb before. Mr. Bobb had kind of a MacArthur 
reputation or a Patton reputation, kind of going for the Rhine 
before he got orders from high command. But he had a 
reputation, more importantly, of getting the job done.
    I brought Mr. Bobb in. He has done a great job for us. And 
I have done that with every single manager, and I believe that 
they in turn, very importantly, have done that with their 
subordinates. There is a message from my administration that 
the head office is not interfering with your management 
decisions, because I believe that ultimately I am going to get 
more political credit by more getting done than by trying to 
micromanage whether Harry or Betty got hired.
    On the external point of view, Mr. Chairman, we have the 
beginnings--I am not saying we are there yet because there is 
an enormous amount left to be done. But we have tried to put in 
the beginnings of a performance system. I got this from the 
time I was CFO in the Department of Agriculture and working 
with people like Dr. Rivlin and the Federal Government, to put 
results management into the District, performance measurements 
around outcomes. There is still an enormous amount left to be 
done, but at least there is a vocabulary now in our city about 
outcomes of our government agencies.
    And, very importantly, I mentioned the call center. One of 
the things that we do with the call center is when you call 
727-1000, you get a tracking number, and then someone calls you 
randomly to ask you how was the service you received. Was your 
e-mail answered? Was your phone call answered? How was it 
answered? And then there is a feedback mechanism into the 
personnel system to see that people comply. I am not saying 
that this is a perfect system, but, again, the initial steps 
have been put into the institution to see that results happen.
    Senator Voinovich. Does anyone want to comment on the issue 
of retirement? What does the situation look like?
    Mr. Gandhi. Mr. Chairman, if I may comment on the financial 
cluster, I am basically quite confident that the second tier 
that is emerging in the Office of the Chief Financial Officer 
is big and as much competence in terms of accomplishing the 
results, balancing the budget, assuring financial viability of 
the city to the Hill and to the citizens. I am very confident 
of their ability to do that. And your point about a retiring 
Federal Government, indeed, when I became the head of the 
Office of Tax and Revenue under then-Chief Financial Officer 
Anthony Williams, I went to the IRS and asked for a list of the 
people that I can borrow from them. And there were many 
retiring superb IRS administrators. I hired 15 of them, and 
they really transformed our tax administration. As I pointed 
out, we collected $1.6 billion more over the last few years 
with declining tax rates.
    And just to cite one example, the returns and the refunds. 
It used to take months and tons of calls to get your refund 
from the District Government. Today, if you file on the Web--
and we were the first city in the country to have Web filing. 
You can go to the Mayor's website and file your tax return. If 
you file on the Web, you get your refund in 1 week. If you file 
on paper, you get it in 2 weeks. That is a remarkable change in 
our tax administration. Why? Because we hired very able retired 
IRS tax administrators. Then in turn trained our own people.
    So I think I am very confident that in the Office of the 
Chief Financial Officer we have a group of people, some of them 
sitting in this room, who are very capable of carrying this 
message and the performance of financial viability, financial 
stability, and fiscal prudence.
    Senator Voinovich. Thank you.
    Ms. Rivlin. Mr. Chairman, could I add something? I agree 
with the Mayor and Dr. Gandhi about the positive successes in 
building a professional corps. But it is very hard, as you 
know, to reach down to all of the agencies in the city and to 
turn them around. It is not just a question of putting the 
right person in at the top. I think we have seen that in the 
emergency response system, we have seen it in the District's 
regulatory authority. It takes a long time to re-engineer the 
systems, re-educate the people, make sure that you have people 
on the front line at the bottom who know what their job is and 
are adequately trained and have the right leadership. There is 
still much to be done in this city on that score.
    Senator Voinovich. Is there a specific amount of money that 
is allocated for training of city workers? One of the things I 
did when I was Mayor was recognize that major corporations that 
are successful spend a nice percentage of their money to 
upgrade the skills of the people in their workforce.
    Mr. Janey. May I take a stab here?
    Senator Voinovich. Yes.
    Mr. Janey. Let me just retreat back first to your question 
about stability and providing a high-quality workforce, because 
it is a workforce issue. And one of the challenges that we are 
going to face, not uniquely as a school district, is recruiting 
and retaining and developing particularly teachers in some of 
the hard-to-recruit areas--mathematics and science. The 
pipeline is just not there. It is not there in special 
education.
    So knowing that we have to do well in the long term but do 
well in the here and now, we have contracted with a national 
firm that provides us services in terms of social workers, 
occupational therapists, physical therapists, and special 
education teachers. And we are contracting with them to provide 
those services directly.
    I would further point out we are spending about 8 percent 
of our budget on employee development. That includes teachers, 
administrators, and support staff. Our remaining challenge, not 
lingering but a very biting challenge, is the fact that we have 
high out in particular business system areas. And it is because 
we do not have compensation comparable to other entities. We 
are behind the District of Columbia and behind the Federal 
Government which creates a lot of out for us and turnover.
    We are putting our plans together for the next couple of 
years to address that, and that is for staff that reports to--
--
    Senator Voinovich. The management and so forth, that you 
are not as competitive as you should be, because in the 
District you have so many other public agencies that may be 
paying more than you are.
    Mr. Janey. Right. For comparable work, someone could go and 
become an human resources specialist in the area of retirement 
somewhere else, and it has nothing to do with performance, 
nothing to do with accountability.
    Mayor Williams. Mr. Chairman, there is a cohort moving 
through the system where you are going to have a lot of 
retirements. I know, for example, that with teachers you have a 
large cohort of teachers that are going to be retiring in a few 
years, and this has radiated out throughout the other 
departments. And I would be happy to share with you the exact 
numbers. Generally, that is a problem in our government and 
governments across the country.
    Senator Voinovich. Well, Senator Akaka and I are trying to 
make sure that it does not drown the Federal Government.
    Senator Akaka, I have taken more than enough time. We will 
have 10-minute rounds of questions since I violated my own 
rule. [Laughter.]
    Senator Akaka. Well, thank you very much, Mr. Chairman.
    I want to commend you, Dr. Rivlin, for your summary and 
your testimony of the status of DC, which was excellent. And I 
want to commend all of you for your commitment to public 
service.
    Mr. Mayor, yesterday you wrote a letter to the Chairman of 
the Council asking the Council to return to deal with an anti-
crime package that you proposed. You are moving quickly to do 
this, and, of course, the possibility is, if everything 
happens, that you can do it in 30 days.
    However, according to the ACLU, your proposals may violate 
your citizens' privacy rights, and my question to you is: How 
would you respond to the concerns raised by the ACLU?
    Mayor Williams. Senator Akaka, I am not a practicing 
lawyer, but I think that if we argue, as many civil 
libertarians do, that malls, for example, are a public space 
and malls have extensive use of cameras, then to me it follows 
as a corollary that we ought to be able to use cameras in other 
public spaces. That would be one argument.
    Another argument is that, with the approval of the Council, 
we are going to try to tailor this to best effectuate crime 
reduction while respecting people's legitimate rights. And I 
think one thing that I have learned by talking to other mayors 
in other American cities and other foreign cities is to have 
citizens empowered--or business groups empowered with the 
responsibility to retain the digital tape of the activities in 
an area. And then if there is a crime, the police would request 
specific evidence to be used in solving that crime so that you 
do not have the specter of the police sitting there watching 
everyone's daily activities. And I think that would address the 
concerns of libertarians.
    But it has been used in other cities. For example, in 
Chicago, it has had an effect in reducing crime in that city 
and leveraging your police presence in that city. And I think 
facing the problems that we face in Washington, we ought to 
give our police, obviously subject to protecting everyone's 
civil liberties, every tool at our disposal to back them up.
    Senator Akaka. Well, I want to commend you, as you say, 
that your program may reduce crime by 50 percent if all of this 
passes. And I also understand that the Council is planning to 
convene for this purpose. So I wish you well.
    Mayor Williams. Thank you.
    Senator Akaka. Mr. Gandhi, some DC agencies have sought 
exemption from the CFO's oversight. Are there any DC agencies 
that you believe should be exempt from the CFO's authority?
    Mr. Gandhi. Senator, to the extent that the Chief Financial 
Officer is responsible for delivering a balanced budget to the 
Mayor, to the Council, to the Congress, and to the citizens at 
large, I think all District agencies must be under the purview 
of the Chief Financial Officer.
    As Dr. Rivlin pointed out, we need to make sure that this 
independent Chief Financial Officer retains the authority to 
basically control expenditure and to make sure that we provide 
financial services--I do tell my staff on a consistent basis 
that we are a service function. We have to make sure that we 
help the managers, the Mayor, the directors, the Superintendent 
to accomplish their mission. But at the end of the day, we have 
to balance the budget and secure a clean audit opinion from the 
auditors, external auditors, so that is all verifiable.
    So my answer to that is this: That, to the extent that I am 
responsible for balancing the budget for the city as a whole, 
then I should have control over the finances of those agencies.
    Senator Akaka. Dr. Rivlin, before I call on the Mayor, 
would you comment on that question?
    Ms. Rivlin. I think it is extremely important that the 
Office of the Chief Financial Officer be independent, as it was 
set up by the Congress, and that it have responsibility and 
authority over all of the agencies that spend city money.
    Senator Akaka. Mayor.
    Mayor Williams. It is a general rule, I believe, Senator, 
and no one has worked harder than I have, initially as the CFO 
when all this independence was built in, it was hard--ladies 
and gentlemen, you cannot imagine how hard it was to actually 
in a real, concrete, tangible way create an independent CFO 
when the Mayor did not want one. I can tell you from 
experience. No one has worked harder and believes more strongly 
than I do in a strong CFO.
    As a matter of fact, I remember talking to Dr. Rivlin 
shortly after I had become Mayor about whether the CFO should 
have budget authority. And there is always some question in CFO 
land as to whether the administrator or the CFO should have 
budget authority. There is an overlap there and there is a blur 
there between program and finance. But I felt, for a lot of 
different reasons, that budget should go to the CFO. So I 
believe very strongly that the CFO should be very paramount, 
and very independent.
    But I do believe in the case of the Water and Sewer 
Authority (WASA), this was at the time I was CFO--we created a 
Memorandum of Understanding working with Congressman Davis over 
in the House, Dr. Brimmer, and the Water and Sewer Authority to 
give them a degree of autonomy and independence that the other 
District agencies did not have because while there are 
commingling of city funds over there, it really is a regional 
enterprise, more analogous to the airport, and it really is an 
enterprise function. So we gave them a degree of autonomy the 
other agencies did not have. Our Attorney General for our city, 
as well as Dr. Gandhi's counsel, we are now seeing that the 
language is, at best, ambiguous and that WASA should come back 
under the CFO. I believe that it should remain autonomous. That 
is my own view.
    Senator Akaka. Mr. Gandhi, in his statement Superintendent 
Janey requested that DCPS should have its own CFO that is 
independent from you and your office. I would like to ask you 
and Dr. Rivlin to share your thoughts on that specific 
proposal.
    Mr. Gandhi. I have been working very closely with the 
Superintendent on this issue, and the bottom line from my 
perspective, Senator Akaka, is that DCPS, with about $1 
billion, including the Federal funds going there, is about 20 
percent of our budget. If I am responsible for balancing the 
city's budget in total, then I cannot let 20 percent of the 
budget be managed financially elsewhere.
    Further, DCPS has a chronic history of overspending. When I 
became the CFO, we had basically given $80 million, after 
having the budget formulated, and year after year we are giving 
them more money. That is fine. That is a congressional and city 
elected officers' decisions, Council and the Mayor. But the 
bottom line still is that I am expected to make sure that they 
balance the budget, because if DCPS does balance its budget, 
the city will not be able to balance the budget.
    So I would resist a Chief Financial Officer independent of 
the District CFO over the schools because I am expected to 
balance the budget.
    But at the same time, I expect the CFO over there to work 
very closely with the Superintendent and help him achieve his 
mission. If our CFOs are no good for him, then they are no good 
for me. That is the expectation I have of all Chief Financial 
Officers in a variety of agencies--police, fire, corrections, 
etc.
    So the bottom line for me is that we have had substantial 
improvement in city schools' finances. We have been balancing 
budgets. But that is because we monitor very closely month by 
month, and towards the end of the fiscal year week by week, how 
the money is spent to determine whether we will have a balanced 
budget.
    Senator Akaka. Dr. Rivlin.
    Ms. Rivlin. I believe the city and the school system have a 
joint interest in strong fiscal accountability and should work 
together on it. The important fact here is that the school 
system has no independent source of revenue. Many school 
systems do. They have an earmarked portion of the property tax 
or the like. This school system does not. Nor does it have 
independent borrowing authority.
    So to create an independent CFO for the school system that 
did not cooperate with the city's CFO would seem to me to make 
no sense. It is all the same pot of revenue and the same pot of 
borrowing authority.
    Senator Akaka. Thank you. I would like to give, before I 
conclude, Superintendent Janey a chance to comment.
    Mr. Janey. A chance to rebut. Let me offer this 
perspective.
    First, school districts throughout the country, 
particularly urban, there are financially independent and 
financially dependent school districts throughout the country, 
and the proposition of still collaborating and working with the 
municipality, whether it is a straight municipality or a 
municipality within a county, is not uncommon.
    Second, from the point of view of we being a school 
district, that is a distinction that should be understood, and 
we are not a regular agency within the municipality. And the 
level of collaboration that we currently have in my proposal, 
in my conception of this, would not cease. It would mean, 
however, that the CFO who works on behalf of Dr. Gandhi's 
office and on behalf of the school district and Board of 
Education would have a direct reporting line for accountability 
purposes. But the oversight would still continue, but in terms 
of being part of the senior leadership management team and the 
like, that would reside within the school district.
    This is something that Dr. Gandhi and I do not agree upon 
at this point in time, and I have, therefore, proposed a way by 
which we can demonstrate the progress that we have made 
recently and see to what extent that progress continues. And at 
any point in time we make that determination that the fit is 
right and the systems are right, we would go forward.
    Senator Akaka. Thank you very much, Mr. Chairman.
    Senator Voinovich. Thank you, Senator Akaka.
    The issue of the increased revenues, Dr. Gandhi, would you 
say that the biggest source of your increased revenues has come 
from the property tax?
    Mr. Gandhi. Yes, sir.
    Senator Voinovich. Are you at all concerned about some of 
the things that have happened around the country in terms of 
property values and overbuilding? I spent several hours down in 
Anacostia to see what was going on there. There is a lot of new 
housing that is going in. Do you have any concern that you 
might have so much of it that you start to see a sag in the 
property values and its impact on your revenues?
    Mr. Gandhi. We already see that, and some of that is 
already included in our 5-year plan. But there is one 
fundamental difference, as Dr. Rivlin pointed out, that under 
the Mayor's administration and the delivery of services, the 
perception about the city has fundamentally changed. So not 
only are we the hottest real property market in the country in 
residential properties, commercially we are among the hottest 
in the world. People from all over the world want to put money 
here.
    Senator Voinovich. Yes, the cranes are flying.
    Mr. Gandhi. They are everywhere, indeed. No doubt about 
that. But your point is well taken, sir, that the growth in the 
real property taxes that we had experienced in the past 2 
years, about 10, 11 percent every year, I do not expect that to 
continue. But nor do I expect it to go down substantially. The 
growth will be moderated, and in our 5-year projections we do 
indeed have a moderate growth in real property. And I think we 
have to be very careful. We have a very able revenue estimation 
staff headed by our Chief Economist, Dr. Julia Friedman, and 
every quarter we sit down and look at this issue. We talk with 
the people in the real property market on a regular basis. We 
look at the surrounding jurisdiction, look at other economic 
trends.
    But as of now, we still are holding a substantial advantage 
compared to regional jurisdiction and compared to the country. 
But I take your point very seriously, sir.
    Senator Voinovich. As property values escalate, what do you 
do for the working poor whose options are closed down?
    Mr. Gandhi. And that is an extremely important issue, sir, 
and as the Mayor has pointed out and so has Dr. Rivlin, we do 
have a very major effort undergoing under the Mayor's 
leadership in the housing production trust. We are continually 
concerned about funding it. Indeed, under the provision of the 
law, we basically are adding about $16 million every year 
towards that funding for affordable housing and leveraging it 
to generate a huge amount of----
    Senator Voinovich. This is your own revenue that you are 
using?
    Mr. Gandhi. Yes, sir.
    Senator Voinovich. And are you taking advantage of any of 
the other Federal programs?
    Mr. Gandhi. Yes, we are.
    Senator Voinovich. Section 8 and so forth.
    Mr. Gandhi. Absolutely right. I think we are among the most 
aggressive jurisdictions to do that, and the Mayor may want to 
talk about it.
    Mayor Williams. One of the things I regret, though, Mr. 
Chairman, I think one of the greatest things HUD has done over 
the last couple of years is the HOPE VI program has been an 
enormously successful program. I do not understand why the 
President and Secretary Jackson really want to cut it back. I 
really disagree with them on that. And what we have tried to do 
in our city is, with the reduction in that program, we have 
tried to actually model it using local dollars. So if you hear 
about the Northwest One, which formerly was known as Sursum 
Corda, there we have actually seen a huge reduction in homicide 
and violent crime, buy-in of the community to create a mixed-
income community there analogous to what we are doing next to 
the Forest City Development and Southeast Waterfront, the 
ballpark complex at Carlsberg, the same thing at Lincoln 
Heights and Berry Farms, a notorious complex, which we hope to 
work with the residents and make a model mixed-income 
community.
    Senator Voinovich. I have a question for you, Mayor. It is 
a little bit off the subject, but I think it is one that I am 
sure may be of concern to you and the entire community. This 
Subcommittee has held two hearings on the security of the 
National Capital Region. At these hearings it became evident 
that the region lacked a strategic plan, which we think is 
unacceptable. I would like to know what has your administration 
done to prepare for a terrorist attack or a natural disaster. 
Are you concerned with the lack of a plan in the National 
Capital Region and the coordination between the region?
    Mayor Williams. My perspective, Mr. Chairman, is that we 
have in the region--we have not worked as well as we should, in 
as streamlined a way as we should in the obligation and 
disbursement of Federal dollars that have come to the region. 
We surely, looking back, should have been moving more quickly 
to come up with a strategic plan, although one of the things I 
have done as Mayor is to meet regularly with the county 
executives. I also meet regularly with the two adjoining 
States' governors. As a matter of fact, just last week there 
was a meeting with Governor Kaine of Virginia and Governor 
Ehrlich of Maryland. We are going to be meeting with the 
Council of Governments, which is the regional collaborative 
body, to actually unveil a regional emergency response plan.
    So I think that there is an effort underway to address your 
concern. It is overdue, but----
    Senator Voinovich. You would agree that we are not where we 
should be.
    Mayor Williams. Absolutely. I would agree, though, that we 
are not where we should be on both the local level and on the 
Federal level. As the Mayor of the city, I am perplexed at how 
Indiana can be more of a--and I have nothing against the 
Midwest, not just because you are from a Midwest State. I 
think, for example, people talk about Omaha. I can understand 
how Omaha has got critical infrastructure that has to be 
protected. But I cannot understand how the District can be on 
the lowest rung of areas in need of homeland security oversight 
and protection.
    Senator Voinovich. Thank you.
    Dr. Janey, do you have a plan to address the education 
issues facing the District?
    Mr. Janey. Yes, there is. We made public our strategic plan 
in February of this year, and we have begun the implementation 
of such, and I would be happy to join you and your staff to 
brief you on that matter in more detail.
    Senator Voinovich. And you have metrics in place to measure 
success?
    Mr. Janey. We have benchmarked all of our work on the 
academic side and on the business system side.
    Senator Voinovich. Does this include responding to the 
Department of Education's declaring that you are high-risk 
grantee?
    Mr. Janey. That distinct strategic action plan will be 
advanced to them July 29. They are in receipt of our draft. We 
are working that draft through a number of different 
organizations in addition to the Department of Education. But 
they will be in receipt of that document on July 29.
    Senator Voinovich. I would like to give all of you an 
opportunity to share with me what you think is the No. 1 
challenge that the new mayor will face. I am sure, Mayor 
Williams, you are thinking about it. I know I tried to advise 
Mayor White who he followed me about some of the problems I 
thought he needed to be aware of. I am sure you have been 
thinking about that for your successor. I would be interested 
in what you think the No. 1 priority should be.
    Mayor Williams. There is no question in my mind that the 
No. 1 fundamental obligation of the city should be to secure a 
vote for Congresswoman Eleanor Holmes Norton to put us in the 
best position in order to fend our way through the Federal 
system. I think that is so important. And it is so important 
that in the capital of the country we honor fundamental voting 
rights. But it has got a practical impact as well because, I 
will tell you, Senator, in a practical matter this whole issue 
of Dr. Gandhi and Dr. Janey and where the CFO should be, I 
still believe in my heart that in a urban system, the best 
model of governance is to have the school system under the 
Mayor or you would not have this issue. And I tried twice to 
get it through our local Council. If we had a vote up here in 
the Congress, I would not have hesitated a second to come to 
the Congress and ask for that support if we had a vote up here, 
because if you look at other cities in the country--New York is 
a great example. Mayor Bloomberg went to the State legislature. 
But New York City has a vote in that legislature, which made it 
possible.
    So that is my biggest regret. I would say to Council Chair 
Cropp--who I hope will be elected, but if it is Councilman 
Fenty, so be it--to either one of them, or someone else, your 
No. 1 priority clearly is education because we are in a great 
position, having set up a situation where if a student gets an 
education and gets prepared, they can get a job in this city. 
That is not true in every city.
    Senator Voinovich. I would like to congratulate you on your 
involvement with the education system. I recall that when we 
were considering the issue of vouchers, which is very 
controversial. As a matter of fact, I lost the endorsement of 
the Ohio Education Association because I supported vouchers for 
the District. Although Cleveland was the first city in the 
country to provide vouchers to nonpublic schools. Your support 
of charter schools, and then vouchers was encouraging and most 
people would have backed away from it. But you got involved.
    But your feeling is that some consideration should be given 
in terms of the school coming into the auspices of the Mayor's 
office.
    Mayor Williams. Because I think that is the best way to do 
a number of things, Mr. Chairman. First of all, I have worked--
and Dr. Janey can tell you this. I meet with him every week. I 
meet with the school board more than probably any other elected 
official. I am willing to make this system work, but I have to 
tell you what I think. I think that if you want to coordinate 
all the governmental and nongovernmental and private sector 
resources around individual children, if you want to coordinate 
best so all the physical facilities that Dr. Rivlin is talking 
about, and if you want to move toward what modern technology 
allows us to do to start managing individual cases of kids, 
looking at all the resources, governmental and nongovernmental, 
the best way to do that is to put it under one point of 
accountability.
    Senator Voinovich. Now, the current situation is you elect 
school board members. Is that right?
    Mayor Williams. Yes, we elect five of them, including the 
president, and then the Mayor appoints four of them. I 
supported that----
    Senator Voinovich. In other words, the board then selected 
you, Dr. Janey?
    Mr. Janey. That is correct.
    Senator Voinovich. How do you feel about what the Mayor is 
talking about?
    Mr. Janey. I think it makes some sense, depending upon the 
jurisdiction. I know that is true in Boston. One of the 
examples that Boston has been able to advance to the public in 
terms of its growth was the stability of not only the 
superintendent, its school board, but also the mayor. I think 
the Mayor there is in 13 years. The superintendent just retired 
after 11 years. And they have had not only stability of 
individuals, but continuity of their effort and the 
promulgation of their policies in terms of education.
    Senator Voinovich. I know how difficult that is. I had to 
personally jam through the State legislature a new governance 
for Cleveland. As the Mayor, I was very frustrated with the 
schools.
    Mr. Janey. But one of the things that I would like to make 
sure the record reflects is here, unlike any other place in the 
country, we have more than one mayor. We have about 50 mayors 
that sign up every day to tell us how to do education. We have 
hundreds of council members and numerous board members who are 
not official in their capacity. And there is almost an 
invitation for that kind of free-for-all because the notion of 
public education, while it is a concern of everybody, it is 
everybody's business, but it just comes down to a few people in 
terms of the responsibility. And for cities and jurisdictions 
that have made serious progress, people own the responsibility 
of public education outside of the school district, and even 
outside of the mayor's office. Everybody has a bit of it, 
appropriately.
    It is different here. It is almost as if protest has its 
own reward, and that is what people do. That has to change 
culturally. We are changing systems. We are changing standards. 
We can change governance. But we also have to change the 
environment in which all of this takes place.
    Senator Voinovich. In the city of Cleveland, we had a panel 
of distinguished people from various universities, community 
colleges, and so forth that nominate people to the school 
board, and then the mayor then chooses from that group of 
nominees for the board, and then the board then selects the 
superintendent. In the first instance, the mayor was able to 
appoint the superintendent. But it is not an easy endeavor.
    Dr. Rivlin.
    Ms. Rivlin. I think there are lots of ways to argue about 
the ideal governance of a school system in a municipality. But 
right now, we have a strong superintendent who has only been 
here 2 years and who has put together an excellent master 
education plan. It would seem to me that the highest priority 
for everybody is to get that plan implemented, stop fussing 
about the governance issue, and pull together to support the 
superintendent and make sure that he stays, because the worst 
thing that could happen here would be another revolving door on 
the superintendency.
    Senator Voinovich. I think that is great. I think that what 
you are saying makes a great deal of sense. I have been in 
management for a long time over the years in the city and the 
State, and you can have the best organizational structure, but 
if you do not have the right people in it, you cannot be 
successful. You can have a lousy organizational structure but 
with good people and you can make it work.
    I think the continuity issue is really important. Dr. 
Janey, you have a very heavy responsibility.
    Mr. Janey. My wife tells me that every day. [Laughter.]
    Senator Voinovich. It takes time for transformation. In 
general, it takes 5, 6, 7 years to have some real 
transformation that is really going to stick and be 
institutionalized. So I wish you good luck in your efforts, and 
I want you to know that we would like to help you in any way 
that we possibly could.
    I really appreciate all of you being here today. I would 
like to again compliment Mayor Williams. You brought a unique 
perspective to the Mayor's job. You have, with the aid of your 
colleagues, but I think from my point of view your personality, 
you have been able to advance the image of the District and 
give people confidence in the future of the District. I can say 
that as a former Mayor and president of the National League of 
Cities, I had a chance to observe the DC situation. I must tell 
you, your leadership has been like sunshine in the District. 
Now, that is not saying everything is perfect, but certainly 
the image of the District is so much better than it ever has 
been. You should feel very good about that.
    My only advice to the citizens of this community is to 
recognize how important it is to have the right leader of the 
District of Columbia. It is important to the citizens of the 
community, but there is an element there that they need to look 
at, and that element is just what kind of relationship is the 
mayor going to have in terms of not only the Congress, but the 
country, and, quite frankly, the world. You have really 
fulfilled that role, and I hope that everyone is grateful to 
you for your years of service.
    I have enjoyed working with you, and as I said to you 
before, I hope that maybe some way you will come back in here 
in some other capacity. I do not know what you have decided to 
do with your future, but I am just so grateful, for example, 
that Dr. Rivlin has been able to come back here and visit with 
us and give her perspective. It is so valuable to us to have 
someone that understands it and is not in it anymore but 
watching what is going on to give us some good advice. Thank 
you for sharing with this Subcommittee regarding voting rights 
in the District, and the Federal compensation for the 
structural imbalance.
    This has been very helpful to me, and I know there are a 
lot of folks--Dr. Gandhi.
    Mr. Gandhi. Mr. Chairman, may I just take a moment to 
reitterate from my narrow financial perspective, what I see to 
be the challenge for the next leadership as I pointed out in my 
testimony.
    Sir, the chart\1\ that you see there from where we were and 
where we are today is truly a remarkable recovery, and it is 
all real. But it is quite precarious. All that shows is that we 
can resolve and address our day-to-day emergencies and day-to-
day operations of the city. Unless we have a stable tax base--
currently it is very narrow and highly restricted. Of every 
$100 earned in the city, we get to tax only $34. It is like 
going to a restaurant and one-third of the people eating there 
would pay, the other two-thirds will not pay, and everybody 
will complain about the service and the food. We are in that 
condition now.
---------------------------------------------------------------------------
    \1\ The chart referred to by Mr. Gandhi appears in the Appendix on 
page 53.
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    My sense here is that whoever is the next mayor and the 
council chair and the council members, I think we always want 
to make sure that our fiscal prudence and financial 
responsibility take a great priority; and that if we ever were 
to go back to the old ways of doing it, we would lose whatever 
limited home rule that we do have. I think home rule, limited 
democracy is very precious, and we should not let the finances 
of the city take it away from us.
    Senator Voinovich. Does anyone else have any last comments?
    [No response.]
    Well, we thank you very much for coming today. The meeting 
is adjourned.
    [Whereupon, at 11:52 a.m., the Subcommittee was adjourned.]




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