D.C. Shortfall Could Hit $175M

September 30, 2010

Sales tax revenue in the Districthas fallen dramatically, helping contribute to more bad budget news for theD.C. government, Chief Financial Officer Natwar M. Gandhi told officials Mondaymorning.

The city’s revenues for fiscal year2011, which begins Friday, are estimated to be off by $100 million, primarilybecause of a drop in sales and income taxes. Gandhi met with Council ChairmanVince nt C. Gray (D) and Council member Jack Evans (D-Ward 2) Monday morningwith his estimate.

Other contributors to the projected$175 million deficit include about $25 million in cost overruns by D.C. PublicSchools and at least a $33 million shortage in Medicaid funding due to cuts by Congress.

"It’s much worse than wethought," said Evans, chairman of the Committee on Finance and Revenue.

Gray, who defeated Mayor Adrian M.Fenty in the Democratic primary, is considered the presumptive mayor in theheavily Democratic city and will probably try to tackle the problem. But Fenty,who remains mayor until January, is responsible for presenting the council witha plan to address the shortfall.