D.C. Budget Autonomy Referendum Hinges on GAO Opinion

Rather than jumping on the chance to begin implementing the budget autonomy referendum that is law effective Jan. 1, Mayor Vincent Gray maintains that the District needs clarity from Congress on its path toward fiscal freedom.

He’s looking to the Government Accountability Office for insight into whether the charter amendment approved by 83 percent of D.C. voters in April is legally sound, discounting the opinion of D.C. Council Chairman Phil Mendelson and local organizations advocating for increased autonomy that the city has the authority to proceed.

“I think that there are people who are dubious about this, and that includes me. I hardly supported going forward with it,” said Gray, who reluctantly signed the legislation in late 2012. “I voted for it hardly myself, but at the same time, I’m very skeptical about whether this in fact will become the pathway to budget autonomy for us.”

Instead, he has opted to publicly pressure his allies on Capitol Hill to move their own proposals, while backing away from implementation.

Referendum supporters, including DC Vote, strongly support efforts to move a budget autonomy bill through Congress.

“Meanwhile, though, the budget autonomy amendment passed by the residents of the District is the law,” Kim Perry, executive director of the pro-statehood group, said in a statement. “It became the law when it cleared congressional review. On that day, it became ‘an Act of Congress.’ Congress also had other opportunities to reject D.C.’s new budget law. And, unless and until it is amended, it not only entitles, but requires, District officials to follow it.”

D.C. Attorney General Irvin B. Nathan has warned that the referendum may exceed the city’s power under the Home Rule Act and the city may risk violating federal law. House Republicans also believe the approach lacks legal muster, though they did not move legislation to halt it during Congress’ 35-day legislative review period.

Days after the referendum crossed its congressional finish line, the GAO received a request to examine it. Attorneys in the Appropriations Law division have since been working on a legal opinion.

Rep. Ander Crenshaw told CQ Roll Call that he requested the GAO examine the referendum and expects an opinion to be delivered by November or December.

The Florida Republican holds the top spot on the House Appropriations Financial Services Subcommittee that oversees the annual appropriation that gives D.C. the authority to spend approximately $6 billion in locally raised revenue and ensures the availability of grants and federal benefit payments.

As written, the law unlinks the local budget from the congressional review process that’s been in place for three decades, allows District officials to set their own fiscal calendar and spares city government the anxiety of future budget showdowns and resulting shutdowns, like the one that gripped the nation for 16 days. It also removes the threat of policy riders, routinely added by Republicans who use control of the purse strings to steer social policy in the heavily Democratic city.

“I think you’re going to pretty much find the GAO says, no, Home Rule Act does not give them the ability to essentially seize additional jurisdiction over and above that given to them,” Rep. Darrell Issa, R-Calif., told CQ Roll Call.

Issa serves as chairman of the House Oversight and Government Reform Committee, a perch that gives him influence over the District. Days after the charter amendment became law, Issa introduced a bill to give the city a great deal of what it asked for in the referendum, while maintaining Congress’ ability to add policy riders. He quickly advanced the bill through committee but has indicated that he’s waiting on Democratic support before trying to bring it to the floor.

Del. Eleanor Holmes Norton, D-D.C., and Gray have both expressed reservations about that bill’s language.

Similar stalemates over policy riders are what encouraged the grass-roots referendum route.

Walter Smith, executive director of DC Appleseed and the chief legal architect of the referendum, said the strategy has been, “give yourself as many alternatives as possible to get to budget autonomy.”

The referendum binds both the District and the Congress right now, he said.

“That, to me, is good news — that one of the tracks has worked, but it doesn’t mean we shouldn’t continue to pursue the other track to give ourselves as many chances as possible to reach what I know the mayor wants, which is a permanent solution to the problem,” he added.

Changing the appropriations process for the city would require a change to the whole structure of the budget process, according to Crenshaw. It would be a complicated maneuver to change something that “right now works pretty good,” he said.

“My view is, there’s kind of a unique relationship,” Crenshaw said when asked to weigh in on the legal standing of the referendum. “It’s unlike other cities, because we appropriate the money that they raise, but they also get money from Congress to help fund some of their services, so it’s a unique relationship. It’s not that easy to just say, ‘Well, just go ahead and do what you want to do.’”

According to the office of Chief Financial Officer Natwar M. Gandhi, D.C. receives only two federal payments that are unique among other states and localities: funds to cover the cost of the presidential inauguration and reimbursement for national demonstrations that require use of the city’s municipal resources. The CFO manages the city’s financial operations with independence from the mayor.

Gandhi is very much in favor of budget autonomy, as well as full statehood, according to spokesman David Umansky, but the CFO takes no position on the referendum because it is a legal matter.

“What’s at issue here, similar to the shutdown, is how far the CFO will go and how far the mayor will go,” said Mendelson, who led the council’s effort to get the grass-roots budget autonomy referendum onto the ballot. During the shutdown, the city defied Congress by staying open and paying workers with already appropriated contingency funds.

Mendelson has no doubts about the District’s authority to proceed and has submitted a letter and legal arguments to the GAO, aiming to sway the decision.

“Basically, what it comes down to is, if I was the one who wrote the checks I would go ahead and write the checks,” he said, “but I’m not.”

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