Council’s Battle for Budget Autonomy Wins Substantial Victory for DC Taxpayers

 

Council’s Battle for Budget Autonomy Wins Substantial Victory for DC Taxpayers

On Friday, the District won a major victory in its battle to allow the local government the ability to determine how to spend the local revenues it has collected. DC Superior Court Judge Brian Holeman issued a pro-budget autonomy opinion on the longstanding struggle for this essential power. Council Chairman Phil Mendelson issued a statement Friday celebrating the decision. To summarize Friday’s news, in short: Our Court decided Our Council and Our Mayor can determine how to spend Our Local Revenues.

In a battle that once pitted the Council and District voters against Mayor Vincent Gray and Chief Financial Officer (CFO) Jeffrey DeWitt, the Council and the District voters have emerged victorious. The battle is of great consequence, because each year, fully 99 percent of the District’s budget is made up of locally-raised revenue and formula-based, non-discretionary federal funding. Only one percent of our budget is discretionary federal funding.

A Brief History of Budget Autonomy

In April of 2013, a referendum on budget autonomy was supported by a whopping 83% of those who voted. The Council fully intended to honor that action, but when Mayor Gray and CFO DeWitt declared their intent not to proceed as the referendum instructed, the Council took the matter to court. (The Mayor and CFO supported budget autonomy in principle, but did not feel adequate legal certainty was in place to begin its implementation.) An initial ruling, by a federal District Court, ruled against budget autonomy. A subsequent federal Appeals Court decision vacated that earlier ruling, and sent the matter to DC Superior Court.

In the midst of this court process, Mayor Muriel Bowser was elected, and she shifted the view of the Mayor’s office. She sided with the Council, leaving the CFO as the lone respondent. The Superior Court decided against the CFO’s argument, and subsequently, the CFO has indicated his office will not appeal this decision, because the legal clarity he sought earlier is now in place. As a result, budget autonomy is now the law of the land.

Logistical Impact of the Decision

Achieving budget autonomy is a truly monumental financial and moral victory for the District, and its importance cannot be overstated. As the Council and District financial officials have stated for years, the fact that we have been able to maintain the stellar financial record that we have, despite the significant hurdles our serpentine funding process requires, is a tribute to the skill and dedication of our officials.

Every year, the District’s budget consists of two key pieces of legislation, the Budget Request Act (which includes agency-by-agency funding specifics) and the Budget Support Act (which includes legislative changes needed to implement the budget). Ever since Home Rule was granted in 1974, the Council has voted on the Budget Request Act just once, and the Budget Support Act two times, every budget cycle. The Budget Request Act would be transmitted to Congress, but would never become law. It served as only a “request” to the President and Congress that the budget approved by the Council and signed by the Mayor be included in a federal appropriations act.

The significance of Friday’s court ruling is that the local portion of the District’s budget no longer requires affirmative approval by Congress. Under budget autonomy, the local portion of the District’s budget, as approved in an act passed by the Council and signed by the Mayor, will become law after completing a 30-day passive review period before Congress unless a congressional joint resolution disapproving it has been enacted into law, as is the case with permanent acts passed by the Council and signed by the Mayor. The act approving the local portion of the budget will require two votes by the Council. A separate act that approves the federal portion of the budget will also be voted on twice by the Council, and, after being signed by the Mayor, will be transmitted to the President for inclusion in a federal appropriations act to be approved by Congress.

In closing, the Council would like to extend its profound gratitude to Karen L. Dunn, a partner with the law firm Boies Schiller & Flexner LLP, and Brian D. Netter, a partner with the firm Mayer Brown, LLP, who represented the Council on a pro bono basis throughout this extensive process. They are true District patriots.