On the Issues
As Councilmember At-Large, Vincent Orange will tackle the tough financial challenges facing our City. Clearly, he has the financial background and experience to face the tough financial challenges head on.
Vincent Orange is an attorney and a certified public accountant with a master of laws in taxation. He possesses four years of public accounting experience, served as operations manager for the DC Tax Amnesty program, was a trial attorney for the finance division of the office of corporation counsel, was an attorney advisor to the Director of the DC Department of Finance and Revenue, was chief of the DC Real Property Assessment Services Division and chief financial officer for the National Children's Center, Inc.
Vincent Orange encountered tough financial challenges when he was elected to the DC Council in 1998 and sworn into office on January 2, 1999. Upon taking office in 1999, Vincent Orange faced the District's $518 million dollar deficit. Working with Mayor Williams, Chairperson Linda Cropp, CFO Natwar Gandhi and his DC Council colleagues, Vincent Orange played a major role in taking the nation's capital to a $1.6 billion surplus reserve in 2006. Today, in 2010, another financial crisis looms.
For the first time in 19 years, the Chairman of the Finance and Revenue Committee has voted against the budget for the upcoming fiscal year 2011. This is a sign of trouble for the financial health of the District of Columbia. Our local government indicated to Wall Street that the District's reserve would not dip below $920 million. The approval of this budget for 2011 will take the reserve significantly below $920 million to a level approaching $600 million. This action will get the attention of Wall Street. This action may reduce the city's bond rating causing our cost to borrow funds to increase. In addition, the legislated 12 percent cap on tax-supported debt service as a percent of expenditures is seriously in jeopardy of being violated as a result of the actions of the DC government. More financial trouble appears to be headed the District's way with the proposed takeover of the United Medical Center. More likely than not, there will be a negative impact on the District's budget and financial plan.
Our reserve or the city's savings account was $1.6 billion in 2006. Now, our savings account will dip to $600 million. This reduction in our savings account is partly related to the pressure of the national recession over the pass few years. For fiscal year 2010, our City was forced to address the estimated revenue reductions of $583.5 million between June 2008 and June 2009, which represented a 10.5% loss in revenue. While one can blame the reduction in revenue on the economy, others view it as fiscal mismanagement. On April 6, 2010, Barbara Hollingsworth, local opinion editor for the Washington Examiner, outlined "$740 million worth of waste, fraud or abuse".
The critical point to be made is, whether or not the District of Columbia's financial condition is a result of the economy, waste, fraud or abuse, or some combination thereof, we are in for some tough financial challenges that can no longer be absorbed by our savings account. Leadership, maturity and accountability are needed to move forward on the financial condition of the District of Columbia in fiscal years 2011, 2012 and beyond. The DC Council, Executive branch along with the city's CFO must face the facts. The facts are as follows:
- Fact number one was articulated by Colbert I. King on June 5, 2010 that "the city cannot tax commuters or federal and non-profit real estate, and it has restrictions on building height, which limits the value of real estate and the taxes that can be collected."
- Fact number two, federal stimulus funding will dry up next year and the District will not be able to balance its budget on this source.
- Fact number three, elected officials will not be able to punt or defer the inevitable in putting together the budget for fiscal year 2012. The DC Council's solution to refunding the District's savings account through the enactment of a commuters tax was disingenuous and unacceptable. This type of trickery led the District to being run by the Financial Control Board in the 1990's.
DC Chief Financial Officer Natwar Gandhi's recent declaration that there will be no change in the District's revenue estimates for this year does not alleviate the tough financial challenges facing the City. Gandhi stated "real property collections are much stronger than expected" and that "a simple calculation of real property using historic ratios of first half to total collections suggests that first half billing is strong enough to completely offset weakness in income and sales collections." Gandhi also indicates that withholding tax collections are "remarkable". Especially in light of the high unemployment rate of 10.4% in May 2010. Gandhi states "this suggest that District resident job losses are primarily at the lower end of the income scale, and that high income District residents are keeping or gaining jobs."
Gandhi's observation is very revealing when examining the unemployment rate of 30% in Ward 8 and 20% plus in Ward 7. These unemployment rates are especially alarming when one realizes that the government of the District of Columbia is funding city projects that require its residents to be hired. District residents are losing jobs to non-District residents simply because our government is not enforcing the law.
Washington Examiner reporter, Alan Sunderman, recently wrote an article entitled "Audit: DC skirts own laws, costing residents jobs." The article indicates that the District has failed to enforce its own law requiring local hires for taxpayer-funded developments. DC Auditor Deborah Nichols indicates that approximately 361 jobs have been lost to non-DC residents or $14 million in lost wages because the District government is not enforcing the law. Under the District of Columbia's First Source Program, developers with District taxpayer-funded projects are required to fill 51% of newly created jobs with District residents. The law is not being followed and the District government is not enforcing it. However, the District government is providing District taxpayer funds for these projects. DC Auditor Deborah Nichols has also revealed that the District's Living Wage Act of 2006 which requires city contractors to pay workers at least $12.10 per hour is being ignored. Clearly, these are the lower end jobs that Gandhi mentions.
The CFO, Council and Mayor have a lot of work to do. Collectively, we need to increase revenue. We need to grow our tourism industry in the nation's capital and bring our many economic development projects to fruition in order to increase revenue and provide jobs for our residents. Collectively, we need to examine spending and make the necessary reductions.
A fiscally responsible Council will not be realized by the election of any one person, however Vincent Orange will work to bring fiscal responsibility to the DC Council through his leadership, maturity and accountability. These traits are needed to move forward on the financial condition of the District of Columbia in fiscal years 2011, 2012 and beyond.
The Orange Vision
Vincent's vision for Washington, DC, is that of a world-class city operating at its fullest potential. An extremely vibrant city that continues to beckon individuals, couples and families to live in, visit and experience its culture, arts, restaurants, retail, entertainment, sports venues, neighborhoods and tourism. More
Get to Know Vincent
As an attorney and certifiedpublic accountant, Vincent Orange has the skillset DC needs to make the citygreat again. In his earlier tenure on the DC Council, Vincent helped the cityturn a $518 million deficit into a $1.6 billion surplus reserve. Sincere-joining the DC Council last year, he has been at the forefront of efforts torestore ethical integrity to the Council, root out government waste, providejobs and continue education reform.More