Jonetta Rose Barras, The Examiner
2008-03-27 07:00:00.0
Current rank: Not ranked

WASHINGTON -

Mayor Adrian M. Fenty is taking aim at earmarking — sort of. He proposes to eliminate one of several funds created by the D.C. Council and supported by tapping a portion of specific tax revenues for targeted programs.

The Comprehensive Housing Fund will be eliminated, if the council approves the plan included in the mayor’s $9.4 billion fiscal 2009 budget request. The fund is supposed to finance housing initiatives including rental and energy assistance.

In 2008, the city budgeted $30 million from deed recordation and deed transfer taxes. But revenues fell short. The trend is expected to continue in 2009, with only $19.3 million being projected for the fund.

“Almost as soon as the fund was created, the receipts went down,” explains Will Singer, the mayor’s budget director.

Fenty wants to take the budgeted $19.3 million, add another $7 million and spread that across three agencies — the Department of Mental Health, the Department of Human Services and the Department of the Environment.

Housing advocates are screaming right now. They should get a grip. Singer says that currently a “critical program is attached to an unreliable revenue stream”; the mayor’s plan fixes that problem.

Eliminating an earmark is a good thing. In fact, Fenty and his budget director working with the Office of the Chief Financial Officer should consider abolishing a few more.

In 2001, about 10 percent of District state revenues were earmarked for special projects. By 2007, that number had grown to 17 percent. Today, there is the Housing Production Trust Fund, which is supported by deed and recordation taxes. The Neighborhood Investment Fund is financed by tapping personal property taxes. The Healthy DC Fund uses insurance premiums.

There are so many of these things, I’m expecting one to be created in my name supported by some fee on publishing companies. Have mercy!

Special interest groups love earmarks; they point to them as tangible victories. And politicians use them to create the illusion of responding to a real community need. But earmarking can be a fiscally irresponsible process, finance experts say.

“In circumstances where there is not a clear relationship between the nature [cost] of the earmark and the use of the funds, [earmarking] reduces the budgetary flexibility of policy-makers,” explains Robert Ebel, the city’s chief economist, adding that “a mismatch between the earmarked funds and the needs of the program” also reduces legislative oversight and flexibility.

“This concern becomes increasingly important in times of fiscal uncertainty such as D.C. is entering due to the slowdown/‘turning point’ in the national and regional economy,” Ebel adds.

In other words, earmarking can result in some programs being overfunded and others being underfunded without regard for actual documented needs. Too often actual spending from these special funds isn’t thoroughly scrutinized. That alone should be reason enough for taxpayers to start asking questions.