the committee will come to order mr hmayor chairman brown thank you for being with us today it is my understanding mr hmayor you have city business to tend to which we understand and appreciate and we want to be affirm that the testimony you are about to give will be the truth the whole truth and nothing but the truth may the record reflect both witnesses answered in the affirmative mister gowdy it is my pleasure to introduce  mayor vincent gray the mayor of the district of columbia and recognize him for his minute opening remarks columbia budget i have had to make tough choices in submitting this budget choices that frankly i wish i didn't have to make but the reality is that the financial health and backbone of our city could be imperiled unless thoughtful balanced and measured choices are made an budget was the product of three very intense months of scrubbing agency budgets and exploring every reasonable option for additional revenue i participated in over hhours of intensive meetings focused exclusively on the budget with the city administrator our deputy mayors agency directors and our office of budget and finance this budget meets and addresses the reality we face a reality that i've discussed in town hall meetings with district residents in all eight wards during the past several weeks in order to close a three hundred and twenty two dollars ten cents million structural budget gap i employed a balanced approach of expenditure reductions and revenue increases my budget focuses on four key priorities of my administration physical stability highquality public education jobs and economic opportunities and safe communities my goal is to ensure a structurally balanced budget the fiscal year two thousand and twelve gross funds budget for the district of columbia is eight billion nine hundred and eighty six million dollars representing an priorities in this budget the first is to introduce a budget that reestablishes fiscal stability in the district of columbia when we met with the bond rating agencies in february all three agencies highlighted three recommendations for ensuring the district's reputation on wall street district residents is critical to our longterm prosperity this budget provides the resources necessary to continue the pace of school reform and to provide an educational continuum from ages three to twenty four my ultimate goal will be to extend this continuum to ages one to two as the economy rebounds and more funding becomes available the increases in the budget for d c public schools and d c public charter schools are due principally to increased enrollment we're now beginning to witness the success of the universal prekindergarten we're retaining students who enter the prek programs at its inception through a growth of enrollment in grades k through two we also have included increases for the first time in years for the university of the district of columbia especially our community college including hmillion and also this budget focuses on beginning to solve a longstanding problem of spending tens of millions of dollars to educate children with disabilities in nonpublic schools job fiscal year twelve budget as everyone knows i've been a major proponent of the concept of one city however the current disparity between areas of our city is particularly pronounced in the area of jobs with a number of communities experiencing chronic unemployment in members of the committee the district of columbia raises over five dollars fifty cents billion dollars per year in local funds from our residents in property taxes sales taxes and income taxes a majority of the functions of the district government including all the services provided by any other state funded through those locally raised dollars nevertheless it is the lengthy and complicated federal appropriations process that has severe effects on the district government as you know in order to comply with the federal process the district must develop its budget months in advance of the timeframe needed by the city in fact the district has had to adopt the federal fiscal year of octoberh to septemberh when another fiscal year may be more appropriate for the city the congressional appropriation schedule prevents the district from being able to make better and more current revenue estimates and expenditure needs that lead to a budget based on better and more complete data further the dual nature of the federal appropriations process requires two affirmative actions by congress the district's appropriations are often caught up in national policy disputes that typically delay our local budget enactment and have nothing to do with the district of columbia this flaw was made abundantly clear a month ago when the district was forced to spend the district of columbia's overall fiscal health is strong for more than a decade we have presented a balanced budget and we have received clean audits in each of those years as have been noted by members of congress we have clearly demonstrated our fiscal responsibility i believe strongly mister chairman that the financial rigor the district exhibits proves that we are more than capable of managing our own resources it is time for congress to adopt legislation that would remove the approval of the district's local budget from the federal appropriation process reasons why i believe budget autonomy will facilitate the ability to run the city and we hope that the congress and this committee will consider that again thank you very much for your time in having me here today to talk about the fiscal year twelve budget host to take somebody from south carolina who hadn't visited the district of columbia since he was a kid in high school you've done a wonderful job helping introduce me to your beautiful magnificent city and i thank you for your time i know you have a today about the council's role in developing the district's fiscal year two thousand and twelve appropriations request this year the council has the difficult task of reviewing and finalizing a budget that continues to provide necessary services to residents businesses and visitors of the district of columbia despite the slow pace of recovery from the recession i would like to commend mayor gray and the cfo for submitting a balanced and structurally sound budget proposal to the council i think the mayor's proposal does not use the district's fund balance to pay for reoccurring services it keeps in place funds created to reduce the debt and replenish our reserve these aspects of the district's budget are particularly important to bond rating companies a message that was conveyed to mayor gray and cfo gandhi and myself during a recent visit expressing that this was an issue for them over the next two weeks the council will continue to review their budget proposal before voting on the fiscal year two thousand and twelve budget district's continuing education reform efforts a commitment shared by both the mayor and the council these pressures together with revenues that have not fully rebounded to prerecession levels of course makes it difficult to continue  competitive while providing muchneeded services and programs to the residents of the district of columbia as well as businesses but let me say to this committee that we will rise to the challenge the budget passed by the council will represent a focus on the district  core priorities of being fiscally responsible continuing education reform economic opportunity and public safety because of the ongoing legislative process i'm unable to forecast exactly where each dollar will be budgeted budgetary shift will be reviewed however let me guarantee you as the chairman of the council of the district of columbia we will pass a balanced and structurally sound budget request to send to this congress after the council reaches consensus and passes the budget i welcome quite frankly the opportunity to brief any member of this subcommittee personally on the council's modifications to the mayor's budget proposal in order for the district to provide vital services to the public i ask that you pass this year's appropriation act in a time for the start of the new fiscal year and that you provide those citizens of the united states of america who call the district their home the right to govern their own affairs through the representation of their elected officials let me stop to thank all of the members of this comm congress as well as the president for keeping the government open as you know had negotiations failed and the government shut down the district of columbia would have been the only place in the united states of america where u s citizens would have been left without the basic government services enjoyed by developing countries such as trash collection or pest control or interpretation services for the blind all of these services and many more would have been suspended because the district lacks the power to continue to spend even its tax dollars in the event of a federal shutdown as you know these services no matter where you are no matter who you are constituents should not go without yet even under the circumstances where no government shutdown is at stake the citizens in the district should always be able to assert local  its local funds and i would hope that you would work with the members of this committee to give the district budget autonomy that the residents in the district deserve in closing let me say that are willing and able to stand with this committee to work together to work together on the things that we can move this great city for knowing that we may not agree on everything but the things that we do agree and have in common we should do everything in our power to continue to give the residents of this great country the opportunity to flourish and to continue to make this the greatest nation in the universe on that note i look forward to times i'm going to recognize myself for five minutes of questions and i'm going to hopefully impose the same green yellow red light barriers on myself that we will subsequently be challenges that you faced as you proposed your budget it looks like medicaid if i read your testimony and the documents prepared correctly medicaid continues to be the largest single expenditure are there any lessons that you can share with the panel with respect to how you are dealing with medicaid any reforms that you would advocate any pearls of wisdom or perspectives that you could lend to us as we quite a robust medicaid program in the district of columbia and in fact it has been essential in our ability to have such a low rate of uninsured people in the district of columbia we have only hpercent of our adults who don't have some form of insurance in the city and only three percent of our children who are not insured one of the things that we've done is to start to look at every one of our optional servicesh as you well know there are mandated services and there are optional servicesh to make sure those services are delivered in the most efficient way i'm delighted to have brought in a gentleman wayne turnage who is very experienced he happened to have worked in virginia for a number of years in health care and health care reform of managed care organizations to try to start to influence health care behavior one of the things that we have in the city that we're working on that is going to take some time is to try to make sure that we have health care services spread across the city  will in the next year open three additional clinics in areas that have historically been underserved and we believe that that will facilitate the use of insurance tools like medicaid because people will have services more accessible to health care more accessible to people who may have the insurance may have the coverage but if they don't have access to services they're not likely to use them except on an emergent basis mister gowdy chairman brown let me ask you this  pleasure of meeting your chief of police with whom i was very impressed i've had the pleasure of meeting your attorney general who i similarly have been impressed with but it also appears as if the budget proposes a cut  services given the cuts mister brown well i mean the budget that's in front of the council in the district of columbia currently there is clearly a lot of discussion going on to make sure that from the public safety standpoint in a reduction of officers that that doesn't happen i think the mayor's proposal doesn't quite lay that out that it will be a reduction of police officers but we want to get the officers number of officers back up to an appropriate level and i think an additional one hundred officers or two hundred officers is where we want to go somewhere and three nine hundred officers and i think this is a phenomenal opportunity to really focus as all the members want to move in that same direction so i don't think what you will see as relates to a budget proposal is a reduction of police officers brown thank you both for being here you know many american citizens as well as people around the world would be surprised to learn that the congress of the united states has to approve the local budget of the nation's unanimous consent to allow the district's local budget to take effect without congressional approval former president george bush supported budget autonomy in his fiscal year two thousand and four to six budgets and where our budget is essentially adopted at the city level in june and not later than july and then we have characteristically gone many months thereafter without having an approved budget because of the need to send it to congress that is adapted to the federal fiscal year octoberhst to septemberhth just one of the practical problems that creates is that our school system and that is the largest budget but for medicaid in the district of columbia actually spans two fiscal years because the school year starts in one fiscal year that is in august and you have expenditures associated with that school year from august until septemberhth and then you have the rest of the sense of what the revenue projections are likely to be and to be able to look at data from the most recent past as we craft the budget for the future so again being able to streamline how we operate and having a better timetable that we seventy technically but you don't really expect to have continuing resolution after continuing resolution after continuing resolution up to the point of brinkmanship how does operating under these continuing resolutions affect the budgeting process and the operation of city government for the district of columbia mister brown well first of all let me start by thanking you for all of your support of the district of columbia clearly as it relates to budget autonomy i think you understand the importance of it and have always been a strong supporter working with congresswoman norton on these particular matters your question has to do with how does congress amend the district so the clear question is why do we have these resolutions over and over and over dcrs over and over again i think it gives an opportunity to set a clear direction of where we want to go gives a clear understanding how we get there and i look i'm concerned only doctor gosar that we can't invest even more money in education education reform has been afoot now for several years in the district of columbia and it is a huge priority of min some of the increases frankly reflect an increased enrollment for the first time in hyears we saw an increased enrollment in our traditional public schools and for the first time since the advent of charter schools we saw an increased enro both we had an increased enrollment of about nine hundred children in the traditional d c public schools this year and another one thousand seven hundred in charter schools for an enrollment increase of two six hundred so carrying that forward some of the increases in our budget  are to ensure that we provide an adequate education for those children as well as projected enrollment increases we have made a very healthy investment also in prekindergarten early childhood education services and  as a result i think that is a contributing factor to our enrollment increases and we want to continue to do that because we recognize getting these children at the earliest possible point will make a huge difference in educational outcomes and frankly life  outcomes the other thing that we are doing doctor gosar is we are tackling a problem now that has been longstanding and that is how we educate children with disabilities in the district of columbia we have had far too many children who have transportation of kids with disabilities in traditional public schools charter schools and nonpublic placements so we are going to invest more in our public education system next year hopefully to incentivize that system to begin to bring our children back in the public education system to comply with the law of the land which changed in one thousand nine hundred and seventy five and still of course exists in two thousand and eleven in the form of the individuals with disabilities education act so i think we're making progress on the education front we still have a very very long ways to go to be able to say that we are adequately educating every child but i think we're going in the right direction mister gosar i'm sure you're aware that we have h r four seventy one the scholarships for opportunity results act i'm also from arizona that struggles with the same type of educational aspect and we look at everything on the table all aspects of where we can go with assets to try to  public education is a great emancipator it is a great liberator it is what levels the playing field and so i place my emphasis and i've indicated here before on public education i will continue to do that i will implement whatever  laws and programs are required of the district of columbia of course but as a product of public education of the city i know what it can do for children i've seen what it can do for children and i want us to have the strongest possible public education system and we have a lot of choice we have a lot of choice in terms of one hundred and twenty three traditional public schools and we now have the most robust charter movement in the country fifty two charter schools operating on ninety three campuses with almost council chair on how well you worked together on the budget even while the chairman and his subcommittees have engaged in very rigorous oversight of your budget i know it is awkward for you to appear to discuss the from the papersh has been very rigorous you are apparently making changes while keeping the rigors represented by the mayor's budget i think both of you are a model for the congress of working together on a budget without rancor and working together in the first place i apologize for the extra cost to the district in redundant budget processes and hope that the committee will understand from your testimony the urgent need for  is never amended no one here would know how to amend the budget i don't have a clue how to change the budget no one could get into those weeds except you the budget is here for one purpose budget is here for riders because members from arizona want you to do what they do in arizona or members from ohio want you to do what they do in ohio i want to speak about one of those riders for about ten years congress kept the district from spending its own local funds on needle exchange programs even though every large city and many smaller jurisdictions use needle exchange programs in light of this evidence tried to reimpose this ban this year after we got the ban off in the prior years we were able to resist that but i have to ask both of you what would for us in fighting hiv and aids in the district of columbia the national average is one percent and anything above that would be regarded as an epidemic we have a three percent rate overall in the district of columbia of people who are virus we know that intravenous drug use is now one of the most prevalent ways in which the virus is transmitted and being able to have people access clean needles has made a difference  there was an organization prevention works that came into being that raised private dollars in order to run this program and in fact it is now out of business because they could not sustain themselves so congresswoman norton i'm not really sure what we would do  we ought to have the flexibility as i think more than two hundred cities now nationally do to be able to continue to operate this program it is an important prevention technique it has proven its worth and we need to have this available to us but i want to fair to everyone and what i would propose is after i recognize the gentleman from maryland to maybe have a lightning round if mister mayor if you would be willing to have just maybe one quick question so i could get all of ms norton's questions asked but also be fair to for her advocacy for the district and to you mayor and to you mister chairman i want to thank you for being here i literally reside in two cities washington d c and baltimore and i must tell you that as i listen to you mister mayor and to you mister brown and then i combined what you have said this morning to in a highly conservative manner with a strong financial management team and institutionalized financial controls even as the economy struggled he found the district faring better than most other cities and states he says something you know i notice the media all of them are up in here today and if we need to do nothing else we need to give you credit for what you've done and what your predecessors have done but the thing that made my heart glad as my mother would say is that not only are you doing this thing managing the money that you have well and you're making the cuts that you have got to do and doing what you got to do but you're also doing it with compassion i heard you talk about the six percent and hpercent the adult three percent children uninsured i think that's what you said mister mayor is that right mayor gray that's right sir mister cummings you know and you talked about spreading the clinics having more clinics and you talked about basically wellness and prevention that's what you're talking about this congress could take some lessons from d c and it is interesting that you have to come up here and go through these changes since the district of columbia government cannot obligate or expend its locally raised funds until congress appropriates these funds back to the district if i recall correctly congresswoman norton offered multiple amendments at the rules committee to allow the district of columbia to continue to spend its local funds for the remainder of fiscal year two thousand and eleven the republicans reject shutdowncontingency planning mayor gray it was scores of hours and scores of people who worked on it the city administrator had the responsibility mister cummings for directing this effort we had the city administrator all the deputy mayors and every department head involved in this exercise in putting together a plan beginning with going back and researching what happened about hyears ago when this occurred previously a plan was put together and frankly had it been implemented and you heard the chairman talk about this chairman brown talk about this there would have been service shutdowns that really would have affected adversely the people of the district of columbia libraries would have been shut down trash would not have been picked up the department of motor vehicles would have had to shut down our consumer and regulatory affairs agency would have had to shut down and frankly we have the money in our budget to be able to do that we were being treated like support those services we had a balanced budget that we adopted as you've indicated last spring and early summer and we're ready to implement that we never should have been caught in this and frankly having to put together a shutdown plan diverted the chairman brown i know you have important business to tend to as well we have another panel so what i would propose is maybe a continuing dialogue i know that you have one with ms holmesnorton and i'm sure others and been gracious enough to considerably more than the district this has been a white collar town the district has had the highest aids rate in the united states higher than our good sister baltimore one would not have expected that and it would not have been the case  if the congress of the united states had not denied the district of columbia the right to spend its own local money to save the lives of district of columbia residents  always at a formal hearing but under both of my predecessors i think there continues to be a good relationship one of the challengesh and the gentlelady from the district of columbia does a good job of representing a point of view of the district but one of the things that we seem to see here is that there are more views of the district than just hers and i might note and actually comment on  impact of both chartered public schools and the private school community within the district and how you feel you will work with federal funding that helps in that effort mayor gray well we'll  try to make everything work that's required of us as i indicated mister chairman earlier we have a very robust commitment to public education in the city we're making very substantial investments in that regard the biggest increase in this budget proposed for fiscal year two thousand and twelve is in public education and especially in early childhood education and trying to get our kids with disabilities back into public education environment so for me and i've said it many times before i think that the future lies for us in having a robust public education system our charter movement i think is second to none in the nation as i indicated earlier we have fifty t kids it's the first time we've seen enrollment increases in our traditional public education in hyears and the first time since the advent of charters back in the s that we've seen enrollment increases in both so i think we're going in the right direction mister issa let me have a followup question on a completely different subject but i think one that is near and dear to all of us who went through a series of continuing resolutions no budget last year essentially one after another shortterm financing of the government and i know that impacts you as the federal city if we're able to come up with a system that allows you to continue operating not with federal funds but with your own means if for any reason there is a break in full funding or in another way of putting it even if there isn't if we wait to the th hour for you to maintain all services even through a period of uncertainty do you believe you're prepared to do that on an annual basis with a budget that reflects a contingency for no federal funds coming mayor gray well for the most part we receive federal funds in the same way as other states do mister issa no i understand that but if the federal government had not fully funded all aspects of the government the states would have been without certain federal funds but they would have for example picked up medicaid no medicaid person would have found themselves without money because the states as sovereigns would have found a way to meet their obligation even  federal funds were delayed my question to you and it's an important question when you look at your budget and contingencies if we essentially allow for the city to be at least on an annual basis early on disconnected from what may or may not happen in a continuing resolution a budget battle a debt ceiling all of those which i think this committee is concerned are you able to give us a contingent budget that shows that for x period of time you can continue to provide all the required services of the federal city and i said federal city because we're not just talking about school we're talking about police and all the functions many of which are ultimately services that are provided often with reimbursement your city receives a certain amount of impact aid equivalent to make up for the fact that embassies don't pay property tax and so on so my question today is one of can you now or in the near future give us if you will a contingency plan so that this committee could look at a way to say okay per that plan on an annual basis we can forward allocate  authorization so that the district of columbia is never caught up in what might be weeks or months of uncertainty in the budget process i would like to see the city have that capability on a goforward basis but i'm looking for some sort of a  structured mechanism to where this committee could say they have a plan they can live without federal dollars and still meet the requirement and each time that is received it would allow us to say we have no reason to be in the way of your spending your dollars if you can make the commitment and we all understand the contingent plan would not fully fund everything you want to do and it may not be able to do it for a full year but can you comment on that mayor gray well first of all again as i many of our services as you know mister chairman are completely funded with local dollars and we certainly would be prepared to be able to do that with budget autonomy that's one of the points that we have made again and i think you're saying this as well if it was something like me quickly recognize the gentleman from illinois mister davis mister davis thank you very much mister chairman and let me appreciate your sensitivity to the needs of our witnesses to move on to other pressing business we'll take a brief recess and if you have got an extra second i would like to come down and thank you both in person