District of Columbia: Appropriations for 2007
Released: 2007-01-18T00:00:00

The authority for congressional review and approval of the District's budget is derived from the Constitution and the District of Columbia Self-Government and Government Reorganization Act of 1973 (Home Rule Act). The Constitution gives Congress the power to "exercise exclusive Legislation in all Cases whatsoever" pertaining to the District of Columbia. In 1973, Congress granted the city limited home rule powers and empowered citizens of the District to elect a mayor and city council, but Congress retained the power to review and approve all District laws including the District's annual budget. As required by the Home Rule Act, the city council must approve a budget within 50 days after receiving a budget proposal from the mayor. The approved budget must then be transmitted to the President, who forwards it to Congress for its review, modification, and approval. Both the President's annual budget submission and Congress may propose financial assistance to the District in the form of special federal payments in support of specific activities or priorities.

On February 6, 2006, the President sent Congress his budget request for FY2007, which included a request for $597.2 million in special federal payments to the District of Columbia. On June 9, 2006, the House Appropriations Committee reported H.R. 5576 , the Departments of Transportation, Treasury, Housing and Urban Development, the Judiciary, the District of Columbia, and Independent Agencies Appropriations Act for FY2007 (TTHUD). The measure, which the House approved June 14, 2006, includes $575.2 million in special federal payments for the District of Columbia. On July 13, 2006, the Senate Appropriations Committee reported S. 3660 , the District of Columbia Appropriations Act for FY2007. The bill would appropriate $597 million in special federal payments for the District.

During the past several years Congress has provided special federal payments in support of tuition assistance for post-secondary education and for elementary and secondary education (K-12) school improvement. In support of post-secondary education, H.R. 5576 would provide $35.1 million for the District of Columbia Tuition Assistance Grant (DCTAG) program, a $2.2 million increase above the amount appropriated in FY2006. S. 3660 would provide $33.2 million for the program, approximately $0.3 million above the FY2006 appropriation and $1.9 million less than recommended by the House. In support of K-12 school improvement, $40.8 million would be provided under the House bill and $40.0 million under the Senate bill to be allocated among public schools, public charter schools, and scholarship vouchers for students attending private elementary and secondary schools.

The House-approved bill does not include the $30 million for central and branch library construction and renovation activities that was initially included the measure reported by the House Appropriations Committee. Nor does it include a special federal payment of $20 million for enhancements to and expansion of the Navy Yard Metro Station. The funds were requested by the Administration and the District in anticipation of an increased federal presence due to the renovation of the Federal Center Southeast area and the construction of a major league baseball stadium for the Washington Nationals. Instead, the House bill would provide the requested $20 million as an earmark under the Department of Transportation's capital investment account. The Senate bill includes $15 million in special federal payments to support improvements in the city's library system, and it would provide a $4 million special federal payment for improvements to the Navy Yard Metro Station. The Senate bill also includes $4 million for marriage development account, $2 million for foster care reforms, and $4.5 million for bioterrorism preparedness and a forensic lab. These provisions were not included in the House measure.

Consistent with appropriations acts for previous fiscal years, the House and Senate measures would restrict or prohibit the use of District and federal funds to support a needle exchange program, abortion services, and a voter-approved medical marijuana initiative.

Budget Request

FY2007: The President's Budget Request

On February 6, 2006, the Bush Administration released its FY2007 budget request. The Administration's proposed budget included $597.2 million in federal payments to the District of Columbia. More than three-quarters of the President's proposed federal payment is for the District's courts and criminal justice system. This included $196.6 million in support of court operations, $43.5 million for Defender Services, and $181.7 million for the Court Services and Offender Supervision Agency for the District of Columbia, an independent federal agency that has assumed management responsibility for the District's pretrial services, adult probation, and parole supervision functions. The Administration also requested $1.3 million for the Criminal Justice Coordinating Council and $32.7 million for the public defender's office. These four functions (court operations, defender-related services, offender supervision, and criminal justice coordination) represent $455.8 million, or 76%, of the President's proposed $597.2 million in federal payments to the District of Columbia. The President's budget request also included $75.9 million in support of elementary and secondary education, and college tuition assistance (see Table 2 ). This represents 12.7% of the Administration's proposed federal payments to the District. Additionally, the Administration requested $8.5 million for security planning, which is $5.2 million less than appropriated in FY2006 (see Table 2 ).

FY2007: District's Budget Request

On May 9, 2006, the District's city council unanimously approved the city's $9.2 billion operating budget for FY2007 and forwarded it to the President for review, approval, and transmittal to Congress. The proposed budget included a request for $634 million in special federal payments. It would decrease local funding for public education by $33.5 million (see Table 3 ), while seeking $40.8 million in special federal payments for public schools ($13.0 million), charter schools ($13.0 million), and school vouchers ($14.8 million) (see Table 2 ). The proposed budget would increase local funding for economic development and regulation by $148 million and human support services by $98.6 million (see Table 3 ). The District budget would also provide $115 million for the city's housing production trust fund in support of affordable housing and homeownership.

The District also requested $35.1 million in a special federal payment for the District of Columbia Tuition Assistance Grants (DCTAG) program, a proposed increase of $2.2 million above the federal government's FY2006 commitment. In addition, the District requested $5 million in special federal payments for construction of a hiking and biking trail along the Anacostia River and $40 million in special federal payments to support security and emergency preparedness activities, including $25 million for bioterrorism preparedness and $15 million for emergency planning and security.

FY2007: Section 302(b) Suballocation

Section 302(a) of the Congressional Budget Act of 1974 requires that the House and Senate pass a concurrent budget resolution establishing an aggregate spending ceiling (budget authority and outlays) for each fiscal year. These ceilings are used by House and Senate appropriators as a blueprint for allocating funds. Section 302(b) of the Congressional Budget Act requires appropriations committees in the House and Senate to subdivide their Section 302(a) allocation of budget authority and outlays among the 10 appropriations subcommittees in the House and the 12 appropriations subcommittees in the Senate. On June 6, 2006, the House Appropriations Committee approved a Section 302(b) suballocation of $87.8 billion in budget authority for FY2007 to be allocated among the various programs and activities within the jurisdiction of the TTHUD Subcommittee. On June 22, 2006, the Senate Appropriations Committee approved a $597 million suballocation for the District of Columbia as part of its $87.8 billion subcommittee spending allocation for FY2007.

Congressional Action on the Budget

Congress not only appropriates federal payments to the District to fund certain activities, but also reviews the District's entire budget, including the expenditure of local funds. The House and Senate Appropriations Committees consider—and may modify—the District's budget. House and Senate versions of the District budget are reconciled in a joint conference committee and considered by the House and the Senate. After final passage, the District's budget is forwarded to the President, who can sign it into law or veto it.

House Bill

On May 26, 2006, a House appropriations subcommittee conducted a markup of the TTHUD for FY2007 and forwarded the unnumbered bill, which was subsequently designated as H.R. 5576 , to the full Appropriations Committee for its consideration. On June 6, 2006, the House Appropriations Committee ordered reported H.R. 5576 , which included $575.2 million in special federal payments for the District of Columbia ( H.Rept. 109-495 ). As reported by the committee and approved by the House on June 14, 2006, the bill recommends $35.1 million for the city's college tuition assistance program, a $2.2 million increase above the program's FY2006 funding level. The bill also includes $40.8 million in special federal payments in support of continued efforts to strengthen public schools and expand elementary and secondary education choices, including funds for public charter schools and private school scholarships. It would reduce the federal payment for security planning from $13.5 million to $8.5 million, and would eliminate funding for bioterrorism preparedness activities and a forensic laboratory for the District. It would provide no new congressional appropriations for the construction of a nature trail along the Anacostia River, but directs the District to use unexpended funds from previous years. Congress appropriated $3 million for this activity in the FY2006 appropriations.

House Bill General Provisions

The House version of H.R. 5576 includes several provisions that District officials want eliminated or modified, including those related to medical marijuana, abortion, and needle exchange. During consideration of past District of Columbia appropriations acts, city officials have asked Congress to eliminate the provision banning the use of medical marijuana. District officials have also sought to win congressional approval for the lifting of restrictions on the use of District funds for abortion services, and the removal of the provision prohibiting the use of federal or District funds in support of a needle exchange program. As approved by the House, H.R. 5576 would continue the restrictions and prohibitions on the use of federal and District funds for medical marijuana, abortion services, and needle exchange programs. Congress's authority to ban the use of medical marijuana, including the implementation of the District's medical marijuana initiative, was upheld by a June 6, 2005, Supreme Court decision. By a vote of six to three, the Supreme Court ruled in Gonzales v. Raich that the federal government could prohibit the possession and cultivation of marijuana in states that have decriminalized its use as a medical or therapeutic treatment.

Senate Bill

On July 13, 2006, the Senate Appropriations Committee approved and ordered reported the District of Columbia Appropriations Act for 2007, S. 3660 ( P.L. 109-281 ). The bill would appropriate $597 million in special federal payments. This is $21.8 million more than recommended by the House and approximately the same amount as appropriated in FY2006. There are several differences between the Senate bill and provisions included in the House-passed version of H.R. 5576 . The Senate bill recommends $33.2 million for the city's college tuition assistance program, $1.9 million less than recommended by the House bill and $332,000 less than appropriated in FY2006. The bill also includes $206.6 million in special federal payments for court operations, which is $13 million less than recommended by the House. The Senate bill recommends funding for several activities not included in the House version of H.R. 5576 , including the following:

$4.5 million for bioterrorism preparedness activities and a forensic laboratory for the District; $5 million for the construction of a nature trail along the Anacostia River; $2 million for improvements in the city's foster care system; $4 million for improvements to the Navy Yard Metro Station; $4 million for marriage development accounts, and $15 million for improvements to the city's public library system.

Senate Bill General Provisions

Like the House bill, the Senate bill would continue to prohibit the District from using local or federal funds to implement a needle exchange program and a medical marijuana initiative. The bill includes provisions that would continue to prohibit the use of District and federal funds for abortion services, except in instances of rape or incest, or when pregnancy endangers the life of the mother; and to promote statehood or voting representation in Congress.

Continuing Resolution

The 109 th Congress failed to complete consideration of the District of Columbia Appropriations Act before adjourning sine die. Instead the Congress enacted a series of budget resolutions, the first included as Division B of P.L. 109-289 . The Continuing Appropriations Resolution, 2007(120 Stat. 1311) included provisions appropriating federal funds nder the District of Columbia Appropriations Act at the lower of either the FY2006 level or the House-passed FY2007 funding level (since the Senate did not pass an FY2007 District of Columbia Appropriations Act for 2007). The Continuing Appropriations Resolution also included a provision allowing the District to spend local funds for programs and activities identified under the heading "District of Columbia Funds" under Title V of H.R. 5576 (109 th Congress) as passed by the House of Representatives, at a rate set forth in the District's FY2007 Proposed Budget and Financial Plan submitted to the Congress on June 5, 2006. On December 9, 2006, Congress passed H.J.Res. 102 ( P.L. 109-383 ), the third in a series of continuing resolutions, to provide funding through February 15, 2007.

As submitted by the District and approved by the House of Representatives and the Senate, the District's operating budget totals $9.1 billion for FY2007. This includes $7.751 billion in operating funds and $1.486 billion in enterprise funds. The budget also provides $2.341 billion in capital outlays, including $63 million to finance the construction of a new baseball stadium.

Key Policy Issues

Needle Exchange

Whether to continue a needle exchange program or whether to use federal or District funds is one of several key policy issues that Congress faces in reviewing the District's appropriations for FY2007. The controversy surrounding funding a needle exchange program touches on issues of home rule, public health policy, and government sanctioning and facilitating the use of illegal drugs. Proponents of a needle exchange program contend that such programs reduce the spread of HIV among illegal drug users by reducing the incidence of shared needles. Opponents of these efforts contend that such programs amount to the government sanctioning illegal drugs by supplying drug-addicted persons with the tools to use them. In addition, they contend that public health concerns raised about the spread of AIDS and HIV through shared contaminated needles should be addressed through drug treatment and rehabilitation programs. Another view in the debate focuses on the issue of home rule and the city's ability to use local funds to institute such programs free from congressional actions.

The prohibition on the use of federal and District funds for a needle exchange program was first approved by Congress as Section 170 of the District of Columbia Appropriations Act for FY1999, P.L. 105-277 . The 1999 act did allow private funding of needle exchange programs. The District of Columbia Appropriations Act for FY2001, P.L. 106-522 , continued the prohibition on the use of federal and District funds for a needle exchange program; it also restricted the location of privately funded needle exchange activities. Section 150 of the District of Columbia Appropriations Act for FY2001 made it unlawful to distribute any needle or syringe for the hypodermic injection of any illegal drug in any area in the city that is within 1,000 feet of a public elementary or secondary school, including any public charter school. The provision was deleted during congressional consideration and passage of the District of Columbia Appropriations Act of FY2002, P.L. 107-96 . The act also included a provision that allows the use of private funds for a needle exchange program, but it prohibits the use of both District and federal funds for such activities. At present, one entity, Prevention Works, a private nonprofit AIDS awareness and education program, operates a privately funded needle exchange program. The FY2002 District of Columbia Appropriations Act required such entities to track and account for the use of public and private funds.

During consideration of the FY2004 District of Columbia Appropriations Act, District officials unsuccessfully sought to lift the prohibition on the use of District funds for needle exchange programs. A Senate provision, which was not adopted, proposed prohibiting only the use of federal funds for a needle exchange program and allowing the use of District funds. The House and final conference versions of the FY2004 bill allowed the use of private funds for needle exchange programs and required private and public entities that receive federal or District funds in support of other activities or programs to account for the needle exchange funds separately.

For FY2007, the District is again seeking to lift the restriction on the use of local funds to finance a needle exchange program. The President's budget proposal for FY2007 includes a provision that would continue to prohibit the use of District and federal funds in support of a needle exchange program. H.R. 5576 as approved by the House on June 14, 2006, and S. 3660 as reported by the Senate Appropriations Committee also includes a provision that would have retained the current law prohibiting the use of federal and District funds for a needle exchange program.

Medical Marijuana

The city's medical marijuana initiative is another issue that engenders controversy. The District of Columbia Appropriations Act for FY1999, P.L. 105-277 (112 Stat. 2681-150), included a provision that prohibited the city from counting ballots of a 1998 voter-approved initiative that would have allowed the medical use of marijuana to assist persons suffering from debilitating health conditions and diseases, including cancer and HIV infection.

Congress's power to prohibit the counting of a medical marijuana ballot initiative was challenged in a suit filed by the DC Chapter of the American Civil Liberties Union (ACLU). On September 17, 1999, District Court Judge Richard Roberts ruled that Congress, despite its legislative responsibility for the District under Article I, Section 8, of the Constitution, did not possess the power to stifle or prevent political speech, which included the ballot initiative. This ruling allowed the city to tally the votes from the November 1998 ballot initiative. To prevent the implementation of the initiative, Congress had 30 days to pass a resolution of disapproval from the date the medical marijuana ballot initiative (Initiative 59) was certified by the Board of Elections and Ethics. Language prohibiting the implementation of the initiative was included in P.L. 106-113 (113 Stat. 1530), the District of Columbia Appropriations Act for FY2000. Opponents of the provision contend that such congressional actions undercut the concept of home rule.

The District of Columbia Appropriations Act for FY2002, P.L. 107-96 (115 Stat. 953) included a provision that continued to prohibit the District government from implementing the initiative. Congress's power to block the implementation of the initiative was again challenged in the courts. On December 18, 2001, two groups, the Marijuana Policy Project and Medical Marijuana Initiative Committee, filed suit in U.S. District Court, seeking injunctive relief in an effort to put another medical marijuana initiative on the November 2002 ballot. The District's Board of Elections and Ethics ruled that a congressional rider that has been included in the general provisions of each District appropriations act since 1998 prohibits it from using public funds to do preliminary work that would put the initiative on the ballot.

On March 28, 2002, a U.S. district court judge ruled that the congressional ban on the use of public funds to put such a ballot initiative before the voters was unconstitutional. The judge stated that the effect of the amendment was to restrict the plaintiff's First Amendment right to engage in political speech. The decision was appealed by the Justice Department, and on September 19, 2002, the U.S. Court of Appeals for the District of Columbia Circuit reversed the ruling of the lower court without comment. The appeals court issued its ruling on September 19, 2002, which was the deadline for printing ballots for the November 2002 general election.

More recently, on June 6, 2005, the Supreme Court, in a six-to-three decision, ruled that Congress possessed the constitutional authority under the Commerce clause to regulate or prohibit the interstate marketing of both legal and illegal drugs. This includes banning the possession of drugs in states and the District of Columbia that have decriminalized or permitted the use of marijuana for medical or therapeutic purposes.

H.R. 5576 as passed by the House and S. 3660 as reported by the Senate Appropriations Committee would continue to prohibit the use of federal and District funds to implement a medical marijuana ballot initiative. During its consideration of the District budget for FY2007, the city council included language that would prohibit the use of federal, but not District, funds to implement the initiative.

Abortion Provision

The public funding of abortion services for District of Columbia residents is a perennial issue debated by Congress during its annual deliberations on District of Columbia appropriations. District officials cite the prohibition on the use of District funds as another example of congressional intrusion into local matters. The District of Columbia Appropriations Act for FY2002, P.L. 107-96 (115 Stat. 950), included a provision prohibiting the use of federal or District funds for abortion services, except in cases where the life of the mother was endangered, or the pregnancy was the result of rape or incest. This prohibition has been in place since 1995, when Congress approved the District of Columbia Appropriations Act for FY1996, P.L. 104-134 (110 Stat.1321-91).

Since 1979, with the passage of the District of Columbia Appropriations Act of 1980, P.L. 96-93 (93 Stat. 719), Congress has placed some limitation or prohibition on the use of public funds for abortion services for District residents. From 1979 to 1988, Congress restricted the use of federal funds for abortion services to cases where the mother's life was endangered, or the pregnancy resulted from rape or incest. The District was free to use District funds for abortion services.

When Congress passed the District of Columbia Appropriations Act for FY1989, P.L. 100-462 (102 Stat. 2269-9), it restricted the use of District and federal funds for abortion services to cases where the mother's life would be endangered if the pregnancy were taken to term. The inclusion of District funds, and the elimination of rape or incest as qualifying conditions for public funding of abortion services, was endorsed by President Reagan, who threatened to veto the District's appropriations act if the abortion provision was not modified. In 1989, President Bush twice vetoed the District's FY1990 appropriations act over the abortion issue. He signed P.L. 101-168 (103 Stat. 1278), after insisting that Congress include language prohibiting the use of District revenues to pay for abortion services except in cases where the mother's life was endangered.

The District successfully sought the removal of the provision limiting District funding of abortion services when Congress considered and passed the District of Columbia Appropriations Act for FY1994, P.L. 103-127 (107 Stat. 1350). The FY1994 act also reinstated rape and incest as qualifying circumstances allowing for the public funding of abortion services. The District's success was short-lived, however; the District of Columbia Appropriations Act for FY1996, P.L. 104-134 (110 Stat. 1321-91), and subsequent District of Columbia appropriations acts limited the use of District and federal funds for abortion services to cases where the mother's life was endangered or cases where the pregnancy was the result of rape or incest. The House version of the TTHUD Appropriations Act for FY2007, H.R. 5576 , and the S. 3660 as reported by the Senate Appropriations Committee include a provision that would continue to prohibit the use of both District and federal funds for abortion services, except in instances of rape or incest, or when pregnancy endangers the life of the mother. During its consideration of the District budget for FY2007, the city council included language that would prohibit the use of federal, but not District, funds to provide abortion services.

Health Care Benefits Expansion Act (Domestic Partners Program)

P.L. 107-96 included a provision lifting the congressional prohibition on the use of District funds to implement its Health Care Benefits Expansion Act. The provision permits unmarried heterosexual and homosexual couples to register as domestic partners. Under the Health Care Benefits Expansion Act, which was approved by the city's elected leadership in 1992, an unmarried person who registers as a domestic partner of a District employee hired after 1987 may be added to the District employee's health care policy for an additional charge. The act was not implemented until 2002 because of a congressional prohibition first included in the general provisions of District of Columbia Appropriations Act for FY1994.

The city's Health Care Benefits Expansion Act allows two cohabiting, unmarried, and unrelated individuals to register as domestic partners with the District for the purpose of securing certain health and family-related benefits, including hospital visiting rights. Under the law, a District government employee enrolled in the District of Columbia Employees Health Benefits Program is allowed to purchase family health insurance coverage that would cover the employee's family members, including a domestic partner.

Opponents of the act maintain that it devalues the institution of marriage, and that the act grants unmarried gay and heterosexual couples the same standing as married couples. At least one bill, H.R. 72 , introduced in the 109 th Congress by Representative JoAnn Davis and others on January 4, 2005, would define marriage in the District of Columbia as a union between a man and a woman. Congressional proponents of lifting the ban on the use of District funds argue that the implementation of the act is a question of home rule and local autonomy. Supporters of health care benefits for domestic partners note that as of 2004, 11 states and the District of Columbia, 185 local governments, and more than 8,000 companies, colleges, and universities offered health insurance benefits to domestic partners.

The House version of the TTHUD Appropriations Act for FY2007, consistent with the provision first included in the District's FY2002 Appropriations Act, includes a general provision that allows the use of District, but not federal, funds to administer the program.

Federal Payment for Resident Tuition Support

The District of Columbia Tuition Assistance Grant (DCTAG) program supports the postsecondary education of undergraduate students who are residents of the District of Columbia by providing grants that may be applied toward the costs of tuition and fees at institutions of higher education. In particular, the program affords undergraduate students the benefit of in-state tuition and fees at public institutions located outside the District of Columbia. Students enrolled in public institutions may receive grants of up to $10,000 per year to pay the difference between in-state and out-of-state tuition and fees, with a maximum cumulative award of $50,000. Students enrolled in private institutions located in the Washington, DC, metropolitan area and any Historically Black Colleges and Universities (HBCUs) also may receive grants under the program, but awards are limited to $2,500 per year, with a maximum cumulative award of $12,500.

For the first five years of the program (FY2000 through FY2004), it was funded at $17 million per year. After the program had carried a full five cohorts of students, funding was increased for FY2005 ($25.4 million) and for FY2006 ($33.2 million). The total number of students served by the program has steadily increased from 1,948 in 2000-2001 (FY2000) to 5,046 in 2005-2006 (FY2005). In testimony before the Senate Committee on Homeland Security and Governmental Affairs, Subcommittee on Oversight of Government Management, the Federal Workforce, and the District of Columbia, Mayor Anthony A. Williams expressed concern that unless the DCTAG program is funded at above $33.2 million, it might be necessary to limit services or eligibility.

H.R. 5576 would provide $35.1 million for the DCTAG program, whereas S. 3660 would provide $33.2 million. Both bills would permit the prioritization of awards under the DCTAG program on the basis of academic merit, income and need, and other factors as may be authorized. This authority could be used to limit the number of students awarded grants if available funding became constrained. Under both bills, administrative expenses would be capped at $1.2 million.

Federal Payment for K-12 School Improvement

Beginning with the Consolidated Appropriations Act, 2004 ( P.L. 108-199 ), a federal payment for school improvement has been included as part of each year's District of Columbia appropriations act. As part of this payment, funding has been provided for three activities: (1) for the District of Columbia Public Schools to improve public education, (2) for the State Education Office to expand public charter schools, and (3) for the Secretary of the Department of Education to fund opportunity scholarships (private school vouchers) under the DC School Choice Incentive Act (which was enacted as part of P.L. 108-199 ). Funding for these activities has been provided to show a commitment toward supporting school improvement in traditional public schools and public charter schools, while also demonstrating and evaluating the effectiveness of fostering school improvement through a scholarship or voucher program in which students receive public funding to support their enrollment in private schools.

H.R. 5576 would appropriate $40.8 million for school improvement, including $13.0 million for the District of Columbia public schools, $13.0 million for public charter schools, and $14.8 million for school vouchers under the DC School Choice Incentive Act. S. 3660 would appropriate $40.0 million for K-12 school improvement, with $13.0 million for public school improvement, $13.0 million for public charter schools, and $14.0 million for the school voucher program. The House bill would permit up to $1.8 million of the amount provided for the voucher program to be used to administer and fund assessments, whereas the Senate bill would permit the use of $1.0 million for that purpose.

DC School Choice Incentive Act

Under this program, funds are appropriated to the Secretary of the Department of Education to fund the operation of a five-year demonstration scholarship program that enables children from low-income families in the District of Columbia to attend private elementary or secondary schools located in the District. Students who are District of Columbia residents and who are from families with incomes not exceeding 185% of the poverty level are eligible to apply for scholarships valued at up to $7,500 to cover the costs of tuition, fees, and transportation expenses associated with attending a participating private elementary or secondary school located in the District of Columbia. Students are selected to receive scholarships through a lottery. Scholarship recipients remain eligible to continue to participate in the program in subsequent years, so long as their family income does not exceed 200% of the poverty level. Students enrolled in public schools identified for school improvement, corrective action, or restructuring under Title I-A of the Elementary and Secondary Education Act are given priority in receiving scholarships (through weighting procedures in the lottery); however, all students meeting program eligibility criteria are eligible for scholarships regardless of whether they were previously enrolled in public or private schools.

The demonstration project includes an evaluation component. Among the issues required to be evaluated as part of the program are the academic achievement of scholarship recipients compared with non-recipients, the success of the program in expanding school choice options, and the impact of the program on students and public schools in the District of Columbia. As of the 2005-2006 school year, 68 of the 109 private schools located in the District of Columbia had elected to participate in the program. By Fall 2005, a total of 4,047 eligible students had applied for scholarships under the program, and 1,716 scholarship recipients had been enrolled in 60 participating private schools. Approximately 10% of the estimated 40,500 students eligible to participate in the program have applied for scholarships.

H.R. 5576 would appropriate $14.8 million for the program, of which up to $1.8 million may be used to fund assessments. S. 3660 would appropriate $14.0 million for the program, of which up to $1.0 million may be used for assessments. The Senate bill also would allow students who received scholarships in either the 2004-2005 or the 2005-2006 school year to remain eligible to receive a scholarship in a succeeding year provided that, notwithstanding any other provision of law, the student is from a household with an income not in excess of 300% of the poverty line. The increased income eligibility thresholds proposed in S. 3660 were incorporated into the Tax Relief and Health Care Act of 2006 ( H.R. 6111 ), as passed by the House and Senate. These changes will allow children from the first two cohorts of the program whose family income increased above the initial threshold to remain in the program. Selected multiples of the 2006 poverty guidelines are presented in Table 4 .

Establishment of Academic Year As Fiscal Year for District of Columbia Schools

In the District of Columbia, local educational agencies (LEAs)—the District of Columbia Public Schools (DCPS) and public charter schools—are fiscally dependent on the District of Columbia government. The fiscal year for the District of Columbia government and its subordinate entities currently runs from October 1 to September 30, with the fiscal year being designated by the calendar year in which it ends. Under this schedule, the fiscal year for public schools begins more than a month after the start of the academic year. In most states, the fiscal year for public school systems runs from July 1 to June 30.

The 2004 District of Columbia Omnibus Authorization Act, P.L. 108-368 (118 Stat. 2230), amended the D.C. Official Code to provide that beginning with FY2007, the fiscal year for DCPS, public charter schools, and the University of the District of Columbia (UDC) would be from July 1 through June 30. The District of Columbia government and DCPS were not, however, on schedule to complete the transition to the new fiscal year calendar for FY2007. Under P.L. 109-356 , the District of Columbia Official Code was amended to provide that beginning with FY2007, the fiscal year for DPCS, public charter schools, and UDC may be from July 1 through June 30.

On February 28, 2006, Mayor Anthony Williams testified that changing the fiscal year for DCPS to a time period different from the fiscal year of the rest of the District of Columbia government may prevent the District of Columbia from being in compliance with generally accepted accounting principles (GAAP). He further stated that this would result in the District of Columbia government's audit report for FY2007 containing a qualification based on a departure from GAAP and Governmental Accounting Standards Board (GASB) requirements. He also noted that it may cost up to $15 million to complete the transition from one fiscal year calendar to another.

Changing the fiscal year from the period of October 1 through September 30 to the period of July 1 though June 30 also would require a "transition" fiscal year. Presumably, the transition fiscal year would be a nine month fiscal year the last year before commencing to operate on a July 1 to June 30 fiscal year. If the District of Columbia proceeds to transition certain education agencies from one fiscal year calendar to another, consideration may need to be given to whether adjustments need to be made in the amounts appropriated to fund them during a nine-month fiscal year.