Appropriations for FY2002: District of Columbia

Congressional research reportJan 10, 2002

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CRS Report for Congress

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Appropriations for FY2002:

District of Columbia

Updated January 10, 2002

name redacted and Michael Fauntroy, Coordinators

Government and Finance Division

Congressional Research Service ˜ The Library of Congress

Appropriations are one part of a complex federal budget process that includes budget

resolutions, appropriations (regular, supplemental, and continuing) bills, rescissions, and

budget reconciliation bills. The process begins with the President’s budget request and is

bounded by the rules of the House and Senate, the Congressional Budget and Impoundment

Control Act of 1974 (as amended), the Budget Enforcement Act of 1990, and current program

authorizations.

This report is a guide to one of the 13 regular appropriations bills that Congress considers

each year. It is designed to supplement the information provided by the House and Senate

Appropriations Subcommittees on the District of Columbia Appropriations. It summarizes

the current legislative status of the bill, its scope, major issues, funding levels, and related

legislative activity. The report lists the key CRS staff relevant to the issues covered and

related CRS products.

This report is updated as soon as possible after major legislative developments, especially

following legislative action in the committees and on the floor of the House and Senate.

NOTE: A Web version of this document with active links is

available to congressional staff at:

[http://www.crs.gov/products/appropriations/apppage.shtml].

Appropriations for FY2002: District of Columbia

Summary

On December 21, 2001, President Bush signed into law the District of Columbia

Appropriations Act for FY2002, P.L. 107-96 (formerly H.R. 2944). Two weeks

earlier, the House on December 6, 2001, and the Senate on December 7, 2001,

approved the conference report accompanying H.R. 2944, after resolving significant

differences in the general provisions of their respective versions of the act. The act,

which appropriates $408 million in special federal payments, includes $16 million for

reimbursement to the District for the cost of providing security for a cancelled World

Bank and International Monetary Fund meeting, and for security planning in the wake

of the attacks on the Pentagon and World Trade Center on September 11, 2001. In

addition, the act approves the city’s $5.3 billion operating budget for the current fiscal

year. The act lifts the ban on the use of District funds for a domestic partners health

insurance act approved by the city council and signed by the mayor in 1992.

Congress has maintained the prohibition on the use of federal and District funds for

needle exchange programs, rejecting a Senate provision that would have lifted the

prohibition on the use of District funds for such activities. The act lifts the restriction

on the location of such activities near public and charter schools. The act, as passed

by Congress, requires the District of Columbia public schools to submit to Congress

a report that identifies all judgments against the DC public schools under the

Individuals with Disabilities Education Act.

The District’s FY2002 budget request was submitted to Congress on May 25,

2001. The city budget request included $199 million in federal payments to the

District of Columbia. The city’s budget proposal included $5.3 billion in general

operating fund expenditures, and $611 million in enterprise funds. The budget also

included $78 million in funding for the newly created Health Care Safety Net

Administration, which replaced the city’s discredited Public Benefits Corporation.

Earlier in 2001, House and Senate District of Columbia Appropriations

Subcommittees held hearings that focused on child and family services, and proposed

reforms of the family division of the District of Columbia Superior Court. P.L. 10796 includes $24 million for a new Family Court Division of the District’s Superior

Court, including $500,000 for the Child and Family Services Agency. The

committees also held hearings on the courts, corrections, the fiscal condition of the

city, and the future role of the Chief Financial Officer.

On April 30, 2001, the control board, which was created by Congress to address

the city’s fiscal and governance problems, approved a resolution that abolished the

Public Benefits Corporation and transferred responsibility for the administration of

health care services to the Health Care Safety Net Administration. The Authority also

awarded a contract for health care services to Greater Southeast Community Hospital

and the Health Care Alliance.

Key Policy Staff

Area of Expertise

Name

CRS Division

Telephone

DC Education

(name redacted)

G&F

7-....

DC Corrections

JoAnne O’Bryant

DSP

7-....

DC Courts

Steve Rutkus

G&F

7-....

DC Governance and Politics

(name redacted)

G&F

7-....

DC Federal Fiscal Relations

(name redacted)

G&F

7-....

DC Oversight

Michael Fauntroy

G&F

7-....

Division abbreviations: G&F = Government and Finance Division; DSP = Domestic Social

Policy Division

Contents

Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

District of Columbia Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Public Benefits Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

School Reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Receiverships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Future Role of the Authority and the CFO . . . . . . . . . . . . . . . . . . . . . . . . . 8

Budget Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Emergency Terrorism and Disaster Recovery Supplemental Appropriations 9

Supplemental Appropriations for FY2001 . . . . . . . . . . . . . . . . . . . . . . . . 10

FY2002: The President’s Budget Request . . . . . . . . . . . . . . . . . . . . . . . . 11

FY2002: District’s Budget Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

FY2002: Section 302(b) Suballocation . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Congressional Action on the Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

H.R. 2944, House Version . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

FY2002 General Provisions, House Bill . . . . . . . . . . . . . . . . . . . . . . 17

H.R. 2944, Senate Version (formerly S. 1543) . . . . . . . . . . . . . . . . . 18

FY2002 General Provisions, Senate Bill . . . . . . . . . . . . . . . . . . . . . . 18

H.R. 2944, Conference Version . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

FY2002 General Provisions, Conference Bill . . . . . . . . . . . . . . . . . . 19

Key Policy Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Needle Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Medical Marijuana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Abortion Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

District of Columbia Anti-Terrorism Appropriations . . . . . . . . . . . . . . . . 24

Health Care Benefits Expansion Act (Domestic Partners Program) . . . . . . 26

Budget Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

List of Figures

Figure 1. Year-End General Fund Balance: FY1997-FY2000 Actual and

FY2001 Projected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

List of Tables

Table 1. Status of District of Columbia Appropriations, FY2002:

P.L. 107-96 (formerly H.R. 2944) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Table 2. District of Columbia FY2001 Supplemental Budget Request

Included in P.L. 107-20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Table 3. District of Columbia General and Special Federal Payment Funds:

Proposed FY2002 Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Table 4. District of Columbia General Funds . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Table 5. District of Columbia Federal and Local Appropriations That May Be Used

to Respond to Terrorism Threats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Table 6. FY 2002 Defense Appropriations Act, P.L. 107-117:

District of Columbia Emergency Preparedness Funds . . . . . . . . . . . . . . . 25

Appropriations for FY2002:

District of Columbia

Most Recent Developments

On December 21, 2001, President Bush signed into law the District of

Columbia Appropriations Act for FY2002, P.L. 107-96 (formerly H.R. 2944). The

House on December 6, 2001 and the Senate on December 7, 2001 approved the

conference report accompanying H.R. 2944, after resolving significant differences

in the general provisions of their respective versions of the act. The act as approved

by Congress reduces the number of general provisions from 67 to 42. P.L. 107-96

appropriates $408 million in special federal payments and approves the District’s

$7.1 billion total budget, including $5.3 billion in general operating funds. The act

includes $12.6 million in special federal payments for security planning, in the wake

of the terrorist attacks on the Pentagon and World Trade Center on September 11,

2001. The city also received $3.4 million to cover the cost of security for a World

Bank and International Monetary Fund (IMF) meeting scheduled for late September

2001. The World Bank and IMF meeting was postponed amid concerns about

security following the events of September 11. In response to the attacks, Congress

appropriated $40 billion in FY2001 emergency supplemental assistance to address

national needs. The costs of providing federal, state, and local preparedness for

mitigating and responding to the attacks, and repairing public facilities and

transportation systems damaged by the attacks, are two of the eligible uses of funds

appropriated under the act. The Defense Appropriations Act, P.L. 107-117, signed

on January 10, 2002, appropriates $200 million in special federal payments to the

District of Columbia and metropolitan area regional entities to assist the city and

region in upgrading and executing emergency response plans.

Table 1. Status of District of Columbia Appropriations, FY2002:

P.L. 107-96 (formerly H.R. 2944)

Committee Markup

Conf. Report Approved

House

Senate

House

Report

House

Passage

Senate

Report

Senate

Passage

Conf.

Report

House

Senate

Pres.

Action

9/20/01

10/11/01

107-216

9/25/01

107-85

11/07/01

107-321

12/06/01

12/07/01

signed on

12/21/01

P.L. 107-96

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Background

Since the signing of the District of Columbia Appropriations Act for FY2001,

P.L. 106-522, on November 22, 2000, the District of Columbia government has

continued to make progress in improving the delivery of services and in the city’s

long-term financial health. The cooperative efforts of the city’s elected leadership, the

District of Columbia Financial Responsibility and Management Assistance Authority

(the Authority)1, the Chief Financial Officer (CFO), the courts, and Congress have

enabled the city to meet the requirements for the return of home rule. The CFO’s

Comprehensive Annual Financial Report (CAFR), released in January 2001, certified

that the city had achieved a $241 million budget surplus for FY2000. This

achievement satisfied the final requirement of the District of Columbia Financial

Responsibility and Management Assistance Act, P.L. 104-8, for the return to home

rule—four consecutive years of balanced or surplus budgets. The favorable report

means the end of a control period, and the dissolution of the Authority’s powers on

September 30, 2001. The city also has met the preconditions for the return of four

city agencies from court-ordered receivership, yet another sign, according to city

leaders, that the District has made progress in addressing government service delivery

issues.

During the last year, the District of Columbia’s elected and appointed leadership

addressed a number of other governance-related issues, including school reform and

medical services for the uninsured. School reform, according to observers, is a workin-progress. The new Board of Education faces an $80 million budget deficit and

issues surrounding special education services and the certification of charter schools.

The debate among city officials on the downsizing of D.C. General Hospital was

contentious and resulted in fractured relations between the city’s appointed and

elected leadership.

District of Columbia Financial Condition

The District of Columbia Financial Responsibility and Management Assistance

Act of 1995, P.L. 104-8, created the Authority and the Office of Chief Financial

Officer (OCFO). The Authority and the CFO are charged with improving the delivery

of city services and returning the District of Columbia to a position of financial

solvency. Working in concert with the District’s elected political leadership, the

Authority and the CFO have implemented a series of financial and management

reforms and have improved tax collection. These reforms, federal assistance, and an

improved economy have resulted in four consecutive years of budget surpluses. P.L.

104-8, the act creating the Authority and the CFO, requires the District to produce

four consecutive years of balanced budgets as a prerequisite for the termination of the

Authority and the return of home rule.

The Authority is also known as the control board.

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The District ended FY1997 with a surplus of $186 million. For FY1998, the

city’s budget surplus was $445 million.2 After a 13-week delay, the city’s CFO

reported an FY1999 surplus of $86.4 million after subtracting a $35 million payment

to the retirement of the city’s long-term debt. For FY2000, the general fund surplus

was $241 million.

On May 19, 2000, Natwar Gandhi, the former deputy CFO to Valerie Holt and

Mayor Williams, became the city’s third CFO. On January 26, 2001, the CFO

released the city’s Comprehensive Annual Financial Report (CAFR) for FY2000. The

report, which is a critical barometer of the city’s financial health, showed the city had

a budget surplus of $241 million. The FY2000 CAFR met the CFO’s key objectives

of producing an unqualified audit opinion and a balanced budget for the fourth

consecutive year.

This year Congress and the city’s elected leadership have considered legislation

concerning the future role of the CFO after the restoration of home rule. The Office

of the CFO (OCFO) has played a critical role in the city’s success in maintaining

budget discipline and its return to fiscal health. The city has considered legislation

that makes the OCFO a permanent part of the city’s governing structure. Without

such legislation, the OCFO will cease to exist beyond September 30, 2001, the end

of the control period.3 In July 2001, a conference committee considering

supplemental appropriations for the District of Columbia for FY2001 considered, but

later withdrew, a proposal regarding the District’s Chief Financial Officer. The

proposal sought to strengthen the powers of the office by giving the CFO subpoena

powers and access to all city agencies’ records. Further, the proposal would have

extended the OCFO’s independence from the Mayor to FY2006. In addition, the plan

would have permitted the mayor to appoint a CFO, and would have given that official

control of the agency’s $68 million budget, 1,000 employees, legal counsel, and

contracts. The proposal was introduced, in part, to fill an oversight void that will be

created by the departing financial control board, which ceases to exist on October 1,

2001. The plan was withdrawn during conference committee consideration of the bill

in deference to legislation being considered by the city council.

On June 19, 2001, the city council held a public hearing on the Independence of

the Chief Financial Officer Establishment Act of 2001, B14-0254. The legislation

makes the position of CFO permanent; it provides for the appointment and removal

The District’s FY1998 surplus was, in part, the result of the National Capital Revitalization

Act of 1997 (P.L. 105-33). The Revitalization Act, which improved the city’s fiscal prospects

through the infusion of over $5 billion in federal funds, transferred financial responsibility for

a number of functions to the federal government, including accumulated pension liability for

police, firefighters, teachers, and judges. The act also increased the federal share for Medicaid

from 50% to 70%, and transferred responsibility for housing District felons to the federal

government.

Under P.L. 104-8 a control period is initiated during any year in which the city fails to

achieve a balanced or surplus budget. A control period is terminated after the city has

produced four consecutive years of balanced or surplus budgets. Administrative authority

reverts back to the Mayor. During a control period authority over the operations of the city

government rest with the control board.

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of the CFO by the mayor, with the consent of the city council; and the act transfers

to the CFO the responsibility for the management of all executive branch agencies

involved in managing the city’s finances. The bill was approved by the Council by

a voice vote on July 10, 2001 as legislative act 14-089. The act is subject to

congressional review. Congress has 30 legislative days to review the act. A

legislative day is any day in which one or both houses of Congress are in session.

Figure 1. Year-End General Fund Balance:

FY1997-FY2000 Actual and FY2001 Projected

Public Benefits Corporation

During the past year, city leaders and Congress have attempted to address

problems and controversies surrounding the Public Benefits Corporation (PBC), D.C.

General Hospital, and the restructuring of the city’s health care delivery system for

uninsured residents of the city. In November 2000, Congress included a provision in

the District of Columbia Appropriations Act of FY2001, P.L. 106-522, prohibiting

the PBC from borrowing funds from the District of Columbia government. In

addition, the act required the mayor, the city council, the Authority, the CFO, and the

Chair of the Board of Directors of the PBC to develop and approve a restructuring

plan for D.C. General Hospital.

Reform in the city’s delivery of health care to the poor was sought by Congress

because of the well-documented problems of the PBC and its mismanagement of D.C.

General Hospital. Since 1997, the PBC amassed $109 million in unbudgeted loans

from the city, using its power to borrow from the city’s general fund in anticipation

of Medicaid reimbursements. These unbudgeted loans were used by the PBC to cover

deficit spending and defer mounting debt. However, the hospital did a poor job in

seeking reimbursement for treatment. In addition to its poor financial management,

the PBC had been the subject of newspaper stories detailing questionable hiring

practices, including the hiring of friends and relatives of city council members and

former associates of the Executive Director of the PBC. The PBC was also the

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subject of a critical report by health care consultants Cambio Health Solutions. Hired

by the PBC in 2000, the consultants criticized the PBC for: (1) a lack of oversight by

the PBC’s board of directors, (2) poor patient care, (3) undocumented or poorly

documented overtime, and (4) the lack of health care experience among some

members of the PBC’s management team.

The consultants recommended the downsizing and restructuring of the hospital

from a 250-bed advance trauma center to a community access hospital or urgent care

facility that treats and releases or transfers patients within 23 hours of admittance. By

late August 2000, the downsizing of the hospital staff had begun with the

announcement that 550 employees of the 2,000-person workforce would be laid off

before the end of the year.

In December 2000, the mayor, with the support of the Authority, had formalized

a proposal that downsized D.C. General Hospital and provided health care services

through a contract with a group of private health care providers led by Greater

Southeast Community Hospital. The mayor’s proposal was not supported by a

majority of the city council. On March 6, 2001, the city council unanimously passed

a resolution rejecting the Authority’s recommendation for the awarding of a contract

for health care services for the uninsured to Greater Southeast Community Hospital.

Several city council members expressed concern that the privatization proposal would

erect new barriers to care for the city’s 65,000 uninsured residents. The majority of

the city council preferred keeping D.C. General as a full-service hospital. Their plan

involved providing the hospital with $21 million in assistance that would have been

used to keep it open until the end of the fiscal year, which was also the end of the

control period and the Authority’s powers. During this time, the city could find a

more permanent solution short of downsizing or closing the hospital. After 2001, the

city council would be in a strong position to override the mayor’s veto without the

threat of the control board negating their veto override.

On April 30, 2001, the Authority used its veto power to negate a city council ‘s

override of a mayoral veto of the $21 million city council proposal that would have

kept D.C. General Hospital open until September 30, 2001, the end of the 2001 fiscal

year. In addition, the Authority voted to dissolve the PBC and transferred its

responsibilities to the city’s Department of Health. The Authority signed an

agreement with Greater Southeast Community Hospital Corporation and the

Healthcare Alliance to provide health care services to the city’s uninsured residents.

The Authority’s actions were controversial and represented a departure from its more

recent efforts to allow the city’s elected officials—the mayor and the city council—to

work out their policy differences. The action was taken after the city council rejected

the mayor’s proposal for revamping the city’s health care service delivery system and

voted on April 27, 2001, to override a mayoral veto and provide $21 million in

FY2001 supplemental assistance to the PBC.

The control board’s constitutional authority to exercise such power was

challenged in court by two members of the city council and several unions

representing hospital employees. On April 30, 2001, city council members Kevin

Chavous and David Cantania filed suit in the United States District Court for the

District of Columbia challenging the Authority’s powers to award the contract for

health care services and to dissolve the PBC. The council members’ suit argues that

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the control board acted without statutory authority and over the objection of the city

council, which on March 6, 2001, unanimously passed a resolution rejecting the

Authority’s recommendation for the awarding of a contract for health care services

for the uninsured to Greater Southeast Community Hospital. The court, which issued

its opinion on August 6, 2001, found that only the council members had standing to

bring suit against the Authority. The court further found that although the council

members had standing to bring suit, the Authority acted within the powers granted it

by Congress under P.L. 104-8 when it overrode the city council and awarded the

contract.

School Reform

In June 2000, voters approved by referendum an amendment to the city’s home

rule charter. The referendum changed the structure of the Board of Education. It

abolished the 11-member board comprising one person elected from each of the city’s

eight wards, and three—including the chair—elected at-large. The composition of the

new nine-member Board of Education includes four members elected to represent

four school districts, an elected chair of the board, and four members appointed by the

mayor. This new structure gives the mayor a significant voice in determining the

direction of public education, and it makes him more accountable, by way of his

appointments, for the future success or failure of the city’s public schools.

In November 2000, voters elected a chair and four members to the new Board

of Education, and the mayor subsequently appointed four others. The city’s new

nine-member school board began its oversight of the school system in January 2001.

Earlier this summer, the Board announced a three-year contract extension with

Superintendent Paul Vance. The move was applauded by parents, city officials, and

congressional leaders. The reform-minded Board of Education and superintendent

face several challenges, including improving special education, raising academic

achievement, and improving the physical facilities. The board also faces issues

concerning its oversight of charter schools and skepticism about the effectiveness of

a school board composed of appointed and elected members, and its ability to avoid

the pitfalls that have confronted other school reform efforts.

A November 22, 2000 report by the District’s Inspector General was critical of

the school system’s inability to provide adequate transportation services for special

education students. In 1999, a District court assigned a special master to monitor the

situation. In addition, an unreleased draft report by the City Council Special Council

Committee on Special Education4 has detailed problems in the District’s delivery of

other special education services. The draft report is critical of District of Columbia

Public Schools’ (DCPS) past operation of special education programs and the

process for the evaluation of student needs for special services. Among the

recommendations contained in the draft report are the following: (1) that the DCPS

strengthen its commitment to provide adequate and qualified staff in the delivery of

special education services; (2) that the DCPS improve its management of

The committee was created in April 1999, and was to issue a report one year later. The

committee has not yet issued a final report.

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transportation costs and the dependability of transportation services; and (3) that the

DCPS improve the process used to assess and place students with special needs.

Students’ performance on standardized reading and math tests again has

disappointed school administrators, remaining stagnant for the second consecutive

year. Despite this lack of progress, Superintendent Paul Vance remains optimistic

that improvement will be made in the coming years. The DCPS has hired at least 29

new principals and has begun to implement its strategic plan which includes efforts to

improve the DCPS’s interaction with other city agencies. The plan also holds

principals accountable for school performance.

The lack of progress in improving academic performance in the public schools

has fueled the growth of public charter schools. Nearly 10,000 students—one in

every 10 students—are enrolled in one of the approximately 34 public charter schools

in the District. At least 17 of these schools were chartered by the Board of

Education, with the remainder receiving charters from the Public Charter School

Board, which was created by Congress when its passed charter school legislation in

1996. The lack of consistency between the two governing bodies charged with

granting and overseeing charter schools, and the increased costs of regulating charter

schools are two of the concerns about the existence of two chartering authorities.

(For additional information on charter schools in the District of Columbia see the DC

Appleseed Center Report entitled Charter Schools in the District of Columbia:

Improving Systems for Accountability, Autonomy, and Competition, April 2001.)

On September 6, 2001, city and school officials announced an $80 million budget

deficit for FY2001. The overspending, mostly cost overruns in special education and

the failure to document properly special education expenses submitted for Medicaid

reimbursement, will be offset by hiring freezes, fund transfers, and unanticipated

growth in tax revenue. Though the deficit does not jeopardize the city’s return to

home rule, the unanticipated overspending was a source of embarrassment for school

officials, the CFO, and the city’s elected leaders. In order to deal with the deficit,

school board officials announced that they were considering shortening the school

year by 7 days. The school board reconsidered after the idea was criticized by

congressional members and the city’s elected leadership, and after city leaders

provided an additional $10 million in funding for the remaining school year.

Receiverships

During the past year the District government successfully removed four agencies

from control by court-appointed receivers. In September 2000, the District’s Housing

Authority and the District of Columbia Jail Medical Services were returned to District

control. Working with the courts and advocacy groups, Mayor Williams and his

administration were able to negotiate the return of the Mental Health Services and

Child and Family Services to District control. Although the return of the departments

was a major accomplishment for the mayor, the inability of the two court-appointed

receivers to make significant progress in the delivery of services also played a role in

the court’s willingness to return administrative control to the District government.

On October 23, 2000, District Court Judge Thomas Hogan approved a plan for

returning the Child and Family Services agency to District control by the summer of

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2001. The agency had been under receivership since August 1995, following findings

in LaShawn v. Williams that the agency failed to provide adequate supervision of

children under its care, and that children under its care were abused and neglected.

The judge’s consent decree of October 23, 2000, established 26 preconditions and a

six-month probationary period before the agency could return to District control. The

conditions imposed by the consent decree included: prohibiting budget cuts and

layoffs; increasing the number of home visits by social workers; passing legislation

that would place the responsibility for investigating abuse and neglect cases with Child

and Family Services rather than splitting the duty between the police and the agency;

developing licensing standards for foster care and group homes; and elevating the

agency to cabinet-level status.

The Child and Family Services Agency Establishment Act of 2001 was passed

on April 4, 2001, elevating the agency to cabinet-level status and fulfilling one of the

final requirements for termination of the receivership. On May 21, 2001, Judge

Hogan entered an order terminating the receivership, effective July 15, 2001.

In addition, Congress is considering legislation that would amend and restructure

the family court division of the District of Columbia Superior Court. The House bill

(H.R. 2657) and the Senate bill (S. 1382) would increase to 15 the number of judges

assigned to Family Court; and would require judges assigned to Family Court to have

expertise in family law, agree to participate in ongoing training, and serve for a

minimum term of three to five years. Congressional interest in reforming family court

can be traced to the tragic death of a 23-month-old child, Briana Blackmon, who was

beaten to death after a family court judge ordered that the child be returned to her

mentally unstable mother.

In May 2001, the city council passed The Department of Mental Health

Establishment Emergency Amendment Act of 2001. Passage of the act was one of

the requirements for the transfer of the Commission on Mental Health Services back

to District government control. The agency had been under the control of a courtappointed receiver since 1997. Much of the support for returning the agency to city

control centered on the receiver’s inability to manage the agency adequately. A

newspaper series chronicled the agency’s problems, including the deaths of 24

mentally retarded or developmentally disabled group home residents since 1999.

Future Role of the Authority and the CFO

The District of Columbia Financial Responsibility and Management Assistance

Act, P.L. 104-8, identified four conditions for the ending of a control period and the

return to home rule. The District must demonstrate that:

(1) all obligations arising from the Authority’s issuance of bonds, notes, or

other obligations have been discharged;

(2) all borrowing by the District from the United States Treasury has been

repaid;

(3) the District government has adequate access to short and long-term

credit markets at reasonable rates to meet its borrowing needs; and

CRS-9

(4) the District has achieved balanced or surplus budgets for four

consecutive fiscal years.

On February 14, 2001, the Authority announced that the District of Columbia had met

the fourth and final precondition for the return of home rule to the city’s elected

leadership and the suspension of the Authority’s oversight and management powers.

Congress has held hearings to explore the future role of the CFO and the Authority

following the end of the control period. In addition, the District’s city council passed

the Independence of the Chief Financial Officer Establishment Act of 2001, which

authorizes the mayor to appoint a CFO, with the advice and consent of the city

council, to a five-year term. The legislation transfers to the CFO the responsibility for

the management of all executive branch agencies involved in managing the city’s

finances. It requires the CFO to perform many of the functions authorized by the

federal legislation P.L. 104-8.

Budget Request

Emergency Terrorism and Disaster Recovery

Supplemental Appropriations

On September 11, 2001, the Pentagon and World Trade Center were the targets

of terrorist attacks. In response to the attacks, Congress appropriated $40 billion in

FY2001 emergency supplemental assistance (P.L. 107-38). The costs of providing

federal, state, and local preparedness for mitigating and responding to the attacks, and

repairing public facilities and transportation systems damaged by the attacks, are two

of the eligible uses of funds appropriated under the act. According to press reports,

the District requested $13 million to reimburse the District government for cost

incurred in responding to the attack on the Pentagon. The Bush Administration has

reimbursed the District $6 million for the cost associated with responding to the

September 11, 2001, attacks. Additional funds may be directed to the District and the

surrounding region to assist them in upgrading and executing their emergency

response. The District government has been criticized for its poor execution of the

emergency management response to the attack on the Pentagon. The mayor

announced that the city will accelerate work on a coordinated regional plan for

terrorist attacks, and the city has rewritten a basic city emergency plan to anticipate

specific problems that may be caused by any future attacks.

On October 9, 2001, the District government forwarded a request for additional

funds for emergency preparedness and economic recovery to the Office of

Management and Budget. The mayor requested $249 million for emergency planning

and response activities and $512.9 million for economic recovery activities, including

small business loans, unemployment compensation, and revenue lost. Additionally,

the mayor’s request included $182 million in economic stimulus assistance. This

included assistance for street resurfacing, technology modernization, and school

repairs. The final disposition of the District’s budget request has not yet been

announced. However, there is an emerging concern about the use of funds for

economic stimulus. Some members of Congress believe that economic stimulus

CRS-10

provided to cities affected by the events of September 11, 2001, should be part of a

larger and separate economic stimulus package.

Supplemental Appropriations for FY2001

On July 24, 2001, the President signed P.L. 107-20, the Supplemental

Appropriations Act for FY2001. The act includes $107 million in additional FY2001

appropriations. The primary source of the additional appropriations will be local

funds drawn from the city’s surplus or reserves and used to cover cost overruns of

various agencies or new initiatives. The act includes a rescission of $131,000 for

taxicab inspectors and a $250,000 rescission budgeted for activities related to the

simplification of employee compensation systems, and transfers the funds to public

education budget function for use under the Excel Institute Adult Education Program.

The act requires the mayor to report to Congress, within 45 days of the passage

of the act, on the specific authority necessary to carry out certain responsibilities

transferred to the CFO in a non-control year and certain responsibilities relating to the

transition of responsibilities under the District of Columbia Financial Responsibility

and Management Assistance Act of 1995.

Table 2. District of Columbia FY2001 Supplemental Budget

Request Included in P.L. 107-20

(in millions of dollars)

Program

City’s

Request

House

Senate

Conference

Government Direction and Support

5.4

Economic Development and

Regulation

1.6

— New E-Conomy

Transformation Act

[1.0]

— Dept of Consumer and

Regulatory Affairs

[0.6]

8.6

8.9

— Metropolitan Police

[2.8]

— Fire and Emergency

Medical Services

[5.9]

—Child Fatality Review

[0.1]

14.0

13.0

—2001 Summer School

[12.0]

— Public and Charter

School Student Census

[1.0]

— Adult Education Program

[1.0]

—

28.0

[15.0]

Public Safety and Justice

Public Education

Human Support Services

— Medicaid Expansion

CRS-11

Program

City’s

Request

House

Senate

Conference

— Office of Latino Affairs

[1.0]

— Disproportionate Share of

Hospital Cost

[4.0]

— Disability Compensation

[3.0]

— Children’s Invest. Fund

[5.0]

Public Works

0.1

Workforce Investment

40.5

Wilson Building

7.1

Water and Sewer Authority

2.1

FY2002: The President’s Budget Request

On April 9, 2001, the Bush Administration released its FY2002 budget

recommendations. The Administration’s proposed budget included $342.5 million in

federal payments to the District of Columbia. An overwhelming percentage of the

President’s proposed federal payments and assistance to the District involved the

courts and criminal justice system. This included $147.3 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. In

addition, the Administration requested $111.2 million in support of court operations,

and $32.7 million for the trustee appointed to oversee the District’s corrections

system, including the closing of the Lorton Correctional Facility and the transfer of

its inmates into the federal prison system. These four functions (prison

administration, court operations, defender services, and offender supervision)

represent $325.5 million, or 95%, of the President’s proposed $342.5 million in

federal payments to the District of Columbia (see Table 3).

FY2002: District’s Budget Request

On May 25, 2001, District officials transmitted the city’s $5.3 billion budget for

FY2002 to Congress for review and approval. The city’s budget included a $150

million reserve fund mandated by the District of Columbia Appropriations Act of

1999, P.L. 105-277. In addition, the budget sought to increase funding for public

education by $107 million, for human support services by $207 million, and for

general government support by $88.8 million. The budget must be approved by

Congress (see Table 4).

FY2002: Section 302(b) Suballocation

Section 302(a) of the Congressional Budget Act 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

CRS-12

and Senate appropriators as a blueprint for allocating funds. Section 302(b) of the

Congressional Budget Act of 1974 requires appropriations committees in the House

and Senate to subdivide their Section 302(a) allocation of budget authority and

outlays among the 13 appropriations subcommittees.

On June 21, 2001, the Senate Appropriations Committee approved a revised

302(b) suballocation for the District of $392 million. The House Appropriations

Committee approved a Section 302(b) suballocation of $382 million in budget

authority for FY2002 for the District of Columbia. On September 20, 2001, the

House revised its Section 302(b) allocation for the District of Columbia

Appropriations to $399 million.

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 District subcommittees of both the House and Senate Appropriations

Committees must approve—and may modify—the District’s budget. House and

Senate versions of the District budget are reconciled in a joint conference committee

and must be passed by the House and the Senate. After this final action, the District’s

budget is forwarded to the President, who can sign it into law or veto it.

CRS-13

Table 3. District of Columbia General and Special

Federal Payment Funds: Proposed FY2002 Appropriations

(in millions of dollars)

FY2002

Enacted

City’s

FY2001 Admin. budget

Programs

House

Senate

Conf.

17.0

Federal Payments: General and Special Fund

Resident Tuition Program

Incentives for the Adoption

of Foster Children

17.0

{5.0}

{5.0}d

0.0

{5.0}

— Adoption

0.0

[2.0]

— Scholarship

0.0

[1.0]

— Resource Center

0.0

[1.0]

— Incentives for

Special Needs

Children

0.0

[1.0]

Capitol City Career Dev.

and Job Training

0.0

1.5

0.0

0.5

Capitol Education Fund

—

0.5

Metro. Kappa Youth Dev.

Foundation

—

0.45

Fire and Emergency

Medical Services Dept.

0.0

0.5

0.0

0.5

Chief Medical Examiner

0.0

0.6

0.0

0.585

Youth Life Foundation

0.0

0.3

0.0

0.25

Food for Friends Program

0.0

2.0

0.0

2.0

City Administrator

0.0

0.3

0.0

0.3

Chief Technology Officer

0.0

0.5

—

0.0

Southeastern Univ./

McKinley Tech Partnership

0.0

0.5

Emergency Planningg

0.0

16.0

16.06

— Development of an

Emer. Ops. Plan

0.0

[4.6]

—

— Emer. Plan

Implementation

0.0

[8.0]

—

— World Bank/IMF

reimbursement

0.0

[3.4]

0.0

2.3

5.9

8.3

CFO

{5.0}

CRS-14

FY2002

Programs

Enacted

City’s

FY2001 Admin. budget

House

Senate

Conf.

— Active Cap River

Cleanup

0.0

[2.25] [2.25]

— U.S. Soccer

Kenilworth Sports

0.0

[0.5]

—One Economy Corp.

0.0

[0.6]

— Langston Project

0.0

[0.5]

— Green Door

0.0

[1.0]

— City Museum

0.0

[0.5]

— Teach for America

0.0

[0.2]

— Child Passenger

Safety

0.0

[0.35] [0.35]

–– Eastern Market.

Renovation Study

—

[0.05]

—Excel Institute Adult

Education Program

1.0

0.0

—

[1.0]

0.0

[1.0]

— Woodlawn

Cemetery Restoration

0.0

[0.3]

0.0

[0.3]

— Real World Schools

—

0.0

—

[0.25]

0.0

[0.25]

— Mentoring and

hotline

—

0.0

[0.3]

0.0

[0.3]

— Values training

—

0.0

[0.25]

0.0

[0.25]

— Character building

—

[0.25]

0.0

[0.25]

Court Appointed Special

Advocate

—

0.25

Corrections Trustee for

Operations

134.7

0.0

32.7

30.2

— Case processing

[1.0]

0.0

[1.0]

— Lorton sewage

treatment plant closing

—

0.0

[2.0]

[1.5]

— Lorton Building

renovations

—

0.0

[2.5]

[0.5]

District of Columbia Courts

Operation

123.4

0.0

134.7

140.2

112.2

— Court operations

[123.4]

[111.2]

[116.9]

—

— Court of Appeals

[7.4]

[8.0]

— Superior Court

[71.1]

[66.1]

[89.5]

[72.7]

[66.1]

CRS-15

FY2002

Enacted

City’s

FY2001 Admin. budget

House

Senate

Conf.

[17.9]

[31.1]e

[31.6]

— Child Abuse

and Neglecta

0.0

— Indigent

representationb

0.0

— Capital

improvements

[3.3]

[6.0]

[27.8]

[6.5]

[5.3]

0.0

—

0.0

23.3

24.02

— Superior Court

0.0

[18.3]

0.0

[23.3]

— Mayor

0.0

[5.0]

0.0

[0.7]

— Child and Fam.

Serv. Agency

—

[0.5]

Defender Services in D.C.

Courtsc

34.4

34.3

39.3

34.3

Court Services and Offender 112.5

Supervision Agency for the

District of Columbia

147.3 f

—f

147.3f

Programs

— Court system:

— Pay raise (8.48%)

Family Court

— Community

Supervision and Sex

Offender Registration

[67.5]

[94.1]f

—f

[94.1]f

[94.1]

— Parole Revocation,

Adult Probation and

Offender Supervision:

—

—f

— Drug testing

and screening

—

—f

— Public Defender

Service

[18.8]

[20.8]f

—f

[20.8]f

[20.8]

[20.8]f

— Pretrial Service

Agency

[26.2]

[32.4]f

—f

[32.4]f

[32.4]

[32.4]f

Children’s National Medical

Center

1.5

0.0

5.5

3.2

5.5

Thurgood Marshall

Academy Charter School

—

0.0

1.0

D.C. Public Schools

0.0

2.7

2.5

0.0

[2.0]

— Voyager Expanded

Learning Literacy

CRS-16

FY2002

Programs

Enacted

City’s

FY2001 Admin. budget

House

Senate

Conf.

— Failure Free

Reading Literacy

0.0

[0.25] [0.25]

— Lightspan, Inc.,

eduTest.com

—

[0.25]

G. Washington University

Center for Excellence in

Municipal Management

0.0

0.25

Child and Family Social

Services Computer

Integration Plan

0.0

0.2

0.0

Law Enforcement Mobile

Wireless Interoperational

0.0

1.4

— CTO

0.0

[0.4]

— U.S. Secret Service

0.0

[0.33] [0.33]

— U.S. Capitol Police

0.0

[0.33] [0.33]

— U.S. Park Police

0.0

[0.33] [0.33]

St. Coletta expansion

1.0

0.0

1.0

0.0

2.0

Faith and Politics Institute

0.0

0.05

0.0

0.05

Poplar Point Brownfield

Remediation

3.5

0.0

3.5

{3.5}

— Environmental

assessment

[2.15]

0.0

[2.15]

0.0

[2.15]

— Anacostia Park

entrance

[1.3]

—

[1.3]

0.0

[1.3]

Public School Anti-Violence

programs

0.5

0.0

— Anti-violence

[0.25]

0.0

— Reading programs

[0.25]

0.0

Washington Interfaith

Network

1.0

0.0

Simplified Personnel System

0.25

0.0

Metro improvements

25.0

0.0

Presidential inauguration

5.96

0.0

Child Advocacy Center

0.5

0.0

Special Olympics

0.25

0.0

CRS-17

FY2002

Programs

Enforcement of law banning

tobacco possession by

minors

Total federal payments

Enacted

City’s

FY2001 Admin. budget

House

Senate

Conf.

0.1

0.0

0.1

464.1

342.5

199.15

398.6

407.9

Funds provided under a separate heading—Defender Services for the District of Columbia Courts.

The transfer is based on the Courts misuse of funds appropriated for such activities in previous

years.

Funds provided under a separate heading—Defender Services for the District of Columbia Courts.

The transfer is based on the Courts misuse of funds appropriated for such activities in previous

years.

In previous years, funds would be provided as part of District of Columbia court operations.

Congress created a separate appropriation to ensure payment of attorneys representing indigent

persons, guardianship, and abused and neglected children in court proceedings.

The $5 million made available for FY2001 is a carryover of unobligated funds appropriated in

FY2000. This amount is not included in total special federal payments for FY2001.

Allows courts to reallocate not more than $1 million among activities funded under this heading.

Certified as a federal agency on August 14, 2000.

Funds were originally targeted to cover the costs associated with providing security for a World

Bank and International Monetary Fund meeting scheduled of late September 2001. The meeting was

cancelled following the terrorist attacks on the Pentagon and World Trade Center.

H.R. 2944, House Version. On September 25, 2001, the House approved

the District of Columbia Appropriations Act for FY2001, H.R. 2944, by a vote of 327

to 88. The bill included $398 million in special federal payments and contributions to

the District. The majority of these funds were to be used for court, prisons, and

offender supervision-related activities. The House bill allocated approximately 95%

of the $398 million in special federal payments to these activities. In addition, the

House bill included $16 million for emergency planning. The House Appropriations

Committee originally recommended that the funds be used for costs associated with

security for a World Bank and International Monetary Fund meeting that was

scheduled for the end of September 2001, but was postponed because of the

September 11, 2001 terrorist attacks on the Pentagon and World Trade Center.

On September 20, 2001, the House Appropriations Committee reported out the

District of Columbia Appropriations Act for FY2002 (H.Rept. 107-216). The

Committee’s markup and reporting of the District Appropriations Act for FY2002,

which was scheduled for September 13, 2001, was delayed following the September

11, 2001 terrorist attacks on the Pentagon and World Trade Center. On September

6, 2001, the House Subcommittee on the District of Columbia Appropriations

completed its markup of an unnumbered bill containing its budget recommendations

for FY2002 for the District of Columbia to the Appropriations Committee.

FY2002 General Provisions, House Bill. In a change from previous years,

House and Senate appropriations committees pledged to review the general

provisions of the District of Columbia with the aim of reducing the number by

eliminating redundant, irrelevant, inappropriate, or arcane provisions. District

officials have sought, in previous years, to reduce the number of provisions, but

CRS-18

without success. These officials have been particularly critical of the number of social

riders that have been included in previous appropriations acts. These provisions have

included prohibitions on the use of federal and city funds for abortions, the use of

marijuana for medical purposes, limitations on the distribution of hypodermic needles

to illegal drug users, and domestic partners health insurance coverage.

During its consideration of the bill, the House Appropriations Committee

approved an amendment, offered by Representatives Kolbe and Moran, that would

remove the prohibition on the use of District funds for costs associated with

implementing the District’s Health Care Benefits Expansion Act of 1992. The Act

would allow unrelated couples to register as domestic partners, and would allow any

District employee so registered to include his or her domestic partner under the same

health insurance plan. The District employee would be responsible for paying the

additional premium for coverage of the domestic partner not employed by the District

government. For a review of the general provisions contained in H.R. 2944, see CRS

Report RL31159, District of Columbia Appropriations Act for FY2002: Comparison

of General Provisions of P.L. 106-522, and House, Senate, and Conference Versions

of H.R. 2944, by (name redacted).

H.R. 2944, Senate Version (formerly S. 1543). On November 7, 2001,

the Senate approved its version of H.R. 2944, substituting the language contained in

S. 1543. The bill included $408 million in special federal payments and contributions

to the District. The majority of the funds were to be used for courts, including funds

for a new family court division; prisons; and offender supervision-related activities.

The Senate bill also included funds for emergency planning activities in response to

the September 11, 2001 terrorist attacks. In addition, the Senate bill included $1.4

million for mobile wireless interoperational links between the city’s Chief Technology

Office and three federal law enforcement agencies—the Secret Service, the Park

Police, and the Capitol Hill Police.

FY2002 General Provisions, Senate Bill. During its consideration of the

bill, the Senate Appropriations Committee included a provision that would remove

the prohibition on the use of District funds for costs associated with implementing the

District’s Health Care Benefits Expansion Act of 1992, which would allow unrelated

couples to be covered under the same health insurance plan. The Committee also

reduced the number of general provisions included in the bill to 36. It retained a

number of provisions that District officials wanted eliminated or modified, including

those related to medical marijuana, abortion, and needle exchange programs.

During the full Senate’s consideration of the bill, several amendments were

offered. The Senate defeated an amendment offered by Senator Allen that would

have reinstated the prohibition on the use of District funds to support needle exchange

programs. The vote was 53 to 47. The Senate considered and approved an

amendment offered by Senator Hutchison of Texas that would increase the cap on

funding for attorneys’ fees to represent students seeking special education services.

The Hutchison amendment, which was approved by a vote of 51 to 49, caps the

amount of funds payable to such attorneys at no more than $150 per hour and $3,000

per case. The Senate approved two related amendments. One, introduced by

Senators Durbin and Boxer, exempts from the cap any attorney representing students

CRS-19

in one of three categories when challenging special education placement under the

Individuals with Disabilities Education Act:

! the student’s family has an income of less than $17,600 per year; or

! at least one of the student’s parents is a disabled veteran; or

! the court has determined the student is the victim of abuse or neglect.

The Durbin/Boxer amendment was approved by a vote of 73 to 26. The Senate also

approved a related amendment introduced by Senator Landrieu, the floor manager of

the bill. The amendment, which was approved by voice vote, directs the General

Accounting Office to submit to the Congress by January 2, 2002, a report detailing

the awards in judgment rendered by the courts that were in excess of the caps on the

allowable fees an attorney may charge when challenging special education placement

in the District of Columbia. For a review of the general provisions contained in

House and Senate versions of H.R. 2944, see CRS Report RL31159, District of

Columbia Appropriations Act for FY2002: Comparison of General Provisions of

P.L. 106-522, and House, Senate, and Conference Versions of H.R. 2944, by (name

redacted).

H.R. 2944, Conference Version. On December 5, 2001, a House and

Senate conference committee reported out the District of Columbia Appropriations

Act for FY2002 (H.Rept. 107-321). On December 6, 2001, the House approved the

conference report by a vote of 302 to 84, while the Senate approved the act by a vote

of 79 to 20 one day later. The act allocates approximately 85% of the $408 million

in special federal payments for court, prisons, and offender supervision-related

activities, including $24 million for a new Family Court Division. In addition, the act

includes $16 million for emergency planning in response to the September 11, 2001

terrorist attacks. It reduces funding for the Correction’s Trustee from $134 million

in FY2001 to $30 million for FY2002. The reduction is a result of the closing of the

Lorton Correctional Facility and the transfer of District felons to the federal prison

system.

FY2002 General Provisions, Conference Bill. As discussed above, in a

change from previous years, House and Senate conferees agreed to reduced the

number of general provisions included in the act, focusing on arcane, redundant, or

irrelevant provisions. In the past city officials have sought to reduce the number of

social riders that have been included in previous appropriations acts, but without

success. These provisions have included prohibitions on the use of federal and city

funds for abortions, the use of marijuana for medical purposes, domestic partners

health insurance coverage, and lobbying for voting representation in Congress, and

limitations on the distribution of hypodermic needles to illegal drug users.

The final version of the act removes the restriction on the placement of needle

exchange programs near school facilities. The conference bill also removes the

prohibition on the use of District funds to implement the District’s Health Care

Benefits Expansion Act of 1992. In approving the conference report, both chambers

of Congress left intact restrictions and prohibitions on the use of federal and District

funds for a needle program, lobbying for voting representation in Congress, and

medical marijuana. The act also directs the GAO to report to Congress by March 31,

2002, on cost issues related to the payment of legal fees to attorneys representing the

CRS-20

school system and special needs children in cases involving the Individuals with

Disabilities Education Act. The Congress directed GAO to undertake the study after

issues were raised during appropriation and oversight hearings concerning the

accuracy of the school system’s estimate of the cost of fees paid to attorneys

representing special needs children in proceeding against the school system. The act

was signed by the President on December 21, 2001, as P.L. 107-96.

Table 4. District of Columbia General Funds

(in millions of dollars)

FY2002

Enacted

Programs

FY2001

District

House

Senate

Division of Expenses: District of Columbia Funds

GENERAL FUND

Governmental Direction and

232.721

284.559

285.359

307.117

Support

Economic Development and

207.655

230.878

Regulation

Public Safety and Justice

768.430

632.668

633.853

632.668

Public Education System

1,023.543 1,106.165 1,106.165

1,108.915

Human Support Services

1,542.240 1,803.923 1,803.923

1,803.923

Public Works

297.495

300.151

Receivership Programs

391.328

403.368

403.868

Workforce Investments

0.000

42.896

Reserve Fund

150.000

120.000

Reserve Relief

0.0

30.0

Contingency Reserve Fund

—

Emergency Planning and

Security Costs

16.058

0.0

16.058

DC Financial Responsibility

3.140

0.0

and Management Assistance

Authority

Repayment of Loans and

243.238

247.902

Interest

Repayment Gen. Fund

39.300

Recovery Debt

Pay Interest on Short Term

1.140

0.500

Borrowing

Presidential Inauguration

5.961

0.0

Wilson Building

8.409

8.859

Emergency Reserve Fund

61.406

33.254

Transfer (Tobacco Settlement

Trust Fund Transfer)

One Judiciary Square

7.950

0.0

Certificate of Participation

Optical and Dental Insurance

2.675

0.0

Payments

Conf.

286.138

230.878

633.853

1,108.665

1,803.923

300.151

403.868

42.896

120.000

30.0

—

16.058

0.0

247.902

39.300

0.500

0.0

8.859

33.254

0.0

CRS-21

Programs

Productivity Savings

Procurement and Management

Savings

Human Resource Development

Operational Improvement

Savings

Management Supervisory

Services

Cafeteria Plan

Productivity Bank

Non-departmental Agency

Risk Management

General Fund Total

Operating Expenses

Water and Sewer Authority

Washington Aqueduct

Stormwater Permit

Compliance

Lottery and Charitable Games

Sports and Enter. Commission

DC Public Benefit Corp.

DC Retirement Board

Convention Center Enterprise

Fund

Housing Finance Agency

National Capital Revitalization

Corporation

Total Enterprise Funds

Total Operating Expenses

General Fund

Water and Sewer Fund

Total District of Columbia

Funds

FY2002

House

Senate

0.0

Enacted

FY2001

0.000

{37.000}

District

0.0

0.000

{10.000}

0.0

13.200

0.0

{5.000}

0.0

0.000

0.0

—

5.799

0.000

0.0

4,948.280 5,290.222

0.0

5.799

0.0

5,308.265

0.0

5.799

0.0

5,332.088

0.0

5.799

0.0

5,312.044

Enterprise Funds

230.614

244.978

45.091

46.510

2.151

3.100

244.978

46.510

3.100

244.978

46.510

3.100

244.978

46.510

3.100

223.200

10.968

78.235

11.414

52.726

229.688

9.127

0.0

13.388

57.278

229.688

9.127

0.0

13.388

57.278

229.688

9.127

0.0

13.388

57.278

229.688

9.627

0.0

13.388

57.278

0.000

4.711

2.673

4.711

2.673

4.711

2.673

4.711

2.673

656.207

611.453

5,677.380 5,901.675

Capital Outlay

1,218.637 1,029.975

197.169

140.725

611.453

5,919.718

611.453

5,943.541

611.953

5,923.997

1,074.605

152.114

1,074.604

152.114

1,074.605

152.114

7,093.186

7,146.437

7,170.259

7,150.716

7,072.375

Conf.

0.0

Note: Brackets indicate projected saving to be achieved and not actual expenditure.

Bill established two reserve funds: a “contingency reserve fund” into which the mayor may deposit

at least 3% of the total fiscal year operating budget; and an “emergency cash reserve fund” into

which the mayor may deposit at least 4% of the total fiscal year operating budget. These reserve

funds are to be established over a multi-year period and would augment the present reserve fund

of $150 million.

CRS-22

Key Policy Issues

Needle Exchange

The continuation of a needle exchange program funded with federal or District

funds is one of several key policy issues that Congress considered when approving the

District’s appropriations act for FY2002. The controversy surrounding funding a

needle exchange program touched 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 government sanctioning of illegal

drugs by supplying drug-addicted persons with the tools to use them. In addition,

they content 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, and restricted where privately funded needle

exchange activities could take place. Section 150 of the District of Columbia

Appropriations Act for FY2001 makes 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. Provisions contained in an earlier House version of the District of Columbia

Appropriations Act for FY2000 (H.R. 3194) would have prohibited any organization

that received federal or District funds from funding a needle exchange program with

private funds. This prohibition was dropped during conference consideration of the

bill, which was signed by the President on November 29, 1999. Presently, only one

entity, Prevention Works, a private nonprofit AIDS awareness and education

program, operates a privately funded needle exchange program.

At a minimum, District officials were seeking to remove restrictions on needle

exchange activities, and to lift the prohibition on the use of District funds for needle

exchange programs. The final version of the act , P.L. 107-96, lifts the restriction that

prohibits the operation of needle exchange programs within 1,000 feet of public

elementary and secondary schools, including public charter schools. It also maintains

the restriction on the use of federal and District funds for needle exchange programs.

The bill as initially approved by the House would have continued the prohibition on

the use of federal and local government funding of needle exchange programs. The

Senate bill would have allowed the use of local government funds for needle exchange

programs, but would have maintained the prohibition on the use of federal funds.

CRS-23

Medical Marijuana

The medical marijuana initiative provision in the District of Columbia

appropriations legislation is another issue that engenders controversy. The District

of Columbia Appropriations Act for FY1999, P.L. 105-277, included a provision that

prohibited the city from counting ballots of a voter-approved initiative that would

have allowed the medical use of marijuana to assist persons suffering debilitating

health conditions and diseases including cancer and HIV infection.

Congress’s power prohibiting the counting of a medical marijuana ballot

initiative was challenged in a suit filed by the D.C. Chapter of the American Civil

Liberties Union (ACLU). On September 17, 1999, District Court Judge Richard

Roberts ruled that Congress, despite its unique 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 on 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, the District of

Columbia Appropriations Act for FY2000. Opponents of the provision contend that

it and similar actions undercut the concept of home rule.

The District of Columbia Appropriations Act for FY2002, P.L. 107-96, includes

a provision that continues to prohibit the District government from implementing 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 the District of

Columbia appropriations. District officials cite the prohibition on the use of District

funds as just another example of congressional intrusion into local matters. The

District of Columbia Appropriations Act for FY2001, P.L. 106-522, includes a

provision prohibiting the use of federal or District funds for abortion services except

in cases where the life of the mother is endangered or the pregnancy is the result of

rape or incest. This prohibition has been in place since 1995, when Congress

approved the District of Columbia Act for FY1996, P.L. 104-134.

Since 1979, with the passage of the District of Columbia Appropriations Act of

1980, P.L. 96-93, 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 would be endangered or the pregnancy resulted from rape and 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, 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 was taken to

CRS-24

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

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 fought for 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. 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. The District of Columbia

Appropriations Act for FY1996, P.L. 104-134, 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 is endangered or cases where the pregnancy was the

result of rape or incest.

The prohibition on the use of District and federal funds is included in the House,

Senate, and conference versions of the District of Columbia Appropriations Act for

FY2002, P.L. 107-96.

District of Columbia Anti-Terrorism Appropriations

The FY2002 District of Columbia Appropriations bill as approved by the Senate

Appropriations Committee on October 11, 2001, and the House on September 25,

2001, included $16 million in funding for emergency planning. The District’s initial

FY2002 budget request included a $16 million federal payment specifically for costs

associated with security support—including counter-terrorism and crowd control

—for the IMF/World Bank meeting that was scheduled for late September 2001. The

meeting, which has been postponed to a date to be determined, also was scheduled

to receive $17 million in funding from the IMF and World Bank for security support.

P.L. 107-96 includes a provision that reallocates the $16 million special federal

payment to emergency security planning activities in response to the September 11,

2001 terrorist attacks. The act allocates $3.4 million as reimbursement to the District

for costs associated with security planning for the World Bank/IMF meeting. Three

additional budget items include funding that may be used to combat or respond to

terrorist acts. However, funds for these operations are derived from local revenue

sources: the Metropolitan Police Department; District of Columbia National Guard;

and the District of Columbia Emergency Management Agency. Budget requests for

these operations are identified in the following table. In addition, Congress

appropriated $1.4 billion in a special federal payment for the development and

deployment of a wireless telecommunication system linking the District government,

the U.S. Capitol Police, the U.S. Park Service Police, and the Secret Service.

CRS-25

Table 5. District of Columbia Federal and Local Appropriations

That May Be Used to Respond to Terrorism Threats

Appropriation Title

FY2002 Budget Request

(millions of dollars)

Metropolitan Police Department

6.8

D.C. National Guard

0.5

Emergency Security Planning

16.0

D.C. Emergency Management Agency

1.0

Congress provided additional assistance for emergency preparedness and

terrorism response activities in the Department of Defense Appropriations for

FY2002, P.L. 107-117. The act includes $200 million in special federal payments to

District of Columbia and selected regional agencies, including the Washington Council

of Governments and the Washington Metropolitan Transit Authority, for emergency

response-related activities. The Defense Appropriations Act for FY2002 was signed

by the President on January 10, 2002.

Table 6. FY 2002 Defense Appropriations Act, P.L. 107-117:

District of Columbia Emergency Preparedness Funds

Activity

Appropriation

(in millions)

Protective Clothing and Breathing

Apparatus

$7.1

Specialized Hazardous Materials

Equipment

$1.0

Chemical and Biological Weapons

Preparedness

$10.3

Pharmaceuticals for Responders

$2.1

Response and Communications Capability

$15.0

Search, Rescue, and Other Emergency

Equipment and Support

$8.9

Equipment, Supplies, and Vehicles for the

Office of the Chief Medical Examiner

$1.8

Hospital Containment Facilities for the

Department of Health

$8.0

Office of the Chief Technology Officer

Communications System

$45.5

Emergency Traffic Management

$20.7

CRS-26

Activity

Appropriation

(in millions)

Increased Facility Security

$9.9

Training and Planning

$25.5

Washington Metropolitan Area Transit

Authority

$39.1

Metropolitan Washington Council of

Governments

$5.0

Total

$200.9

Health Care Benefits Expansion Act

(Domestic Partners Program)

P.L. 107-96 includes a provision lifting the congressional prohibition on the use

of District funds to implement the Helath Care Benefits Expansion Act. On

September 20, 2001, the House Appropriations Committee approved, by a vote of 28

to 21, an amendment introduced by Representatives Kolbe and Moran that would

remove the congressional prohibition on the use of District funds for the

implementation of the city’s Health Care Benefits Expansion Act. The Act, which

was approved by the city’s elected leadership in 1992, has not been implemented

because of a congressional prohibition first included in the general provisions of

District of Columbia Appropriations Act for FY1994.

The city’s health care expansion act would allow two 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 visitation rights.

Under the law, District government employees enrolled in the District of Columbia

Employees Health Benefits Program would be allowed to purchase family health

insurance coverage that would cover the employee’s family members, including

domestic partners. In addition, a District employee registered as a domestic partner

would assume the additional cost of the family health insurance coverage for family

members, which would include the employee’s domestic partner.

Opponents of the act believe that it is an assault on the institution of marriage,

and that the act grants unmarried gay and heterosexual couples the same standing as

married couples. 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 the amendment noted that at least 115 local governments,

and more than 4,000 companies offer benefits to domestic partners.

On September 25, 2001, during House consideration of H.R. 2944,

Representative Weldon offered an amendment (H.Amdt. 310) that would have

reaffirmed the band on the use of District funds to implement the health care

expansion program. The Weldon amendment failed by a vote of 194 to 226. The

Senate bill also included a provision that allows the District to use city, but not

CRS-27

federal, funds to implement the District of Columbia Employees Health Benefits

Program.

Budget Reserves

Congress passed legislation in 1999 that required the District to create a $150

million reserve fund to guard against unexpected expenditures undermining city

finances.5 Reserve funds may only be expended under three conditions:

! Expenditures must be based on criteria established by the Chief Financial

Officer and approved by the mayor, the city council, and the control board (during a

control year); but in no case may funds be expended before all other surplus funds

have been used.

! The funds may not be used for agencies under court-ordered receivership.

! Funds may not be for shortfalls in projected productivity savings and

management reforms.

In 2000,6 and in addition to the budget reserve fund, Congress required the

District to establish two additional funds: an emergency reserve fund; and a

contingency reserve fund. These funds total 7% of the District’s operating revenue,

or about $250 million, by 2007. The emergency reserve fund requires a 4% positive

fund balance above the projected general fund expenditure level for the following

year. The contingency fund would set aside up to 3% of each year’s operating budget

for unforeseen or nonrecurring needs such as natural disasters, federal mandates, and

revenue shortfalls.

The District government requested that Congress eliminate the $150 million

budget reserve. A plan to abolish the fund was endorsed by the Senate Appropriations

subcommittee on the District in June 2001. Consistent with the provisions found in

the Senate-passed measure, the final—conference—version of act includes a provision

that requires the District to maintain a budget reserve of $120 million in FY2002, and

$70 million in FY2003. P.L. 107-96 also requires the District to maintain a

cumulative cash reserve of $50 million for FY2004 and FY2005.

P.L. 106-113.

P.L. 106-522.

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