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Context
Focus of Expenditure Growth
- Overall, District expenditures rose by:
- Increases were concentrated in four agencies:
- DCPS
- Charter schools
- PBC (and transition costs)
- Mental health
- Excluding these agencies, the rest of the District’s budget grew
by:
Focus of Overspending
- The four agencies with major growth collectively overspent their
budgets by:
- Excluding these agencies the rest of the District’s budget was
underspent by:
- negative 4% in FY00
- negative 3% in FY01
Financial Experience of Other States
Funding Pressures
- 45 states show revenue shortfalls
- 28 states show spending over budget
- 23 states show Medicaid over budget (other common program
overspending includes mental health, corrections, and education)
Gap Closing Measures
- 30 states have reduced budgets to close gaps
- 15 states have used reserves (and 10 more may)
- 8 states have or will consider using tobacco funds
- 7 states have delayed, reduced, or canceled capital projects
- 9 states have proposed or enacted delays/repeals of tax cuts
- 14 states have proposed or enacted tax increases
FY 2002 Spending Pressures ($ in millions)
Agency |
Explanation |
Spending Pressure |
Closed by Agency |
Proposal for Gap Closing |
DCPS - Medicaid & Non-Medicaid |
Medicaid revenue shortfall ($27m); cost overruns in
Special Ed and Transportation, lifting of Special Ed fee cap, and
teacher pay raises ($98m) |
125 |
(35) |
90 |
Dept. of Mental Health |
Medicaid revenue shortfall ($26m) and annualized
effect of pay raises in 1/01 ($3m) |
29 |
(3) |
26 |
Dept. of Health |
Proposal to increase rates for specialty Medicaid
providers has been deferred |
11 |
(11) |
- |
Assessment Contracts |
One-time costs for consultants to assess District’s
Medicaid programs. |
3 |
- |
3 |
Health Care Safety net |
Additional PBC close-out costs |
14 - |
- |
14 |
Child & Family Services Agency |
Increased adoption case rates; higher case loads for
adoption and emergency group home utilization |
13 |
(2) |
11 |
State Education Office |
Mandated census audit ($1 m) and LEAP program match
and administrative costs ($0.5m) |
2 |
- |
2 |
Police Dept. |
Overtime, terminal leave due to longevity bill,
civilianization for one quarter, and modification of red light &
photo radar contracts |
7 |
(2) |
5 |
Corrections Dept. |
Delay in RIF of 400 employees, overtime and additional
gross pay, and higher contract costs |
15 |
(6) |
9 |
Fire Dept. |
Overtime, fixed cost and prior-year GSA bill |
8 |
(7) |
1 |
Labor Costs |
Based on status of current negotiations |
10 |
0 |
10 |
DMV |
Additional adjudication costs associated with photo
radar and red light programs, and meter ticketing |
1 |
- |
1 |
Dept. of Public Works |
New impound lot and unbudgeted rate increases for
contracts |
9 |
(8) |
1 |
TOTAL |
|
247 |
(74) |
173 |
FY 2002 Gap-Closing Actions ($ in millions)
Funding Source |
Notes |
Amount |
FY 01 Unspent Reserve |
Reflects deposit of $5m for the Highway Trust Fund |
41 |
FY 02 Reserve Relief |
Entire reserve relief will be used to fund DCPS’s
pressures |
30 |
FY 2002 Budgeted Reserve |
An additional $39m is held as offset against revenue
shortfall |
80 |
Agency Reductions |
Deputy Mayors are working with agencies to identify
cuts |
18 |
Red Light/Photo Radar Revenue |
Based on higher-than-estimated first quarter
collections |
4 |
Total, Gap-Closing Actions |
|
173 |
One-Time and Recurring Spending Pressures
|
|
FY 2002 |
FY 2003 |
One-time FY 2002 pressures: |
|
|
|
Citywide Medicaid contracts |
3 |
|
|
PBC closeout costs |
14 |
|
|
MPD contract modifications |
5 |
|
|
SEO census |
2 |
|
|
Workforce investments |
10 |
|
|
DMV |
1 |
|
Subtotal, one-time FY 2002
pressures: |
35 |
|
|
|
|
|
FY 2002 pressures that recur in FY
2003: |
|
|
|
DCPS Medicaid, special ed, transportation |
90 |
76 |
|
DMH Medicaid |
26 |
26 |
|
CFSA adoption rates and case loads |
11 |
15 |
|
Corrections PS and contracts |
9 |
11 |
|
DPW impound lot |
1 |
1 |
|
FEMS overtime and fixed costs |
1 |
8 |
Subtotal, FY 2002 pressures that
recur in FY 2003: |
138 |
136 |
|
|
|
|
New FY 2003 pressures: |
|
|
|
CFSA compliance with mandates |
|
9 |
|
DHS compliance with mandates |
|
13 |
|
DOH specialty provider fees |
|
11 |
|
MPD communication center |
|
2 |
Subtotal, new FY 2003 pressures |
|
35 |
Total, spending pressures: |
173 |
172 |
Multi-Year Spending Pressures
Agency |
Basis for Cost Increase |
Cost Increase (in 000s) |
DCPS |
- Increase in Special Education (SE) tuition
- Increase in SE transportation costs
- Increase in SE attorney fee caps
|
$75,921 |
DOH |
- Legal requirement that rates must not fall to a level where
services is compromised
- Specialty rate provider increase is needed
|
$11,358 |
DHS |
- Court ordered staffing increases for YSA
- Court ordered staffing, equipment, and facility improvements
for MRDDA
|
$13,272 |
CFSA |
- Adoption subsidy increase
- Updated estimate of past rate increases for therapeutic foster
homes
- Increase in emergency group homes and other expensive
placements
|
$24,000 |
DMH |
- Medicaid reserve fund needed in anticipation of revenue
shortfalls
|
$25,000 |
MPD |
- Operating costs associated with Public Safety Communications
Center
|
$2,437 |
FEMS |
- Account for historical increase in overtime for HAZMAT unit
- Provide overtime (including overtime for 55 additional
paramedic FTEs)
|
$7,948 |
DOC |
- Adjustments to reconcile funding for appropriate staffing
level
- Rate increase in contracts for inmate health care and halfway
house beds
|
$11,156 |
DPW |
- Rent for Impound Lot at Addison Road, due to Brentwood
development
|
$1,000 |
TOTAL |
|
$172,092 |
|