Gandhi: D.C. Facing $131 Million Revenue Shortfall

The District has identified a $131 million revenue shortfall, which will force the city to cut funding for programs in fiscal year 2009, said sources who have been briefed on the matter by D.C. Chief Financial Officer Natwar M. Gandhi.

The shortfall is due largely to income taxes, which have fallen off projections because of the troubles in the stock market, said the sources, who spoke on condition of anonymity because Gandhi intends to announce the figures at a news conference Wednesday.

The city, which had enjoyed large surpluses for years, had its first shortfall in the spring, when Gandhi announced a $35 million budget gap for fiscal 2009, which begins next month. Mayor Adrian M. Fenty (D) and the D.C. Council made up that divide in part by raising taxes on cigarettes by $1 per pack.

However, the new shortfall might not be as easy to swallow. The city is projected to have $17 million left over from fiscal 2008, the sources said, but the rest of the gap likely will have to be bridged by budget cuts or tax hikes.

The only solace, one D.C. official said, was that "it's not as bad as in Virginia."

Fenty declined to comment this evening as he left the John A. Wilson Building. Gandhi could not be reached.