Gandhi warns D.C. bond rating might fall
Chief Financial Officer Natwar M. Gandhi welcomed Mayor Vincent C. Gray and Council Chairman Kwame R. Brown to their new posts with a letter warning that District's hard-earned bond rating is in danger of falling with the depletion of reserves and any subsidy of United Medical Center.
Gray (D) repeatedly criticized the administration of former Mayor Adrian M. Fenty for proposing budgets that drew down on the rainy day fund.
In a letter to Gray and Brown, Gandhi points to a December credit report by Standard & Poor's with concerns about the reserves, the hospital and a decrease in the collection of property taxes.
Collections dropped to 83.7 percent in fiscal 2009 from 89.4 percent the previous fiscal year, according to Gandhi's letter. He said some taxpayers refused to pay their bills in full because of an increase in rates, but changes that are going into effect could encourage them to pay in the future.
After delivering his inaugural speech Sunday, Gray said an increase in taxes to help to close an estimated $440 million budget gap in fiscal 2012 is "on the table." Gray's stance differed from Fenty's pledge to propose no new taxes.
On the campaign trail and as a council chairman, Gray pushed legislation to replenish the reserves, on which the Fenty administration depended to help overcome budget gaps.
Meanwhile, Brown (D) said he preferred to find other alternatives to raising taxes.
Nikita R Stewart
| January 6, 2011; 4:55 PM ET
Categories: Budget, City Finances, Kwame Brown, Nikita Stewart, Vincent C. Gray, vincent gray
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