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D.C. Now Has 'Budget Autonomy.' But What Does That Even Mean?

In April 2013, 83 percent of D.C. residents voted in favor of budget autonomy — but the referendum has been stuck in court since.
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In April 2013, 83 percent of D.C. residents voted in favor of budget autonomy — but the referendum has been stuck in court since.

On Thursday, D.C. Mayor Muriel Bowser unveiled her budget for the 2017 fiscal year, setting off a two-month process in which the D.C. Council debates, amends and approves her spending plan.

But unlike in years and decades past, one thing will be different: the role Congress plays in how D.C. spends its money.

That's because of a ruling that came down from a D.C. judge March 18. In that ruling, Superior Court Judge Brian Holeman upheld the legality of an April 2013 referendum in which 83 percent of D.C. residents voted to amend the city's Home Rule Charter to allow legislators more flexibility in passing its local budget and spending local dollars.

When it was first passed by Congress in 1973, the charter granted D.C. limited self-governance. On the city's annual budget, the charter spelled out a specific process: The Council would approve a local spending plan that would then be submitted to Congress as part of the broader federal budget. Only when Congress passed the federal budget would D.C. be allowed to start spending its own local dollars.

The Budget Autonomy Act proposes that the District can spend its money as long as Congress doesn't say no. — Superior Court Judge Brian Holeman

City officials have long complained about the arrangement. They say it forces the city to start the budget process earlier than needed, leaves the budget they finally approve to the whims of Congress and broader partisan fights over federal spending, and even threatens the city with shutdowns when the federal government shuts down. In short, it treats D.C. like just another government agency.

The 2013 referendum sought to change that. D.C.'s budget would still be sent to Congress, but only for a 30-day passive review. That means that if Congress did nothing in that period, it would be assumed that the budget was approved and the city could start spending its money as soon as the next fiscal year started.

In essence, the referendum sought to give Congress less direct power over the city's local budget. (The majority of the $13 billion annual D.C. budget comes from local revenues.) Or, in local parlance, it would give D.C. "budget autonomy."

But even though the referendum was approved by voters, it never took effect because it was wrapped up in court. Former D.C. Mayor Vincent Gray and current CFO Jeffrey DeWitt had argued that the referendum was an improper means to amend the charter. A court agreed with them, but when Mayor Muriel Bowser took the opposite side of the argument upon taking office, the case was sent back to a lower court for consideration.

That's how it came to Holeman, who ruled that the referendum was legal and, as such, that budget autonomy is the law of the land.

In his ruling, Holeman summarized how budgeting in D.C. will change: "The status quo is that Congress must say yes before the District can spend its funds," he wrote. "The Budget Autonomy Act proposes that the District can spend its money as long as Congress doesn't say no."

Supporters of the referendum were quick to celebrate the decision. D.C. Del. Eleanor Holmes Norton called it a "historic home-rule victory." D.C. Council Chairman Phil Mendelson said it was a "seminal day in the history of Home Rule." Kimberly Perry of D.C. Vote hailed the ruling, saying, "With the law on our side, we freed ourselves from congressional control over our local tax dollars."

Racine said he would not appeal the ruling, and DeWitt was quick to say that he would abide by it in the upcoming budget process.

"Now that we have received direction from Superior Court, the city can develop its budget independently and not as a federal agency," he said in a written statement. "This ruling will benefit the District in many ways, including eliminating the rating agencies’ concerns about the impact of federal shutdowns and the historical delays in the federal budget process."

With this budget, Bowser said this week that two versions would be submitted: The local portion would go straight to Congress for a 30-day passive review, while the federal portion — which includes money the government gives D.C. for its courts — would be submitted to the White House and then sent to Capitol Hill as part of the federal budget.

Judicial Watch suit is still active

But, like many things in D.C., that's not the end of it.

"We believe the law is illegal," said Tim Fitton, president of Judicial Watch. "For budget autonomy to be attained, it has to be done through Congress."

Last November, Judicial Watch filed a lawsuit on behalf of D.C. resident Clarice Feldman, who argued that it would be illegal for the city to spend money not explicitly allocated by Congress.

That lawsuit, filed in federal court, remains active.

And even though the budget autonomy referendum cut Congress's role in the city's annual budget process, the national legislature still retains control of the city. As such, it can pass a law saying the referendum has no effect, or attach a rider to another bill saying as much. Or, says Mendelson, it could simply use its powers to rewrite the budget altogether.

"We will be sending the [budget] directly to Congress as we do any other legislation for the 30-day review period," he explains. "Congress continues to retain plenary authority, which is to say they can rewrite our budget if they want to do that."

An email to the House Oversight and Government Reform Committee, which oversees D.C., was not returned.

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