Appropriations for FY2002: District of Columbia

CRS Report for Congress
Appropriations for FY2002:
District of Columbia
Updated January 10, 2002
Eugene Boyd 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. 107-
96 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 ExpertiseNameCRS DivisionTelephone
DC Education Eugene BoydG&F7-8689
DC CorrectionsJoAnne O’BryantDSP7-6819
DC CourtsSteve RutkusG&F7-7162
DC Governance and PoliticsEugene BoydG&F7-8689
DC Federal Fiscal RelationsNonna A. NotoG&F7-7826
DC Oversight Michael FauntroyG&F7-0635
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 Appropriations9
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 MarkupConf. Report Approved
House House Senate Senate Conf. Pres.House Senate House Senate
Report Passage Report Passage Report Action
10/11/01107-2169/25/01107-8511/07/01107-32112/06/0112/07/01signed on
12/21/01
P.L. 107-96



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 work-
in-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.


1The Authority is also known as the control board.

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


2The 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.
3Under 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.

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



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



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 Council4
Committee on Special Education 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


4The committee was created in April 1999, and was to issue a report one year later. The
committee has not yet issued a final report.

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



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 court-
appointed 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



(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



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’sHouse Senate Conference
Request
Government Direction and Support5.45.45.45.4
Economic Development and1.61.61.61.6
Regulation
— New E-Conomy[1.0][1.0][1.0][1.0]
Transformation Act
— Dept of Consumer and[0.6][0.6][0.6][0.6]
Regulatory Affairs
Public Safety and Justice8.68.68.68.9
— Metropolitan Police[2.8][2.8][2.8][2.8]
— Fire and Emergency[5.9][5.9][5.9][5.9]
Medical Services
—Child Fatality Review [0.1][0.1][0.1][0.1]
Public Education14.014.014.013.0
—2001 Summer School[12.0][12.0][12.0][12.0]
— Public and Charter [1.0][1.0][1.0][1.0]
School Student Census
— Adult Education Program[1.0][1.0][1.0]—
Human Support Services28.028.028.028.0
— Medicaid Expansion[15.0][15.0][15.0][15.0]



Program City’sHouse Senate Conference
Request
— Office of Latino Affairs[1.0][1.0][1.0][1.0]
— Disproportionate Share of[4.0][4.0][4.0][4.0]
Hospital Cost
— Disability Compensation[3.0][3.0][3.0][3.0]
— Children’s Invest. Fund[5.0][5.0][5.0][5.0]
Public Works0.10.10.10.1
Workforce Investment40.540.540.540.5
Wilson Building7.17.17.17.1
Water and Sewer Authority2.12.12.12.1
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



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.



Table 3. District of Columbia General and Special
Federal Payment Funds: Proposed FY2002 Appropriations
(in millions of dollars)
FY2002
Enacted City’s
ProgramsFY2001Admin.budgetHouse Senate Conf.
Federal Payments: General and Special Fund
Resident Tuition Program17.017.017.017.017.017.0
Incentives for the Adoption0.00.0{5.0}d{5.0}d{5.0}d{5.0}d
of Foster Children
— Adoption0.00.00.00.0[2.0][2.0]
— Scholarship0.00.00.00.0[1.0][1.0]
— Resource Center0.00.00.00.0[1.0][1.0]
— Incentives for0.00.00.00.0[1.0][1.0]
Special Needs
Children
Capitol City Career Dev.0.00.00.01.50.00.5
and Job Training
Capitol Education Fund—————0.5
Metro. Kappa Youth Dev.—————0.45
Foundation
Fire and Emergency0.00.00.00.50.00.5
Medical Services Dept.
Chief Medical Examiner0.00.00.00.60.00.585
Youth Life Foundation0.00.00.00.30.00.25
Food for Friends Program0.00.00.02.00.02.0
City Administrator0.00.00.00.30.00.3
Chief Technology Officer0.00.00.00.5—0.0
Southeastern Univ./0.00.00.00.00.50.5
McKinley Tech Partnership
Emergency Planningg0.00.016.016.016.016.06
— Development of an0.00.00.0[4.6]——
Emer. Ops. Plan
— Emer. Plan0.00.00.0[8.0]——
Implementation
— World Bank/IMF 0.00.00.0[3.4][3.4][3.4]
reimbursement
CFO 0.0 0.0 0.0 2.3 5.9 8.3



FY2002
Enacted City’s
ProgramsFY2001Admin.budgetHouse Senate Conf.
— Active Cap River0.00.00.00.0[2.25][2.25]
Cleanup
— U.S. Soccer0.00.00.00.0[0.5][0.5]
Kenilworth Sports
—One Economy Corp.0.00.00.00.0[0.6][0.6]
— Langston Project0.00.00.00.0[0.5][0.5]
— Green Door0.00.00.00.0[1.0][1.0]
— City Museum0.00.00.00.0[0.5][0.5]
— Teach for America0.00.00.00.0[0.2][0.2]
— Child Passenger0.00.00.00.0[0.35][0.35]
Safety
–– Eastern Market.—————[0.05]
Renovation Study
—Excel Institute Adult1.00.0—[1.0]0.0[1.0]
Education Program
— Woodlawn0.00.00.0[0.3]0.0[0.3]
Cemetery Restoration
— Real World Schools—0.0—[0.25]0.0[0.25]
— Mentoring and—0.00.0[0.3]0.0[0.3]
hotline
— Values training—0.00.0[0.25]0.0[0.25]
— Character building———[0.25]0.0[0.25]
Court Appointed Special————0.250.25
Advocate
Corrections Trustee for134.70.00.032.732.730.2
Operations
— Case processing [1.0]0.00.0[1.0][1.0][1.0]
— Lorton sewage—0.00.0[2.0][2.0][1.5]
treatment plant closing
— Lorton Building—0.00.0[2.5][2.5][0.5]
renovations
District of Columbia Courts123.40.00.0134.7140.2112.2
Operation
— Court operations[123.4][111.2][111.2][111.2][116.9]—
— Court of Appeals[7.4][8.0][8.0][8.0][8.0][8.0]
— Superior Court[71.1][66.1][66.1][89.5][72.7][66.1]



FY2002
Enacted City’s
ProgramsFY2001Admin.budgetHouse Senate Conf.
— Court system:[17.9][31.1]e[31.1]e[31.1]e[31.6][31.6]
— Child Abusea0.00.00.00.00.00.0
and Neglect
— Indigent0.00.00.00.00.00.0
representation b
— Capital[3.3][6.0][6.0][6.0][27.8][6.5]
improvements
— Pay raise (8.48%)[5.3]0.00.00.00.0—
Family Court0.00.00.023.323.324.02
— Superior Court0.00.00.0[18.3]0.0[23.3]
— Mayor0.00.00.0[5.0]0.0[0.7]
— Child and Fam.————[0.5][0.5]
Serv. Agency
Defender Services in D.C.c34.434.334.334.339.334.3
Courts
Court Services and Offender112.5147.3 ff147.3f147.3f147.3f
Supervision Agency for the
District of Columbia
— Community[67.5][94.1]ff[94.1]f[94.1][94.1]
Supervision and Sex
Offender Registration
— Parole Revocation,——fffff
Adult Probation and
Offender Supervision:
— Drug testing——fffff
and screening
— Public Defender[18.8][20.8]ff[20.8]f[20.8][20.8]f
Service
— Pretrial Service[26.2][32.4]ff[32.4]f[32.4][32.4]f
Agency
Children’s National Medical1.50.00.05.53.25.5
Center
Thurgood Marshall———0.01.01.0
Academy Charter School
D.C. Public Schools0.00.00.00.02.72.5
— Voyager Expanded0.00.00.00.0[2.0][2.0]


Learning Literacy

FY2002
Enacted City’s
ProgramsFY2001Admin.budgetHouse Senate Conf.
— Failure Free0.00.00.00.0[0.25][0.25]
Reading Literacy
— Lightspan, Inc.,—————[0.25]
eduTest.com
G. Washington University0.00.00.00.00.250.25
Center for Excellence in
Municipal Management
Child and Family Social0.00.00.00.00.20.0
Services Computer
Integration Plan
Law Enforcement Mobile0.00.00.00.01.41.4
Wireless Interoperational
— CTO0.00.00.00.0[0.4][0.4]
— U.S. Secret Service0.00.00.00.0[0.33][0.33]
— U.S. Capitol Police0.00.00.00.0[0.33][0.33]
— U.S. Park Police0.00.00.00.0[0.33][0.33]
St. Coletta expansion 1.00.00.01.00.02.0
Faith and Politics Institute0.00.00.00.050.00.05
Poplar Point Brownfield3.50.03.5{3.5}{3.5}{3.5}
Remediation
— Environmental[2.15]0.0[2.15][2.15]0.0[2.15]
assessment
— Anacostia Park[1.3]—[1.3][1.3]0.0[1.3]
entrance
Public School Anti-Violence0.50.00.00.00.00.0
programs
— Anti-violence[0.25]0.00.00.00.00.0
— Reading programs[0.25]0.00.00.00.00.0
Washington Interfaith1.00.00.00.00.00.0
Network
Simplified Personnel System0.250.00.00.00.00.0
Metro improvements25.00.00.00.00.00.0
Presidential inauguration5.960.00.00.00.00.0
Child Advocacy Center0.50.00.00.00.00.0
Special Olympics0.250.00.00.00.00.0



FY2002
Enacted City’s
ProgramsFY2001Admin.budgetHouse Senate Conf.
Enforcement of law banning0.10.00.00.0 0.00.1
tobacco possession by
minors
Total federal payments464.1342.5199.15398.6407.9407.9
a 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. b
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. c
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.d
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.e
Allows courts to reallocate not more than $1 million among activities funded under this heading.f
Certified as a federal agency on August 14, 2000.g
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



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 Eugene Boyd.
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



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 Eugene
Boyd.
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



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)
EnactedFY2002
ProgramsFY2001District House Senate Conf.
Division of Expenses: District of Columbia Funds
GENERAL FUND
Governmental Direction and232.721284.559285.359307.117286.138
Support
Economic Development and207.655230.878230.878230.878230.878
Regulation
Public Safety and Justice768.430632.668633.853632.668633.853
Public Education System1,023.5431,106.1651,106.1651,108.9151,108.665
Human Support Services1,542.2401,803.9231,803.9231,803.9231,803.923
Public Works297.495300.151300.151300.151300.151
Receivership Programs391.328403.368403.368403.868403.868
Workforce Investments0.00042.89642.89642.89642.896
Reserve Fund150.000 a150.000150.000120.000120.000
Reserve Relief0.00.00.030.030.0
Contingency Reserve Fund—— — ——
Emergency Planning and
Security Costs16.0580.016.05816.05816.058
DC Financial Responsibility3.1400.00.00.00.0
and Management Assistance
Authority
Repayment of Loans and243.238247.902247.902247.902247.902
Interest
Repayment Gen. Fund39.30039.30039.30039.30039.300
Recovery Debt
Pay Interest on Short Term1.1400.5000.5000.5000.500
Borrowing
Presidential Inauguration5.9610.00.00.00.0
Wilson Building8.4098.8598.8598.8598.859
Emergency Reserve Fund61.40633.25433.25433.25433.254
Transfer (Tobacco Settlement
Trust Fund Transfer)
One Judiciary Square7.9500.00.00.00.0
Certificate of Participation
Optical and Dental Insurance2.6750.00.00.00.0


Payments

EnactedFY2002
ProgramsFY2001District House Senate Conf.
Productivity Savings0.0000.00.00.00.0
Procurement and Management{37.000}0.00.00.00.0
Savings
Human Resource Development0.0000.00.00.00.0
Operational Improvement{10.000}0.00.00.00.0
Savings
Management Supervisory13.2000.00.00.00.0
Services
Cafeteria Plan{5.000}0.00.00.00.0
Productivity Bank0.0000.00.00.00.0
Non-departmental Agency—5.7995.7995.7995.799
Risk Management0.0000.00.00.00.0
General Fund Total4,948.2805,290.2225,308.2655,332.0885,312.044
Operating Expenses
Enterprise Funds
Water and Sewer Authority230.614244.978244.978244.978244.978
Washington Aqueduct45.09146.51046.51046.51046.510
Stormwater Permit2.1513.1003.1003.1003.100
Compliance
Lottery and Charitable Games223.200229.688229.688229.688229.688
Sports and Enter. Commission10.9689.1279.1279.1279.627
DC Public Benefit Corp. 78.2350.00.00.00.0
DC Retirement Board11.41413.38813.38813.38813.388
Convention Center Enterprise52.72657.27857.27857.27857.278
Fund
Housing Finance Agency 0.0004.7114.7114.7114.711
National Capital Revitalization0.0002.6732.6732.6732.673
Corporation
Total Enterprise Funds656.207611.453611.453611.453611.953
Total Operating Expenses5,677.3805,901.6755,919.7185,943.5415,923.997
Capital Outlay
General Fund1,218.6371,029.9751,074.6051,074.6041,074.605
Water and Sewer Fund197.169 140.725152.114152.114152.114
Total District of Columbia
Funds 7,093.186 7,072.375 7,146.437 7,170.259 7,150.716
Note: Brackets indicate projected saving to be achieved and not actual expenditure.a
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.



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.



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



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.



Table 5. District of Columbia Federal and Local Appropriations
That May Be Used to Respond to Terrorism Threats
Appropriation TitleFY2002 Budget Request
(millions of dollars)
Metropolitan Police Department6.8
D.C. National Guard0.5
Emergency Security Planning16.0
D.C. Emergency Management Agency1.0
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 $7.1
Apparatus
Specialized Hazardous Materials $1.0
Equipment
Chemical and Biological Weapons $10.3
Preparedness
Pharmaceuticals for Responders $2.1
Response and Communications Capability $15.0
Search, Rescue, and Other Emergency $8.9
Equipment and Support
Equipment, Supplies, and Vehicles for the $1.8
Office of the Chief Medical Examiner
Hospital Containment Facilities for the $8.0
Department of Health
Office of the Chief Technology Officer $45.5
Communications System
Emergency Traffic Management$20.7



Activity Appropriation
(in millions)
Increased Facility Security$9.9
Training and Planning$25.5
Washington Metropolitan Area Transit$39.1
Authority
Metropolitan Washington Council of $5.0
Governments
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



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.


5P.L. 106-113.
6P.L. 106-522.