Highlights of the Mayor’s FY 2000 Budget
April 1999

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GOVERNMENT OF THE DISTRICT OF COLUMBIA
EXECUTIVE OFFICE OF THE MAYOR

OFFICE OF COMMUNICATIONS

ONE JUDICIARY SQUARE
441 FOURTH STREET, N.W.
SUITE 1100
WASHINGTON, D.C. 20001
(202) 727-6224

Highlights of the Mayor’s FY 2000 Budget

SUMMARY

OVERALL MESSAGE

The Mayor's FY2000 budget will allow us to take our existing resources and expand our government's ability to deliver services in the short-term and the long-term. It represents the Williams Administration's vision for making the city work for everyone.

BIG PICTURE

The time has come for us to make the difficult decisions that will put us in a competitive position for the next millennium -- decisions about what the government can and cannot do, should and should not do. Decisions that will determine, to a large extent, whether our city succeeds or fails.
The city is in a service crisis. Since coming into office, we've found the same level of dysfunction throughout the government that existed in the CFO's organization. The now famous tax file room is emblematic of conditions throughout our government. We must take decisive steps NOW to rebuild our government from the ground up. Anything less would be merely playing at the margins.
This budget takes those tough decisions head on. It will put the District on a path to a stable future, ensuring for years to come that Washington will be a capital all Americans can be proud of. Most importantly, it strengthens our investment in four critical areas:
- Children
- Education
- Health Care
- Neighborhood Revitalization
This budget sets out aggressive policy goals for our children, our schools, our health care system, and our neighborhoods. It provides new investments our citizens want and deserve. In order to meet these goals without exposing the District to the danger of another financial collapse, we need a smaller, more efficient government. This will be accomplished in three ways.
- Service Improvements — the budget will reform service delivery and make strategic capital investments to improve the District's capacity to provide prompt, quality services to citizens.
- Workforce Investment — the budget will invest in the workforce in a manner that promotes productivity, training and more efficient service delivery.
- Managed Competition — where appropriate, the budget will utilize managed competition to allow our workers to make more money while providing residents better service at reduced costs.

CHILDREN

Summary: This budget represents a historic investment in children, creating a $33 million fund for out-of:school youth programs and devoting an additional $21.3 million for new and expanded District programs to serve youth.

The Child and Youth Investment Partnership will distribute $33 million for after school programs, child care, abuse/neglect prevention programs, and other youth programs.
- The collaborative approach allows services to be delivered by community organizations instead of government bureaucracies. This is part of a new paradigm of Public-Private Partnerships that is a core principle of my administration.
- The goal is to create a seamless web of high quality services and challenging opportunities to promote the healthy development of the city's young people through a network of nurturing families, caring neighborhoods, and safe and enriching centers of learning in and out of school.
New and Expanded District Programs for Children. The budget includes more than $21.3 million in capital improvements and operating expenditures to District agencies whose hose missions impact services for children, youth and families. These funds will:
- Provide needed improvements to the foster care and child welfare transition, to better serve our foster children and bring the function back under the control of the District. We will provide funds to increase payments to foster parents, improve retention of social workers, and implement management reforms to speed the process of getting foster children into permanent homes.
- Add $13.5 million in new child care subsidies, which will support subsidized child care for approximately 2,000 more children and increased child care subsidy rates.
  - This represents a significant advance in child care, providing added capacity, improved facilities, and expanded access to lower middle class families.
  - This initiative will help mothers and fathers be good parents while making ends meet for their families. Ultimately, strengthening our education system as a whole depends on recognizing and supporting the role of parents as first teachers.
- Provide $500,000 to renovate public schools to deal with the needs of infants whose mothers are still in school. The funds will help create lead free infant and day care centers in the school.
- Focus on giving young people the tools they need to succeed in the world of work. It will allow more young people to participate in the successful SummerWorks program, create a youth internship program, and implement a Youth-to-Careers and Entrepreneurship program to target high school dropouts and engage them in non-traditional educational and vocational training.
For the first time, our city will have an innovative, unified strategy to work collaboratively with community organizations to improve the lives of children, youth, and families.
The future of Washington is vested in our children. Children are our most precious resource and the wisest possible investment in our future.
Unfortunately, we have lacked a unified strategy or a strong enough commitment from the District government to assure that our children are safe, educated, happy and healthy. The results are ominous:
- 2 out of 5 children in the District live in poverty
- 1 out of 10 children in the District die before the age of 3
- The District has the highest percentage ( 13.4%) of low- birth weight babies in the nation
- 40% of our children do not graduate from high school
- 1 out of 4 of our young men spend time in prison
- The, 3,128 foster children in the District - more than 98 percent of whom are African American -- languish in the child welfare system for an average of 3.5 to 4 years, more than twice the national average.
We face a moral imperative to renew and strengthen our commitment to children. We cannot allow an entire generation of youth to slip into a world of permanent poverty and hopelessness. This budget reflects that imperative, and follows through on the Mayor's promise to devote $33 million toward children's programs.

EDUCATION

Summary: This budget makes a strategic investment in modernized classrooms, good teachers, and expanded opportunities for higher education.

If we are to build a stable and prosperous future for our city, we must have a well educated and prepared workforce. More fundamentally, education is about giving children a chance to fulfill their innate talents so that they can become all they are supposed to be in life. This budget recognizes the paramount importance of education and makes a strategic investment in our children's future.
School Modernization and Construction. As a first step, this budget will invest $364 million over the next six years in capital improvements for our city's crumbling schools to provide children a safe, clean and effective learning environment. These funds pay for modernization, renovation, new construction, and technology upgrades to prepare students for the 21st Century.
- Our students deserve to learn under a roof that doesn't leak. They deserve schools where bathrooms work and classrooms stay warm in the winter and cool during summer school.
Teacher Salaries. The Mayor's budget provides a 5% increase in teacher salaries. The fact is, we have by far the lowest teacher salaries in the region. It is hurting our ability to compete for the best and brightest educators. A large percentage of the District's teachers are fast approaching retirement age — we need incentives to bring dedicated young teachers into our school system. We owe our children nothing less.
A first class education depends on first class schools, from kindergarten through college. While the need to invest in primary and secondary education is critical, we must also expand access to quality higher education for high school students.
A proposal under consideration in Congress to allow District students in-state tuition for schools in Maryland and Virginia is a good first step toward expanding options for our students and retaining families in the District. But we must also improve opportunities for higher learning at the University of the District of Columbia.
Investing In UDC. A Historically Black, Land-grant University, and our only public, four-year institution of higher learning, the University of the District of Columbia has a critical mission for our city. As with schools across the country, we must sharpen the mission of UDC and build it into a first class institution. This requires us to take a look at the current structure and focus of UDC and to make difficult decisions about its future.
- UDC's campus, located far from most of its potential student body, desperately needs an overhaul costing in excess of $125 million. The Mayor has an innovative proposal to move the campus east of the river, where it can fulfill its education mission at a reduced cost. It will be a vital resource to the community, and can serve as a catalyst for the implementation of an enterprise zone. The Mayor has included a request for $1 million to study the feasibility of this option.
- Due to years of neglected maintenance, UDC is literally crumbling. It would cost the District $6$ million — more than UDC's annual subsidy — just to stabilize the buildings. That's $65 million not spent on improved classrooms? modern technology, or academic programs designed to prepare students for the world of work. We need a better option. A new campus east of the river is the best choice for our students.
- Additionally, the Mayor believes we must refocus the energies of UDC to concentrate on technology and preparing students for the world of work. These changes are not easy, but are necessary if we are to build UDC into a first class University that meets the needs of its students and the community.
- For the first time, the District will invest $5 million a year in the endowment for UDC, to provide for the long term health and prosperity of the University.

HEALTH CARE

Summary: This budget will provide insurance to an additional 39,00() residents who currently lack coverage. This will reduce the uninsured rate from 17 percent to 8 percent, making Washington a national leader. The budget will fundamentally restructure the health care delivery system to provide more access and better quality to underserved communities, particularly low- income families.

Expanded Coverage. The centerpiece of the Mayor's Health Care initiative for the city is to guarantee the availability of comprehensive health insurance coverage to every District resident with a family income at or below twice the federal poverty level. This will cut the uninsured rate by more than half, from 17% to 8%, putting us in the top ten percent of States, and first among benchmark cities. Washington can and should become a deader in health care coverage.
Primary Care The second component of the Mayor's Health Care plan is a new emphasis on primary care services, including substance abuse treatment. Although our city has enough overall primary care capacity, some areas of the city are dramatically underserved. The Mayor's budget will work to solve this inequity, building two replacement primary care facilities in Wards 7 and 8. Through insurance coverage and capital investments, this budget will greatly increase access and resources available for primary care service to District residents.
Strengthening the Safety Net. The third priority in this area is to strengthen the health care delivery system and the "safety net." This proposal begins to achieve this goal by reducing the number of uninsured in the District, thereby reducing the burden of uncompensated care on health care providers. In addition, this proposal maintains funding for the uninsured. The proposal contains two accounts to fund contractual arrangements with the Public Benefits Corporation (PBC). These contracts will reimburse the PBC for services provided at D.C. General Hospital and the clinics to individuals who remain uninsured.
Substance Abuse Treatment and Prevention. Substance abuse treatment and prevention is also an important part of this initiative. The health care restructuring proposal includes the addition of substance abuse services as part of the standard managed care benefits package. Thus, newly insured and current Medicaid enrollees will have access to substance abuse services.
The District spends about one-third of its budget on health care related services. Despite this spending, the current health care system in the District fails to meet the needs of many residents. The District has higher than national average rates of infant mortality, homicide' and communicable diseases including HIV/AIDS. An alarming 17 percent of our citizens - 80,000 residents - lack any health insurance at all.

NEIGHBORHOOD REVITALIZATION

Summary: A fourth priority of this budget is neighborhood revitalization. This budget seeks to vastly upgrade the District's ability to address key neighborhood issues including jobs, affordable housing and clean streets.

The Mayor's budget includes a three pronged approach to neighborhood revitalization:
- First, the budget provides for needed upgrades in the District's internal capacity to address neighborhood issues by putting more resources into the understaffed Offices of Planning and Zoning.
- Second, under this budget, we will dramatically step up street cleaning efforts and begin to coordinate cleaning efforts with community and private sector groups.
- Third, we will work through the National Capital Revitalization Corporation to leverage new investments in business and housing — investments that will renew our neighborhoods, one block at a time
Additionally, the Mayor's budget includes $284,000 in capital for the Commission on Arts and Humanities to fund the installation of murals, sculpture and other artworks at more than 20 public sites including city streets and parks, the Metro system, city government buildings and offices, and other public settings. Art respects and improves the physical character of our neighborhoods as well as reaffirming and strengthening the District as the economic hub of the National Capital Area.
To be prosperous, a city must have a strong and vital core, and we are moving forward with plans to ensure that our downtown remains an engine of economic growth. But economic development downtown cannot come at the expense of our city's greatest treasure — the many diverse and unique neighborhoods from which is woven the fabric of our social and cultural life.
The District has many great neighborhoods, each with a rich history. traditions, and identity. Good people raise their families here. They worship, educate their children, and relax with friends -- all in our neighborhoods. If our city is to prosper, we must have healthy, vital neighborhoods.

INVESTING IN OUR WORKFORCE

Summary: The Mayor's budget proposes a series of reforms designed to invest in our workforce, promoting productivity, training, and more efficient service delivery. For the first time? the District will have a coherent strategy for developing a highly skilled and satisfied workforce. Specifically, the budget will address the pay disparity between union and non-union employees, link pay to performance, and improve training.

Equal Pay for Equal Work. The Mayor proposes to eliminate the growing disparity between union and non-union pay schedules. This disparity is destructive to morale and productivity, and is unfair to workers.
- Pay parity will be achieved by FY 2002, beginning with a 3.8 percent base pay increase in FY 2000. In addition, the Mayor proposes a 2.2 percent performance bonus fund for non-union workers, bringing the total increase to 6 percent in FY 2000. The effect of this proposal is to link part of employees' compensation to performance while, at the same time, achieving pay parity.
Gainsharing. We must develop a mechanism to link pay to performance. As a first step, the Mayor's budget proposes a gainsharing initiative for certain programs that have measurable outcomes. When employees reduce costs through reengineering or other means and increase productivity, they are awarded a performance bonus for their efforts. By working with the unions, we can use gainsharing initiatives to improve services and reduce costs.
Training. The employees of District government are our most important partners in building a government that is more responsive to the needs of citizens. Therefore it is critical that the workforce is properly trained to do their job. Under the Mayor's budget, District employees will receive additional training to enhance their ability to provide quality services. This proposed workforce investment is a long-term strategic approach to improving management and compensating the workforce for a job well done.

MANAGED COMPETITION

Summary: In order to provide prepare our city for the 21st Century, the Mayor proposes to introduce competition into our government, where appropriate, allowing our workers to earn more money while providing residents better services at reduced cost.

Managed competition is a process whereby public and private entities compete for the provision of services. Cities across the country have used managed competition to improve service quality, efficiency, as well as reduce costs. The Mayor has a commitment to working together with our labor unions to inject competition into certain government services. We will give our workers new opportunities for increased training, performance incentives, and the ability to rethink their work.
The assumption behind managed competition is that in most cases our workers are the best prepared, most experienced people for the job. Given the monopolistic nature of government, however, they lack incentives to go the extra mile required to provide the highest quality service at the lowest cost.
Under this plan, workers will be allowed to organize themselves and bid for a contract to deliver certain government services. They will receive training and technical support to help them get organized and to prepare them for a competitive bidding process. Contracts will be structured with incentives for efficiency and quality.
The Mayor recognizes that oftentimes workers know better than management how to improve services and reduce costs. We will empower them to rethink and redesign the way they do their work. If they can cut costs, they should be rewarded. If they can increase productivity, they should be rewarded. If they can improve service quality, they should be rewarded.
Over the course of the next several years, a variety of government services — from rat control to litter can distribution — could be "competed" out. Street sign replacement, for example, is an ideal program for managed competition.

Highlights of the Mayor’s FY 2000 Budget April 1999