Who killed DC?

By Sam Smith

[From the May 1995 Progressive Review]
Copyright 1995 The Progressive Review

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OCCUPIED WASHINGTON -- In the midst of this city's fiscal crisis, DC's homicide rate dropped to its lowest level since 1987 -- down 31% from the same period last year.

It wasn't the result of Clinton's 100,000 new cops or three-strikes-and-you're-out or some Gingrichian grostequery. What happened was that the homicide squad was finally brought up to full strength, reducing the number of cases per detective from 13 to three. The detectives were also assigned in proportion to the number of murders in each district.

The story didn't get much attention here. When you come right down to it, things that make cities work aren't really that glamorous -- especially when you're trying to prove that DC can't possibly govern itself. Especially when the city is said to be dying.

The alleged cause of death is a $722 million deficit. No sooner had it been declared than America's most dangerous hate group -- the 104th Congress -- was on the case, dreaming up punishments for the city. It finally settled on turning the city over to an authority that has many of the powers of a military junta short of summary execution. This strange creature, which goes well beyond other recent urban financial control boards, is called the District of Columbia Financial Responsibility and Management Assistance Authority. But that's really just an anagram for Now aren't you sorry you voted for Marion Barry?

Even if Washington weren't the nation's capital what has happened to it should be a matter of national concern. If Washington were a foreign country, the State Department would probably have already filed a note of protest complaining of the loss of democracy to a "illegitimate regime" (unless, of course, the CIA was responsible for it). A strong case can be made that DC's colonial status -- even before the latest congressional moves -- is a violation of the UN Charter, OAS agreements and human rights treaties. And if DC had been a southern state, the Justice Department would have surely gone into court to get an injunction against the new control board under the voting rights act.

The ambassador from South Africa has referred to DC's situation "a struggle for liberation." Unfortunately, not only does the rest of the country fail to see it that way, even the citizens of this capital colony display baffling passivity in the face of the assault on their rights. The destruction of the limited self-government known by the city for the past 20 years has brought far more depression and anxiety than either anger or action.

It must be said in the citizen's defense, however, that the local media has described the situation poorly, tending to view it as just a change in the governmental organization chart rather than as a return to full-fledged colonialism.

The Washington Post editorially attacked those who think otherwise as "demagogues and defeatists." The Post, which has become a sort of tabloid for the politically encephalitic, has most of its circulation in the suburbs and has but marginal interest in its namesake any more. On the day the president signed the measure that abbrogated local democratic rights, a front page story described DC as "less a model for democracy than a dangerous laboratory for all the sicknesses of big US cities."

Similarly, those supporting DC democracy got virtually no support, time, or space from either the yuppie weekly, City Paper, or from the local public radio station, WAMU, whose talk show hosts specialize in presenting all sides of the conventional wisdom. Only the black media seemed to have a good word for the place.

The politicians -- even the normally admirable Eleanor Holmes Norton (who has the difficult and voteless task of representing DC in the House of Representatives) -- haven't helped by pretending nothing bad has happened. In such an environment, it is not surprising that many DC residents don't understand what is going on. DC has become a battered child of urban America.

Since $722 million is hard to grasp, maybe this will help:

It's three-quarters of the amount Orange County blew on just a few bad investments. It's about one-tenth the current cost overrun on the third Boston harbor tunnel. And the cost overrun on Washington's own Metro system.

It's just 2% of "problem disbursements" that the GAO found at the Pentagon. A problem disbursement is money the Pentagon has spent but can't find what it was spent for or who authorized it.

It's about half the size of Pentagon overpayments to contractors as reported in another recent GAO audit.

And it's sixty percent of the overspending on contracts by just one of Pentagon payment center. This center has 13,600 "unreconciled contracts." According to Senator Charles Grassley, it would cost about $550 million in accountant fees to correct the figures, fees that would cover about three-quarters of the current DC deficit.

All these overruns, illegal expenditures and "problem disbursements" have a number of characteristics that distinguish them from the current DC deficit. The most notable of these include the fact that no one gets excited about them and that they were not incurred by Marion Barry or any other black politician. Which brings up an important point few like to mention: What has happened to DC is as much about race as it is about money.

Which is not to say that DC's deficit is a good thing or that there hasn't been a lot of waste, corruption and non/mal/misfeasance in the city's government. I know. As a local newspaper editor, I spent much of two decades trying to get somebody interested. Sometimes it seemed like the late DC city council chair, John Wilson, and I were about the only people in town -- local or federal -- who gave a damn.

Yet as a result, I also know that the deficit isn't all Marion Barry's fault. Not by a long shot. It even predates the city being granted "home rule." By a long shot.

Here, for example, is what I wrote in 1972, a couple of years before Congress gave DC a modicum of self government

The District government is currently employing 40,679 people, give or take a few hundred. That means one DC employee for every eighteen people, adult or child -- or a considerably better ratio than that between student and teacher in the public schools . . . Some 12,800 of these District workers are filing jobs that weren't even in existence ten years ago. The District workforce has grown 46% since 1962. No other statistic can make that claim -- except for the crime rate.

In 1975, at the start of home rule, I wrote:

One of the things we've complained about in the past has been the enormous size of the DC government. . . DC spends $122 per capita on its local police force. The figures for [seven other comparable] cities run between $38 per head in Atlanta to $79 in Boston. If we spent the seven city average we would save $48 million . . . The per capita expense to DC of five city functions is $287, placing it first. If we spent the seven city average we would save ten percent of the city's budget.

In 1980, just two years after Marion Barry had taken over as mayor, I reported that the city was facing a current budget deficit of $246 million. Further, Arthur Anderson & Company had found an accumulated $284 million deficit, sixty percent of which was incurred before home rule. The story -- remember, this is 15 years ago -- noted:

The auditors finally caught up with the game of fiscal musical chairs that [Mayor] Walter Washington and [budget director] Comer Coppie played so well: changing the dates when taxes were due, throwing accounts payable into the next fiscal year, not paying back bridge loans from the Treasury, switching from the accrual to the cash method of accounting for a one-time gain and so forth. As the city's financial advisors, Lazard Frere & Co. put it in the genteel language of its trade, the city got in trouble, in part, by carrying over "prior year liabilities into subsequent years without adequate provisions of their payment." To put it more bluntly, the city has, for a decade or more, been engaged in a sophisticated version of check-kiting and saying "the check's in the mail." That it has done so with impunity merely points to another way in which politicians and bureaucrats are different from the rest of us.

Marion Barry started out with a firm hand on the city's finances, but by 1985 he was playing the same games as his predecessors:

[City Council finance chair] John Wilson has been attempting to introduce an element of rationality into budgetary planning but he is receiving precious little support. A recent article he wrote for the Washington Post sums up the matter well: "The District must begin to live within its means and to finance its future budgets with existing resources. I believe that this can be done but only if the city acts now to create a 3 to 5 year tax and spending plan that establishes firm budget priorities divorced from political expediency; reorganize city agencies along service-delivery lines that provide more workers in the field and fewer highly paid consultants, executives, deputy and special assistants; and commit the city to a policy of tax-competitiveness aimed at increasing rather than eroding the tax base."

In 1987, near the end of Barry's term, I wrote:

As usual, Barry plans to spend almost every dime he gets . . .Someone might want to ask how come the city can afford to spend nearly 25% of its snow removal budget on a consulting report on snow removal -- and then lose the report. And what will a 25% increase in economic development funds do when previous expenditures have left us with fewer jobs for DC citizens than before we became a "city on the move?" . . . And if we are going to add 33% to the housing and community development budget what guarantees do we have that it won't continue to produce more scandals than housing? And if the council authorizes $15 million for housing assistance how can we be sure that it gets spent -- and for housing -- and not have half of it show up paying off the corrections department's over-spending as happened this year?

Thus the city's financial problems, contrary to the current impression, have run a familiar course whether or not Barry was in office and whether or not the city had home rule.

In fact, Barry actually reduced the long term deficit in the 1980s. With the election of the far less competent Sharon Pratt Kelly (who squeaked in thanks to the heavy backing of the Post) and with a national economic deterioration, this improvement was dramatically reversed. Not only did revenues falter but a significant number of DC residents slipped into poverty, adding greatly to social welfare costs, again factors ignored by the media and Congress.

Further, about two thirds of the DC's financial problems were on the revenue side. In 1990 the Commission on Budget and Financial Priorities, chaired by now White House budget director Alice Rivlin, cited a number of these problems:

-- In granting "home rule" the federal government left the city with an unfunded pension liability of over $5 billion.

-- It similarly left the city with an accumulated deficit of over $300 million.

-- The federal payment for services provided by the city and for land removed from the tax rolls had declined from over 35% of total DC revenues in the first year of home rule to just over 15% in 1990.

-- "With home rule, the federal government imposed significant financial responsibilities -- the accumulated operating deficit, the unfunded pension liability -- on the District government. Congress did not provide adequate funding to meet those responsibilities. Congress in fact impaired the District's ability to raise revenues by restricting the District's taxing authority."

These restrictions included everything from hundreds of millions of dollars lost annually because Congress won't let the city tax suburban commuters, $300 million because it exempted Fannie Mae's headquarters from local taxes, and $70 million because military and diplomatic personnel don't have to pay local sales tax. If you add these all up, and then throw in a fair federal payment for services rendered and taxable land preempted, you come up with an annual revenue loss twice the size of the current city deficit. In other words, without congressionally imposed limitations, DC would be showing a surplus.

Congress, however, has never taken responsibility for its role in the city's problems even though it approved every line of every budget for which it is now excoriating Barry and the city council. It refuses to set DC free yet ducks blame for what happens as a result. In creating the new authority, Congress once again has created a wall to hide behind as it bashes the city it loves to hate.

Ironically (although not surprisingly), the Gingrich gang has already screwed things up. Even as the junta bill was headed to the Senate from the House, two Wall Street firms announced they were lowering the rating of DC bonds to "junk" status because the legislation had undermined the creditworthiness of the notes. It was not an auspicious beginning.

There are yet other factors that don't get much consideration. For example, like many American cities, national and local policies have repeatedly vacuumed money from DC into the suburbs. The national urban squeeze began with the misapportionment of federal housing funds after WWII. While the suburbs were enjoying an intentional boom, cities were being involuntarily decimated -- socially, physically and economically. Freeways stabbed neighborhoods and businesses drifted outward.

The national response to these developments turned sharply pessimistic following the riots of the 1960s. In place of the hopeful rhetoric of the war on poverty, a language of urban disappear arose. Rather than repair the damage to our cities, to many it seemed simpler, and certainly less dangerous and more profitable, to rebuild the American city somewhere else. As early as 1971, articles were cropping up such as the one in Time on "Suburbia: The New American Plurality," and in US News & World Report: "New Role of the Suburbs."

In Washington, the first blow was Southwest urban renewal. The project, then the largest in the nation, began in 1954 and five years later 551 acres had been cleared. Some 24,000 people and 800 businesses were kicked out to make way for the program. Sixty percent of the latter never went back into operation.

Every subsequent grand plan for the city -- the freeways, the Metro subway system, the convention center, the Pennsylvania Avenue plan, various urban renewal and rezoning schemes -- have shared a number of damaging characteristics:

-- The uprooting of stable communities, producing new long-term demands on the social welfare systems.

-- The destruction of small business and the jobs it created.

-- The strong support of the welfare fathers -- the Washington Post and downtown business interests --who, it inevitably turned out, were prime beneficiaries of the projects they were boosting.

Some of these plans were stunning disasters. Perhaps the single worst economic mistake was DC's participation in the construction of a subway system without, at very least, a non-resident income tax. In effect, DC greatly subsidized a convenient means by which workers could live in the suburbs while employed in DC and not have to pay any city taxes other than those for their lunch-time yogurt and salad. As a result, two out of three dollars earned in the city are now exported tax-free each evening to the suburbs. Meanwhile, employment of DC residents has declined markedly, street traffic has increased, badly needed intra-city bus service deteriorated and service costs steadily mounted.

The subway was based on remarkably false premises. Heavy federal funding was sought on the spurious claim that ridership would be twice that which actually occurred. Those responsible -- unlike the current black city government -- never got even a brisk slap for their phony projections nor for the billions in federally-subsidized cost overruns that resulted.

And what was the final payoff for the city after all its "economic development' schemes? Sales tax revenue grew at less than the rate of inflation in the 1980s, and actually declined in the 1990s. It was a terrible price to pay to keep the suburban dominated Board of Trade and the suburban circulated Washington Post happy.

Of course, Marion Barry didn't help. But not so much because he was a crook or allowed crooked things to happen, but because of his longtime covert affair with downtown business. During the 80s, the most integrated meetings in town were when Marion and his staff got together with his campaign contributors. This relationship outlasted even his jail term; when a potential independent black mayoral candidate approached white businessmen last year for funds, he was told they were sticking with Barry. Once again, Barry had proved far more complex and adaptable than he appeared.

Marion still has this hold on people. He has repeatedly taken advantage of one of the city's great virtues -- the decency, patience and forgiveness of the black middle class. Much as with OJ Simpson, his troubles have become not so much matters of objective fact, but symbols of the treatment a subculture has repeatedly received from a still larger system. The tale of Barry is a mythical translation of an all too often true story. When Marion was shown handcuffed on television following his drug arrest, the FBI created the iconography of martyrdom. Marion has used this to the fullest.

Marion, of course, hasn't been the only hustler in town. The city council, a body once marked by its commitment to civil rights and social progress, has deteriorated into a decadent incumbentocracy spewing words without meaning, legislation without purpose, and debts without compensating assets. It ought to be arrested en masse for loitering on public property. Further, the city has been badly damaged by a biracial culture of self-aggrandizement that arose in the 1980s and which regards politics and the public purse as just one more potential profit center.

Abused by both white and black power, often working in concert, the city today has few friends. Even Jesse Jackson, elected as one of the city's senators-in-waiting, has been missing in action. So has the Congressional Black Caucus. As for Bill Clinton, the city is just one more problem he wishes would go away.

Meanwhile DC, filled with people who work for bureaucracies and service industries, is too civil, too polite and too colonial to stand up for itself. It has forgiven too much for too long to know how to begin.

Thus it is not surprising that when the extent of city's financial plight was revealed, the vultures ceased circling and dove for the feast. The Gingrich crowd moved quickly to take control. Ultra right think tanks chortled over the prospect of carrying out their cultural experiments in a place with only test mice rather than real citizens. Suburban congressmembers, long accustomed to corruptly influencing the city's affairs, were now free from even the leash of local suffrage. For the downtown white business community it was chance to return to the pre-home rule days when the director of the Board of Trade was the de facto city manager. And the Washington Post knew that the new board would listen to it far more respectfully than had a generation of elected politicians. On its front page, the paper tore after Marion Barry on campaign finance violations while burying citizen opposition to the new authority deep inside its weekly District section.

Disingenuous rhetoric flowed through the city like champagne in a Super Bowl victor's locker room. But what had really happened was just this: a black elected government of a black city had been effectively replaced by an appointed body that -- from behind closed doors -- would serve a white Congress, white business interests, white suburbia and a white newspaper.

As local activist Lawrence Guyot noted, "Everything we fought for in Mississippi is being taken away. In Mississippi the strategy was to prevent us from voting; the strategy now is to render our votes worthless."