WASHINGTON - District of Columbia officials held their breath yesterday as Congress continued to debate the district's fiscal 1995 spending measure, with the shutdown of all non-essential services hanging in the balance.

The deadline for the vote is midnight tonight. As of press time yesterday, Congress had not acted on the measure. Under federal law, the district is required to shut down non-essential services without an appropriation in place.

"We are the Christmas tree for everybody's agendas and interests," Mayor Sharon Pratt Kelly said at her first news briefing since losing the Democratic mayoral primary on Sept. 13.

Both the House and Senate have approved the district's $3.4 billion fiscal 1995 budget and $660 million federal payment. But the measure stalled this month in the Senate when members led by Sen. Phil Gramm, R-Tex., started attaching amendments on issues ranging from Haiti and crime to campaign finance reform.

The budget debate "has nothing to do with our cash position;" it "has to do with our ability to spend our own money," Kelly said. The fiscal 1995 budget would not be significantly affected by the immediate crisis, she said.

Ellen O'Connor, the district's deputy mayor for finance and chief financial officer, said the city's cash balance is a little more than $100 million and all bills are being paid in a timely way, including payments of interest and principal on notes and bonds. "We will continue in that fashion," she said.

O'Connor said the district is facing a gap of between $20 million and $40 million between general fund spending and revenue for fiscal 1994, and a $35 million gap in the operating budget of the public District of Columbia General Hospital.

The general fund gap stems from lower-than-projected receipts from a public safety fee imposed on businesses to balance the fiscal 1994 budget and overspending on Medicaid, city officials said.

Kelly said she has been in constant touch with Senate leaders, senior staff at the White House, the district council, and other key players to avert a government shutdown. In addition, she is consulting with the district's corporation counsel, the attorney general, and members of the judiciary to determine what constitutes non-essential services. The district shut down in 1986 for half a day before Congress acted in a similar situation.

"We have little choice except to be ready for the worst-case scenario," Kelly said. The White House is intervening and is "well aware of the seriousness of the situation," but it is uncertain whether President Clinton will become personally involved if Congress fails to act by midnight, Kelly said.

The budget debate, "which has nothing to do with the District of Columbia," shows the need for structural reform of the way the district is governed, Kelly said. Such reform would include not only a higher federal payment to compensate for the federal government's non-taxable presence in the district, but also new taxing authority that would, fir example, let the district collect a commuter tax, she said.

Kelly made an appeal to Democratic mayoral nominee Marion Barry, whom she is "enthusiastically" endorsing, to use his "power and magnetism" to bring about such reform.

Because Congress has run out of time, it will not consider measures that would allow the district to spend tax revenue that it has authority to collect to finance a proposed sports arena and a proposed new convention center. Kelly said she does not believe Congress has malicious intent in putting off consideration, but she said this is a "classic example" of the need for governmental reform.

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