WASHINGTON -- The District of Columbia consistently overspends because it relies on unrealistic revenue projections and is in danger of running out of cash, a key lawmaker said yesterday.

Rep. Julian Dixon, D-Calif., chairman of the House appropriations subcommittee on the District of Columbia, said he does not want to hear any more justifications for the district's dire financial straits.

He called instead on Mayor Sharon Pratt Kelly and district financial officials to acknowledge and curb the overspending.

"I believe that these [financial] problems are resolvable, but there is a lot of hostility and tension between all of us," Dixon said, referring to the mayor, the city council, and Congress. "This has got to stop. We have got to work together" and start being "real about our figures and our facts."

At a hearing before the subcommittee on the district's proposed $3.7 billion fiscal 1995 budget, Dixon cited findings of an ongoing investigation that he requested into district finances by the U.S. General Accounting Office and the Congressional Budget Office.

Dixon has not released the findings to date, which prompted Kelly yesterday to request that the information be made available because of inconsistent reports about it, "I talk to GAO and am told one thing, then I read the papers and watch the television news and hear something else," Kelly told Dixon. "This is truly not in the best interest of the district"

Local papers have quoted Dixon as saying that the report concludes a federal "bailout" is inevitable. "I have not asked for nor will I ask for a federal bailout," Kelly said.

Dixon cited study findings to raise concern about the district's continued reliance on projected "receivables," or revenues that the city expects to collect, to justify spending.

"What I did not realize was the receivables are not always translated into cash," he said. The district puts people on the payroll and buys supplies on the basis of revenue projections. "The problem is, you can't use receivables to make payments, but you can use receivables to incur obligations. The dilemma hits when the bills have to be paid and you haven't collected those receivables."

In 1991 Congress authorized the district to issue $331.6 million in 12-year deficit funding tax-exempt bonds to retire and accumulated general fund deficit of $284 million, Dixon said. The proceeds were placed in escrow on Sept. 26, 1991, and by Dec. 20 of that year, "it was all spent," he said. The city's request for the bond authority reflected "desperation" over its cash situation, he said.

The bond proceeds helped obscure overspending of $109 million in fiscal 1991, Dixon said. General fund cash overspending for fiscal 1992 was $73 million, and in fiscal year 1993 it was an additional $93 million, he said. The district's fiscal year starts Oct. 1.

"If no corrective action is taken and the $93 million in cash overpayment in 1993 continues, the district will be out of cash in less than two years, Dixon said. The prediction assumes the district will pay it bills on time, including $190 million it owes the city pension fund this fiscal year, which the district does not plan to pay on time, he said.

"This has been described as a cash flow problem ... that's part of it," he said. But there has been "just plain additional spending" and the district needs to admit it, Dixon said. Methods used to balance the budget, notably deferral of the pension fund payments, have "alarmed" members of Congress, "which will make it difficult ... to move legislation effectively through the House," he said.

Dixon said he is concerned that the district plans to borrow $250 million in the short-term market next year, a $50 million increase from this year's borrowing. He said he fears the borrowing will rise to $300 million in fiscal 1996, and that the district would be forced again into long-term borrowing.

Dixon faulted continuing overprojections of revenue. The district projected it would collect $684 million in individual income tax revenues in fiscal 1991, but it actually took in $615 million, Dixon said. "You were way off," he told district financial officials.

In 1992 the district took in $620 million but projected collecting $687 million, and in 1993 it took in $600 million but estimated $645 million in revenues, Dixon said. The current fiscal year is "still in flux.'

The district estimates taking in $684 million in fiscal 1995, even though Kelly testified that one of the city's major problems is a declining tax revenue base.

"You have never taken in this much money," Dixon said. "You plug in unreal numbers."

Not only does the district overproject revenues, Dixon said, but it also underprojects expenditures. For example, in the district's budget for human services, the district estimated it would spend $727 million for human support in fiscal 1991, but it spent $753 million, he said.

In 1992 the district projected spending $727 million for human services, but it actually spend $791 million, IN 1993 it estimated spending of $750 million, but spent $832 million. Despite the record, the district is projecting spending only $765 million in 1994 and $779 million in 1995, Dixon said.

Ellen O'Connor, the city's deputy mayor for finance and chief financial officer, told the subcommittee that during its ongoing hearings on the budget, it has "challenged my straightforwardness" and "forthrightness" and efforts to address the district's financial problems in the face of a harsh recession. She said the panel has "dismissed reality" and "diminished the district."

Dixon apologized, saying he would be the last person to diminish the community to which he belongs. "I have had an attachment, a connection, to this community long before you came here," he said. Dixon grew up in the district. Moreover, as chairman of the subcommittee for 14 years, Dixon said he takes "full responsibility" for the district's financial problems.

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