WASHINGTON -- The House District of Columbia Committee yesterday unanimously approved legislation that would allow the district to issue deficit bonds to wipe out its accumulated deficit.

Under the bill, the district would be able to sell $332 million of 12-year bonds as part of Mayor Sharon Pratt Dixon's plan to get the city's fiscal house in order and eliminate the need for more costly short-term borrowings.

The bill was passed as part of a package of austerity measures that includes giving the mayor authority to cut the budgets of the district's independent agencies, such as the school board.

An aide to the committee said the full House may vote Monday on the package. District officials have said they hope the measure can be enacted before August, so they can issue the bonds and avoid having to sell tax and revenue anticipation notes to cover cash-flow needs.

The committee vote had been scheduled a week ago, but it was postponed because of last-minute objections raised by panel member Rep. Thomas J. Bliley, R-Va. At the time, Rep. Bliley said he was not sure issuing deficit bonds was the most prudent solution to the district's fiscal problems.

But yesterday, Rep. Bliley, who is the ranking Republican on the panel, said he was willing to support the measure, though he did so reluctantly. He said he changed his mind because Mayor Dixon convinced him that she realized the severity of the crisis and because there were no other realistic options open to the district.

Several committee members, in fact, said the district's desire to issue deficit bonds was an unfortunate -- though, in this case, necessary -- course to take. But witnesses who testified before the vote were more positive about the action.

The committee's package of austerity measures, in fact, "is a key and prudent step in restoring fiscal balance in the district and insuring long-term discipline," said Frank Shafroth, director of the National League of Cities' Center for Policy and Federal Relations.

Rep. Bliley and several other panel members said granting the authority to issue deficit bonds was a onetime emergency measure, and they did not want to see the district asking for it again.

"If we're back here next year with the same problem ... we're going to have a lot more pointed questions" about whether the district should be issuing deficit bonds, said Rep. Larry Combest, R-Tex.

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