WASHINGTON -- The House Appropriations Committee on Friday approved a $668 million federal payment to the District of Columbia for fiscal 1995 after defeating a Republican-led effort to attach strings to the payment.

Mayor Sharon Pratt Kelly claimed victory after the committee's voice vote to approve the district's budget package. The package included a supplemental $21 million increase in the district's $3.4 billion fiscal 1994 budget and a budget of $3.6 billion, including capital spending, for fiscal 1995. The full House is scheduled to vote on the package this Wednesday.

In other action last week, the district council authorized the city to issue $198.3 million of general obligation bonds for capital projects. The district, which expects to hold the bond sale in mid-July, originally had sought $250 million.

The council approved all of the projects for which the bond proceeds will be used, and the cutback in the total amount simply means the district will go to the market "a little sooner" in fiscal 1995, said Ellen O'Connor, the district's chief financial officer and deputy mayor for finance.

In the House committee action, Rep. James Walsh, R-N.Y., failed in his attempt to set aside $295 million of the federal payment in a special interest-bearing account for payments to be made to the district's pension fund.

The federal payment, which is a $20 million increase from the fiscal 1994 level, is "an unprecedented high amount," said Kelly at a news briefing. The payment will be made after the district's fiscal year begins on Oct. 1.

The committee vote is the first congressional action after release of a General Accounting Office report that warned of a worsening cash problem that could force the district to borrow from the U.S. Treasury next year.

"The direction of the hype" surrounding the report suggested the district would get a "pounding" in the committee, said O'Connor. "That didn't happen."

Members of Congress and other "interested players" looked at the report and saw that "there are problems, but it's not new," O'Connor said. "We did get to an edge," but "we are serious about balancing our budgets. They will be balanced."

In a letter sent Friday to Rep. Julian Dixon, D-Calif., chairman of the appropriations subcommittee on the District of Columbia, Kelly said the district "takes seriously the issues raised in the report. The district has taken considerable and extraordinary action to balance the fiscal year 1994 and fiscal year 1995 budgets and the Kelly administration will continue to take all necessary steps to assure that outcome."

Both Dixon and Kelly pledged to maintain a good relationship between the district and Congress.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.