WASHINGTON -- A leading co-sponsor of legislation to provide the District of Columbia with a preditable annual federal payment said Friday that the House of Representatives will approve the measure by "a considerable margin" when it votes on the matter tomorrow.
"In the House, it's pretty well taken care of," Rep. Thomas J. Bliley Jr. of Virginia, the ranking Republican on the House District of Columbia Committee, said in an interview.
There is no companion bill in the Senate, and it is unclear how the issue will play itself out.
But if cleared by Congress and signed into law by President Bush, the measure could help place the financially troubled district on a sounder fiscal footing. And in concert with other reforms, the bill could help the city achieve a bond rating upgrade.
The city's uninsured general obligation bonds are rated A-minus by Standard & Poor's Corp. and Baa by Moody's Investors Service. Analysts have cited the unpredictability of the federal payment as a negative factor in their assessment of the city's debt.
The legislation, co-sponsored by Rep. Bliley and House District Committee Chairman Ronald Dellums, D-Calif., would establish a formula under which the federal government would provide the city with an annual amount of money equal to 24% of city revenues.
Under the bill, each year's authorization would be calculated based on revenues the city raised two fiscal years prior to that in which the payment is made -- a provision reducing temptations that district officials might have to jack up local taxes to increase the federal payment.
The federal government provides money to the city every year to compensate it for revenue constraints. For example, the district cannot tax the federal government or foreign embassies, currently resulting in an $800 million loss annually.
The federal payment has been stagnant in recent years, holding at about $435 million for the past six years. Previous attempts to provide the city with a formula-based payment have fallen by the wayside, in part because of concerns among Republicans that such a payment would reduce the effectiveness of congressional oversight. The U.S. Constitution gives Congress power to "exercise exclusive legislation" over the district.
But Rep. Bliley, a former mayor of Richmond, said he believes it is important for the district to know in advance how much money it can expect from the federal government each year. "I know how important it is to know what you can expect for purposes of projecting a budget," he said, adding that budget uncertainties can affect bond issuance. "Some of the most difficult so-and-so's I had to deal with as mayor were bond lawyers, who always want one more 'hold harmless' or something else," he said.
