WASHINGTON -- District of Columbia Mayor Sharon Pratt Kelly and her financial team were tossed out by voters in Tuesday's Democratic mayoral primary as former mayor and ex-convict Marion Barry swept to victory.
Also on Tuesday, Maryland incumbent Louis Goldstein handily won the Democratic primary for comptroller with 64% of the vote, defeating attorney James Moorhead. In the Republican bid for the slot, Timothy Mayberry beat Richard Taylor with 52% of the vote.
The 81-year-old Goldstein, one of the few elected comptrollers in the country, has served in the post since 1958.
Barry served six months in jail in 1991 for possession of crock cocaine. Now a member of the district council, Barry ran his campaign on a theme of redemption, saying he will combine what he has learned from his mistakes an.d from his three terms as mayor to tackle the city's financial problems.
The financial community and Congress are waiting to see whether Barry wins in November and whether in fact he is a new man.
"Here's the unknown: Should you take this redemption seriously?" said a spokesman for Rep. Pete Stark, D-Calif., who chairs the House Committee on the District of Columbia. Members of Congress are focused on Haiti and their own elections, and it is too early to talk about implications of a Barry Administration, the spokesman said.
A Senate aide to the appropriations subcommittee that oversees the district and its budget agreed that the focus iS on Haiti and' had no comment on Barry.
Barry won with 47% of the vote after organizing and leading an intensive voter registration drive during the past year. Heavy turnout, especially from low-income wards, bucked the national trend of low voting by the poor and assured Barry's success.
Runner-up John Ray, a councilman, lost his fourth bid to become mayor, with 37% of the vote, while Kelly garnered just 13%. Winning the primary is considered tantamount to winning the election in a city that has a 9-to-1 ratio of Democrats to Republicans.
Republican Carol Schwartz easily won her party's mayoral primary, and members of the anti-Barry camp may turn to her in the general election, political analysts said. However, the anti-Batty vote may be split between Schwartz and independent William Lightfoot, an attorney and district council member, who is just entering the race. Lightfoot had promised to stay out of the race and support Ray if Ray won the primary.
What a Batty win might mean for the future credit standing of the district remains uncertain, analysts with two rating agencies said.
"The rating is based upon a lot of factors other than who's in power at the time," said Parry Young, a director in Standard & Poor's Corp.'s municipal finance department. "When we look at the general obligation bond rating, we are looking at the economy, the debt service, the finances, and administrative factors, which would include how [the district government] manages all these factors."
The mayor, whoever he or she will be, "certainly faces a lot of challenges, including operational, financial, and political," that must be evaluated for future credit concerns, said Patricia McGuigan, assistant vice president in the public finance department of Moody's Investors Service.
Young and McGuigan said that during Barry's tenure as mayor in the 1980s, the district economy prospered. The rating agencies first started tracking the district credit when Barry weaned the district from U.S. Treasury borrowing and entered the municipal bond market in 1984, just a few years after it was granted home rule by Congress.
Moody's assigned a Baa rating that remains unchanged, while Standard & Poor's initial A rating was maintained until 1990. Standard & Poor's now rates district GO bonds A-minus with a negative outlook. If the financial stress that the district has faced for a long time is not addressed, "the rating may be lowered," Young said.
"Because of the chronic budget stress and the economic realities; it will be more important than ever that the unique political dynamic of the district works effectively," Young said. The new administration must bring together Congress, the district council, the business community, and the district's workers to solve the problems, "which are resolvable," he said.
Under Barry, the district's budget grew in tandem with the economy, and tax revenue increased "quite dramatically," Young said. The 1990s ushered in a much tougher economic climate, and with citizens leaving the district, the tax base has been considerably weakened, he said. The population, 606,900 in 1990, declined to 585,221 in 1992, according to the U.S. Census Bureau.
Congress has much power over the tax base because it not only approves the annual federal payment to the district and the district's budget, but it has the power to let federal,agencies move out of the district, force them to stay in, and create new agencies -- and thus new jobs -- in the district, Young said.
Congress is almost a separate factor in Standard & Poor's credit analysis, although "we kind of throw it into the economy," he said.-"That's a tremendous influence we don't see in other cities."
"Whoever gets elected has a tough job. ahead of them," said McGuigan. "We will have to see what kind of budgetary control [the mayor] demonstrates" and what kind of political support he or she can garner, she said. "It's hard to assess that from a campaign.'
Another prominent financial analyst of the district said that if Barry wins and "if he's a good mayor, God bless him."