Washington, D.C. revenues beating expectations

WASHINGTON, June 24 Mon Jun 24, 2013 4:33pm EDT

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WASHINGTON, June 24 (Reuters) - Revenue collections for Washington, D.C. have been beating expectations, causing the city's chief financial officer to increase his estimates for revenues this fiscal year by 3 percent to $6.14 billion.

CFO Natwar Gandhi said on Monday he also now expects revenues for the nation's capital to reach $6.23 billion during the next fiscal year that begins Oct. 1.

The new, higher expectations come after Gandhi had revised his revenue estimates upward in February.

Nonetheless, Gandhi, who is set to retire this summer, remains cautious about the district's fiscal fortunes. As the seat of federal power, Washington survived the recession better than most places and has recovered faster.

But as the U.S. Congress looks to shrink the federal deficit, it has embraced spending cuts that, as part of a process known as sequestration, include furlough days and salary cuts for federal employees and contractors.

"The greatest sources of uncertainty for the District of Columbia continue to be the measures that the federal government has implemented or may implement to reduce federal budget deficits," Gandhi said in a letter to Mayor Vincent Gray.

About sequestration, he said "it is still too early to assess accurately the impact," adding that his estimates assume the spending cuts "will slow the District's economic growth."

The bump in revenues came from real property tax payments and April income tax final payments, which rose as the city's population continues to boom. Many places are seeing a burst of income tax revenue, after taxpayers sold off investments and made other financial moves in the closing days of 2012 to avoid steeper federal tax rates set to go into effect this year.

"Over the past year, however, growth in employment located in the District has slowed and commercial office vacancies have risen," Gandhi wrote.

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