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Several folks have asked me for thoughts about the CFO's resignation. This is a big deal b/c the CFO is one of the most important positions in the city, having responsibility for keeping our financial house peaceful and orderly--and being a "bean counter." Here are some thoughts.
Overall, DeWitt has ensured that DC’s budget and tax administration has been strong, as illustrated by our balanced budgets, clean audits, and “AAA” bond rating, which makes it easier to borrow money from Wall Street firms.
With that said, there are two aspects of his approach that DCFPI hopes the next CFO will improve upon. (1) DeWitt took an overly cautious approach to fiscal management & revenue projections, leading to huge surpluses & missed opportunities to help struggling residents/businesses.
For ex, FY20 ended with a $526M surplus at a time when tens of thousands of residents lost their jobs, fell behind on rent, & struggled to put food on the table--& as many small businesses were closing their doors. Austerity holds back DC’s ability to have a just/strong recovery.
It is understandable that a CFO will be fiscally cautious, but especially in a place where the CFO is independent of the executive and DC Council, we also need a CFO who thinks about using DC’s finances to address community needs. More balance is needed.
(2) Dewitt also applied an overly conservative approach to tapping our reserves. Both during this recession & the late 2018 federal shutdown revealed a reluctance among the CFO (and our leaders) to use reserves to help bolster the city’s finances + keep crucial programs afloat.
He has been dead set on reaching 60 days of reserves--even during periods when using a portion of reserves was needed, not savings, like during the shutdown. Yet, once we built up 60 days of reserves, the CFO has been reluctant to tap into a sizeable amount of those reserves...
.. during the recession we’re currently in. This defeats the point of building 60 days. He often points to concerns that it would hurt DC’s bond ratings. However, DC already has the highest possible credit rating & it is unlikely that a 1-time use of funds would have a neg impact
He also failed to be a champion to end federal restrictions on how DC uses its locally funded reserves--a policy change that would advance DC’s budget autonomy. The fed government should not be dictating when and how the city taps its reserves. Only the Mayor and Council should.
Also, there were times where he seemed to step beyond the bean counter rule to use his influence for his goals, like trying to stop Council from using Events DC $$ for public housing. If he had won, public housing would be in a worse state of disrepair. https://www.dcfpi.org/press-releases/cfo-overreach-in-designating-events-dc-surplus-jeopardizes-critical-public-housing-repairs/
DC needs a CFO that sees the importance of there being more balance between sound tax and budget administration and using finances to help residents and small businesses in need.
It doesn’t make fiscal, economic or moral sense to amass substantial surpluses and leave most of our reserves in the bank in this deeply painful recession when that money could help struggling residents and businesses and limit the recession’s damage to the economy.
DCFPI would like the next CFO to improve transparency (as @rosenamy explains) and proactive interaction with advocates https://twitter.com/TazraMitchell/status/1362457539003232258?s=20
