D.C. Will Direct $417M Surplus Into Savings

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D.C. Mayor Vincent Gray. (Credit: MANDEL NGAN/AFP/Getty Images)

D.C. Mayor Vincent Gray. (Credit: MANDEL NGAN/AFP/Getty Images)

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WASHINGTON (CBSDC/AP)— A $417 million surplus the District accumulated in fiscal 2012 will be used to pad the city’s savings.

D.C. Mayor Vincent C. Gray and Chief Financial Officer Natwar M. Gandhi announced Tuesday that the city is within sight of a goal to have two months worth of cash on hand in its coffers. After that goal is reached, future surplus amounts can be spent, Gray said. The city’s savings now contains about $1.5 billion.

“We believe we have a tremendous opportunity to save the surplus this year while spending anticipated new fiscal year 2013 funds to make important and significant new investments in social programs that we have long wanted to make, but for which we did not previously have the funds.”

Norton Francis, a researcher at the Urban-Brookings Tax Policy Institute, says the savings balance is a little high for normal times, unless there’s a serious threat to a state’s revenue.

The reserve fund can help protect the city if there’s a sudden downturn or cut in federal spending.

Some, like Jenny Reed of the DC Fiscal Policy Institute, were eager to see the surplus go toward what they perceive to be more pressing issues.

“D.C. has more and more resources, but, at the same time, we also have a lot of unmet needs,” Reed said, noting that city social programs could use funding.

Gandhi praised the city leadership for wise management of its finances.

“The District is in perhaps the best financial condition in its history,” he said.

WNEW’s Matt DelSignore contributed to this report. Follow him on Twitter.

Follow WNEW on Twitter.

(© Copyright 2013 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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