City Faces Struggle Over Budget Drained by Social Costs Series: RUNNING ON EMPTY: The District's Troubled Finances Series Number: 1/3
The District of Columbia government is living beyond its means, pursuing an ambitious social agenda and attacking crime at a cost that could force new taxes on city residents or shatter a seven-year record of balanced budgets.</br></br>Spending in several major agencies is largely uncontrolled because city officials habitually have underestimated the price of their campaign against drug abuse, poverty and other worsening social conditions.</br></br>The largest and most troubled city agency, the $1 billion Department of Human Services, may have ended fiscal 1988 tens of millions in the red, according to confidential financial records.</br></br>Those findings are the result of a two-month examination of the city's finances by The Washington Post. They underscore a budget crunch that has compelled the $3.5 billion D.C. government to consider its first major retrenchment since Mayor Marion Barry's administration ran a $105 million deficit in 1980.</br></br>The magnitude of the current financial crisis was demonstrated in October, only two weeks into the 1989 fiscal year, when Barry announced that the city faced a $150 million projected budget deficit. City officials raised the estimate to $175 million last month, and say the shortfall could expand to as much as $300 million in 1993 if trends persist.