D.C. Chief Financial Officer Natwar Gandhi on Wednesday revised his revenue estimates down, again, pegging the shortfall for the current fiscal year at nearly $35 million and the problem in 2011 at more than a half-billion dollars.
The local and national economies are rebounding, Gandhi said in his quarterly letter to Mayor Adrian Fenty and D.C. Council Chairman Vincent Gray, but the improvement is muted because the credit market remains tight. The real estate market, once the District's most consistent producer, is now costing city coffers millions.
The CFO dropped his estimate for real property tax revenues by $71.3 million in 2011 alone.
Gandhi projects $17.7 million less overall in the current fiscal year 2010 than his December estimate, bringing the year's total anticipated shortfall to $34 million. Revenues tank in 2011 -- Gandhi's anticipates $49.4 million less than his earlier guess, putting next year's gap in the $600 million range.
Among factors impacting the bottom line:
» The District's $2.50 per pack tax on cigarettes is driving smokers to buy elsewhere, Gandhi said, so the corresponding tax revenues were revised down $15 million in 2010 and 2011.
» Fenty's ambitious plans to expand automated traffic enforcement have not materialized, driving down traffic fine revenue by an estimated $18 million.
Fenty and the council are in the early stages of fixing the 2010 budget and crafting the 2011 spending plan.