D.C. Mayor Vincent Gray announced on Jan. 29 that the city has a budget surplus of $417 million through Fiscal Year 2012, increasing the city’s rainy day fund from $1.1 billion to $1.5 billion.
The surplus is largest for the city since 2005 and the second highest surplus figure since the city gained limited independence from Congress, according to D.C. finance officials.
“The District is in perhaps the best financial condition in its history,” D.C. Chief Financial Officer (CFO) Natwar Gandhi said in a statement.
He added that, “Our fund balance is in excellent shape, we are experiencing growth in both jobs and population.”
The surplus was generated through unexpected boosts in revenue from a windfall of $53 million in estate taxes, $78 million in business taxes and $68 million in sales taxes. Additional revenue came from traffic tickets, including fines generated by speed cameras, which generated $27 million more than city officials expected.
Even though talks have begun on how the government should allocate the money, the mayor said the money will be applied to its savings account.
Some council members and local advocates are encouraging Gray to spend a portion of the surplus on human services for the city’s neediest residents but so far Gray plans to save a little then spend a little.
“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,” Gray said in a statement.
The surplus was reported in the District’s Fiscal Year 2012 Comprehensive Annual Financial Report, independently conducted by auditing firm KMPG.