District of Columbia Budget Autonomy: An Analysis of H.R. 733, 110th Congress

District of Columbia Budget Autonomy:
th
An Analysis of H.R. 733, 110 Congress
Updated August 30, 2007
Eugene Boyd
Analyst in Federalism and Economic Development Policy
Government and Finance Division
Nonna A. Noto
Specialist in Public Finance
Government and Finance Division

District of Columbia Budget Autonomy:
An Analysis of H.R. 733, 110^th Congress
Summary
The District of Columbia Budget Autonomy Act of 2007, H.R. 733, 110^th
Congress, introduced on January 20, 2007, by Congresswoman Eleanor Holmes
Norton, is the latest in a series of legislative proposals dating back to 1981 and the
97^th Congress that have sought to provide budget autonomy for the District of
Columbia. When Congress passed the District of Columbia Government
Reorganization and Self-Government Improvement Act (the Home Rule Act, P.L.
93-198, 87 Stat. 774), in 1973, granting the city limited home rule authority, it
included provisions retaining its constitutional authority to exercise exclusive
legislative control over the District’s affairs, including the budget process. The
Home Rule Act requires congressional approval of the District’s annual budget as
part of the congressional appropriations process, and includes prescriptive provisions
governing budget submission, financial management, and borrowing authority.
H.R. 733 would allow the District to forego congressional review and approval
of that portion of its operating and capital budgets financed with local revenues. The
bill would also lift several budget content and financial management reporting
requirements and restrictions on the city’s borrowing authority. City leaders have
consistently contended that Congress has repeatedly delayed passage of the
appropriations act for the District (in which Congress approves the city’s budgets)
well beyond the October 1 start of its fiscal year. The city’s elected leaders contend
that the delay in Congress’s approval of the city’s budget hinders their ability to
manage the District’s financial affairs and negatively affects the delivery of public
services. Proponents of increased budget autonomy can point to the Bush
Administration’s budget for FY2004, which included a statement in support of
budget autonomy for the District of Columbia, and the fact that the District has
produced 10 consecutive balanced budgets, six of them without the supervision of
the Financial Control Board.
An argument against granting the city budget autonomy is that it could be
viewed as an abdication of Congress’s constitutional responsibility to exercise
legislative control over and oversight of the Nation’s capital, “the seat of the
Government.” Such a lack of oversight of the city’s financial affairs could result in
the city slipping back into a fiscal crisis of the magnitude that led Congress to create
the Financial Control Board in 1995. This report will be updated as events warrant.

Contents
Current Budget Process and Structure..................................1
Summary and Analysis of Provisions of H.R. 733........................5
Budget Submission Requirements.................................5
Summary of Proposed Changes...............................5
Policy Implications of Proposed Changes.......................6
Financial Management Requirements..............................7
Summary of Proposed Changes...............................7
Policy Implications of Proposed Changes.......................8
Borrowing Restrictions.........................................8
Summary of Proposed Changes...............................8
Policy Implications of Proposed Changes.......................9
Arguments For and Against District Budget Autonomy...................10
Arguments in Favor of Budget Autonomy..........................10
Constitutional and Philosophical Arguments...................10
Accountability and Governance Arguments....................10
Best Practices and Economic Impact Arguments................10
Arguments Against Budget Autonomy............................11
Constitutional and Philosophical Arguments...................11
Accountability and Governance Arguments....................11
Best Practices and Economic Impact Arguments................11
Policy Questions .................................................12
Appendix. A History of D.C. Budget Autonomy Legislation...............13
Summary ...................................................13
The Home Rule Act and Early Budget Autonomy Bills...............14
The D.C. Financial Control Board and the
Government Shutdown of 1995..............................15
Budget Autonomy Bills of the Last Decade.........................17
References ......................................................18
List of Tables
Table 1. Date of Enactment of the D.C. Appropriations Act,
FY1996-FY2007 ..............................................3

District of Columbia Budget Autonomy:
th
An Analysis of H.R. 733, 110 Congress
Current Budget Process and Structure
Authority for congressional review and approval of the District’s budget is
derived from the Constitution and the District of Columbia Self-Government and
Government Reorganization Act of 1973 (Home Rule Act, P.L. 93-198, 87 Stat.

774). The Constitution gives Congress the power to “exercise exclusive Legislation¹

in all Cases whatsoever” pertaining to the District of Columbia. In 1973, Congress
granted the city limited home rule powers and empowered citizens of the District to
elect a mayor and city council. At the same time, however, Congress retained the
power to review and approve all District laws including the District’s annual budget.
Under the District’s home rule charter, the mayor must submit operating and
capital budgets to the city council for review and adoption by a date specified by the
council.² The charter also mandates that the proposed budget submitted by the mayor
must assume that expenditures will not exceed resources, and requires that certain
elements be a part of the mayor’s budget submission.³ In addition, the charter
requires that the proposed budget include a four-year financial management plan
outlining the projected long-term impact of current spending. When appropriate, the
mayor may prepare, at his discretion or at the direction of the council, a supplemental
or deficiency budget to address the need for additional expenditures and must identify
the potential sources of revenues that will be used to address the deficiency.
The council must act on the budget and any supplemental appropriations,
including the reprogramming of funds, which must be offset by reductions, within
56 calendar days of receiving the budget from the mayor. The approved budget must
then be transmitted to the President, who forwards it to Congress for review,
modification, and approval. Both the President, through his annual budget
submission, and Congress may propose financial assistance to the District in the form

¹ U.S. Constitution, Art. 1, §8, Cl. 17.
² For the last three years (FY2005-2007), the D.C. Council has approved budget submission
requirements resolutions identifying the third Monday of March as the date for the mayor’s
proposed budget submission to the council and the public. The budget submission
requirements resolutions for each of the fiscal years also identified the elements to be
included in the mayor’s budget submission.
³ This includes financial and statistical information on the proposed budget, multi-year
budget estimates for all agencies, multi-year capital budgets, program performance reports
on as many programs as practical, and issues analysis statements on any activity or proposal
having significant budgetary and revenue implications.

of special federal payments in support of specific activities or priorities. Congress
must approve the District’s budget as one of the appropriations bills.
District of Columbia appropriations acts typically consist of three titles or parts.
Title I includes special federal payments or contributions for specific activities or
priorities. These are additional sums granted to the District, outside of the normal
federal grant process, to address specific congressional priorities. Most recently,
these special federal payments have included, but have not been limited to: funding
of court operations and defender services; emergency planning and security; and
education initiatives, including college tuition assistance, support for public schools,
school choice scholarships (vouchers), and public charter schools.
Title II of District appropriations acts consists of the District’s operating and
capital budgets, including enterprise funds. The operating budget is supported by
revenues from local taxes, fees, charges, and federal assistance available to all
eligible state and local governments. The capital budget is sustained through bond
sales and annual appropriations.
Title III consists of general provisions governing various aspects of the operations
and functions of District government. The general provisions included in recent
District of Columbia appropriations acts can be grouped into six categories that:
^!address fiscal and budgetary matters related to deficit spending,
limits on the reprogramming of funds, prohibitions of the use of
sole-source contracts, and requirements for emergency and
contingency reserve funds;
^!impose administrative controls;
^!facilitate congressional oversight and reporting;
^!limit use of appropriated funds for advocacy of District statehood or
congressional voting representation;
^!address educational issues related to the payment of attorney fees in
Individuals with Disabilities Education Act (IDEA) actions; and
^!impose limits, restrictions, and prohibitions on the use of federal or
local funding to carry out specific social policies such as abortion
services, needle exchange, and medical marijuana.
On occasion, Congress has used the District’s appropriations act to authorize specific
initiatives including school vouchers, the Chief Financial Officer act, and charter
schools under a fourth title.
Once forwarded by the President to Congress, typically during the first weeks of
June, the District’s budget moves through the congressional appropriations process.
This includes subcommittee hearings, which may take place before the actual budget
submission to Congress, subcommittee and committee markups in both houses,
committee reports and votes, floor action, reconciliations and conference report

consideration, and final passage.⁴ All of this is supposed to happen within
approximately 120 calendar days before the beginning of the District’s fiscal year on
October 1. City leaders have consistently expressed concern that Congress has
repeatedly delayed passage of the appropriations act for the District (in which
Congress approves the city’s budgets) well beyond the start of its fiscal year. The
city’s elected leaders contend that delay in Congress’s approval of its budget hinders
their ability to manage the District’s financial affairs and negatively impacts the
delivery of public services.
During the past decade the approval of the District’s annual budget has been
delayed by complications in the congressional appropriations process. Rather than
being enacted on its own, the District of Columbia appropriations act has often been
folded into omnibus or consolidated appropriations acts, and continuing resolutions.
As documented in Table 1, FY1997 was the only year out of the past 12 years for
which the D.C. appropriations act was enacted before the start of the fiscal year (on
October 1 of the prior-numbered year).
Table 1. Date of Enactment of the D.C. Appropriations Act,
FY1996-FY2007
FiscalP.L.Date ofRemarks
Year Num b e r Enactment
1996104-134April 26,Five general continuing resolutions and three laws
1996targeted to D.C. preceded this final omnibus
appropriations act.
1997104-194SeptemberThe District’s initial budget request was rejected
9, 1996by the Financial Control Board. It was cut and
revised before being submitted to the President
and the Congress. The Omnibus Consolidated
Appropriations Act for FY1997, P.L. 104-208,
also contained several provisions regarding D.C.
public schools.

1998105-100NovemberDuring part of the complicated approval process,

19, 1997the D.C. bill was combined with two other
appropriations bills. A controversial school
scholarship proposal was split off as a separate
bill. Between Oct. 1 and Nov. 19, the District was
covered under successive continuing resolutions
on appropriations.

⁴ Currently, the committees of jurisdiction are the House Committee on Oversight and
Government Reform, Subcommittee on the Federal Workforce, Postal Service, and District
of Columbia; the House Committee on Appropriations, Subcommittee on Financial Services
and General Government; the Senate Committee on Homeland Security and Governmental
Affairs, Subcommittee on Oversight of Government Management, the Federal Workforce
and the District of Columbia; and the Senate Committee on Appropriations, Subcommittee
on Financial Services and General Government.

FiscalP.L.Date ofRemarks
Year Num b e r Enactment
1999105-277October 21,D.C. was one of eight regular appropriations bills
1998included in the Omnibus Consolidated and
Emergency Supplemental Appropriations Act,
1999. From Oct. 1 through Oct. 21, D.C. was
covered under five general continuing resolutions.
2000106-113NovemberThe D.C. bill was included with four other
29, 1999appropriations measures in the Consolidated
Appropriations Act, 2000. This was the third D.C.
appropriations bill for FY2000 approved by
Congress. Two previous bills were vetoed by
President Clinton.
2001106-522NovemberEnactment of the D.C. appropriations bill was
22, 2000delayed nearly one month because it was first
combined with another appropriation in a bill
vetoed by President Clinton.
2002107-96DecemberCongressional approval of D.C. appropriations
21, 2001was delayed by efforts to resolve differences
between the House and Senate over “general
provisions” addressing social policy and to
eliminate redundant or obsolete provisions.
2003108-7FebruaryThe 107^th Congress failed to complete action on
20, 2003D.C.’s and 10 other appropriations bills for
FY2003 before it adjourned at the end of 2002.
Eight continuing resolutions froze spending by the
District and federal agencies at the FY2002 level^th
until the 108 Congress approved the
Consolidated Appropriations Resolution, 2003,
encompassing 11 appropriations acts.

2004108-199January 23,The Consolidated Appropriations Act, 2004,

2004including the D.C. and six other appropriations
acts, was not enacted until the second session of^th
the 108 Congress. Five continuing resolutions
were enacted to cover the District and affected
federal agencies for the first four months of
FY2004.
2005108-335October 18,The D.C. Appropriations Act was enacted on its
2004own, just a few weeks after the start of the fiscal
year.
2006109-115NovemberD.C. appropriations were included together with
30, 2005five other appropriations in a consolidated
appropriations act enacted two months after the
start of the fiscal year.
2007110-5February 5,The D.C. bill was combined with six other
2007appropriations bills, but that consolidated bill was
not enacted. Ultimately, the government operated
under continuing appropriations resolutions for the
entire fiscal year.
^Sources^:^T^h^e^c^o^r^r^e^sp^oⁿ^dⁱ^{ng a}^nnua^l^{CRS r}^e^p^o^r^t^s^,^lⁱ^s^t^e^dⁱⁿ^t^h^e^References^sectioⁿ^{at th}^{e en}^d^o^f^th^is
^report^.

Summary and Analysis of Provisions of H.R. 733
The District of Columbia Budget Autonomy Act of 2007, H.R. 733, 110^th Congress,
introduced on January 20, 2007, by Congresswoman Eleanor Holmes Norton, is the
latest in a series of bills dating back to 1981 that would provide budget autonomy for
the District of Columbia. (See the Appendix.) The bill was introduced by D.C.
Delegate Eleanor Holmes Norton and co-sponsored by Representative Tom Davis.
When the District of Columbia Government Reorganization and Self-Government
Improvement Act (Home Rule Act, P.L. 93-198, 87 Stat. 774) was enacted in 1973,
granting the city limited self-governing authority, it retained congressional authority
to review and approve the District’s annual budget as part of the congressional
appropriations process. The Home Rule Act includes several prescriptive provisions
governing budget submission, financial management, and borrowing authority.
Several of these provisions were put in place in response to the fiscal crisis the city
faced during the 1990s.
H.R. 733 would allow the District to forego congressional review and approval
of its operating and capital budgets financed with local revenues. The bill would also
remove several budget submission and financial management reporting requirements
and restrictions on the city’s borrowing authority. Proponents of increased budget
autonomy can point to the Bush Administration’s budget for FY2004, which included
a statement in support of budget autonomy for the District of Columbia,⁵ and the fact
that the District has produced 10 consecutive balanced budgets (six of them without
the supervision of the Financial Control Board).
Budget Submission Requirements
Summary of Proposed Changes. H.R. 733 would eliminate substantive
elements of the District’s home rule charter governing the budget submission
process. Specifically, the bill would remove language that establishes different fiscal
year starting points for the District of Columbia general government (October 1 to
September 30); public education institutions, including public schools, charter
schools, and the University of the District of Columbia (July 1 to June 30); and the
Armory Board (January 1 to December 31). The bill would also eliminate provisions
that:
^!prescribe the content and timing of the mayor’s proposed budget
submission to the council, such as the inclusion of a multi-year
budget plan for all agencies, multi-year capital budgets, and annual
program performance reports;

⁵ “The budget also supports ‘budget autonomy’ for D.C. This proposal would allow D.C.’s
local budget to go into effect without prior congressional approval, provided that any
general provisions from the previous year stay in effect until the Congress acts and provided
that the Congress retains the right to redirect by law portions of the local budget after it goes
into effect. This proposal reflects the dramatic improvement in the District’s ability to
manage its budget processes in the post-Control Board era.” U.S. Executive Office of the
President, Office of Management and Budget, Budget of the U.S. Government, Fiscal Year

2004 (Washington: February 2003), p. 298.

^!dictate the timetable for council consideration of the proposed
budget (currently 56 days);
^!restrict the mayor’s and council’s ability to alter the budget
submissions of specific independent agencies;⁶ and
^!require a 30 legislative-day congressional review period for District
budget acts (instead of allowing such acts to take effect on the date
stated in the act).
Policy Implications of Proposed Changes. H.R. 733 renders inapplicable
large portions of the Home Rule Act, notably the requirements for congressional
review. Section 2(b) of H.R. 733 states that “the process by which the District of
Columbia develops and enacts the budget for the District government for a fiscal
year, and the activities of the District government for a fiscal year, shall be
established under such laws as may be enacted by the District.”
Those portions of the D.C. Code that dictate the timing and content of the budget
process would remain in effect during a control year.⁷ For non-control years, the
policy implications of H.R. 733 are highly dependent upon the nature of the laws that
would eventually be enacted by the District. Should Congress approve H.R. 733, the
District would have the power to change its fiscal year or otherwise alter its budget
processes to better serve its constituents without having to go through Congress. A
change in the fiscal year may more closely reflect the needs of the District.
Decoupling the District general budget from the appropriations process could result
in a shorter budget cycle, allowing for more accurate revenue and expenditure
estimates. The current budget approval process involves the mayor, the council, the
congressionally created Chief Financial Officer (CFO), the President, the Office of
Management and Budget, the Appropriation Committees of the House and Senate,
and the full Congress. The process requires at least 15 months to complete; typically,
the process has exceeded 15 months.
Enactment of H.R. 733 would not prevent Congress from intervening in District
budgetary matters. Even if autonomy were granted for the part of the District’s budget
financed by locally raised revenues, Congress would still need to appropriate federal
funds for certain functions that are carried out by the District but financed by the
federal government as special federal payments. This includes, for example,
corrections; courts and defender services; security and emergency planning; and
selected education initiatives, such as the college access program, school choice
scholarships, and public charter schools. Furthermore, H.R. 733 may not prevent

⁶ The independent agencies include District of Columbia Auditor, District of Columbia
Judicial Nomination Commission, Court system, the Zoning Commission of the District of
Columbia, the Public Service Commission, the Armory Board, the Commission on Judicial
Disabilities and Tenure, and the District of Columbia Water and Sewer Authority.
⁷ The District of Columbia Financial Responsibility and Management Assistance Act of
1995 established the definition of a “control period” as any period where the District fails
to service its debt, defaults on any loan, has a large cash deficit, or requisitions funds from
the U.S. Treasury (P.L. 104-8 §209, 109 Stat. 97).

Congress from adopting future proposals, including so-called "social policy”
provisions, that would limit the District’s ability to spend its own funds (as well as
federal funds) on certain goods or services. Congress could always pass freestanding
legislation restricting the use of the District’s own source revenues, or include such
restrictions or prohibitions as general provisions in a District appropriations bill. Such
actions would run counter to the intent of H.R. 733 and the principles of home rule.
Moreover, the rules of both chambers bar the inclusion of legislation in appropriation
bills. Any attempt to include "social riders" or other legislative provisions in District
appropriation bills could be challenged on a point of order. However, the House or
Senate could adopt procedural rules governing federal appropriations for the District
that would allow for the inclusion of legislative provisions that would impose
restrictions on the use of District funds or authorize new programs. For instance,
during consideration of the District of Columbia Appropriations Act for FY2004, H.R.
2765, the House approved a rule (H.Res. 334), which allowed the consideration of an
amendment (H.Amdt. 368) authorizing a school choice program. Without the rule,
a point of order could have been raised challenging the amendment as legislation in
an appropriations measure.
Financial Management Requirements
Summary of Proposed Changes. The bill would remove certain provisions
and financial management reporting requirements included in the home rule charter.
Specifically, the bill would strike provisions that:
^!limit the city’s ability to increase spending based on an increase in
revenues after Congress has approved a fiscal year appropriation;
^!require the mayor to submit a complete financial report to the council
by February 1 of each year;
^!require the city to maintain an emergency reserve fund equal to 2%
of operating expenditures as identified in the Comprehensive Annual
Financial Report (CAFR) submitted by the CFO and dictate the uses
of such fund; and
^!require the city to maintain a contingency reserve fund of not less
than 4% of operating expenditures as identified in the CAFR
submitted by the CFO and dictate the use of such fund;
^!establish the position of the District of Columbia Auditor;
^!require the mayor annually to develop and submit to the House and
Senate oversight and appropriations committees, and the Government
Accountability Office (GAO), a performance accountability plan for
all departments, agencies, and programs of the government of the
District of Columbia for the next fiscal year;
^!require the mayor to develop and submit to the House and Senate
oversight and appropriations committees, and the Government
Accountability Office (GAO), a performance accountability report for

all departments, agencies, and programs of the government of the
District of Columbia for the previous fiscal year;
^!require the CFO to develop and submit to the House and Senate
oversight and appropriations committees, and the Government
Accountability Office (GAO), not later than March 1 of each year, a
five-year financial plan for the government of the District of
Columbia that contains a description of the steps the government will
take to eliminate any differences between expenditures from, and
revenues attributable to, each fund of the District of Columbia during
the five years beginning after the submission of the plan.
^!require the CFO to submit a financial compliance report to the House
and Senate oversight and appropriations committees on the progress
made in executing the plan, and to have the report evaluated by GAO
and OMB, which must report their findings to the House and Senate
oversight and appropriations committees not later than April 15^th of
each year; and
^!require the CFO to submit quarterly financial and budgetary status
reports to the House and Senate oversight committees and
appropriations subcommittees.
Policy Implications of Proposed Changes. The bill would render moot
certain provisions and financial reporting requirements put in place to ensure that
congressional committees of jurisdiction have sufficient information from which to
exercise informed oversight and appropriations responsibilities. On the one hand,
eliminating congressional review of the District’s budget and financial management
process is consistent with promoting self-government and local autonomy, and does
not necessarily imply the elimination of performance and financial plans and reports.
On the other hand, the absence of any formal congressional review and oversight
process may hinder Congress’s ability to guard against waste fraud and abuse, and to
ensure that the nation’s capital is financially solvent. Another implication is that the
District would be less of a federal city; Members would have less say on District
financial matters.
Borrowing Restrictions
Summary of Proposed Changes. The bill proposes to allow the District to
enact laws that establish the “the process and rules” that the District would follow in
borrowing funds, rather than the congressionally approved structure currently included⁸
under the city’s home rule charter. The home rule charter currently contains
limitations on the amount of borrowing the District may undertake: “No general
obligation bonds or Treasury capital project loans shall be issued during any fiscal
year in an amount which would cause the amount of principal and interest required to
be paid ... to exceed 17% of the District revenues....” (D.C. Code § 1-206.03b).

⁸ The following constraints are similar to those self-imposed, constitutionally or statutorily,
by other state and local governments.

Additionally, revenue anticipation bonds can be issued, but “The total amount ... shall
not exceed 20% of the total anticipated revenue of the District for such fiscal year....”
(D.C. Code § 1-204.72b).
The D.C. Code also establishes the manner in which bonds may be issued. It
requires that certain provisions appear in the act that authorizes the issuance of bonds.
It places constraints on the payment schedule for issued bonds (e.g. annual payments
“beginning not more than 3 years after the date of such bonds and ending not more
than 30 years after such date”). It institutes a special annual tax to cover the principal
and interest due on such bonds. It also establishes that all District bonds are backed
by the full faith and credit of the District of Columbia, and not that of the United
States. It contains a number of other provisions that establish other protocols relating
to the roles played by the mayor and the council in the issuance and payment of bonds.
Except in the case of a control year, H.R. 733 would make almost all of the current
language related to District borrowing non-binding. Important exceptions to this
general theme are stated in the bill. H.R. 733 would retain:
^!the full faith and credit of the District;
^!the nonapplicability of the full faith and credit of the United States;
and
^!federal and District tax exemption for District-issued bonds and
notes.
Policy Implications of Proposed Changes. While much of the existing
language would become non-binding, a significant provision in H.R. 733 is that “...
the process and rules by which the District of Columbia issues bonds or otherwise
borrows money shall be established under such laws as may be enacted by the
District.” As a result of this provision, it is unclear what rules or laws would be
established to regulate issuance of bonds by the District.
If H.R. 733 were enacted, it is possible that the District would maintain the
protocols and procedures set forth by Congress in the Home Rule Act. An important
past example of District policy in the wake of a repealed congressional mandate may
be that of the budget reserve fund. The budget reserve fund was at one time, but is no
longer, congressionally mandated. Despite the repeal of the congressional mandate,
the District continues to maintain a budget reserve fund at the level originally
mandated by Congress ($50 million). However, the legislative changes that the
District would actually undertake are unknown.
It cannot be stated with certainty what impact the current limitations and
regulations on borrowing has on the District’s financial health or its ability to govern.
The proposed changes would allow the District to establish its own laws governing
the borrowing process. Some benefits of this might include the ability of the District
government to respond to particular circumstances quickly by raising the borrowing
cap or by allowing special issuances of bonds not currently outlined in the D.C. Code.

Another implication of borrowing autonomy for the District is that, given the
power to borrow according to its own laws and rules, the District government can be
held accountable by its constituents in the event of poor decisions surrounding the
management of its borrowing authority. The District would need to set up financial
institutions, including borrowing regulations and limitations, that would serve its
constituents’ needs efficiently and maintain financial stability.
While considering H.R. 733, Congress may want to inquire of the District what
laws it intends to pass and what procedures it intends to maintain, repeal, or establish
in order to ensure good borrowing practices in the future. These changes would likely
take some time to establish. In the interim, it may make sense for Congress to require
that the District establish certain temporary institutions, or to propose a time-line for
the creation of relevant District laws, while granting the District the power to alter
such institutions or laws at some future time.
Arguments For and
Against District Budget Autonomy
Arguments for and against budget autonomy for the District may be grouped into
three general categories: constitutional and philosophical; accountability and
governance; and best practices and economic impact.
Arguments in Favor of Budget Autonomy
Constitutional and Philosophical Arguments.
^!The citizens of the District of Columbia have a democratic right to
elect representatives with the authority to make decisions over the
expenditure of their constituents’ tax dollars without needing federal
approval.
Accountability and Governance Arguments.
^!Without its own authority to enact an annual budget and with
congressional constraints that make the process cumbersome, District
government cannot be held singularly accountable since
responsibility for final passage is shared between the District and the
federal governments.
Best Practices and Economic Impact Arguments.
^!Involving the District in the congressional appropriations process
extends the District’s budget process by six months or more. As a
result, spending and revenue estimates are often based on incomplete
or dated information. This makes the budget less reliable and incurs
economic costs.

^!In theory, it is more efficient to have a single body in charge of
budgetary matters rather than splitting financial decision making
between two bodies with vastly different objectives and priorities.
Arguments Against Budget Autonomy
Constitutional and Philosophical Arguments.
^!Congress has a constitutional obligation to maintain oversight over
the affairs of the District. It cannot surrender that obligation except
through constitutional amendment.
^!The District of Columbia is the seat of the federal government and,
as such, the policies and practices of the District should represent not
only the interests of the citizens living in it, but also the interests of
the entire nation. Maintaining congressional oversight helps to ensure
that this is the case.
Accountability and Governance Arguments.
^!Without congressional oversight, there is no guarantee that the
District will not once again fall into financial trouble. Line-item
approval of the District’s budget is an important safeguard against
future financial trouble.
^!Should the District government perform poorly under budget
autonomy, it could trigger another takeover by the financial control
board serving as an agent of the federal government.
Best Practices and Economic Impact Arguments.
^!Other cities have state governments which, to some degree, oversee
the activities of local governments to ensure that they comply with
state and federal regulations. If the District government acts as both
city and state, it will lack a counter-balance that is present in other
cities.

Policy Questions
Should H.R. 733 become law, what changes might be enacted by District officials
regarding:
^!The budget process?
^!The fiscal year?
^!Revenue estimation?
^!Financial management safeguards?
^!Contingency and emergency reserve funds?
^!Borrowing limits?
^!Protocol for issuance of general obligation bonds?
If Congress does not grant the District full budget autonomy, which specific
provisions currently in place are regarded as particularly burdensome and of high
priority for removal by District officials? Some examples might include the power
to change the fiscal year dates or relax requirements for the reserve fund. If full
budget autonomy is not approved, what would be an appropriate compromise?
What prevents the District from passing needed changes to the Home Rule Act
through Congress under the prevailing legislative structure, including improvements
in the budget process and the fiscal year?
How have delays in congressional approval of the District’s budget harmed the
operation of the District government?

Appendix.
A History of D.C. Budget Autonomy Legislation
The proposed District of Columbia Budget Autonomy Act of 2007, H.R. 733,

110^th Congress, is the latest in a series of bills dating back to 1981 and the 97^th

Congress that have sought to provide budget autonomy for the District of Columbia.
In 1973, with the passage of the District of Columbia Self-Government and
Governmental Reorganization Act, commonly known as the District of Columbia
Home Rule Act, Congress acted to “... grant to the inhabitants of the District of
Columbia powers of local self-government; ... and, to the greatest extent possible,
consistent with the constitutional mandate, relieve Congress of the burden of
legislating upon essentially local District matters.”⁹
During consideration of the Home Rule Act, budget autonomy for the District was
a feature of the original House bill, but was abandoned as Congress adopted the
substitute Senate resolution.¹⁰ In the intervening 34 years, the issue has repeatedly
been brought before Congress.
This appendix contains an accounting of previous bills that proposed budget
autonomy for the District of Columbia, including the main provisions of the bills, the
relevant context surrounding their introduction, and important actions of Congress
with regard to such bills.
Summary
District of Columbia Budget Autonomy Act of 2007, H.R. 733, is the latest in a
series of bills dating back to 1981 and the 97^th Congress that have sought to provide
budget autonomy for the District of Columbia. None have become law. Briefly, bills
seeking budget autonomy for D.C. may be grouped into five categories:
^!District of Columbia Budget Autonomy Acts: 97^th - 99^th Congresses.¹¹
These bills sought to grant the District of Columbia autonomy over
the expenditure of own-source revenues. They would also have
provided the District with the authority to hire employees.
^!Budgetary and Legislative Acts: 101^st - 103^rd, 105^th Congresses.¹² In
addition to eliminating the requirement that the District budget be
approved by an act of Congress prior to becoming effective, these
bills sought to provide the District with the authority to hire
employees and to allow the District Council to override a mayoral

⁹ P.L. 93-198, 87 Stat. 774.
¹⁰ H.R. 9682, 93^rd Congress; S.R. 1435, 93^rd Congress.
¹¹ H.R. 1254, 97^th Congress; H.R. 3708 and H.R. 3699, 98^th Congress; and H.R. 324, 99^th
Congress.
¹² H.R. 52, 101^st Congress; H.R. 3581, 102^nd Congress; H.R. 2071, 103^rd Congress; and H.R.

3920 and H.R. 4054, 105^th Congress.

disapproval of a budget with a two-thirds majority. The bills also
sought to waive the period of congressional review required before
District acts took effect.
^!Fiscal Protection Act, 104^th Congress.¹³ This bill would have
provided the District with the authority to spend own-source revenue
to continue District operations. It required written notification from
the District of Columbia Chief Financial Officer (CFO) to interested
parties, including both the President and the Appropriations
Committees in the House and Senate.
^!Fiscal Integrity Act, 107^th Congress, and the District of Columbia
Budget Autonomy Acts, 108^th, 109^th Congresses.¹⁴ These bills sought
to allow enactment of the District’s budget without congressional
approval, as well as the hiring of employees. They also sought to
alter the role of the CFO by repealing sections of the Home Rule Act
pertaining to the CFO and providing for the enactment of the
Independence of the Chief Financial Officer Establishment Act. In
the 108^th Congress, the Senate passed the District of Columbia
Budget Autonomy Act of 2003, but the legislation was not considered
by the House.
^!District of Columbia Budget Autonomy Acts (House versions): 105^th,
106^th, 108^th - 110^th Congresses.¹⁵ This series of bills represented a
return to similar bills in the 97^th - 99^th Congresses. These bills, in
common with the current bill under consideration, H.R. 733, sought
to amend the Home Rule Act to eliminate congressional review,
allowing the District budget to take effect upon its approval by the
city council and the mayor. H.R. 733 would also eliminate previous
federal mandates governing the District budget, financial
management, and borrowing. It would allow the District to operate
under its own laws provided that the fiscal year is not a “control
year.”
The Home Rule Act and Early Budget Autonomy Bills
Some of the first discussions on budget autonomy for the District of Columbia
occurred in consideration of the passage of the District of Columbia Home Rule Act
in 1973.¹⁶ There was enough political support for self-government for the District to
pass the Home Rule Act, but the prospect of budget autonomy was ultimately rejected.

¹³ H.R. 2661.
¹⁴ H.R. 2995 and S. 2316, 107^th Congress; S. 1267, 108^th Congress; and S. 800, 109^th
Congress.
¹⁵ H.R. 4054 and H.R. 3920, 105^th Congress; H.R. 1197, 106^th Congress; H.R. 2472, 108^th
Congress; H.R. 1629, 109^th Congress; and H.R. 733, 110^th Congress.
¹⁶ For a comparison of two versions of the House resolution, as well as some discussion of
budget autonomy in the 93^rd Congress, see House Debate, Congressional Record, vol. 119,
part 26 (October 9, 1973), pp. 33353-33413.

The bill that became law contained provisions requiring that the District of Columbia
transmit its budget to Congress, and that Congress approve the budget before the
budget could take effect. Although the Home Rule Act became law in 1973, it took
several years before the District was governed under its own rule, with elections of a
Mayor and the Council in 1974 and the establishment of other institutions in the
following years. Congress proposed the Voting Rights Amendment, seeking to give
the District voting representation in Congress in 1978, but the amendment was not
ratified by the states. In 1980, voters called for the creation of a state constitution.¹⁷
One of the earliest bills seeking to provide budget autonomy to the District was
the District of Columbia Budget Autonomy Act (H.R. 1254, 97^th Congress),
introduced by the District’s Delegate to Congress, Walter Fauntroy, in January 1981.
The bill sought to amend the Home Rule Act to grant autonomy to the District over
expenditures of own-source revenues. It also set forth procedures by which the
Council could exercise control over its budget processes. It was introduced without
cosponsors and referred to committee, where it received no action. Over the next two
Congresses, virtually identical bills were introduced by Delegate Fauntroy, also
without cosponsors, but never made it out of committee.
In 1989, Delegate Fauntroy was a cosponsor of the District of Columbia Budgetary
and Legislative Efficiency Act of 1989 (H.R. 52, 101^st Congress), the first in a series
of bills that sought not only to provide budgetary autonomy, but also to eliminate the
congressional review period required before laws passed by the District Council take
effect. The bill died in committee. In 1991, Representative Ronald Dellums
introduced H.R. 3581, in the 102^nd Congress, the District of Columbia Legislative and
Budget Autonomy Act of 1991.
In 1992, Congress passed an act that included the portion of H.R. 3581 that
waived the period of congressional review for certain legislation enacted by the
District of Columbia.¹⁸ As the House prepared to vote in favor of the bill, Delegate
Eleanor Holmes Norton urged her colleagues to pass H.R. 3581 as well. The bill was
reported out of committee in February 1992,¹⁹ and placed on the Union Calendar, but
never made it to the floor. A similar bill in the 103^rd Congress died in committee.
The D.C. Financial Control Board and
the Government Shutdown of 1995
In 1990, the Rivlin Commission Report warned of continuing operating deficits
over the following five years.²⁰ In June 1994, a federal audit made it clear that the

¹⁷ The Council of the District of Columbia, “History of Self-Government in the District of
Columbia,” 1997, at [http://www.dccouncil.washington.dc.us/history.html], visited May 24,

2007.

¹⁸ H.R. 5623, 102^nd Congress; P.L. 102-360.
¹⁹ H.Rept. 102-429.
²⁰ Commission on Budget and Financial Priorities of the District of Columbia, Financing
the Nation’s Capital, (known as the Rivlin Commission Report), November 1990.

District was in financial distress, running out of cash on hand.²¹ These and other
problems for the District government contributed substantially to Mayor Sharon Pratt
Kelly’s defeat in the 1994 Democratic primary. Former Mayor Marion Barry was
returned to office in the subsequent general election. In April 1995, Congress passed
the District of Columbia Financial Responsibility and Management Assistance Act of
1995, establishing what came to be known as the Control Board, and defining a
“control period” as any period where the District failed to service its debt, defaulted
on any loan, had a large cash deficit, or requisitioned funds from the U.S. Treasury.²²
In the bills introduced after the establishment of the Control Board, provisions
relating to budget autonomy — in particular, the ability of the District to expend own-
source revenues without prior congressional approval — were conditioned on the
fiscal year in question not being a control year. In debates and discussions over
District budget autonomy since 1995, the need for and establishment of the Control
Board has been a regular feature of opposition to District autonomy.²³
On November 14, 1995, both the federal and the District of Columbia
governments shut down when Congress failed to approve an appropriations bill in
time to service the national debt. Three days later, on November 17, 1995,
Congresswoman Norton introduced H.R. 2661, the District of Columbia Fiscal
Protection Act of 1995. The shutdown ended on November 19, 1995, and over the
next several months, Congresswoman Norton regularly addressed Congress,
advocating passage of a resolution allowing the District to spend its own-source
revenues during the federal government shutdown.
On December 14, 1995, it became clear that the federal government would be
entering another period of shutdown. Representative Tom Davis published an editorial
in The Washington Post endorsing H.R. 2661, and the House Committee on
Government Reform and Oversight filed a late report by midnight.²⁴
On December 22, 1995, a continuing resolution was introduced and passed by
both the House and the Senate and signed into law, allowing the District to operate
until January 3, 1996.²⁵ Another continuing resolution was introduced on January 3,
1996, and passed the following day, providing the District with appropriations until
January 25, 1996.²⁶ The budget autonomy bill, H.R. 2661, was placed on the Union
Calendar on December 14, 1995, but never made it to the floor for a vote.

²¹ “Governing Washington, D.C.” CQ Researcher, vol. 6, no. 44 (November 22, 1996), p.

1046.

²² P.L. 104-8, 109 Stat. 97, §209. For the House Report from the Committee on Government
Reform and Oversight, see H.Rept. 104-408.
²³ “Q: Should Congress let the District of Columbia control its own budget? - Eleanor
Holmes Norton answers yes; Rep. Charles Taylor says no - Symposium,” Insight on the
News, July 6, 1998.
²⁴ Davis, Thomas M. III, “Why Shut Down the District?,” The Washington Post, December

14, 1995.

²⁵ P.L. 104-69.
²⁶ P.L. 104-90.

Budget Autonomy Bills of the Last Decade
In 1998, the first of the latest series of budget autonomy bills (H.R. 4054, 105^th
Congress) was introduced but never made it out of committee. The following year, an
identical bill (H.R. 1197, 106^th Congress) was introduced and also never made it out
of committee. In the 107^th Congress, a bill entitled “District of Columbia Fiscal
Integrity Act of 2001” was introduced in the House by Representative Constance
Morella, with a related bill introduced in the Senate the following year by Senator
Mary Landrieu (H.R. 2995 and S. 2316, 107^th Congress).
These bills were more ambitious than other bills introduced in the last decade, not
only seeking budget autonomy for the District but also expanding the authority of the
District’s CFO, with the stated intent of the bill “To make technical and conforming
changes to provide for the enactment of the Independence of the Chief Financial
Officer Establishment Act of 2001.” The House and Senate versions of the D.C.
Fiscal Integrity Act died in committee.
In the 108^th Congress, Representative Davis and Senator Susan Collins introduced
H.R. 2472 and S. 1267, respectively, both titled the “District of Columbia Budget
Autonomy Act of 2003.” The House version of the bill returned to the more modest
wording of the 105^th and 106^th Congresses. The Senate version contained Title II:
District of Columbia Independence of the Chief Financial Officer Act of 2003, which
again sought to expand the authority of the District’s CFO. The bill passed in the
Senate on September 9, 2003, and was sent to the House, where it was not reported
out of committee.²⁷
In the 109^th Congress, the District of Columbia Budget Autonomy Act of 2005 was
introduced in both the House and the Senate. Both bills were very similar to their
counterparts in the previous Congress.²⁸ Neither bill made it out of committee.
Finally, in the 110^th Congress, H.R. 733 seeks to amend the District of Columbia
Home Rule Act by making large portions of the act inapplicable so long as the District
in not in a “control period” as defined by the criteria established by the District of
Columbia Financial Responsibility and Management Assistance Act of 1995 (P.L.
104-91). The bill’s stated intent is “To amend the District of Columbia Home Rule
Act to eliminate all federally imposed mandates over the local budget process and
financial management of the District of Columbia and the borrowing of money by the
District of Columbia.”

²⁷ United States Congress, Senate Committee on Governmental Affairs, District of Columbia
Budget Autonomy Act, report to accompany S. 1267, 108^th Cong., 1^st sess., S.Rept. 108-212,
(Washington: GPO).
²⁸ H.R. 1629 and S. 800.

References
CRS Report 97-213, Appropriations for FY1998: District of Columbia, by Nonna A.
Noto.
CRS Report 98-213, Appropriations for FY1999: District of Columbia, by Nonna A.
Noto.
CRS Report RL30213, Appropriations for FY2000: District of Columbia, coordinated
by Eugene Boyd.
CRS Report RL30513, Appropriations for FY2001: District of Columbia, by Eugene
Boyd.
CRS Report RL31013, Appropriations for FY2002: District of Columbia, coordinated
by Eugene Boyd and Michael K. Fauntroy.
CRS Report RL31313, Appropriations for FY2003: District of Columbia, coordinated
by Eugene Boyd.
CRS Report RL31813, Appropriations for FY2004: District of Columbia, coordinated
by Eugene Boyd.
CRS Report RL32313, Appropriations for FY2005: District of Columbia, by Eugene
Boyd, coordinator, and William J. Krouse.
CRS Report RL32994, District of Columbia: FY2006 Appropriations, by Eugene
Boyd, coordinator, William J. Krouse, and David P. Smole.
CRS Report RL33563, District of Columbia: Appropriations for FY2007, by Eugene
Boyd and David P. Smole.