Financial Status: District of Columbia Finances

GAO discussed the: (1) District of Columbia's finances; (2) calculation of the District's authorized federal payment; and (3) proposed legislation amending the District's self-government act. GAO noted that: (1) the District's cash balances continue to decline and the District may have to borrow from the Treasury by fiscal year 1995; (2) the District's cash balance estimates for fiscal years 1994 and 1995 include deferrals of certain payments that may not occur; (3) the District's actual revenues and expenditures often differ significantly from budgeted amounts; (4) the District and Congress do not agree on what local revenues should be included in the base for calculating the District's federal payment; (5) the proposed legislation would increase the applicable percentage to a maximum amount of 30 percent, modify the revenue base to include only general fund revenues, and make the federal payment at least equal to the average of the payments made during the preceding 3 fiscal years; (6) the legislation would increase the federal payment above historical trends; and (7) basing the federal payment on the average of the preceding years would reduce the impact of large reductions in local revenues.