District Government Expenditures, 2002-2014

The District government’s expenditures from its local resources increase every year (well, almost every year). In constant-dollar per-capita terms, however, expenditures have dropped since 2008. In other words, government spending since 2008 has not kept pace with the combination of inflation and the District’s population increase.

Total expenditures increased steadily from 2002 through 2008, peaking at nearly $6.3 billion, but fell in 2009 and 2010, during the great recession. By 2013, they had exceeded their earlier 2008 peak and reached nearly $7 billion in 2014 – almost double the 2002 level. However, two cost drivers (inflation and population, shown in dashed lines in the graph below) have also been increasing. Population today is 15 percent greater than where it was in 2002, and the price level is 38 percent higher. As a result, per capital spending, adjusted for inflation, has remained stagnant. Between 2008—the peak year—and 2012, per capita government spending, adjusted for inflation (in 2014 dollars), declined from $12,104 to $9,963, and since then it only marginally increased to $10,509.image002

One can examine spending trends by broad government function. District agencies are grouped into “appropriation titles” in the annual appropriations bill that Congress enacts to authorize the District’s spending. An appropriation title includes agencies with a common function. The three largest appropriation titles are:

  • Human Support Services – including the Departments of Human Services (and the local share of funds for Temporary Assistance for Needy Families (TANF)), Health, and Health Care Finance (including the local share of Medicaid funds).
  • Public Education System – including D.C. Public Schools, Public Charter Schools, the local subsidy to the University of the District of Columbia, and D.C. Public Library.
  • Public Safety – including the Metropolitan Police Department, the Fire and Emergency Medical Services Department, and the Department of Corrections.

Expenditures in Human Support Services, and to a lesser extent in Public Education, fell in 2010 as the District’s revenues fell during the Great Recession. However, the District was able to partially make up for these losses using federal stimulus funds (through the American Recovery and Reinvestment Act of 2009). During this period, the federal government paid for a larger share of our Medicaid bills, and we also received additional education funds. The federal stimulus funds are not in this chart, which shows only the District’s expenditures from its own funds, but they made up for some of the decline in local spending and allowed the District to keep its services closer to a constant level. Because we were able to use the federal funds, the District was able to shift its own dollars away from these areas – to be replaced by the federal funds – and toward other areas of need. For example, expenditures in Public Safety remained fairly steady in the face of the decline in revenue over the 2009-10 period.

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We show the smaller appropriations titles separately so that they can be displayed on a scale more relevant to their size. These appropriations titles are:

  • Governmental Direction and Support – including the Office of the Mayor, the District Council, and agencies that serve other government agencies such as the Department of General Services, the D.C. Department of Human Resources, and the Office of the Chief Financial Officer.
  • Economic Development and Regulation – including the Department of Housing and Community Development, the Department of Employment Services, and the Deputy Mayor for Planning and Economic Development.
  • Public Works – including the Department of Transportation, the Department of Public Works, and the District’s subsidy payment to the Washington Metropolitan Area Transit Authority.
  • Financing and Other – including all debt service agencies, the operating budget contribution to capital projects through Pay-as-you-go (Paygo) capital, and the District’s contribution to its retirees’ health care costs.

Expenditures on these functions fluctuated more over the 2002-2014 period than did those in the three largest functions. In particular, expenditures decreased by more than 45 percent between 2008 and 2012 in Economic Development and Regulation, and by more than 25 percent between 2008 and 2010 in Financing and Other. This might indicate that spending on economic development projects and capital projects (through debt service and Paygo capital) expand when revenues are strong and are easier to reduce when revenues decline.

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What exactly is this data set? The expenditure data include all District government agency spending from the General Fund. The General Fund, broadly speaking, means revenues and other resources the District raises locally, through taxes, fines and fees, and sometimes use of its own fund balance (accumulated surpluses from prior years). Spending of federal or private grants is not included in these expenditure data.  The data include slight adjustments from the data reported in the District’s Comprehensive Annual Financial Report to maintain comparability across years.

This study is for the operating budget only, as opposed to the capital budget.

  • The operating budget covers day-to-day needs and purchases that are generally consumed within the current year. For example, most government worker salaries, school operations, most public safety expenses, and transfer payments to residents (such as Medicaid) are paid for through the operating budget.
  • The capital budget covers purchases of assets with a long life, usually 5 years or more. For example, construction of schools or other government facilities, improvements to road and bridge infrastructure, and purchases of police cars and fire trucks are paid for through the capital budget.

A future post will discuss the District’s recent capital expenditures.

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