Unlike the New York Yankees or the Boston Red Sox, the major league baseball team of America’s capital city Washington, DC has no stadium of its own. Starting in 2008, the Nationals’ $611 million (about Rs2,400 crore) stadium will sit on the Anacostia river with views of the US Capitol—the symbolic home of Congress.
Natwar Gandhi is the chief financial officer of the city of Washington, DC, who has also published two poetry books in Gujarati
When the DC city council came back to the city’s chief financial officer Natwar Gandhi to ask for more public money to build more stadium parking, the CFO’s answer was “no”. They had to find it elsewhere.
This wasn’t the first time Gandhi has given that answer. In the US capital, he is known as ‘Dr No’. The nickname coined by the local magazine, Washingtonian, has stuck as he consistently refuses to spend outside the city’s budget. His goal: keep DC away from the bankruptcy of the mid-1990s.
Gandhi holds the purse strings to the US political capital. Keeping fiscal discipline around approximately $9 billion in annual operating and capital funds is a challenge in any city, but DC is different.
The city is like a business that cannot collect money from most of itscustomers. DC provides services comparable to a state at roughly $4 billion annually, but cannot collect taxesfrom more than half of its workforce and almost half of its real estate owners. As Gandhi says, “the city is not a viable proposition.”
According to the most recent US census in 2000, every day approximately 400,000 commuters (78% of the DC workforce) pour into the city from the neighboring states of Maryland and Virginia. They use the city’s roads, parks, bridges, technology and libraries, but go home and pay taxes in their own states.
“The bottom line is that two-thirds of the income that is generated in this city is not taxed in this city,” says Gandhi. “It is like saying that you go to a restaurant and one-third people pay, two-thirds people do not pay, and then everybody complains about bad food and bad service.”
It is an example he has given repeatedly to press and constituents as he explains the city’s predicament and his accomplishments in a concise 10-page presentation.
On top of the commuter straitjacket, the 10 largest private employers also don’t pay tax. Roughly 42% of the real property values are tax exempt, he says. This includes the White House, the Capitol, Georgetown University, about 375 consulates, and the World Bank.
“This is an anomaly,” he says. “Nowhere else in America, this could happen.”
Other cities in the country, such as Detroit, Philadelphia, New York, Atlanta or St Louis get funds from the richer suburbs to support the heavy needs of the city through the state government.