PRESS RELEASE

Council of the District of Columbia

Office of Chairman Vincent C. Gray
The John A. Wilson Building
1350 Pennsylvania Avenue, NW
Washington, D.C. 20004

For Immediate Release: Contact: Doxie A. McCoy 202-724-8032

October 5, 2010 202-664-9862-cell
dmccoy@dccouncil.us

Gray’s Cost-Cutting Measures Are Crucial First Step to Closing Budget Gap

Washington, D.C. – Council Chairman Vincent C. Gray today commended Mayor Adrian M. Fenty and members of
the Council of the District of Columbia for acting quickly on his cost-cutting recommendations to begin addressing
the $175 million budget deficit announced last week.

Working with the Chairman, the Mayor late yesterday issued an order that freezes hiring, promotions, travel, and
training in all executive branch agencies. Today at its legislative meeting, the Council approved the Chairman’s
emergency legislation required in order for the Council and independent agencies to follow similar cost-cutting
measures. Independent agencies that will be covered by the order include the Offices of the D.C. Auditor, Zoning,
Public Library, and Advisory Neighborhood Commissions, among others. Executive and legislative agencies also
will be required to reduce their non-personnel spending by 10 percent and agencies will receive only the first quarter
of funding for fiscal year 2011, which began on October 1 st.

“I want to take this opportunity to thank Mayor Fenty, City Administrator Neil Albert, Chief Financial Officer
Natwar Gandhi, Councilmembers, and their staffs for working with me to move quickly with this responsible
action,” Chairman Gray said. “Time was absolutely of the essence to immediately put the brakes on agency
spending. By restricting expenditures just days into the fiscal year, we are able to take early steps as we ponder
additional actions to close this budget gap.”

Gray also expressed deep concerns about an additional structural budget gap that could grow as high as $400 million
in Fiscal Year 2012. A significant portion of this gap will result from spending for programs that historically have
been funded every year, but are instead funded out of the District’s reserves on a one-time basis. These programs
include the Summer Youth Employment Program, the Home Purchase Assistance Program, the Low-Income Home
Energy Assistance Program, and Emergency Rental Assistance. “There is currently no money for these important
programs in Fiscal Year 2012,” Gray said.

“If we do not act now, we will have severe cash flow problems and our bond ratings will clearly be at risk of a
downgrade, which could raise our cost of borrowing by millions of dollars per year. Clearly, I don’t believe it is in
our best interest to delay making the hard decisions.

“I am not looking forward to the tough choices we will be forced to make because of the potential impact on key
services during these challenging economic times. However, I am willing to put every solution on the table--first
spending cuts, then revenue increases. I am not willing to continue on our current path of using the one-time fixes
that drained our fund balance, and clearly is not sustainable.”

Gray said the next step will be for the Mayor to submit a gap-closing plan to the Council, likely in mid-to-late
October. A public hearing will be held in early-to-mid November. With the difficult decisions ahead, public input
and involvement will be more important than ever, the Chairman said. A vote on the Fiscal Year 2011 gap-closing
plan will occur in late November or early December.

“This will be a budget process with painful choices,” Gray said. “However, we simply must produce a sustainable
budget that preserves core government services and our social safety net for the survival of our most vulnerable
citizens.”

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