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Delegate Eleanor Holmes Norton (DC) (appearance on January 30,
1998)
Testimony: Delegate Norton advocated having a capital budget.
She urged the Commission to use the District as a case study, because the
study would indicate the need for reforming the current budgeting practice.
Her remarks centered around three ideas:
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The current budget scoring rules allowed no funds for developing the Southeast
Federal Center (SFC), even though the Congress authorized the full amount
needed.
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Capital budgeting is not a new idea.
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The Federal government should adopt successful financing practices of the
private sector and State and local governments.
Delegate Norton said she's been trying to get Federal funds to develop
the SFC, so Federal agencies could occupy federally owned facilities to
reduce a huge rental bill. She said Congress authorized the full amount
to develop this land, but scoring rules left the site still undeveloped.
She believes the District has many examples of pent-up Federal infrastructure
needs that are unmet and a study of budget practices would indicate the
need for reform.
She believes capital budgeting is a traditional practice, because it
is used by almost every State and large city. She cited the Port Authority
of New York as one example of where a capital program was successfully
financed through a sale of bonds.
She said using money over time to fund projects with future benefits
is the accepted marketplace strategy for businesses and homeowners alike.
She feels the Federal government should adopt this strategy.
In closing, she supported having a capital budget by saying, "Now is
the time to organize the budget around fresh ideas that are consistent
with an investment rather than an operating approach to investments."
Questions from the Commissioners: Questions focused primarily
on funding delays for SFC, the definition of capital, and the special mechanism
used to build the Ronald Reagan building.
Q. Why was the funding for SFC delayed? Why was this
property not sold to the private sector for development?
A. The funding has been delayed because the total
amount had to be scored under the discretionary cap in a single year. Also,
the Federal government is reluctant to sell property in the city to private
developers, because we already rent so much.
Q. Should the definition of capital be restrictive
or expansive?
A. I recognize the difficulty of defining capital,
so I urge you to first look at the scoring problems we have encountered.
In one instance, the Federal government did not score the expenditures
for building the Ronald Reagan building, because the building process involved
an innovative sale-and-lease-back type of agreement with GSA.
President's Commission to Study
Capital Budgeting
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