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:
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
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.