U.S. capital city budget gap swells

WASHINGTON, Nov. 28 (UPI) -- Washington Mayor-elect Adrian M. Fenty will confront a budget gap of more than $300 million when he takes office Jan. 2.

The Washington Post calls the shortfall an "early test" for the new mayor, who promised an increase in providing services without a tax increase.

Fenty plans to wipe out waste and pinpoint cost-savings in some departments to channel money to agencies in need.

D.C. Chief Financial Officer Natwar M. Gandhi notified Fenty in a memo the district's budget overage already stands at $87 million for the fiscal year that began Oct. 1. The budget forecast for 2008 predicts a shortfall of $215 million.

The district's woes stem from the Department of Mental Health and the Mental Retardation and Developmental Disabilities Administration's failure to file paperwork for federal reimbursement of Medicaid and Medicare services.

District council member Jack Evans, who chairs the Finance and Revenue Committee, called the shortfall part of a "long-standing problem."