Summary: Pursuant to a congressional request, GAO updated its comparison of the District of Columbia's revenues with those of selected other cities, focusing on: (1) the District's revenues, on a per capita basis, compared with the per capita revenues of eight selected cities, using alternative assumptions regarding the allocation of state-level revenue to cities; and (2) some potential reasons why expenditures per capita may differ across cities. GAO did not independently verify the accuracy of the census data.
GAO noted that: (1) in GAO's analysis, the District of Columbia had the highest total revenue per capita among the cities GAO reviewed, under both of the nontransferred revenue allocation assumptions it made; (2) other assumptions could produce a different result; (3) for example, in commenting on a draft letter, the Office of the Chief Financial Officer of the District of Columbia offered an analysis using a different assumption; (4) under their assumption, all nontransferred state revenue was allocated to cities in proportion to their share of the state's poverty population; (5) under this assumption, the District ranked second, behind New York City; (6) while the ranking of the cities did not change significantly from one assumption to the next, the amount of total revenue per capita for some cities differed significantly under the alternative assumptions; (7) these results illustrate the sensitivity of the comparisons to the assumptions used; (8) comparisons of city total revenues per capita do not address the question of whether the revenue available to each city was sufficient to meet its expenditure needs and should not be used alone to assess whether these revenues are too high or too low; and (9) GAO's review of studies of the District of Columbia's finances revealed that expenditures per capita may vary across cities owing to differences in the: (a) types of services provided; (b) share of each city's population that receives particular services; (c) quality of service provided to each recipient; (d) costs of labor and other service inputs; and (e) efficiency of service provision.
