The voices of Urban Institute's researchers and staff
December 17, 2014

How Congress meddles with the District of Columbia: Marijuana edition

December 17, 2014

Congress’ last-minute agreement to fund the federal government through September includes a provision banning the District of Columbia from regulating and taxing marijuana.

District voters overwhelmingly supported legalizing marijuana in a November ballot measure, and the DC Council recently held hearings on the possibility of public sale and taxation of the drug. None of these actions involved federal spending.

So why is Congress changing the District’s law?

Rep. Andy Harris, the congressman most responsible for inserting the ban into the spending bill, told the Baltimore Sun that “the Constitution treats the District differently from the states and … federal lawmakers have a legitimate oversight role.”

The congressman’s statement is accurate. The Constitution gives Congress authority over the District “in all cases whatsoever.” But does that make it good public policy?

The District’s population is just over 646,000 people, making it slightly larger than Boston and more populous than two states (Vermont and Wyoming).  In fiscal year 2015, its gross funds totaled over $12 billion, including $7 billion in taxes and fees on its residents and businesses and $2 billion in local special funds (e.g., water and sewer). The District did receive $3 billion in federal grants, but these are basically the same grant dollars (mostly Medicaid) sent to every other state government.

And the District has its own government. In 1973, Congress passed the Home Rule Act, allowing District residents to elect a mayor and council, and for those equal branches of government to adopt laws and budgets. It also created a general fund, and allowed the District to deposit its local revenues there instead of with the US Treasury.

The District’s budget is balanced and has been for 19 consecutive years. In fact, the District has a fund balance surplus of $1.75 billion. The District’s bonds are highly rated. The biggest fiscal news this year was a significant tax cut.

But for whatever reason, Congress has not relinquished control of the District. The District’s budget still must get congressional approval—it is included in one of the 12 annual appropriations bills—and Congress can overturn any legislation passed by the DC Council.

The current spending bill says funds in the act cannot be used to “enact” marijuana laws.  Because the District’s funds are in the act, Congress can dictate how the dollars are spent. Congress also blocked the District from funding abortions in the 2011 budget deal, and prevented it from spending on clean-needle programs from 1997 to 2007. In 1998, Congress even prevented the District from using funds to certify the results of an election—not so coincidently, a ballot measure approving medicinal marijuana.

“Normal” congressional approval of the District budget also causes problems. The lag between when the District approves its budget and when Congress approves its budget (often four months) creates implementation and oversight problems. And when Congress shuts down the federal government, the District’s government also gets shut down. In 2013, DC had to tap a contingency reserve to stay open until a deal was reached on Capitol Hill.

The District has tried to change this. In April 2013, voters approved a budget autonomy referendum permitting the District to spend its local tax and fee revenue without congressional approval. However, some argue only Congress can remove itself from the process. (Important note: District residents don’t have representation in Congress). The autonomy law is currently in the courts.

Sometimes trading democracy for oversight is good for financially distressed local governments. New York City, numerous municipalities in Pennsylvania, and more recently Detroit have all benefited from intervention at higher government levels.

In fact, the District owes some of its current success to reforms implemented by an oversight committee. In the 1990s, the District had a deficit over $500 million, or about 20 percent of its general revenue funds. Congress created a Control Board and gave it veto power over the District’s budget, laws, and borrowing requests. And it worked. The Control Board was disbanded in 2001 after four consecutive balanced budgets.

But congressional oversight of the District’s current budget and laws has nothing to do with fixing fiscal problems. Congress merely views the District as a bargaining chip or policy experiment. Congress interferes with the District’s budget and laws simply because it can.

Photo from Shutterstock

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Comments

There is nothing harmful about marijuana, on the contrary, it is a good asset for a healthy lifestyle, if you consume it moderately. It alleviates the stress, helps terminally ill, gives artists new inspiration, and so on. I believe that the Columbia district presented a very good policy that could bring more money, and alleviate its residents even more. The current criminalization of marijuana is not sustainable in a long run. On the contrary, it only makes the situation worse and takes police from its main anti-drug tasks, in which it should be working on capturing the big fish of the international drug trade.