Can The District of Columbia Afford Statehood?
02/15/2024 | New Columbia Archives | Finance
In 1995, after years of governing with unbalanced budgets requiring extensive borrowing, the District of Columbia government was declared “insolvent” by various bond-rating entities and found itself unable to fund numerous state-level responsibilities. This situation was in large part the result of income limitations imposed by Congress, the large extent of tax-exempt property, inability to tax non-resident incomes earned in the District, and development restrictions such as limitations on the height of buildings.
The budgetary funding crisis led to Congress enacting the Revitalization Act of 1997 which required the federal government to assume the District’s $5 billion unfunded pension liability, take over the financing of local courts, and provide for the incarceration of all D. C. felons in facilities funded by the Federal Bureau of Prisons in numerous states.
In a March 4, 1998 press conference, Norton was asked about statehood legislation. Explaining the effect of District of Columbia Revitalization Act of 1997, under which the U. S. Government took over financial responsibility for seven major state-level functions, she replied, “D. C. just gave back many state functions. We can no longer seek to be a state. We had our fair chance. I have not put in a statehood bill.”
Indeed, Delegate Norton did not introduce a statehood bill from 1995 to 2008. In addition, the demand for statehood was dropped from the Democratic Party Platform in 2004 at the request of Delegate Norton, then the vice-chair of the DNC Platform Committee. In 2008, Norton did not oppose keeping statehood out of the party platform.
Note: For more information about the Revitalization Act, see Wikipedia Article
