The Secret to D.C.'s Budget Surplus? Traffic Cameras and Rich People Dying

Also, high per capita incomes and a booming population.

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City governments all over the country remain mired in budget constraints and shortfalls, four long years since the recession first set in. But not, as it turns out, in Washington, D.C.

Yes, despite vying valiantly over the last two years for the title of most embarrassing municipal government in American history, the District of Columbia's chief financial officer announced on Friday that the city should expect a $139.5 million surplus at the end of the fiscal year, which closed on Sunday. And that's nine months after an audit revealed a whopping $240 million surplus from the previous year.

So what's going on here? Has the D.C. government somehow magically become uber-efficient in managing its money, at the same time that it's seen a series of city council members plead guilty to charges such as fraud and embezzlement? Not quite. Rather, as the Washington Post reports and CFO Natwar Gandhi explains in a letter to the council and mayor, the D.C. government has been benefiting from an unusually large helping of economically fortunate happenstance. From the Post:

about one-third of the projected $139.5 million surplus is due to an estate tax “windfall,” with another third due to increases in income tax withholding.

Of the remainder, about half can be attributed to increased sales taxes, and the rest to $23 million in “automatic traffic enforcement” revenue — that is, speeding and red-light camera fines.

Got that? One-third, about $46 million, comes thanks to Washington's high per capita incomes and there suddenly being a lot more of them in the District, plus half of one-third, or about $23 million, from those same newcomers buying things at stores located inside D.C. But the rest is split up between fines from a lot of drivers speeding and running red lights and, seriously, an usually high number of old rich people kicking the bucket.

Which gets me wondering, at a minimum: Are there other cities out there with just the right sort of demographics to foretell a similar sort of estate tax "windfall"? If so, which ones would you guess they might be? We've started digging into the numbers and will let you know what we find.

UPDATE: Commenter Peter Burka makes a great point: Since D.C. is unique in terms of its city-state status, it is likely the only municipality in the U.S. that's even able to levy an estate tax. So even if a major U.S. city has a high proportion of elderly wealthy people, that city government wouldn't be able to collect those taxes directly.

Top image: Vepar5/Shutterstock.com

About the Author

  • Sommer Mathis is editor of CityLab. Previously she spent five years editing and reporting on the D.C. metro area at DCist.com and TBD.com.