Today, Mayor Williams sent his FY 2004 budget to the District Council. We are projecting a city budget gap of $144 million for FY 2004. He also has asked each District agency to take additional cuts totaling $134 million government-wide in FY 2003 to assure a balanced budget for this fiscal year. The continued reduction in the city's revenues is a direct result of the nationwide economic downturn. We do have some spending pressures, mostly in public safety and entitlements, but the primary problem is revenue.

The impact of these cuts on the Department of Mental Health is minimal. As most of you know, we reduced our FY 2003 budget from $228 million to $218 million last October. However, we are held harmless from additional FY 2003 cuts. More importantly, we are held harmless in FY 2004 with the exception of three areas where across-the-board cuts occurred. Step increases are frozen and we will bear a small reduction in travel and a reduction in our security contracts. Even with these reductions, we were exempted from the across-the-board hiring freeze and freeze on contract procurements and communications that most other agencies were asked to take. Altogether, these cuts total $544,000. Our budget request for FY 2004 is $218 million, which includes a $21 million increase in local funds to reflect a more accurate revenue projection.

We emerged from these budget deliberations with our FY 2004 capital budget ($25,480,000) also intact. We were appropriated funds to renovate buildings and make improvements in telecommunications at St. Elizabeths Hospital. Funds also were appropriated to renovate the DMH Community Services Agency North Center site; and $5.5 million was appropriated for consumer housing.

Our budgets for both years essentially were kept whole, which clearly demonstrates the Mayor's commitment to helping us continue the work of building a strong, consumer-focused public mental health system through the effective and efficient use of scarce resources.