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D.C. Officials Say They’re Financially Prepared for Statehood Despite Undetermined Cost

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District of Columbia Chief Financial Officer Fitzroy Lee made it clear in his Monday testimony before the House Committee on Oversight and Reform that Washington, D.C. is “more than capable” to financially handle becoming the 51st state after the bill for D.C. statehood, the Washington, D.C. Admission Act, was introduced to the 117th Congress in January by Representative Eleanor Holmes Norton (D-D.C.).

Despite the declared financial capabilities of the District, which is home to about 714,000 residents, according to Lee, the costs of statehood are to be determined and will be primarily paid by D.C. taxpayers, Norton told The Liberty Buzz.

“The District is more than ready to pay for statehood,” said Norton, who is the only nonvoting delegate for D.C. and authored the bill for D.C. statehood. “There is a transition period during which the state figures out what the cost will be and then, gradually, [the state] takes over all of the costs over time until it absorbs them all.”

There is no transition period time limit for becoming a state, according to Norton. She said the length of D.C.’s transition could not be estimated in comparison to previous state transitions because some states had been U.S. territories, such as Hawaii, which was the most recent state added to the union in 1959.

Norton said that the District could not yet begin to calculate the exact costs for transitioning to statehood. She explained that the expenses are to be calculated by the chief financial officer and it would require a transition budget being presented to the mayor and the D.C. Council. Then, the budget would have to be accepted.

Regarding immediate costs for statehood, Norton told The Liberty Buzz that there are none “except the cost of an election. The only direct cost would be two new members of the Senate, the cost of a new flag and so forth.”

However, she said that election costs might amount to zero because it could occur at the same time the district regularly holds its elections.

Activists hold signs as they take part in a rally in support of D.C. statehood near the U.S. Capitol in Washington, D.C. on March 22, 2021. Democrats, emboldened by their control of the U.S. House, Senate and White House, launched a fresh push Monday for statehood for the nation’s capital, beginning with a high-profile congressional hearing addressing the issue.
AFP via Getty Images/Mandel Ngan

“I think the only justification for not making D.C. a state would be that the city couldn’t pay for it and therefore shouldn’t be allowed to be a state, but I don’t believe that’s the case,” Walter Smith, executive director of the D.C. Appleseed Center for Law & Justice, told The Liberty Buzz. “I think D.C. will be able to pay for it, no matter how the variables work out.”

D.C. is likely to pick up some costs it does not currently pay if it becomes a state, such as for functions paid for by the federal government, according to Lee.

“With the transition to statehood, we expect that certain functions currently managed by the federal government will fall to the new state,” Lee said in his testimony.

The D.C. courts and prisons are currently funded by the federal government.

Despite this, Smith said D.C. is not financially dependent on the federal government, which Lee emphasized during the hearing.

“Contrary to a widespread misconception, the District does not receive an annual payment to cover its operations. Over 75 percent of District revenue is generated from our local taxes and fees,” Lee said.

“The District’s budget is comparable to other states in its reliance on federal dollars for Medicaid, education, other human services and transportation.”

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