Bad news for the D.C. government this morning — District Chief Financial Officer Nat Gandhi revealed that the budget deficit for fiscal year 2011 will actually be around $175 million as revenues from income and sales taxes were, well, way below estimates. We knew that the city was probably going to be at least $60 million in the red after overspending on Medicaid and budget overruns from schools and emergency services were factored into the equation, but this morning’s revelation means that the city will once again be scrambling to figure out how to close a fairly sizable gap. One interesting aspect to this news is that Mayor Adrian Fenty (he’s still the mayor, remember?) will actually be the one responsible for presenting the Council with a plan for FY 2011, though Vince Gray (who is still the Chairman) will probably want to take the lead, since he’ll have to deal with the fallout from however they decide to balance the budget. Will Fenty back down and let Gray take over the reins, or will he flex his muscle in his dwindling time in office? We’ll see.