If Not Tax Increases, What?

Spent a good part of last Monday watching the DC Council hearing on Mayor Gray’s Fiscal Year 2012 budget. None of the six Councilmembers participating was ready to go along with all the proposed revenue raisers that would help close the $322 million budget gap.

Much has already been written about the split over the proposed income tax increase. What was news, at least to me, was that even Councilmembers in favor of that balk at extending the sales tax to live performances.

Bad for the cultural vitality that makes the District an attractive place to live.

So there goes an estimated $2.3 million — not much, but it has to be made up somewhere.

Then there’s the matter of $22 million or so that the mayor’s budget would shift from two special accounts established to fund neighborhood development projects. “Not fair,” says Councilmember Jack Evans. “Disingenuous,” in fact.

And the matter of the large funding reduction for homeless services. Council Chairman Kwame Brown repeatedly expresses concerns about impending shelter closures.

Says he intends to look for a way to restore the lost funds. That’s at least $7.1 million, since he seems committed to sheltering only homeless families and victims of domestic violence.

Also to addressing the perceived need for more police officers. Another $10 million there.

So where are these millions going to come from?

Not from an income tax increase, it seems. Council Chairman Brown and participating colleagues Bowser, Evans and Catania all reiterate adamant opposition.

Brown since has said he’ll accept the deduction limit, but not the rate increase, which accounts for the larger share of the $35.4 million the mayor’s proposal would raise. Questionable whether he can corral a majority for this.

Catania rails against “the tired old notion of tax increases” — apparently referring to the idea that high-income residents should pay higher rates.

Seems he’s again holding out the possibility that he’d support a uniform across-the-board rate increase. “Whether people can afford to contribute” is something he “doesn’t care about.”

But this is merely a rhetorical flourish. He repeatedly insists that spending cuts versus tax increases is a “false either/or.”

When he became chairman of the Health Committee, he reviewed every item the departments the committee oversees spent money on. Found a lot of excess expenditures. Would that other committee chairs had done the same.

The answer, Catania says, is to go after our “gout-ridden government” — shrink “the bureaucracy that continues to feed itself.” This apparently would not qualify as a spending cut.

We heard a less florid version of the same from witness Barbara Lang, President and CEO of the D.C. Chamber of Commerce. She, on behalf of members, objects to all tax increases. Also wants the funds cut from small business technical assistance restored.

The local government, she says, isn’t operating efficiently. Implies that eliminating unnecessary and redundant functions would allow the government to deliver all essential services without raising either taxes or fees.

Now, I’m the last one to say that the District government — or any government for that matter — is as efficient as it could be. Surely some functions are duplicative, unnecessary or of such low priority that they could, in theory, be eliminated.

But let’s get real. Virtually every function — indeed, every significant expenditure — has supporters that would make meaningful reductions politically difficult. Recall, for example, what happened when former Mayor Fenty tried to fold the Office on Asian and Pacific Affairs into a larger unit.

More importantly, the Gray administration and the Council would have to find — and agree on — some $127 million in “efficiencies” in order to balance the budget with no tax increases or yet deeper cuts in core services.

Also somehow to accommodate the cost impacts of a large increase in unemployed residents — not only government employees, but those employed by contractors and the many local retailers that would come up short on revenues.

And they’d have to do it before May 24, when the Council is scheduled to vote on the budget.

All this efficiencies business is just a distraction from the very real choice between adopting even more significant revenue raisers than the mayor has proposed or creating even greater hardships for low-income District residents.

NOTE: Just as I was finishing up this posting, Councilmember Evans marked up the Finance Committee’s share of the proposed budget. Under his leadership, the committee majority rejected virtually all the revenue raisers. This reportedly leaves the budget shy nearly $119.5 million.

Like Catania, Evans claims that revenue raisers versus deep cuts in social services is a “false choice.” No hint as to what the real choice is.

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One Response to If Not Tax Increases, What?

  1. […] DC Council budget discussion answered my question about where the money’s going to come from to restore cuts Councilmembers don’t like […]

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