Local listservs are buzzing. Advocacy groups are huddling. We’re all concerned about how the DC Council will close the $175 million gap in the current budget.
We know that spending cuts will be at least part of the answer. What they’ll be and how big are open questions. But if past is prologue, programs that serve the needs of low-income residents will be highly vulnerable.
Last year, funding for human services and other programs for low-income people took at $49 million hit — the second largest after public education. And it could have been worse if the District hadn’t still had unused federal stimulus funds for our schools.
It would have been better if Mayor Fenty and the DC Council had focused more on the revenue side of the ledger. What we got were a couple of sales and excise tax increases, plus freezes in the homestead property deduction and the standard exemption and personal deduction in the income tax — all disproportionately costly for low-income residents.
This year a similar story. Some fee increases, a couple of highly targeted taxes and one regressive expansion in the sales tax, which now covers soft drinks, but not various services used mostly by higher-income residents.
But maybe the day for a serious look at the local tax structure has dawned. Soon-to-be-mayor Vincent Gray has remarked that services have been cut to the bone. “Actually, we’ve cut down to the bone marrow,” he’s said.
More importantly, he’s reportedly told attendees at two successive ward meetings that he’s ready to consider new or expanded revenue raisers.
As you may recall, the Save Our Safety Net coalition championed two news brackets last spring — a 9% rate for residents with incomes over $200,000 and a 9.4% rate for those with incomes over $1 million.
SOS-DC is back on the case — hopeful that it can help shift Gray and a couple of other Councilmembers to the “yea” column. How many have to shift depends on when the Council gets around to voting.
SOS is still working as the grassroots arm of the Fair Budget Coalition and an overlapping coalition including FBC members, local labor organizations and some faith-based and other community groups.
They’re now focusing on one new tax bracket — 1% higher for residents earning over $200,000. This, I assume, is after the adjustments the federal tax code permits.
Gray has said that he thinks District residents will at least be open to tax increases if they understand how damaging a cuts-only approach to budget balancing will be. “If we can make the case that the vulnerable are going to be imperiled, I think there are going to be a lot of people who are going to entertain some sort of tax increase.”
“Some sort,” of course, covers a lot of territory. But a new top tax bracket certainly could be there, along with some other measures that would increase both revenues and fairness. I’m still hopeful eliminating the District’s almost unique exemption for interest paid on out-of-state bonds.
Gray has reportedly challenged advocates to make the case to the public. Originally, I thought this was shifting the burden where it didn’t belong. Now, however, it appears that what he actually wants are the facts, figures and, very importantly, the stories to help him make the case.
He’s planning to work with fellow Councilmembers on a list of potential budget cuts and then seek public input on whether taxes should be raised instead. So look for announcements of public hearings — or maybe just one of those all-nighters the Council sometimes perpetrates.
In the meantime, there’s a need to show that we, like Gray, wouldn’t mind paying more if the trade-off were protecting investments in our safety net and other key programs that can give low-income residents a better chance at finding full-time, living-wage work.
SOS-DC has an editable letter we can send to our representatives on the Council. A quick, easy way to voice our support for a balanced approach to budget balancing.