DC Council Chairman Says No To Tax Increases

News Talk host Bruce DePuyt reports that DC Council Chairman Kwame Brown will oppose any local property or income tax increase. “People are tired of their taxes going up,” says Brown, “especially in these environments.”

Whom, I wonder, has Brown been talking to? And what are they griping about anyway?

Property tax rates have remained flat, except for the rates on vacant property. So most of those who are paying more are homeowners and businesses whose property, according to the assessors, is worth more on the market. They’re tired of seeing their assets appreciate?

Income tax rates have also remained flat, notwithstanding proposals to add at least one new bracket for high-income residents. So we’ve still got a system that taxes households with incomes below the median average for the District at the same rate as those with incomes over $1 million.

As the DC Fiscal Policy Institute recently wrote, we’ve all — but especially the wealthiest among us — gotten a windfall from the extension of the Bush era tax cuts. For those in the top 5% of the income scale, it nets out to an average of at least $9,400.

Windfalls like these would more than offset the increased local taxes better-off residents would owe if the Council adopted the progressive reforms that Save Our Safety Net and allies now advocate.

Perhaps it’s really the “environments” Brown’s concerned about. None of us is happy paying taxes to satisfy his personal transportation preferences — or, for that matter, to cover what seem to be excessive and unwarranted salary increases for some of Mayor Gray’s appointees.

But I doubt many of us would let these tawdry matters cloud our view of the issues confronting the Gray administration and the Council.

Once again, there’s a budget gap to close. Every budget gap for some years now has been closed primarily by spending cuts.

Programs that serve the needs of low-income residents have been cut so much that they’re serving only a shrinking fraction of those needs. (I’ll forgo the links here because, sadly, they’d stretch this posting beyond compass.)

Public education has thus far weathered the storm. But it’s hard to see how the District can sustain its investments in this second largest major budget area without more revenues or devastatingly large cuts in other areas.

Reasonable tax increases won’t drive families out of the city. According to a recent DCFPI analysis, District residents generally pay lower taxes than their counterparts in some neighboring counties. In the rest, taxes are about the same.

But if cuts prevail, families who can afford to will leave the city, taking their income tax and at least some of their sales tax dollars with them.

They understandably want good schools, convenient, well-maintained libraries and recreation centers, clean, safe streets — and a community that’s not pocketed with decay and desperation. As do we all.

Brown says we need to “cut programs that don’t work and reallocate those dollars to programs that do work.” No one would argue with that. But we’ll have scant dollars to reallocate if the Council again relies mostly on spending cuts to eliminate the shortfall.

DCFPI has made the case for a balanced approach to budget balancing repeatedly — and from more angles than I imagined possible. It’s identified a range of revenue-raising options (not mutually exclusive). It’s put figures on the consequences of adopting — and not adopting — them.

I’d just add that I think it’s high time the District develop a systemic solution to its chronic budget problems. And, to my mind, that means, among other things, revisions to the tax code that will bring in more revenue from those who can best afford it.

The current tax structure may again yield more local revenues — unless, of course, the economic recovery flags. But the District, like all state and local governments, depends in part on federal funding for its programs.

The Gray administration and the Council would be well-advised to assume that the District will have to rely more on its own resources in the future — even if the House Republicans don’t get their way on the upcoming bills to avert a government shutdown or a default on the federal debt.

Because the cuts on the table now are  just a harbinger of things to come.

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