Mayor Gray Doesn’t See Property Or Income Tax Increases Either

March 28, 2011

Just as I pushed the Publish button for my posting on DC Council Chairman Kwame Brown’s views on tax increases, I learned belatedly that Mayor Gray probably shares them.

Patrick Madden at WAMU reports that the mayor said last Monday that he doesn’t “envision” any increase in either property or income taxes. Nor sales taxes, for that matter.

There are other options for revenue raising, he said, but “across the board tax increases — I don’t envision anything like that.”

There are indeed other options. No one, to my knowledge, ever said that property and/or income tax increases should be the only options on the table.

We’ve heard talk again about raising commercial parking fees — a good way to rake in a relatively small amount from visitors and commuters.

The just-released Fair Budget Coalition report for Fiscal Year 2012 recommends two others — a doubling of the District’s hospital bed tax and ending, at long last, the anomalous tax exemption for on out-of-state bonds.

But, I hasten to add, these would be in addition to at least one new top tax bracket for high-income households. Such a reform would not, of course, be an “across the board” increase, though the mayor apparently thinks otherwise.

Nor would an expansion of the sales tax to include theater tickets and services like pet grooming and yoga classes. I stubbornly still believe that this could be part of a sensible solution.

At any rate, the real issue isn’t whether next year’s budget includes any revenue raisers. It’s their structure and the balance between the projected revenues raised and the savings purportedly achieved by spending cuts.

Even former Mayor “No Tax Increases” Fenty put some fee increases into his proposed budgets, plus freezes on several broad-based tax benefits. Virtually all these revenue raisers would have affected low-income residents the most.

And those adopted didn’t raise nearly enough to allow for even level funding of programs and services that meet vital human needs.

The Fair Budget Coalition has singled out just seven that it says make up “the bare minimum of a safety net” and, at the same time, enable those who can to move toward economic self-sufficiency.

Seems to me that protecting these is the very least we can do. And by protecting, I mean ensuring they’ve got enough funds to do what they’re supposed to.


DC Council Committee Finds $$ For Affordable Housing and More

May 7, 2009

D.C. City Council committees have finished marking up the Mayor’s budget, i.e., making changes to create the budget the Council will finally vote on. It’s pretty clear that they’re not all happy with proposed funding levels for programs that serve low-income residents–or with the proposed tax changes and fees that would hit low-income residents hardest.

But it’s not enough to have concerns. If Councilmembers want to fund increases or modify revenue raisers, they’ve got to find other funds to keep the budget balanced. And that’s what the Committee on Public Works and Transportation has just done. Details are in its draft report and recommendations.

The funds the Committee found wouldn’t come out of any other program budget. In fact, one source wasn’t in the Mayor’s budget at all–a projected $26.2 million from additional citations for neighborhood parking violations. Of this amount, $6.8 million will come from the city’s new Sweeper Cam Initiative–cameras mounted on street sweepers that are used to photo license plates of illegally parked cars.

The Committee proposes that $3.5 million of the Sweeper Cam revenues be used to increase funding for three affordable housing programs:

  • The Local Rent Supplement Program, which provides housing vouchers for very low-income residents and so-called “project-based vouchers,” which are linked to affordable housing units. (Project-based vouchers cover some of the ongoing operating costs of these units and so also help developers secure private financing.)
  • The Housing First program, which provides permanent housing with supportive services for chronically homeless individuals.
  • The Housing Purchase Assistance Program, which helps low and moderate-income individuals and families cover the down payment and/or closing costs on their first home.

Another $1.5 million of the Sweeper Cam revenues would go to the TANF (Temporary Assistance for Needy Families) program. According to the DC Fiscal Policy Institute, this wouldn’t even preserve the value of the current benefit, let alone provide TANF families with anything close to what they need for basic living costs. So they’ll still be in worse straits unless the Council finds more funds.

The other source of found funds is about $15.5 million in Metro Transit Authority costs that were double-counted in the Mayor’s budget. The Committee recommends that the Council use $12 of this instead of adopting the proposed Streetlight Operation and Maintenance Fee–a new revenue raiser that would add $51 per year to residents’ electricity bills.

The Committee would also combine $1.9 million from one of the double-counts with $990,000 in Sweeper Cam revenues to fund a continuation of the cost-of-living adjustment for the standard deduction in D.C. personal income taxes. This is one of four COLAs that would be eliminated under the Mayor’s budget.

The Committee’s recommendations aren’t a done deal. Other Councilmembers may have different ideas about what to do with the found funds. Councilmember Evans, for example, has talked about business tax cuts.

And one would hope that some Councilmembers would have reservations about the more than $6.1 million in earmarks for groups and projects in the PW&T Chairman’s ward. Enough found funds here to fully fund a real TANF increase, with plenty left over to boost affordable housing resources or preserve some of the other COLAs.

The City Council will meet on May 12 to vote on a final mark-up. So it’s time to weigh in if you’ve got views on what the priorities should be. Contact information is on the Council’s website.

Proposed DC Taxes Would Hit Low-Income People Hardest

April 20, 2009

Mayor Fenty’s proposed budget includes about $120 million in new and expanded revenue raisers. These are to offset the sharp drop in District revenues due to the recession.

In principle, they’re the right approach to the projected shortfall because the alternative would be drastic program cuts. And some of them make a lot of sense. Look, for example, at the discussion of corporate tax loopholes in the DC Fiscal Policy Institute’s budget toolkit.

But, as DCFPI shows, about $26 million of the revenue raisers would disproportionately impact low-income residents. They include:

  • The elimination of the cost-of-living adjustments for three tax benefits–the personal exemption and standard deduction for personal income taxes and the homestead deduction for property taxes.
  • A new fee for streetlight maintenance, to be added to electricity bills.
  • An increased fee for the operations of 911 emergency services, which is folded into our phone bills.

Eliminating the COLAs will affect all D.C. taxpayers. But, for various reasons, they’ll have greatest impacts on low-income residents. For example, most low-income residents take the standard deduction, while many higher income residents itemize because they’ve got mortgage interest and property taxes to deduct.

The fees will also hit low-income people hardest. They may not seem much to residents in upper income brackets, but low-income residents often have to struggle to pay their utility bills. The increase could lead to even more shut-offs or force poor families to cut back even further on other essential needs.

The District has other revenue raising options. As I wrote awhile ago, the Coalition for Community Investment has offered a number of them. One is reflected in a bill introduced by City Councilmember Jim Graham–a new top income tax bracket.

The current top tax rate applies to taxable incomes over $40,000. Graham would create another rate for residents with taxable incomes of $500,000 or more.

The new rate would be only 0.4% more than the current top rate. Seems to me it could kick in at a lower income level–say, $200,000. But even the $500,000 seems to be giving other Councilmembers heartburn.

DCFPI is spearheading a campaign against the tax and fee increases. It’s posted a letter for organizations to collectively communicate their concerns. So if you belong to an organization, you might see whether it would sign on.

The rest of us can raise concerns by e-mailing the City Council, Better yet, we can write or call the Councilmembers who represent us.

The Council will vote on the budget on May 12, so they need to hear from us soon.