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.


Mayor Gray Wants Our Input On DC’s Fiscal Year 2012 Budget

March 20, 2011

The Gray administration has posted a short survey on its website. It aims to get feedback on key issues in the proposed Fiscal Year 2012 budget, which will go to the DC Council on April 1.

So all of us who live in the District have a chance to tell the mayor two important things:

  • Our priorities for next year’s local funding — specifically, how we rank major areas of the budget, e.g., human services, education, government operations
  • Whether we agree — and if so, how strongly — that the District government “should consider revenue enhancements,” e.g., taxes and fees, in balancing the budget.

We also have an opportunity to provide whatever specific recommendations we choose.

For example, if you feel, as I do, that “revenue enhancements” are a must-do — not just something the mayor should consider — you can tell him so. Also tell him what they should be.

A couple of big impact options.

Save Our Safety Net has an updated plan for new tax brackets that I personally feel is the best version yet.

The DC Fiscal Policy Institute recommends something similar, plus legislation the Council should have passed long ago to close a tax loophole that’s leaking millions of corporate dollars out of our local budget.

So much for the lobbying.

The recommendations box is also a great place to flesh out your priority choices — specific programs that should get more funding, programs and/or activities we could do without, etc.

It’s a good way to advocate constructively at a key momentespecially for those of us without access to the inner sanctums.

But time is short. The mayor and his people are undoubtedly putting the proposed budget together now. Once it gets to the Council, chances to significantly alter it are limited.

So take a moment to weigh in. A large volume of responses will let the mayor know that we’ll tell him what we think if he asks.

NOTE: Thanks to budget and children’s policy consultant and indefatigable blogger Susie Cambria for alerting me to the survey.


DC Council Cuts TANF Benefits, Approves Full Cut-Offs

December 26, 2010

Our lawmakers on the DC Council had decided to wrap up lawmaking for the year on December 21. They had a long agenda and, with Christmas fast approaching, probably shopping to finish up, parties to get to, etc.

So they decided to vote on a revised Budget Support Act* that they’d seen for the first time less than a day before. Decided not to worry that they wouldn’t have a second chance to vote, since Council Chairman Vincent Gray had introduced it as emergency legislation.

Gray had obviously had second thoughts about the impending cuts in cash benefit to families in the District’s Temporary Assistance for Needy Families program. Also third thoughts, since the final TANF provisions were significantly different from those I’d seen in a version of the substitute BSA circulated several days before.

For poor families dependent on TANF, there’s some tentative good news about cash benefits. Also some news that very ominous — both about cash benefits directly and about sanctions that will henceforward put families at risk of no benefits at all.

Cash Benefits

As I earlier wrote, the Council voted in early December to phase out benefits for TANF families who’d been in the program for a total of more than five years. This would have meant a 20% cut each year until 2015, when benefits would have been zeroed out.

The final version of the BSA imposes a 20% reduction on these families’ benefits after February 2011, but specifies no further reductions. In other words, it reverts to Mayor Fenty’s budget gap closing proposal.

However, the final BSA allows the mayor to adjust the level of TANF assistance payments through the rulemaking process. It thus opens the door to further benefits reductions.

We’ve got some evidence that Gray has his eye on them. The prior draft of his substitute BSA imposed an across-the-board 12% reduction. For a family of three, this would have meant a maximum of $377 a month — less than 25% of the federal poverty line.

Councilmembers got wind of this, thanks to some swift and effective advocacy. Gray apparently got enough pushback to opt for a strategic retreat. But I think it’s prudent to view further benefits reductions as dormant, not dead.

Sanctions

The final BSA apparently authorizes full family sanctions, i.e., termination of all cash assistance when a participating parent fails to comply with some program requirement.

I say “apparently” because the relevant provision doesn’t expressly authorize full family sanctions. But Chairman Gray referred to them in summarizing the BSA changes, and no one else on the Council piped up to challenge him.

As some of you may recall, Mayor Fenty’s mid-2009 budget gap closing proposal included full family sanctions. The Council rejected them — and wisely.

An Urban Institute study found that many District TANF recipients who’d been sanctioned faced serious challenges that might hinder not only their ability to comply with the work requirements, but even to understand them. Studies of TANF participants in other jurisdictions have raised similar concerns.

Yet the Council has decided to let the Department of Human Services move forward with a three-phase sanctions plan, ending in a total benefits cut-off for any failure to “participate [in] or complete an Individual Responsibility Plan,” i.e., the program of activities the participant is supposed to follow.

The final BSA directs the mayor to submit proposed sanctions policy rules to the Council by April 1. They’ll become effective 45 business days later unless the Council officials disapproves them.

But DHS has until September 30 to fully implement its TANF program reform plan. It can thus begin imposing full family sanctions before it has improved assessments, referral processes, training or other services.

Does it make any sense to punish recipients based on their failure to comply with an Individual Responsibility Plan that may be egregiously inappropriate? Because they haven’t received the services they’d need to comply?

What’s the big rush here anyway?

We know that DHS and some Councilmembers are very concerned about the high percentage of District TANF families who’ve been in the program for more than five years — close to 45%, according to recent testimony by DHS Director Clarence Carter.

How many of them could “graduate” if they’d just buckle down to their required job preparation and/or search activities is an open question. Full family sanctions supporters imply the answer is a lot of them. They just need a greater incentive than the partial sanctions already used.

During the Council’s discussion of the BSA, Chairman Gray said that we “need to encourage people to go to work,” implying that harsher sanctions will do that. But he also linked the new sanctions provision to his decision to, at least temporarily, limit the benefit reduction for long-term participants.

Councilmember Marion Barry, who supported the sanctions provision, noted that the existing appeals process will probably delay completion of the 20% reductions until the end of next year. In other words, not much by way of immediate savings from them.

But when Mayor Fenty proposed the reductions, they were supposed to contribute $4.6 million to closing the budget gap.

That could explain the rush.

As Legal Momentum recently reported, full family sanctions have contributed to large TANF caseload reductions. And states have financial incentives to impose them rather than rely on partial sanctions that preserve assistance for the children in a family.

With full family sanctions, states can avert penalties for failing to meet the federal work participation standard — something the District has struggled with. They can also free up funds for a variety of programs and services available to non-TANF families, e.g., child care, early childhood education.

So is the Council really hoping to bring a lot more families into compliance? Or is it banking on the savings DHS will realize by getting jobless families out of the TANF program?

Could it be hoping to mitigate budget constraints by having additional TANF funds for programs more politically popular than “welfare?”

* The Budget Support Act is one of two pieces of legislation needed to enact or make changes in the District’s budget. It makes whatever changes in existing legislation are necessary for the executive branch to carry out the spending directions in the Budget Request Act, i.e., the actual budget. Like most District legislation, it ordinarily must be passed by the Council twice.


DC Council Makes Bad TANF Benefits Cut Worse

December 8, 2010

Talk about robbing Peter to pay Paul!

DC Council Chairman Vincent Gray has pushed through a budget gap-closing plan for this fiscal year that takes cash assistance away from families in the District’s Temporary Assistance for Needy Families program to fund adult job training — maybe some other things as well.

I say pushed through because Councilmembers didn’t get the final plan until the wee small hours of the morning the vote was scheduled. No time for them — or the public — to work through the details or come up with vote-ready alternatives.

I, for one, am feeling hampered by the lack of a clear account of the total package. But the stepped-up raid on TANF is clear enough.

As I previously wrote, Mayor Fenty seized on Councilmember Marion Barry’s now-repudiated proposal to impose a five-year lifetime limit on TANF benefits for poor D.C. families.

Under his gap-closing plan, maximum benefits would have been cut by 20% for all families who’d been in the program for more than five years, whether consecutive or occasionally over a long period of time.

Gray’s version adopts this cut for the current fiscal year, then increases it by 20% each year so that post-five year benefits are fully phased out in Fiscal Year 2015.

No circuit breaker if the planned improvements in the TANF program don’t get fully implemented on schedule or deliver sufficient results. No exemption for victims of domestic violence or other singular hardships, though the District could still have used federal funds to support many, if not all of them.

Half the money saved will be invested in job training programs that target TANF recipients. Maybe Gray used some of the rest to restore the mayor’s proposed cuts to the adult job training programs operated by the Department of Employment Services.

But it’s hard to know how funds freed up in one area have been shifted to undo or mitigate proposed cuts in another.

Not hard at all to know that the phase-out of TANF benefits will work extraordinary hardships on for families who, for various reasons, can’t achieve sustained self-sufficiency. Or to know that it would never have materialized if Gray had decided to balance the budget by a reasonable mix of spending cuts and revenue raisers.

By the time of the vote, Councilmembers had a range of revenue-raising proposals in hand. Councilmembers Michael Brown and Jim Graham reportedly favored the single new top income tax bracket advocated by a large number of local organizations.

Councilmember Tommy Wells had a new income tax reform plan that would have created three new top tax brackets, the first beginning with a minimal increase at $75,000.

Councilmember Barry wanted to revive last year’s proposed expansion of the sales tax — anathema to the health club crowd, but still, I think, a good idea.

He’d also picked up on Councilmember Graham’s thoughts about increasing the tax on commercial parking fees. To these, added an increase in the District’s egregiously low minimum franchise tax.

But Gray decided to postpone any consideration of any sort of tax increase until next spring, when he has to produce his proposed budget for Fiscal Year 2012.

Fat lot of good that will do the TANF families who’ll be pushed out of the safety net.