Tuesday, December 7, the D.C. Council will vote on how to make up the District of Columbia’s $188 million budget shortfall for this current fiscal year. The mayor’s proposal calls for balancing the budget by implementing deep and broad cuts to city services. A number of grassroots and advocacy organizations are calling on the D.C. Council to avoid some cuts to services by enacting a 1 percent tax increase on those earning more than $200,000.
This past Tuesday, at an all-day (and night) hearing, numerous witnesses stated their willingness to pay more in taxes in exchange for protecting the safety net services. Apparently this was too much to handle for At-large Councilmember David Catania who launched into a series of tirades. Catania would be impacted by the proposed tax increase since he earns more than $200,000. In addition to his Council salary of $125,000, Catania earns an additional $120,000 a year working for a subsidiary of M.C. Dean, a company that has done more than $130 million in business with the District over the past decade.
Tuesday morning at 9 AM, before the D.C. Council vote on the budget, several groups are holding “The People’s Hearing “ outside of the John A. Wilson Building at 1350 Pennsylvania Ave, NW. They are calling on “the Council to make the better choice: raise income tax by 1 percent for income over $200,000 a year and invest in priorities that put DC to work!”
While a good deal was said about the need to raise revenue at the hearing this past Tuesday, there was little mention of the capital budget. When the District builds, for example, a school or a road, rather than taking money out of the operating budget (which funds all the schools, the police, the services, etc), the District may borrow money from a bank and pay it back over many years.
The D.C. Council and the mayor portray the capital budget as being completely separate from the operating budget, but each year more than 10 percent of the District’s budget goes to paying off banks for what are all too often massive and unnecessary capital projects. Examples include the baseball stadium (more than $800 million), the convention center ($850 million) and the convention center hotel ($272 million). In my testimony before the D.C. Council, I raised the issue of the lack of attention paid to the capital budget.
Additionally, I discussed the controversial proposal for a major tax abatement for a luxury boutique hotel in Adams Morgan. Ward 1 Councilmember Jim Graham told me that the D.C. Council would be voting on the tax abatement this coming Tuesday, but that now looks doubtful. Thursday, in a 3-2 vote, the Committee on Finance and Revenue tabled the tax abatement for the proposed hotel. (Yes: Michael Brown, David Catania, Harry Thomas; No: Kwame Brown, Jack Evans)