D.C. MAYOR Muriel E. Bowser (D) presented the D.C. Council with a sound spending plan to deal with the loss of revenue and continuing fiscal uncertainties caused by the pandemic. She canceled pay raises for city workers but avoided furloughs and maintained programs — even increasing spending in education and health care — with the use of the city’s rainy-day funds and some federal money. She did not raise taxes, understanding the risks and not wanting to add more burdens to those who live and do business in the District.

Unfortunately, the council does not share in this sensible, measured caution. To the dismay of those who witnessed the fiscal irresponsibility that drove D.C. into federal receivership in the 1990s, council members want to raise a variety of taxes to support a spending increase of 3.1 percent, up from the mayor’s proposed 1.8 percent.

The council, in initial action on the $16.7 billion budget for the fiscal year that starts Oct. 1, voted July 7to raise taxes to support about $60 million in additional spending. To free up money for affordable housing, violence prevention efforts, mental health supports and other programs, the council voted to increase the city’s estate tax, essentially eliminate a tax credit for high-tech companies, delay some corporate tax cuts, increase the gas tax and add a tax on advertising in D.C. (The ad tax, requiring all media outlets to pay a 3 percent tax on advertising revenue, would affect The Post, and, with other media companies and local broadcasters, the company is opposing it.) A move to impose a “wealth tax” on incomes higher than $250,000 was fortunately defeated in an 8-to-5 vote, but it’s clear the idea has taken root with the so-called progressive wing of the council and is sure to resurface again, particularly if tax-and-spend candidates for the council prevail in this fall’s general elections.

“I am worried about the city’s financial future,” Council Chairman Phil Mendelson (D) told the DC Line’s Jonetta Rose Barras. “The dramatic change in ideology on the council is putting at risk the financial stability we built over the years with healthy reserves and a largely competitive tax base.” Nowhere else in the country are jurisdictions raising taxes in the middle of a pandemic to support new spending. And while homelessness, violence and mental health are issues that need to be addressed, the council seems less interested in solving them than throwing money at them. “It worries me,” said D.C. auditor and former council member Kathy Patterson, “that taxes are being raised and money is going to programs that have not yet proved their value.”

Chief Financial Officer Jeffrey S. DeWitt has cautioned that the pandemic may lead to sustained economic decline and lowered revenue. D.C. is already in a recession, and the economic picture is almost sure to worsen unless a covid-19 cure or vaccine is found soon. Council members are set Tuesday to vote again on the budget, with final approval on July 28. D.C. residents should hope that they wake up to reality and show some fiscal responsibility.


Link to the entire article:  https://www.washingtonpost.com/opinions/bowser-presented-a-sound-spending-plan-now-the-dc-council-needs-to-wake-up-to-reality/2020/07/17/28f16b96-c7c1-11ea-b037-f9711f89ee46_story.html