Today, the DC Council is holding a roundtable to discuss Mayor Gray’s proposed plan to use additional revenues announced by DC’s Chief Financial Officer just two weeks ago. The Mayor’s plan focuses on the $107 million in additional revenue announced for FY 2011. Between additional revenues in FY 2011 and FY 2012, the new funding would help cover significant spending pressures in health care, provide additional funding to hire more police officers, and offset cuts in a commercial revitalization program, among others. It would also put aside funding in DC’s fund balance, or savings account, and move personnel out of the capital budget and into DC’s operating budget.
DCFPI largely supports the Mayor’s plan. It helps fund a number of important services that were not funded in the FY 2012 budget. Yet, even with the promising uptick in revenues, the revenue growth is not sufficient enough to fund all of the critical programs and services on the priority list including housing, libraries, and assistance for people with disabilities, just to name a few. And with a provision that half of all new revenues in 2012 will be deposited in DC’s savings account, revenue estimates will need to grow another $70 million in order to cover these critical services.
DC residents strongly prefer maintaining services over holding down taxes. This suggests that the Council should not adjust the priority restorations list to re-instate a tax break for people who currently invest in out-of-state bonds, as has been suggested by some Councilmembers. Until the Council removed this tax break, DC was the only state to offer such a break. All other states offer a break to their residents who invest in their states bonds, but not out-of-state bonds, to encourage investment in their states infrastructure. And data show that most DC residents with out-of-state bonds are not low-income or retirees, despite claims to the contrary.
DCFPI’s Ed Lazere is testifying on the Mayor’s proposal today. You can read a copy of his testimony here.
