Well, we no longer can say the vote on the DC budget is coming. It has, in fact come and gone, with a good amount of last-minute drama. Chairman Gray shared his final budget proposal early Wednesday morning, which the Council then considered and voted on at a hearing that started on Wednesday morning.
The good news: In response to a huge amount of advocacy, the Council restored funding — mostly at the last minute — to a number of programs critical to vulnerable DC residents that were facing large cuts. These programs include: Grandparent Caregiver, Rapid Housing, EITC, and adult job training. With the Council’s actions, these services will not be cut in 2011 (they won’t be increased, either).
Beyond these, the Council added $1 million to the Local Rent Supplement Program, which will help 75 very low-income households get safe and affordable housing.
The bad news: The Council left in place many of the cuts that had been proposed by Mayor Fenty. They added $1 million to offset a small part of a $7 million cut to Interim Disability Assistance, the cash assistance program for residents with disabilities who are waiting for federal disability benefits to be approved and often have no other source of income. The Council did not find any funds for emergency rental assistance, which will be funded below the amount DC provided in 2008, before the recession pushed thousands of more families to the financial edge. And support for homeless services, which was cut this year by about $4 million, will stay at that level, even as the city faces up to the fact that it is turning away some homeless families with children who have nowhere to go.
The DC Council had a spirited debate around raising income taxes, after Councilmember Jim Graham introduced an amendment to create a new tax bracket for households above $350,000 in taxable income. That tax increase would have allowed all of the cuts to be restored. But the Council rejected that proposal on an 8-5 vote, with Councilmembers Michael Brown, Harry Thomas, Tommy Wells, and Marion Barry joining Councilmember Graham. Phil Mendelson voted no but suggested that tax increases may need to be revisited if the budget falls out of balance again.
The Council’s vote wasn’t a statement about raising taxes generally, because they in fact supported two tax increases that helped preserve services. In April, Jack Evans and Muriel Bowser proposed setting a new property tax rate on vacant properties, and the final Council budget package included expanding DC’s sales tax to soda. (The Council also supported expanding the sales tax to medical marijuana, though there was no revenue estimate tied to that and so it was not used to fund specific programs.)
Instead, the Council rejected the specific notion of an income tax increase on DC’s highest income households. This is unfortunate, considering the fact that DC’s top tax rate now starts at $40,000, many states have set new tax rates on high-income households, and noted economists have endorsed this approach as a sound way to address budget shortfalls while limiting the impact on the economy.
