Vince Gray unveiled his first budget and it’s just what he promised — deep cuts and some tax increases. It will have a direct impact on residents across the District from the poorest to the richest.
The LGBT community is represented in its diversity across that spectrum. It is not easy to balance a budget of more than $9 billion and this is the first time in many years that it has been done without major gimmicks and not dipping into our quickly diminishing rainy day fund. It was done recognizing we had to close a $322 million gap. The District joins nearly ever other state and city in facing budget deficits caused by the recession and the pending cutbacks in federal spending.
The budget was released to the Council on April 1, but it wasn’t an April Fools’ joke. As soon as it was released we heard the screams of pain from all those who will be affected and their advocates. The first out of the gate was Jack Evans, Ward 2 Council member, who can always be counted on to speak out for big business and the wealthy. Then we heard comments from Ed Lazere, executive director of the D.C. Fiscal Policy Institute, who claims that 60 percent of the cuts come from social services. Could that be because those services are such a huge part of the budget?
The most humorous comment was in the Washington Post budget coverage. Barbara Lang, president and CEO of the D.C. Chamber of Commerce, commented on the parking garage tax and said, “People that are going to be impacted are people like me who provide parking for their employees.” Well what a great perk if you can get it! I wonder how many of those employees don’t actually live in the District and pay no taxes here? Someone should remind Lang that those who do live in the District can easily take the bus, Metro, or even bike to work thereby getting cars off the roads and helping the environment at the same time.
Each year at budget time you realize how major an impact the federal government has on us and how much control it can exert. Although we no longer receive a direct federal payment we do get funding for a number of services including the courts, prisons and additional school funds. But the fact is that these funds in no way make up for the loss of property taxes we forgo on all federal land and Congress’s prohibition on our charging a commuter tax. We also get money for the same programs that other states do such as Medicaid.
Now the Council must review, possibly change and then pass a budget. Here is where the real debate begins. It will be between Council members Jack Evans and Michael Brown who will lead the debate on whether social services spending went up or down. Council member Jim Graham is complaining about the proposed cuts in TANF but does like the increase in parking garage taxes. Chairman Kwame Brown doesn’t like the income tax increase but I think that is more about gaining political favor after his SUV debacle and in the end he will vote for it.
Over the years, tax increases have become anathema to politicians. That began with Ronald Reagan’s 1980 campaign. In 1984, Walter Mondale lost partly because he proposed a tax increase. The first George Bush probably lost his re-election because he broke his “no tax increase” pledge. I don’t think a tax increase of .4 to 8.9 percent for those with an adjusted income of over $200,000 will make a huge difference in their lives and they will be able to deduct some of that increase from their federal taxes. The only caveat I want is a two-year sunset clause on that tax based on the expectation of an invigorated economy.
The Council will need to balance the interests of the poor who have seen the greatest impact on their lives from this recession with those who pay higher taxes and are demanding that government provide the services they are paying for in an efficient way.
It will be important to separate the budget debate from the missteps of the mayor during his first three months in office. There is no real connection between the budget and his hiring of friends’ kids who are now all off the payroll and breaking salary caps for a few people, which have now all been rolled back.
The 2012 budget issues should be, and need to be, debated on their own merits.