The D.C. Council on Tuesday voted 8 to 5 to approve a resolution by Council Chair Phil Mendelson (D-At-Large) to postpone the Council’s final vote on the city’s fiscal year 2021 budget to give the Council time to figure out how to drop a controversial sales tax on advertising that the Council attached to the budget on July 7 in a preliminary vote.
Mendelson said he would immediately ask the city’s Office of Budget and Planning to identify ways to cut $18 million from the budget or to find new sources of revenue to offset the $18 million that the city’s Chief Financial Officer projected would be generated by the advertising tax as originally introduced.
The Washington Blade and Tagg magazine, the local publication that covers issues of interest to lesbians of color, joined the Washington Informer, one of the city’s African-American newspapers, and other local community newspapers in calling on the Council to drop the ad tax. The papers said advertising revenue, the life blood of newspapers, had dropped dramatically since March due to the economic downturn brought about by the coronavirus pandemic.
The local papers and representatives of local small businesses that depend on advertising to promote their products and services said the proposed 3 percent advertising tax would be devastating for business at a time when their revenue was already drastically reduced due to the epidemic.
At Tuesday’s D.C. Council session, Mendelson initially introduced an amendment to the budget bill to change the advertising tax from a value added tax, which he said he had not intended to introduce two weeks ago, to a simple 3 percent tax on the sale of ads from media outlets to businesses or individuals buying an add.
Fellow Council members expressed support for Mendelson’s amendment but said it would not address the underlying problems that media outlets and small businesses said the 3 percent tax would still create during the current economic crisis.
It was at that time that Mendelson took the unusual step of calling for postponing a vote on the budget for a day or two, up until Thursday at the latest, to give the city’s budget office and the Council time to come up with a way to offset the $18 million that the originally proposed ad tax was expected to generate in revenue.
Council member Charles Allen (D-Ward 6), who said he disliked the ad tax, was among several Council members that opposed the postponement proposal, saying it would be unfair to cut other programs without having time to consider the impact of those cuts on city residents, especially low income residents facing turmoil from the epidemic.
“Everybody is going to be unhappy about something,” Mendelson said in referring to the cuts needed to offset the $18 million. But he said that was the only way to get around keeping the ad tax.
Mendelson promised to send whatever proposed cuts the city’s budget office comes up with to the other Council members within a day or two. He said he would then reconvene Tuesday’s Council session to enable the Council to decide on the proposed cuts or any new proposals for generating additional revenue.
Susana Castillo, a spokesperson for D.C. Mayor Muriel Bowser, told the Blade she expects the mayor’s office to ask the Council to consider the budget the mayor initially submitted to the Council earlier this year, which was balanced. Castillo noted that Bowser did not support the advertising tax.
Castillo said that Bowser sent Mendelson a detailed letter on Monday of this week offering suggestions on making adjustments to the Council’s proposed budget that included removing the advertising tax.
The Council members who voted in favor of Mendelson’s proposed action included Mendelson, Brandon Todd (D-Ward 4), Trayon White (D-Ward 8), Anita Bonds (D-At-Large), Mary Cheh (D-Ward 3), Vincent Gray (D-Ward 7), Kenyan McDuffie (D-Ward 5), and Brooke Pinto (D-Ward 2).
Those who voted against the proposal included Elissa Silverman (I-At-Large), Robert White (D-At-Large), Charles Allen (D-Ward 6), David Grosso (I-At-Large), and Brianne Nadeau (D-Ward 1).
ad taxAnita BondsBrandon ToddBrooke PintoCharles Allencoronavirus pandemicD.C.D.C. City CouncilD.C. CouncilD.C. Office of Budget and PlanningDavid GrossoDistrict of ColumbiaElissa SilvermanFiscal Year 2021 BudgetKenyan McDuffieMary ChehMuriel BowserPhil MendelsonRobert WhiteSusana CastilloTagg MagazineTrayon WhiteVincent GrayWashington BladeWashington Informer
Lou Chibbaro Jr. has reported on the LGBT civil rights movement and the LGBT community for more than 30 years, beginning as a freelance writer and later as a staff reporter and currently as Senior News Reporter for the Washington Blade. He has chronicled LGBT-related developments as they have touched on a wide range of social, religious, and governmental institutions, including the White House, Congress, the U.S. Supreme Court, the military, local and national law enforcement agencies and the Catholic Church. Chibbaro has reported on LGBT issues and LGBT participation in local and national elections since 1976. He has covered the AIDS epidemic since it first surfaced in the early 1980s. Follow Lou