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D.C. Council Nearing Budget Decision

Update 1:48 p.m.:: Read the full article.

Update 12:10 p.m." The council has just voted unanimously to approve the budget changes. There was very little debate

D.C. Council members and their aides are scrambling this morning to put the final touches on their proposal to slash spending and raise the sales, gas and cigarette taxes to close a $666 million budget shortfall over the next three years.

The council convened at 11 a.m. to begin debating its plan, which is expected to easily pass but will likely generate hours of debate.

Under the proposed plan, the council will increase the sales tax from 5.75 percent to 6 percent, and the District's gas tax will rise by 3.5 cents. The cigarette tax will also increase to $2.50-per-pack, which would give the District the sixth highest tobacco tax in the nation. Council members also want to freeze the standard and homestead deductions at current levels.

The budget also includes about $100 million in spending reductions, which are in addition to the savings that Mayor Adrian M. Fenty (D) proposed earlier this month. The council wants to balance the budget without tapping into the city's reserve fund, as Fenty had proposed.

"In talking with colleagues on the council, I decided that an approach of facing the problem head-on now was a more responsible tact to take," Council Chairman Vincent C. Gray (D) said during his opening remarks this morning.

Cuts are being proposed for nearly every city agency, including the school system. The council is considering a $30 million reduction in schools spending, despite Fenty's earlier insistence that the system be spared. One of the council's proposed savings is a 50 percent reduction in summer school slots in 2010.

One of the most controversial decisions that council members have to make is whether to eliminate all earmarks to arts groups and non-profit social service agencies. In addition to saving money, Gray is trying to respond to the controversy over Marion Barry's (D-Ward 8) use of the earmark process to divert money to several organizations in Ward 8.

Anne L. Corbett, executive director of the Cultural Development Corporation, sent Gray a letter this morning raising concerns about the elimination of earmarks.

"We certainly agree that the earmark process has been flawed, however, we are disappointed that the decision pending completely disinvests the District from its network of nonprofit service providers and constituents," Corbett wrote.

--Tim Craig

By Tim Craig  |  July 31, 2009; 1:48 PM ET
Categories:  Tim Craig  
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check your editing.. you have several paragraphs published twice in this article...

Posted by: spaganya | July 31, 2009 10:56 AM | Report abuse

Jesus! Standard and homestead deductions gone? I hope this doesn't tax elderly tax paying, law abiding citizens out of their homes.

Posted by: candycane1 | July 31, 2009 12:34 PM | Report abuse

"Unanimiously" is on the front page of the Post as its banner headline. Should be spelled "unanimously." It's spelled correctly in the blog post.

Posted by: tester2 | July 31, 2009 12:49 PM | Report abuse

This is the first I've seen the Homestead Deduction being mentioned. Not good. As we all know, "Temporary" usually means "Permanent" in DC. We already have a "Temporary" additional income tax that has been around for a while. Of course that's not going away.

It completely baffles me that there have been so many people moving into the city (mostly not using ANY city services) and yet we still can't balance the budget.

Posted by: tj722 | July 31, 2009 1:08 PM | Report abuse

You mean 666 MILLION budget gap (not 666 billion). Those darn 0s keep getting in the way.

Posted by: brianfruchey | July 31, 2009 1:08 PM | Report abuse

I want to clarify one thing, council members want to freeze the standard and homestead deductions at current levels, not get rid of them. I have updated the blog post to reflect this. Sorry for the confusion.

Tim Craig

Posted by: realclear | July 31, 2009 1:14 PM | Report abuse

Thanks for the clarification! Elimination of the Homestead Deduction would have equated to a substantial tax increase for many DC homeowners.

Posted by: tj722 | July 31, 2009 1:50 PM | Report abuse

Does anybody know what's actually in the budget? Is there a link anywhere to a copy of the budget passed today?

Posted by: jackwatson1968 | July 31, 2009 2:46 PM | Report abuse

Thanks Tim!

Posted by: candycane1 | July 31, 2009 6:44 PM | Report abuse

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