Three council members to propose tax hikes; Gray's position unclear
Three D.C. Council members plan to push ahead Tuesday with proposals to raise taxes to help solve the city's budget shortfall, even though Mayor-elect Vincent C. Gray (D) is not likely to go along with the idea.
Gray, the council chairman, is putting the final touches on refinements he made to a proposal from outgoing Mayor Adrian M. Fenty (D) to slash more than $100 million from the budget to close a mid-year shortfall. The council plans to take the first of two votes on the proposal Tuesday.
In recent weeks, some advocates have been pressuring Gray to consider an array of potential revenue increases - many of which were aimed at the wealthy - to soften the cuts in human service programs.
But Gray has been signaling to members he would prefer to take up the question of a tax increase next spring, when, as mayor, he likely will face a shortfall of at least several hundred million dollars. Gray is instead cobbling together an array of savings - including potential one-day furloughs of city employees on paid holidays - to raise some additional revenue.
Not only is Gray trying to close the $188 million mid-year shortfall, he's looking to raise or save up to an additional $50 million to place in the city's reserve funds, according to council members. But Gray's budget deliberations have largely been done out of public view, making it difficult for council members and advocates to gauge exactly what he will propose late Monday or early Tuesday prior to the vote.
Even though Gray isn't likely to embrace a tax increase this year, Council members Tommy Wells (D-Ward 6), Michael A. Brown (I-At large) and Jim Graham (D-Ward 1) are all expected to push for an increase Tuesday when the council takes up the vote.
"You will see all of us doing our own (proposal) or teaming up behind one," Brown said.
Under the proposal being floated by Brown, the city would create two new top income tax brackets for wage earners, one that starts at $200,000 and another at $1 million. Currently, all District residents who make $40,000 or more pay an 8.5 percent income tax rate. Brown wants to raise the rate to 8.9 percent for those who residents who earn between $200,000 and $1 million. Residents who earn more than $1 million would pay a 9.2 percent rate.
Wells, the chairman of the Human Services Committee, plans to offer a competing proposal that would result in higher taxes for anyone who earns more than $70,000. If approved, residents who earn between $75,000 and $150,000 would see their tax rate rise to 8.75 percent while while those who make up to $500,000 would see a half-percentage point hike. Wage-earners who make at least $500,000 would see a 1 percent increase.
Instead of just targeting the rich, Wells argues upper-middle class District residents should also share the burden in balancing the budget.
"I'm trying to change the conversation away from the millionaires tax so everyone gives up something," said Wells, who said he won't support the budget unless it includes additional revenue.
But several council members said Monday they prefer to wait until the spring to deal with taxes. Council members David A. Catania (I-At large) and Phil Mendelson (D-At large), for example, both said they are unlikely to support a tax increase Tuesday but could embrace one in the spring if its part of a larger gap-closing proposal.
"I view what is happening tomorrow as the start of broad-based discussion," said Mendelson.
| December 6, 2010; 4:10 PM ET
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