D.C. Council Chairman Kwame Brown appears to have the votes he needs to pass a budget that eliminates the increase in the income tax rate on the wealthy that Mayor Vincent Gray proposed. Brown told The Washington Examiner two weeks ago that the budget he would present to the council on May 25 wouldn’t include the mayor’s proposal to raise the income tax rate for those who earn $200,000 or more. But it wasn’t clear how he would get the votes. Several council members have historically favored an increase in the income tax rate to prevent cuts to human services, and it seemed likely they would push a measure to get it back into the budget.
Any hope of that appears to have evaporated.
“Once he had Barry, the rest of us fell in line,” one council member told The Washington Examiner, referring to Councilman Marion Barry. In a May 18 memo to Brown, Barry asked for $1.9 million in property tax abatements for six churches and nonprofit organizations in his Ward 8. Look for those tax abatements when Brown’s budget proposal comes out late Tuesday or early Wednesday.
“No comment,” Brown said through a spokeswoman Monday when asked about the abatements. Barry did not respond to requests for comment.
Barry’s likely support became the seventh vote needed to pass anything on the D.C. Council. After Brown had seven, other council members were left with little advantage to go against the chairman and swung his way. A budget vote that once looked like it could come down to 7-6 might now be in the chairman’s favor by a much wider majority.
Brown’s promise to fully fund homeless services that were about $19 million short of their current funding level in Gray’s budget plan has also made it difficult for council members in the tax-raising set to vote against him. Brown is expected free up those dollars by spreading out over years Gray’s proposal to shift to the operating budget about $40 million from the capital budget that was being used to fund certain government jobs.
Brown may still run into trouble. Council members say his budget will include a tax on out-of-state municipal bonds projected to raise about $14 million and help offset the revenue lost with Gray’s income tax rate increase. A similar measure was nixed in 2002 after it became controversial.
“The question is, what’s going to happen when people who opposed to it in the past find out,” said Ed Lazere, who heads the DC Fiscal Policy Institute. “It’s not clear why Brown is switching out the income tax rate increase for a tax on municipal bonds, when the income tax increase has broad support and the bond tax hasn’t been discussed in public.”
