D.C. Council Chairman Kwame Brown is trying to find the $13.8 million he needs to offset a new tax on out-of-state municipal bonds as the council restarts budget debates over $107 million in new revenue expected for the current fiscal year. “The top priorities I had were adding police officers and not going back and taxing people on their out-of-state municipal bonds,” Brown told The Washington Examiner.
The council will hold a hearing Thursday on a supplemental budget package Mayor Vincent Gray sent down late last week that detailed his spending plans for the $107 million projected in new revenue, kicking off a fresh budget battle just weeks after the last one closed. The bulk of Gray’s proposal — about $74 million — would go toward offsetting overspending in various departments. The remaining cash would be saved for the next fiscal year, which starts Oct. 1, and would send $10.8 million to the police department to hire more officers and $12.5 million to an underfunded school nurses program, among other items.
Because adding more officers is taken care of, Brown said, “I’m now working hard to get the money for the municipal bonds.”
Brown added the tax on the out-of-state municipal bonds to the budget in May to offset Gray’s proposal to raise the income tax rate. Brown’s plan was to then kill the tax when new revenue for the next fiscal year came through. But Ward 6 Councilman Tommy Wells pushed through an amendment to make the tax permanent. Brown, and others, were unsuccessful in overturing the Wells amendment.
Ward 2 Councilman Jack Evans is working with Brown to find the cash.
“If we can’t find it, then I won’t be able to support the budget,” Evans said.
Brown and Evans said they haven’t identified the source of the money yet.
The council is scheduled to vote on the budget July 12.
The renewed budget fight will draw in those who favored the tax increase, among them the D.C. Fiscal Policy Institute.
“I’m not sure who these council members are listening to,” said institute spokeswoman Elissa Silverman. “They’re not listening to the people, because the [Peter D.] Hart [Research Associates] poll showed support for the income tax, and they’re not listening to their own colleagues who have voted twice to make the bond tax permanent.”
