D.C. Councilman Jim Graham’s introduction last week of legislation creating a new income tax bracket is a short walk from that now infamous fifth-quarter tax year gimmick. Is a financial control board waiting in the wings?
To understand the analogy, let’s go to the clips: It’s the early 1990s; Sharon Pratt Kelly is mayor. Congress, in an anyone-but-Marion-Barry mood, dumps a boatload of money in her lap. Three years later, red ink is rising like the Red River. Hoping to keep the city from drowning, Kelly and her finance expert propose a fifth quarter to the tax year. The council, as inept as the executive, approves the plan.
What happened to the money? That’s the question Virginia Rep. Tom Davis and others in Congress want answered. The Government Accountability Office conducts an audit and reports Kelly and her minions are illusionists. The city is near bankrupt. Kelly loses her re-election bid; Barry becomes mayor — again. The District gets a federal bailout — long before the term “bailout” became an international household word. A financial control board is appointed. Some rich residents split while government services to low-income citizens are severely reduced.
“[Graham’s plan] is not quite as bad as the fifth quarter. [That] was purely a fiction,” says a District budget expert, who requested anonymity. “But it is resultant of the same kind of thinking: an unwillingness to recognize the resources of the government have materially changed.”
The District faces an $800 million projected revenue shortfall for 2010. Mayor Adrian M. Fenty’s budget plan, currently being debated by the council and citizens, reduces spending by 4 percent. To balance his proposal, Fenty has included new fees or extended existing ones. It’s not very attractive, but there’s recognition that the government can’t continue growing at unhealthy rates. The executive appears to be trafficking in economic reality.
Graham and his colleagues are dreaming and scheming. He wants to shake down upper-income District residents. A spendthrift, the Ward 1 councilman has never seen an entitlement program whose funding he didn’t want to increase, especially around election time. The man loves to reach into other people’s wallets.
But tax experts told The Examiner that Graham’s bill, as written, also is a fiction. It actually will reduce taxes for rich folks, which means a loss of revenue — not an increase.
Meanwhile, Ward 6’s Tommy Wells and Ward 5’s Harry Thomas Jr. persuaded the council to give select businesses an additional six months to pay their 2009 property taxes. The city may have to use borrowed money to cover the loss. “Taxpayers will be picking up the interest,” a council source says. “[The council] did that without a public hearing.”
“They are making political decisions that are not sustainable,” added another John A. Wilson Building insider.
Making a budget is like making sausage: a messy enterprise. But what the council seems to be putting together may be too terrible for most of us to eat.
Jonetta Rose Barras, an author and political analyst, can be reached at [email protected].
