The federal government must expand its financial investment in the District if the city is to overcome a $1 billion annual shortfall and become a “world-class capital city,” a regional advocacy center concludes in a report to be released today.
“Building the Best Capital City in the World,” a study produced by the D.C. Appleseed Center, finds that the District has restored its fiscal reputation since the bankrupt days of the mid-1990s. Yet, the city still is treated “far worse” by its federal partner than other famed capital cities, is heavily burdened by fiscal restraints, and badly needs an economic boost to address critical infrastructure needs.
The report is timed to coincide with the inauguration of a new administration.
“This is all happening at a moment when an incoming administration is about to invest billions and billions of dollars in infrastructure,” Walter Smith, D.C. Appleseed executive director, told The Examiner. “This report says why the District of Columbia ought to be included in that investment.”
They are common refrains for city leaders: D.C. takes on the functions of a state, county and municipal government, but is barred from collecting the revenue it needs to support its operations as well as its capital demands.
D.C.’s Home Rule charter precludes a tax on nonresident income, which comprises $2 of every $3 earned in the city, according to the report. The federal government, the District’s largest landowner, pays no property taxes.
“The United States really does mistreat its capital,” Smith said.
At a minimum, the report concludes, the District needs roughly $1 billion a year to address its most basic infrastructure needs.
A nonresident income tax charged at the current rates would produce an estimated $2.26 billion in annual revenues, but Smith stressed that the report does not call for a commuter tax. Brooke DeRenzis and David Garrison with The Brookings Institution called for a “dedicated, recurring source” of federal funding if the District is to be a “showcase capital.”
“Congressman Wolf would not support a commuter tax and doesn’t know how you could carve out a ‘dedicated’ funding stream without every other state in the nation asking for the same,” Dan Scandling, chief aide to U.S. Rep. Frank Wolf, R-Va., said in an e-mail.
Mayor Adrian Fenty declined comment. He is expected to address the report’s findings during a news conference today.
To see the complete report online, go to dcappleseed.org.
