D.C. Mayor Vincent Gray is expected to raise certain taxes to help close a $325 million budget shortfall when he sends his first budget to the council Friday, although most District residents likely won’t feel the pain. That’s because the tax increases are expected to target the parking garages used primarily by commuters from outside the city and large corporations that currently don’t pay taxes on their D.C. revenues, instead filing in states where they pay less, two sources with knowledge of Gray’s proposal confirmed to The Washington Examiner.
Closing the corporate tax loophole by requiring companies to report their revenues in the District would garner about $20 million in new annual revenue, city officials say. The cash boost from raising taxes on parking garages depends on the levy Gray imposes, and the sources did not know how high the increase might be.
Given falling revenue in recent years, Gray said in his State of the District address on Monday that “$325 million of cuts and new revenue are still needed for this city to emerge with a balanced budget.”
Gray recently told WAMU that he doesn’t “envision” increases on income, property or sales taxes.
When council members get the budget Friday morning, they’ll skim through it to see if their interests take a hit.
At-large Councilman Phil Mendelson’s eye will go straight to the police department, he told The Examiner.
“The police department has seen cuts in the last several years, and we’re at the point at which we can no longer sustain reductions,” Mendelson said.
The number of sworn officers is rapidly shrinking below 3,800, the point at which the size of the force becomes “troubling,” Police Chief Cathy Lanier said last week. Mendelson said he believes the department assumed it would receive more cash in federal reimbursements than it did, and that prevented the city from filling positions vacated through attrition.
Ward 1 Councilman Jim Graham said the District will also have to address $25 million in federal funding for homeless shelters that won’t be available when fiscal 2012 starts Oct. 1.
