D.C. Council members Wednesday essentially rejected a Fenty administration plan to establish a small-business financial assistance program using money the Council set aside specifically for commercial tax relief.
“It missed the whole point,” Ward 6 Council Member Tommy Wells said of the administration’s proposal. “If we have people borrow money to pay their taxes, we’re operating like the company store.”
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Citing years of devastating double-digit commercial tax increases, the Council allocated $11 million in the Department of Small and Local Business Development’s fiscal 2008 budget to provide targeted relief to small businesses.
But to several members’ dismay, the department announced plans Wednesday during a Council committee roundtable to spend the money on “a range of financial assistance tools,” said Erik Moses, the agency’s director. The District’s small-business economic assistance program would offer hardship grants up to $25,000, hardship loans up to $50,000, and matching loans up to $100,000.
The $11 million pot was a “source of unallocated funding” and could therefore expedite his department’s plans, Moses said. The program, he said, would “complement a tax relief strategy.”
The concept was immediately shot down.
“We’re not using it for that,” said Ward 2 Council Member Jack Evans, chair of the finance and revenue committee. “That money is for commercial property tax and rent relief.”
Council Member Kwame Brown said Moses’ goals were “worthy,” but his plans were not the best use of the $11 million.
How to divvy up the pot is still to be determined. Major questions remain, for example: Should there be an application process, or should the money be doled out based on gross revenue? Should the city focus on businesses in historic districts, or those in neighborhoods torn apart by construction?
While the District debates, owners crushed by tax increases are crying out for help.
“We can only charge so much for a hamburger and a bowl of chili,” said Mark Medley, co-owner of Dupont Circle’s Mark and Orlando’s. “When you get so far out of whack, this must be passed onto the consumer or we must close.”
