- The Washington Times - Tuesday, May 15, 2007

The D.C. Council yesterday unanimously passed Mayor Adrian M. Fenty’s first budget after removing what had been called significant tax increases in the mayor’s original proposal.

“We won,” said council member Phil Mendelson, at-large Democrat. “When I say: ‘We won’, I mean the people won. The mayor proposed these tax increases, but the rhetoric was ‘No new taxes.’ He right there set the [bar] for the council taking these out.”

The $9.7 billion budget, which contains about $6 billion in local funds, is an increase of 6.2 percent over last year’s approved $9.1 billion budget.

Mr. Fenty’s initial budget proposal for fiscal 2008 included a plan to raise the District’s monthly 911 fee for most customers from 76 cents to $1.55. The increase would raise the annual rate in most households from $9.12 to $18.60.

But the plan was seen by some on the council as a tax increase, and members instead opted to shift funds from other areas of the budget to replace the proposed rate increase.

About $7 million of the replacement funds came from “fat” in agency budgets that fell under the oversight of the council’s Committee on Public Safety and Justice, said Mr. Mendelson, the committee’s chairman.

Mr. Fenty’s budget also contained a proposal to repeal a mechanism used to calculate the District’s real property tax rate.

The mayor had proposed a fixed tax rate of 86 cents per $100 of assessed value, which officials said would cost 1 cent more per $100 than under the current system.

Council Chairman Vincent C. Gray said he rejected the mayor’s proposal because the calculated rate simply provided more tax relief.

“Frankly, it is a system we know has worked,” said Mr. Gray, a Democrat. “If we see some seismic changes, we can always change the system.”

The council scrapped a measure from the Committee on Finance and Revenue that would have capped the District’s property tax rate increases at 5 percent instead of the current 10 percent and raised the cap on estates exempt from inheritance taxes.

Members also approved a $4,000 increase in the District’s homestead deduction and a $1,500 increase in the standard income-tax deduction.

In addition, the council rejected Mr. Fenty’s plan to allow government agencies to bill each other for the costs of procurement and personnel.

Mr. Gray said he asked each committee chairman to find funds in agencies under their oversight to help make up for what once was seen as a roughly $30 million shortfall. The mayor’s office also asked city agencies to find unused funds to help close the gap.

“We’re essentially back to where we were before this budget was submitted,” Mr. Gray said.

A proposal by Jim Graham, Ward 1 Democrat, that the city take fiscal authority over the D.C. Water and Sewer Authority (WASA) remained in the version of the budget passed yesterday.

Funding to help rebuild the fire-damaged Georgetown Library and Eastern Market was also included. The council allocated $6.5 million in supplemental revenue in fiscal 2008 to help rebuild the two city landmarks.

Council member Marion Barry, Ward 8 Democrat, criticized allocating the funds for the library because he said that it is not known how much the repairs would cost and that there are other community library branches that need city funding.

“Why would this council give a blank check for a number that nobody has certified as being real?” Mr. Barry said.

After the budget proceedings, the council moved a bill introduced by Mr. Graham that would allow several homosexual strip clubs to relocate from the area surrounding the new baseball stadium in Southeast to Ward 5.

The move has been opposed by Harry Thomas Jr., Ward 5 Democrat, who called the bill an “egregious” decision made by Mr. Graham.

“Why should I have trust in the process when someone has no regard for the citizens of Ward 5?” Mr. Thomas said. “You cannot look at any other council member on this dais and say they’re being asked to accept the total relocation of clubs due to the stadium.”

Mr. Thomas’ objections helped him win $3.6 million during the budget proceedings to pay for street, safety and lighting improvements on streets in the area where the clubs would relocate, likely in the Ivy City neighborhood of Northeast.

The council will take its first vote on the clubs bill on June 5.

The budget also faces a final vote June 5 in the council before heading to Capitol Hill for congressional approval.

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