Mayor Adrian M. Fenty has proposed his plan to right-size an unbalanced budget, which the public scrutinized Tuesday during a D.C. Council hearing at which several lawmakers and stakeholders proposed a host of new taxes and fees.
Mr. Fenty's plan to close a $188 million budget gap for 2010 slashes agency budgets - including police, schools and social services - by $161 million. But with lawmakers, unlike the lame-duck mayor, still facing a potential $375 million deficit for 2011 when budget deliberations begin anew in the spring, city leaders are weighing raising current taxes and imposing new ones to push back spending pressures.
They also want to work around a federal law that prohibits the city from levying property taxes on federally owned land and on such federally protected entities as Fannie Mae and the Daughters of the American Revolution.
"We need to start to be more creative about making folks pay a fair share," said Democrat Mary Cheh of Ward 3. "They should pay something in lieu of taxes."
Union Station was cited an example. The rail station is exempt from property taxes because it is situated on federal land, but lobbyist David Wilmot urged the council to pass legislation that would tax Union Station businesses.
A new land-use levy imposed on the businesses could "generate about $10 million to $11 million this budget year," Mr. Wilmot testified, urging lawmakers to move quickly "with Republicans coming into [Capitol] Hill."
While the District is bound by law to sustain a balanced budget, city officials also are moving with a sense of urgency because the Republicans who won a House majority last month already have vowed stricter oversight of D.C. affairs.
Some D.C. leaders revealed their tax-raising strategy on Tuesday.
"There are taxes other than income we can consider," said Democrat Jim Graham of Ward 1, who also plans to reintroduce legislation that would raise income taxes on wealthy residents. "The Off-Street Vehicle Storage and Use Tax principally involves downtown garages. It is 12 percent and has not changed since 1976 and is principally paid by commuters. Raising the rate to 18 percent would produce $19 million annually."
Mr. Graham and Michael A. Brown resurrected their arguments to raise taxes on the wealthy.
Council member David A. Catania, at-large independent, said he and his colleagues shouldn't engage in "class-warfare finger-pointing" and proposed "modest, broad-based" tax increases.
Not all stakeholders agreed with the lawmakers' tax-and-spend direction.
The council "should institute an across-the-board spending cut," said Robert Brannum, president of the D.C. Federation of Civic Associations.
"Folks at the top of the income bracket have their attackers, and folks at the bottom have their defenders, but folks in the middle are fighting for survival," said Mr. Brannum as people scheduled to testify streamed in and out of the council chamber.
The witness list included more than 160 stakeholders eager to testify on the mayor's plan, which also proposes eliminating 250 jobs.
Pay freezes and governmentwide furloughs of city workers also are on the table, although teachers are exempt because of a hard-fought contract negotiated by Interim Schools Chancellor Kaya Henderson during the Rhee administration.
Long before Council Chairman Vincent C. Gray, the mayor-elect, began the hearing, the council chamber was packed with social-service advocates ready to reject out of hand what Mr. Fenty deemed the "very tough but necessary decisions" to produce a balanced budget in the final weeks of his administration.
The mayor cut some of the same programs for which many of the advocates had fought during budget deliberations in May.
Lawmakers hope to have a final budget-cutting package ready for Mr. Fenty's signature before they recess for Christmas.
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