D.C. Council passes $10.8 billion budget

Final debate centers on priorities on spending potential future revenue

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Council member David A. Catania, at-large independent and chairman of the Committee on Health, said rumblings that a managed-care organization would end its contract with the city were unfounded and amounted to a squeeze by the group to obtain $32 million without negotiations.

“We don’t have to take the bait,” he said, noting that the mayor should look at supplemental rebates on pharmaceutical purchases for needed revenue.

But council member Tommy Wells, Ward 6 Democrat, said the problem is shared by all sectors of the city government. The council voted 7-6 to keep it on the list before it was knocked down to second place by the Green Teams.

Funding for the Department of Health’s school nurses is third on the list, at $12.5 million, pushing additional police officers and the bonds tax ever further down the list.

Mr. Graham was able to secure the No. 1 spot by splitting up an unsuccessful proposal by Mary M. Cheh, Ward 3 Democrat, that would have placed the grandfathering of the bonds tax at No. 1 and Green Teams at No. 2.

Mrs. Cheh voted in favor of the budget, although she was “deeply disappointed” that the out-of-state bonds tax will affect current bondholders.

“I have to look at it as a package,” said Mrs. Cheh, whose ward has a large percentage of constituents with tax-exempt income now affected by the bonds measure.

Local governments typically don’t tax in-state municipal bonds as an incentive for residents to buy them. The District was the only jurisdiction in the United States that did not tax out-of-state bonds, largely because the bonds had not been available in the city in the past.

A contingent led by Mr. Wells successfully moved on May 25 to make the tax on out-of-state bonds permanent instead of “buying it back” if $13.5 million in additional money comes into the District’s coffers — and after other line items on the priorities list are checked off.

After the legislative meeting, Mr. Wells said a pivotal vote cast Tuesday by council member Yvette M. Alexander, Ward 7 Democrat, preserved the May 25 maneuver, keeping him optimistic about the new spending plan.

“I don’t think we did anything to imperil the city,” he said.

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