- The Washington Times - Tuesday, April 16, 2002

In 1998, within weeks of his inauguration, Mayor Anthony Williams learned the hard way that not following the legislature's tax-cut lead would be foolish. The 13-member D.C. Council passed veto-proof tax-parity legislation that gave residents and businesses immediate breathing room and lowered the top personal-income tax rates in later years. Everything was fine or so taxpayers thought. Indeed, the very compromise that allows the city to rescind the tax cuts and made at the behest of the mayor has come back to haunt.

The Tax Parity Act of 1999 called for the top personal income-tax rate for people earning more than $30,000 to drop from 9.5 percent to 8.5 percent over five years. The rate fell to 9.3 percent this year, and that is where the mayor wants it to stay. His lame excuses for delaying the carefully planned tax cuts are A) there has been a slowdown in the economy, B) he'll have to cut programs if the tax cuts continue, and C) he wants to spend extra revenues "if we find them" on public safety. D.C. Delegate Eleanor Holmes Norton worries that going ahead with the tax cuts will hurt the city's chances of getting additional funds from Congress. Meanwhile, the mayor and allies also mistakenly believe that voters favor spending to bolster the bureaucracy. Mr. Williams really ought to know better, too.

First of all, every economist worth his salt has said that the recession really wasn't a recession though we have been hit with a measurable slowdown. Indeed, while tourism was severely hit in the immediate months following September 11, hotel occupancy is, in fact, up nearly 5 percent over this time last year and jobless claims have subsided. Both the housing and office markets are booming. Moreover, while the city might not enjoy the huge surpluses of recent years, delaying promised tax cuts is not the way to reverse so-called revenue shortfalls. Even when the tax cuts hit their lowest mark of 8.5 percent in the out years, that rate will still be higher than Maryland's and Virginia's, 7.75 percent and 5.75 percent, respectively.

"Threatening District residents with cuts to critical government services if the tax cuts move forward is a classic scare tactic that we thought would be beneath the mayor," said Betsy Warronen, chairman of the D.C. Republican Committee. "Given his financial management background, we would expect him to act more responsibly."

It should be fairly obvious to Mr. Williams how to handle what portends to be a tax-cut showdown. He must, first and foremost, trim his $5.6 million 2003 budget proposal, a budget that essentially rewards several agencies' bad spending habits, including schools and human services. After Mr. Williams handles that chore, he needs to address his constituents to apologize for even considering freezing tax cuts this election year. Or Mr. Williams can continue his no-tax-cut course and see where it gets him come the Democratic primary in September.

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