- The Washington Times - Wednesday, November 3, 2004

District officials will nearly double the top-end fee to large city businesses in the gross-receipts tax, considered the dominant funding source for a new ballpark, according to a revised version of the stadium bill.

In a series of sweeping changes to the legislation that will be voted upon this morning by the D.C. Council’s finance and economic development committees, the highest annual fee will soar from $28,200 per business to $48,000. Rather than use the extra money to retire the stadium construction bonds early, which would follow typical District fiscal policy, the additional funds will funnel into a community benefit fund proposed last week by Mayor Anthony A. Williams.

That community benefit fund, originally designed to generate money from a tax-increment financing (TIF) district around the proposed stadium in Southeast, is now slated to be supplied by both TIF revenue and extra money from the gross-receipts tax collections. The fund, now projected at $450million over a 30-year span, would help support libraries, recreation centers and other city amenities.

But even with that benevolent goal in mind, the changes, resulting from a flurry of high-level meetings in recent days, are angering many trade groups around the city. Businesses are being targeted to provide $26million a year, up from $24million. The changes, however, could extend the stadium bond repayment period by as many as 12 years.

“We’ve maintained there was a likelihood there would be changes to the bill and said we would stay flexible,” said Len Foxwell, director of government relations for the Greater Washington Board of Trade. “But we have very strong reservations on the expansion of the purpose of the gross-receipts tax. This was presented as a special collection to aid the construction of the ballpark. We feel very strongly the mayor and council should abide by those terms.”

Debbi Jarvis, Pepco spokesman, said executives for the utility were upset at being specifically targeted by some council members as needing to pay more toward the stadium.

“We are very concerned that we are the subject of criticism of perceived inequities in the mayor’s plan. We had nothing to do with the creation of that plan,” Jarvis said. “We are also very concerned about the [upward] trend this tax is taking. We are a holding company, and because of that, we’re going to have to pay more than $100,000 a year in this tax.”

Pepco is allowed to explore the possibility of passing the cost of the gross-receipts tax onto its customers. However, it may do so, in this instance, only on commercial entities.

City officials have raised the minimum threshhold to be subject to the gross-receipts tax from $3million in annual revenues to $4million, a step that releases nearly 300 businesses from any direct responsibility toward paying for the ballpark. Two new fee categories have also been created to more precisely levy taxes on businesses grossing more than $16million a year.

Those changes, as well as the dedication of some gross-receipts tax money to the community benefit fund, are similar to those lobbied for last week by Jim Graham, Ward1 Democratic councilman.

“I appreciate the progress being made,” said Graham, one of five members of the economic development committee. “[The Williams administration] is clearly working to deal with the issues we have raised.”

But Jack Evans, Ward2 Democrat and chair of the finance committee, said the changes are not in response to Graham, but rather objections raised last week during a 16-hour public hearing on the stadium bill.

“I think it’s now a fairer and better package,” said Evans, who last week said the mayor’s TIF plan needed significant work. “Not everybody is happy with this, but I feel good about this. Hopefully, the votes are out there.”

There’s been talk around the John A. Wilson Building for weeks that Evans, an ardent ballpark supporter, had the needed six additional votes to pass the legislation. But the latest changes indicate the bill remains anything but a sure thing. During last week’s marathon hearing, five council members, including Graham, were openly critical of the original version of the bill.

City officials, even in the midst of yesterday’s elections, continue to race against the clock to keep the stadium bill on target. If the bill emerges out of the committee today, the full council is slated to have the first of two votes Tuesday. The District’s agreement with Major League Baseball mandates the bill be ratified by Dec.31 to ensure the relocation of the Montreal Expos to Washington.

“This is where we are right now with the bill,” said Chris Bender, District spokesman. “A lot of numbers are moving around, and we’re trying to meld in everyone’s concerns and do so in a very compressed period of time. But I think we all agree on the merits of the stadium and merits of the economic development we have in mind.”

Among the other changes in the revised stadium legislation:

• An increase in the total bonding directly for the stadium from $500million to $550million. The jump is the result of a report last week from District chief financial officer Natwar Gandhi, who cautioned final stadium costs would elevate from the $435.2million currently estimated.

• A designation of $30million in District funds to act as seed money for the community benefits fund. The $30million will be joined by $45million in bonds backed by the additional revenues from the gross-receipts tax.



Click to Read More

Click to Hide