- The Washington Times - Tuesday, July 18, 2006

Last of three parts.

More than half of the D.C. government’s employees live outside the District, taking about 60 percent of the government’s $1.73 billion payroll to spend — and be taxed — in the suburbs.

Meanwhile, city officials have been rebuffed in their efforts to expand the District’s narrow revenue base by taxing commuters.

Ed Lazere, director of the nonprofit D.C. Fiscal Policy Institute, said a “very crude” estimate shows that the District loses $50 million to $100 million in potential revenue from city government jobs held by nonresidents.

“This is big,” Mr. Lazere said. “I guess the question is why they don’t live here and what can we do to get them to live here.”

More than 18,100 — or 46.4 percent — of the D.C. government’s 39,000 workers say their principal residence is in the District, according to city payroll records obtained by The Washington Times under the Freedom of Information Act.

The combined pay of the city government workers who live in the District totals about $686 million — slightly less than 40 percent of the D.C. government’s $1.73 billion payroll.

By comparison, about 17,800 — or 45.5 percent — of the city government’s work force identify Maryland as their principal place of residence. But their combined pay of more than $885 million accounts for more than 51 percent of the D.C. government’s payroll.

In addition, 2,900 of D.C. government workers live in Virginia, taking home a combined total of more than $149 million, or about 8.6 percent of the city’s payroll.

The records show that many of the District’s highest-paid government workers opt to live outside the city, causing the District to lose potential revenue from property, sales and income taxes.

Twenty-two of the District’s 43 government employees who are paid at least $150,000 a year live outside the city.

The District imposes a 5.75 percent sales tax and a property tax rate of 92 cents per $100 assessed value. It also levies a top income tax rate of 9 percent.

Among the D.C. agencies that employ the most residents is the public school system, which has 7,312 of its 13,707 employees living in the District.

One of the agencies with the least resident workers is the Office of the Chief Technology Officer. About 78 percent of its 217-person staff resides outside the city, including the agency’s director — Chief Technology Officer Suzanne J. Peck, who earns $144,538 annually and lives in Virginia.

Only a few hundred government employees are required to live in the District. They typically work in the city’s executive service, which includes agency directors, and the excepted service, which includes the staffs of the mayor and city administrator.

In addition, the members of the D.C. Council — who earn $92,520 annually — are required to reside in the city and in the wards they represent. The council chairman earns $139,200 a year.

According to city regulations, the director of personnel may grant a residency waiver if an employee is “appointed to a hard-to-fill position or presents exceptional circumstances.”

Of the members of the mayor’s Cabinet, only Miss Peck; Francis Buckley, interim director of the D.C. public libraries who earns $138,159 a year; and Uma Ahluwalia, interim director of the Child and Family Services Agency who earns $122,117 annually, live outside the District.

As D.C. mayor in 1980, Marion Barry implemented a residency rule for city government jobs. He and other officials described the rule as a key to maintaining the District’s tax base and sense of community identity.

But in 1988, Congress approved an amendment to the District’s appropriations bill that forced the city to scrap its residency requirement, calling it unfair and citing criticism from local unions.

The D.C. Council, in response, enacted a preference policy that gives residents a 10-point advantage over nonresidents in scores that determine hiring and promotions.

Mr. Barry, a Democrat who represents Ward 8 on the council and leads the Special Committee on Vocational Education and Jobs for District Residents, has accused Mayor Anthony A. Williams of not “vigorously enforcing” the residency preference.

“I’m outraged that this is happening,” the former mayor said. “I’m seriously thinking of recommending to the committee and the council to go back to a strict D.C. residency rule, with the exception of police and fire.”

In 2004, the council eliminated a 49-year-old requirement that police officers and firefighters live within 25 miles of the U.S. Capitol.

Of the 4,723 persons on the police department payroll last year, about a quarter — 1,193 — lived in the city. Of the fire department’s 1,988 employees, 580 were city residents, or 29.2 percent.

City officials said one reason for lifting the rule was a real estate boom that escalated housing prices — and property values. The average price of a home in the District topped $200,000 last year.

For many years, D.C. officials, backed by reports from the federal government and the private sector, have complained that a structural imbalance narrows the District’s tax base.

Mr. Williams, who earns $149,200 annually, testified yesterday before a Senate subcommittee that 42 percent of the property value in the city is exempt from taxation because the property is owned by the federal government and that an additional 11 percent is not subject to taxes because it is owned by an international entity or a nonprofit group.

He complained that the city officials cannot count on high-density property to make up for limited taxable property because of height restrictions on city buildings and cannot levy taxes on the District’s 1 million commuters.

“The District must undertake its city, county and state functions with a severely restricted tax base while also providing over $200 million in unreimbursed services to the federal government,” said Mr. Williams, a Democrat who is not seeking re-election.

In March 2004, a federal judge threw out a lawsuit seeking to allow the District to tax commuters. In May, the U.S. Supreme Court declined to hear the case.

Mr. Williams long has been criticized for instituting what some have called a “back-door commuter tax” in the form of an aggressive, automated traffic enforcement program. The Times reported in March that, since its inception in 1999, the program has disproportionately targeted Maryland residents and has generated more than $135 million in fines.

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