The D.C. Council is poised to take up a change to the city charter that would clear the way to impose a commuter tax on most city government workers — including teachers and principals, public safety personnel and administrative and blue-collar workers — who do not live in the city.
The measure could present challenges to several D.C. agencies whose ranks are filled with residents of the city’s suburbs.
The proposed commuter tax, which the council is likely to take up Wednesday, is expected to generate $70 million. Past suggestions of a commuter tax by city officials have sparked angry protests from surrounding jurisdictions.
D.C. Council member Harry Thomas Jr. said he is proposing the District Tax Dollars Fairness Act of 2010 because 70 percent of the D.C. government work force lives outside the city’s limits. That 70 percent represents earnings of more than $1 billion that it is out of the reach of D.C. tax laws, he said.
“If District tax dollars are paying a District government worker’s salary, then it is only fair that we have the ability to tax those salaries at the source,” Mr. Thomas said.
Unlike earlier commuter tax plans, which included all commuters who worked in the city but claimed residency elsewhere, the Thomas bill would levy the tax only on employees who work for the city and receive their salaries from locally appropriated dollars. An employee whose salary includes federal stipends or grant money could be subjected to the tax as well.
The D.C. government “can determine what percentage of [a] worker’s salary is derived from local dollars, federal dollars and grant dollars,” a council staffer told The Washington Times.
This means a broad swath of workers — from administrative aides and blue-collar workers to emergency first responders — could face sending income tax dollars to D.C. coffers.
The proposal comes as lawmakers face a vote Wednesday on Mayor Adrian M. Fenty’s $6.14 billion fiscal 2011 spending plan. Having already rejected the mayor’s plan to raise parking fees and his proposed new spending, the council members want to find new revenue.
Mr. Thomas contends that his commuter tax plan has the support of the majority of his 12 colleagues — all but two of them Democrats.
But critics say the tax would be bad policy because it would only exacerbate the city’s habit of overspending and put off the day when the government cuts back on unneeded programs.
“It sounds to me that this piece of legislation is no more than a Band-Aid to fix a huge budget hole,” said Paul Craney, executive director of the D.C. Republican Committee. “We have a massive spending problem in D.C. government. The city needs to cut the budget.”