Mayor Vincent C. Gray’s fiscal 2012 budget proposal already has drawn sharp criticism from D.C. Council members who either oppose tax increases for the city’s top earners or cuts to social services, providing a glimpse into the potential battles in the coming weeks.
Mr. Gray, a Democrat, plans to increase the tax on city residents earning more than $200,000 annually, from 8.5 percent to 8.9 percent, to help close a $332 million budget gap. He estimates the increase will generate an additional $35.4 million and is part of a $9.6 billion plan that also calls for raising an estimated $127 million through fee and tax increases.
Council member Jack Evans, Ward 2 Democrat and chairman of the powerful Committee on Finance and Revenue, opposes the income-tax increases, calling the proposal “one of the worst Ive seen in my time here.”
Mr. Evans, the lone dissenter on last year’s budget, called the increases a “deal-breaker” that fly in the face of common sense during the economic recovery.
“I would not, under any circumstances, vote for this budget as long as some of these things are here,” Mr. Evans said.
Council Chairman Kwame R. Brown, a Democrat, also is opposed to the income-tax increase.
Mr. Gray’s proposal, introduced Friday, also calls for slashing more than $113 million in health and human services programs, which is expected to draw fire from advocates for the city’s poorest residents.
Cuts include $4.9 million less in Temporary Assistance for Needy Families (TANF) cash assistance — a 40 percent reduction for 60-month-plus participants when coupled with cuts from last year.
Jim Graham, Ward 1 Democrat, raised concerns about the proposed cuts to TANF funding and $1.5 million in savings by suspending the Interim Disability Assistance Program that provides temporary assistance to those unable to work because of disability.
Council member Michael A. Brown, at-large independent, also expressed concern about the cuts to human services, saying overall funding has gone down since 2007.
“We are going this way,” Mr. Brown said, gesturing downward.
Mr. Gray’s proposal is composed of nearly 57 percent local funds, or $5.5 billion. In addition to the $127 million in tax and fee increases, the budget calls for $187 million in spending cuts and $7.9 million in additional income.
The mayor’s capital improvement plan totals almost $845 million, highlighted by $267 million in school modernization projects, transportation funding of $255.5 million and a $126.7 million contribution to Metro.
Among Mr. Gray’s proposed increases are: a tax on alcohol purchased in stores that would rise from 9 percent to 10 percent to generate about $3 million, and keeping the city’s the sales tax at 6 percent instead of having it revert to 5.75 percent in October 2012 as was scheduled.
Businesses that operate in the city and in other states would be required to pay D.C. taxes to raise about $23 million.
Another potential sticking point in budget negotiations is a series of initiatives that include increasing the parking-garage tax from 12 percent to 18 percent, expanding the sales tax to include tickets to live theater performances and increasing the fare on the Circulator bus from $1 to $2, for $1.1 million in revenue.