A contentious and unexpected vote to raise taxes on the District’s highest-income earners took shape largely behind the scenes, as council members revived an old proposal, wrangled votes and found common ground with reluctant colleagues.
D.C. Council member Phil Mendelson, at-large Democrat, rallied the majority in a testy 7-6 vote Tuesday to create a new tax bracket for residents who earn more than $350,000 a year and make sure holders of out-of-state bonds are not taxed retroactively.
Mary M. Cheh, Ward 3 Democrat, cast the deciding vote, though she declined to introduce a similar plan in earlier budget talks.
“It was very strange,” said council member Tommy Wells, Ward 6 Democrat. “She had the votes.”
Mr. Mendelson had a similar thought, saying he was “very surprised” that Mrs. Cheh declined to put forth her plan to raise taxes on the city’s wealthiest residents instead of a retroactive tax on current bondholders.
Mrs. Cheh, whose constituents are among the city’s wealthiest, acknowledged not liking the income-tax increase, nor the bond tax, but saw no good alternative.
“I dusted off the old proposal,” she said.
Mayor Vincent C. Gray, who initially proposed an income-tax increase on those making $200,000 or more, used a veto in August to stop the council’s plans to use $13.4 million in reserve funds to delay the bonds tax.
Mrs. Cheh was livid over the surprise veto and fumed about it the next morning in between photographs with Mr. Gray at a ribbon-cutting ceremony.
Mr. Mendelson said he was out of town at the time of the veto and “not in a position to talk to anyone about it.”
But ahead of the council’s first legislative session last week after summer break, he wrangled the seven votes for a revamped version of Mrs. Cheh’s proposal.
“We’ll still talk to each other,” said Mr. Mendelson amid the public perception of a fractured, 13-member council.
The Cheh initiative indeed caught several council members off-guard. They felt the tax increase sends the wrong message, the bonds tax could have been forestalled or that neither was necessary through adequate spending cuts.
“Some of the people on the losing side were really unhappy about losing,” Mr. Mendelson said.
He also referred to the proposal as “sound tax policy.”
Said Mr. Wells: “Phil did a brilliant job to win the day.”
The result was a setback for council Chairman Kwame R. Brown, a Democrat, who had pledged to hold the line on income taxes and found himself on the short end the vote, in which the issue was debated at length.
“It is what it is,” he said. “But the important thing is, all my colleagues seem to be fiscally responsible.”
Said Mrs. Cheh: “It does show we have the capacity to get things done.”