Final Compromise Brings to a Close to this Year’s Budget Process

Passing the Budget Support Act (the more detail-driven of the District’s two budget bills) always requires two Council votes. Both the initial vote on May 29, and today’s vote, were unanimous. Yet, that is not to say that some drama and compromise were not occasioned between the two votes in order to ensure the ultimately successful result.

This time last year the Council passed a package of progressive tax reforms recommended by the Tax Reform Commission chaired by former Mayor Anthony Williams. Those reforms, intended to be enacted en bloc last year, instead were designed to consist of a series of staged phases in order to meet financial restrictions.

Due to increased recent and projected upcoming revenues, the version of Budget Support Act unanimously passed last month moved the implementation of the second phase of the tax cuts up from February of 2016 to June of 2015. However, over the last month a number of Councilmembers expressed concern and advocated for a return to the February 2016 date.

At issue was more than just eight months of timing. Whether the tax cuts would be implemented in June or February determined whether the planned tax cuts would become effective this tax year, or would wait a full additional year. The earlier trigger date also indicated how excess revenue earned by the District in the intervening months might be expended—for the tax cuts, or otherwise.

In the end, it was decided that the tax cuts would be implemented this September, by which point the Council would have received two additional revenue updates from the Chief Financial Officer. Knowing they would have this additional hard data in hand provided the reassurance the Council needed to approve the compromise date.

What the Budget Bill Includes

Substantively, the fully implemented tax reform package will lead to a 50 to 100% increase in tax refunds paid to those earning under $25,000, a one-third reduction in taxes paid by those earning $25,000 to $50,000, and a 10 to 20% decrease in taxes paid by those earning $50,000 to $200,000.

Some highlights of the rest of the budget bill include (a longer list can be found here):

  • Provided $109 million for the Housing Production Trust Fund
  • Expanded an already-generous package of other affordable housing and anti-homelessness funds by nearly $10 million to end chronic homelessness in 2017
  • Created a first-ever single comprehensive system of prioritizing which schools receive modernization funds
  • Extended provision of Temporary Assistance for Needy Families (TANF) benefits to those beyond the 60-month payment limit for one final year
  • Increased funding and accelerated timing for the H Street “Hopscotch” Bridge reconstruction, a key component of the Union Station and streetcar projects
  • Invested over $120 million for the United Medical Center facility

The only other substantive change to the budget made at today’s meeting was the redirection of funds intended for a $250,000 feasibility study researching the possibility of a publicly-owned District electric utility to other related purposes.

Other Measures Considered Today

In other measures considered at today’s meeting, the Council:

  • Recognized the ultimate sacrifice made by Kevin McRae, a lieutenant with the Fire and Emergency Medical Services Department, who lost his life responding to a May 6 fire
  • Mourned the loss and recognized the accomplishments of Ron Linton, who served the District in a variety of roles across two decades, most recently as  the head of the DC Taxicab Commission during a period that saw implementation of credit card readers and other popular reforms
  • Toughened penalties against businesses selling synthetic marijuana, including allowing the police chief to shutter offending businesses for 96 hours (as is currently the case with severe liquor license offenses)
  • Approved the final necessary precursor legislation to allow for the planned soccer stadium at Buzzard Point to move forward
  • Approved a large number of contract modifications at the request of the Mayor, while expressing frustration at the current process and interest in reforming it

A complete summary of actions taken at today’s meeting can be found here.