I am thrilled to share with Capital Commonsense readers that I am contributing regular columns to City Cast , and wanted to share an excerpt of my first piece, which ran last week. As the Council discusses various revenue proposals beginning this fall, we will cover them here as well.
D.C.’s Disastrous New Tax Ideas
Amid a regional slump, the District needs to hold onto its rich residents — like it or not.
“For the last few years, the warning lights on the District’s budget have been flashing red. A presentation from the District’s Chief Financial Officer Glen Lee last week underscored the precarity: The unemployment rate is 1.8 percentage points above the national average. And one-time funding sources, including reserves, were used to close last year’s budget gap.
“The short version of what’s happened: Post-pandemic spending has increased faster than inflation. And revenue cannot keep pace because of a District economic slump caused by remote work and federal workforce reductions.
“The COVID-era rise of work-from-home and the Trump-era government layoffs have devastated commercial real estate. As a result, more of the District’s overall revenue mix now comes from individual income taxes. Those are actually up, but it’s not enough to make up the difference.
“And so, after kicking the can down the road the last couple of years, the D.C. Council next month will hold a hearing on several policies to raise new revenue.
“In an overwhelmingly Democratic city with Councilmember Janeese Lewis George poised to become the next mayor, it will no doubt be tempting for the Council to simply increase taxes on high-income earners and businesses and ignore the spending side of the ledger.
But for the long-term economic and fiscal health of the District, the Council must resist this temptation, and approach raising taxes again cautiously….”