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Posted at 09:40 AM ET, 08/23/2011

Kwame Brown adds fuel to tax increase debate

In a noticeable shift, D.C. Council Chairman Kwame R. Brown (D) is softening his opposition to raising taxes on the District’s wealthiest residents, saying he would consider the idea if the money is set aside to maintain schools, recreational centers and parks.

Brown met earlier Monday with several of his colleagues for preliminary talks about how the council will come up with $13 million to keep the fiscal year 2012 budget in balance. At the meeting, for the first time, Brown sent a strong signal that he may backtrack on his previous opposition to taxes.

“If someone introduces a income tax increase, it has to go to maintaining existing facilities,” Brown said in an interview.

His comments will likely fling open a tax debate on the council, perhaps resulting in an income tax hike on the rich as early as Oct. 1.

Earlier in the month, Mayor Vincent C. Gray (D) vetoed a provision of the budget that would have delayed the collection of the city’s new tax on out-of-state bonds until next year, expressing concerns the delay could endanger the city’s credit rating.

Brown, who has been staunch opponent of raising the income tax, appears to be setting the stage for an ambitious budget deal when the council returns in September.

Noting several liberal members of the council are aggressively pursuing an income tax hike, Brown said in an interview he would be open to the idea if the money were “dedicated” toward the maintainence of District property.

As The Post’s Mike Debonis pointed out in his column last week, the District often struggles with maintaining schools, parks and community centers. And with more and more new and rehabilitated facilities coming on line thanks to former Mayor Adrian M. Fenty’s (D) aggressive building spree, Brown said the city needs a plan to maintain it’s shiny new property.

“Residents are talking about how we are going maintain these new facilities,” Brown said. “The question is, ‘do we need to come up with a solution’? And do we need a dedicated revenue stream so there is accountability, so they fall apart and become dilapidated?”

Brown’s comments could represent a major break through for progressive advocates who have long argued the city needs a more progressive tax structure. Currently, all residents who earn $40,000 or more annually pay an 8.5 percent income tax rate. Gray’s staff estimates a tax increase on the wealthy would generate at least $10 million annually.

If it came up for a vote today, Brown and Council member Mary M. Cheh (D-Ward 3) would likely cast the deciding votes on whether to raise the income tax.

With the bond tax poised to take a bite out of some of her constituents’ retirement savings, Cheh has been under growing political pressure to devise an alternative.

During the budget fight in the spring, Brown was a vocal opponent of a tax increase. Partly because of his opposition, the council instead voted to assess the city’s 8.5 percent income tax on the proceeds of out-of-state, even though purchases thought they would tax-free.

In the interview, Brown stressed he’s still reluctant to raise income taxes, but by sending the signal he might consider one, Brown is hoping to frame a potential increase on his terms.

“We have brand new schools, Rec centers and community centers and residents want to know we are going to maintain them,” Brown said.

This story has been updated since it was first posted.

By  |  09:40 AM ET, 08/23/2011

 
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