DeMorning DeBonis: May 25, 2011

TODAY IS MAY 25, 2011 — DAY 144 OF THE GRAY ADMINISTRATION

Yes, indeed: The D.C. Council is voting on the fiscal 2012 budget today. Details on what members will be voting on and how they will be voting on it are after the jump. But first, this thought: Boy howdy, wouldn’t those lawmakers have liked to have tens of millions of dollars or more to spend over the past decade? That’s the upshot of the revelation today that city lawyers are reviewing whether the city has failed to properly apply the deed recordation tax over the course of the past decade, during the hottest years the real estate market here has ever seen: “The legal review comes months after two Washington lawyers approached [Chief Financial Officer Natwar Gandhi]’s office claiming knowledge of a method used by large property owners, their lenders and their attorneys to evade the payment of those taxes. During several meetings, the would-be whistleblowers proposed, for a fee, to search on the city’s behalf for any owed taxes and penalties. City officials reacted warily, and the lawyers now say they are no longer seeking profit. But in a letter sent to Gandhi and D.C. Attorney General Irvin Nathan last Wednesday, Jeffrey A. Mitchell did not back down from his assertion of a widespread problem, saying it was ‘pervasive ... potentially resulting in hundreds of millions of dollars of unpaid taxes.’” The Post has reviewed documents indicating that if Mitchell’s interpretation is correct, the city could indeed have missed out on huge sums. For details on the rather arcane legal dispute, read the story. The Examiner’s Freeman Klopott also has Mitchell’s letter. Now on to the budget ...

AFTER THE JUMP — Budget, budget, budget — redistricting battle gets serious — honoring the District’s best employees

*** MAIN COURSE ***

WHAT’S IN THE BROWN BUDGET — D.C. Council Chairman Kwame Brown released his budget package to his colleagues at about 9:30 p.m. Tuesday, which is a sight better than the 3 a.m. circulation we saw a year ago. As expected, an income tax increase is out. Replacing most of that revenue is a new tax on out-of-state municipal bonds. A proposed sales tax increase on theater and other live entertainment is out, replaced with a new sales tax on security services, armored cars and private eyes. Brown proposes to spend an additional $23.4 million on human services — split between homeless programs, the Interim Disability Assistance program and TANF. In a rebuke to business interests, combined reporting and a parking tax hike are in the Brown budget. Tommy Wells’ proposal to increase parking taxes based on how many cars a household has is out, but most of his other budget proposals are in: a “green alleys” pilot, Capital Bikeshare expansion, $1 Circulator fares, and more money for performance parking. Despite significant neighborhood protests, Brown proposes to keep a proposal to allow liquor stores to sell until midnight rather than 10 p.m., and to allow early sales in bars and restaurants on Sunday mornings. No furloughs are in the budget. There is a proposal to pay kids in the Summer Youth Employment Program less than the D.C. minimum wage in order to boost enrollment. And it’s clear Marion Barry wasn’t the other council member engaged in horse-trading with Brown to avoid an income tax hike — draft budget legislation shows that not just Ward 8 won new tax abatements; Yvette Alexander’s Ward 7 did okay, too.

WHAT’S NOT FUNDED .. YET — In a novel move, Brown’s budget lays out how to spend anticipated revenue upgrades. The formula goes like this: The first $21.6 million will shift capital personnel to the operating budget, which Mayor Vincent Gray had proposed. Every dollar after that will be split 50/50 between padding the city’s savings account and funding a list of priorities that starts with $10.8 million for new police officers. “Buying back” the bond-tax hike is fifth on the list, after funding the Housing Production Trust Fund, the Rent Supplement Program and mental health services. For the bond tax to be eliminated, the city will have to take in about $108 million more than currently expected. Yesterday, Gandhi sent a letter to Council members telling them not to encumber money they haven’t seen yet, but key members told me last night that it’s not likely to make much of a difference. Greater Greater Washington has a very handy table showing how much of a revenue boost will be needed to pay for each of the priorities laid out in the budget legislation. The D.C. Fiscal Policy Institute has some thoughts on the matter this morning, asking Brown to devote less to the savings account and use it instead to restore services and eschew the $41 million tax withholding gimmick.

ON THE DAIS — Michael Brown and Phil Mendelson are expected to co-introduce an amendment that would replace the new tax on out-of-state bonds with the income tax hike initially proposed by Gray, using the $4 million increment between the two proposals to pay for more human services spending. Social services advocates, who believe that a bond tax is unlikely to survive, prefer the income tax, but an amendment is unlikely to pass. (Michael Neibauer explains at WBJ why the bond-tax measure might spark outrage before the final budget vote next month; WTTG-TV and WAMU-FM covered yesterday’s Wilson Building rally by Save Our Safety Net.) Also don’t be surprised to see a amendment vote on the liquor store hours.

WILL GRAY VETO? — Not likely, says Klopott: “The veto pen would only come out if the budget the council passes steers away from Gray’s priorities to reform the city’s special education system, add dollars to the schools budget and maintain funding for public safety agencies,” he writes citing a “source close to Gray.”

JUST FOR YUKS — Mary Cheh sent her colleagues and reporters a parodic budget memo yesterday that was, at least for a paragraph, somewhat plausible. My favorite: “The Committee takes notice that the ten-year review of the campus plans of Georgetown University, American University and the University of the District of Columbia has caused far too much community discord in the District of Columbia. Therefore, the Committee recommends that the government of the District of Columbia, in line with an exercise of the takings clause expressed in Kelo v. City of New London, hereby condemns and seizes all land and the physical structures located therein of the above mentioned Universities. The properties shall be respectively converted into a subway station, the nation’s largest dog park, and a strip mall.”

REDISTRICTING HEATS UP — Yesterday’s rally against moving the eastern reaches of Capitol Hill out of Ward 6 gets coverage thanks to WTTG-TV’s Matt Ackland: “Residents in the area that could be divided, Capitol Hill, protested along East Capitol on Tuesday night. Many say they have worked hard over the years to make Ward 6 a strong part of the city and they don’t want to break up the neighborhoods in Ward 6. Council Member Michael Brown chairs the committee in charge of redistricting. ‘It’s hard and no one said it was easy,’ Brown says. ‘No one likes to be moved or cut out of a particular neighborhood, but some things just have to be done. We are going to have to make the tough decisions to do it.’” At D.C. Schools Insider, Bill Turque covers how education advocates are concerned about the potential separation of Eastern High and Eliot-Hine Middle from its feeder schools to the west: ”’When you deal with multiple council members it becomes more problematic,’ said Joe Weedon, a parent at Maury Elementary, and one of the activists working with Eliot-Hine. He said parents don’t want to ‘lose the cohesiveness and potentially the political will to make reforms.’ Put another way, they worry that their clout will be diluted by placing the schools in the ward of a council member (Yvette Alexander) whose political base will remain east of the river.” In the Examiner, Wells calls the potential splitting of the Hill “disastrous.” Says Alexander: “Change is a little challenging. ... But I will be especially sensitive to those areas and make an extra effort.” And Jonetta Rose Barras, in the second column mounting her curious crusade on Reservation 13, says drawing the line down 17th Street as discussed would end up “delaying development even further.” Also see excellent photos from Hill Rag’s Andrew Lightman.

CHARGES DROPPED AGAINST WHEELCHAIR MAN — The U.S. attorney’s office is not pursuing charges against the man in a wheelchair who was apparently tossed to the ground by Metro Transit Police officers last week. Martin Weil and Clarence Williams of the Post have the story, which is not online for some reason. Here’s an AP feed. The officers involved have been placed on desk duty pending the outcome of an investigation.

GOOD ON YAS — Courtland Milloy tips his cap to the winners of this year’s Cafritz Foundation Awards for Distinguished D.C. Government Employees: “I was on the selection panel this year and came away with a newfound appreciation for the commitment to excellence demonstrated by a wide range of public servants.” The honorees include: Gordon McDonald, deputy chief financial officer for budget and planning; Soumya Dey, a DDOT engineer “credited with transforming the city’s parking meter system”; Sakina Khan, senior economic planner in the Office of Planning; Johnetta Brower Bond, an administrator at the Office of Pay and Retirement Services who “took three archaic payroll systems and converted them into one state-of-the-art system”; Tracie Martin, who investigates deaths for the Child Fatality Review Committee; and Marc Williams, who works at the Bald Eagle Recreation Center and “used his own money to purchase sports equipment and uniforms and to help pay for the groups’ out-of-town travel to competitive events. He also makes frequent visits to schools to check on the members’ progress and arranges for them to receive tutoring if they start falling behind.”

*** SMALL PLATES ***

One Gray partisan thinks his fellow supporters should keep their mouths shut (Loose Lips)

Nathan Saunders on Parker-Rhee alliance: “This isn’t surprising news to me and a lot of people who really understood what was going on.” (Examiner)

Richard Whitmire on the “battle to defame Michelle Rhee” (WaTimes)

Veteran Anacostia High athletic director charged with “verbally harassing a 17-year-old female student with ‘vulgar and lewd’ comments” (Crime Scene)

Office of Employee Appeals orders MPD to pay $223K in lawyers’ fees for improperly fired cops (WaTimes)

The troubled history of Ebony Franklin’s father and alleged killer (City Desk)

Updated libraries for five DCPS schools, thanks to Target (Examiner)

Bedbugs found on one United Medical Center patient; TV news jumps (WJLA-TV, WUSA-TV, )

Darrell Gaston launches another run for Marion Barry’s Council seat (campaign site)

A call for better tweeting by Metro (GGW)

Access to juvenile court records: pro and con (Legal Times)

How would you shorten Metro station names? (The Buzz)

Big ups to WaTimes for correcting the record (@mikedebonis)

*** ON THE MENU ***

Gray returns from Las Vegas this morning — D.C. Council budget wrangling begins at 9:30 a.m. in JAWB 500

Mike DeBonis covers Congress and national politics for The Washington Post. He previously covered D.C. politics and government from 2007 to 2015.

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