Bailey's share of the profits comes as a dividend payment, theoretically making him one of the big winners last year, when Congress slashed the tax rate on dividends. But for now, that is cold comfort. His dividend in 2003 amounted to $747.34, his tax savings $157 -- hardly enough to make up for the $290,000 in lost personal profits since Bush took office.
In the rougher world off North Capitol Street, Alverta Munlin has been feeling squeezed as well. The 68-year-old tutors children and organizes adult education programs for Center City Community Corporation, earning about $38,000 to support herself and her adopted 14-year-old. It is not easy, she admitted. She gets some assistance to cover the $5,700 tuition that covers her child's Catholic-school education. Her mortgage payment of $585 and her utility bills of up to $150 a month all add up.
Airline copilot Al Aitken says property taxes have eaten up his federal tax savings and then some; maintenance mechanic Donald Belton faces rental inflation; brew-pub owner Jerry Bailey says his late-'90s profits have evaporated.
(Gerald Martineau -- The Washington Post)
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But what really galls her is a crackdown by the District on the appearance of the neighborhood around her First Street NW home. Twice now, she said, she has been fined $100, first because her grass was too long, then because there was trash in the alley.
"I'm 68 years old. I cannot be out sweeping streets, and I cannot afford to hire someone else to do it," she protested. "The mayor takes it for granted that people can do this. I don't have that luxury."
The Bush tax cuts did lower her federal tax payments, by about $1,000 last year, thanks to the child tax credit that grew from $500 to $1,000, as well as tax-rate cuts at the bottom of the income scale. But 20 percent of that gain went to those two fines. An additional $113 will disappear when her property tax payment jumps from $939.84 this year to $1,052.61. Remaining from her tax cut? $637.
In a single-room-occupancy hotel at 14th and R streets in Northwest Washington, Donald Belton is also confronting the cost of living in the nation's capital. For most of the Bush years, Belton, 37, lived on the streets, messed up on heroin, cocaine, marijuana, "a little bit of everything," he said.
But last year, he turned himself over to the interfaith charity So Others Might Eat, and turned his life around. He shook off the drugs, enrolled in SOME's job-training course, studying building maintenance, and accepted assistance to cover the $603 a month he needed for his room with a shared bath and kitchen.
In early May, he finished school. By the end of the month, he had landed a maintenance mechanic's job at a Washington hotel, earning $26,000 a year. Then in June, he said, he was dropped from the D.C. Housing Authority's rental assistance program. Just under half his $700 biweekly take-home pay goes to his hotel. Dreams of an apartment of his own now seem remote.
"I want to get out," he said. "I want to find an apartment, but you can't find one for $600, $650 a month in D.C., and I can't get out of town because of the transportation."
As he stretches his $26,000 a year, Belton will receive some help from the Bush tax cuts -- $350, by Stretch's estimate. But that may be dwarfed by cutbacks in social services, increases in Metro fares and D.C. rents that have increased 18 percent since 2001.
For years, the District received federal funds -- about $3 million at its height -- for drug-crime prevention, public safety programs, even basketball leagues in its public housing projects. In 2003, those funds vanished, said Michael Kelly, director of D.C. public housing.
"The fact of the matter is a lot of programs have been cut," said Gregory P. Irish, director of the D.C. Department of Employment Services. "When you have high unemployment, you can't merely depend on tax cuts. You have to put some money out there for job training."
Indeed, local government organizations say much of their tax increases were driven by the unfunded demands of the federal government. Since 2001, 62 percent of the nation's cities raised public safety spending above the rate of inflation, in part because of terrorism threats and the demands of the new Department of Homeland Security, said Chris Hoene, research manager at the National League of Cities.
During that time, city property tax collections cumulatively rose 5 percent in 2001, 7 percent in 2002 and 4 percent in 2003.
In their No Child Left Behind education law, Congress and the president promised that funding for Title I, the main federal program for disadvantaged students, would be increased significantly to help bring poor-performing schools up to new expectations. But this year, federal funding will fall $6.2 billion short of that pledge, said Dan Fuller, director of federal programs at the National School Boards Association.
Congress long ago mandated programs for children with special needs, but the gap between the cost of those programs and the federal contribution to cover them will reach $10 billion, a gap that is being made up largely with property taxes.
"There is essentially a federal education tax," Fuller said. "It's disguised as a local property or sales tax increase, but it's because the federal government is not providing for their mandates."
