D.C.'s Bid To Impose Commuter Tax Denied

Court Undercuts Home-Rule Effort

A federal appeals court ruled yesterday that the District cannot impose a commuter tax without the permission of Congress, dealing another blow to the city's quest for home rule.

In a sharply worded opinion, the U.S. Court of Appeals for the D.C. Circuit reinforced the view that the District is a creation of Congress and subject to its will. The ruling was signed by three judges, including John G. Roberts Jr., who had heard the case before he became chief justice of the United States.

The decision has economic and political consequences for the Washington area. Congress barred the District from imposing a commuter tax as part of the Home Rule Act of 1973, a ban that city leaders say has resulted in unfair tax demands on D.C. residents.

At stake is an estimated $1.4 billion that the District hoped to tap each year from residents of Maryland and Virginia who work in the city. The two states sided with the federal government in opposing a lawsuit filed by a coalition of D.C. activists and government leaders that sought to overturn the ban.

A federal judge dismissed the suit last year, and the District hoped to revive it on appeal. Activists expressed hope yesterday that the Supreme Court would consider the case, despite the fact that Roberts participated in the decision.

"Whether D.C. residents will be full-fledged citizens seems to be a case worthy of the Supreme Court," said Walter Smith, leader of DC Appleseed, an advocacy group. He helped argue the city's case.

City leaders maintained that the congressional ban on a commuter tax discriminates against D.C. residents and forces them to shoulder one of the highest tax burdens in the nation. They said that D.C. residents, who do not have a vote in Congress, have been forced to pay the costs of providing city services to 300,000 daily commuters from Maryland and Virginia who do have that vote.

More than 40 communities across the country impose commuter taxes -- none subject to congressional approval.

Attorneys for Virginia, Maryland and the federal government argued that the District, as the seat of national government, is a unique entity and enjoys federal subsidies that other cities do not.

They also warned that a commuter tax would hurt the economies of Virginia and Maryland by draining tax dollars from the states.

The appellate ruling focused on constitutional issues and found the District's arguments lacking.

The decision made reference to a pair of cases, filed several years ago by D.C. officials and activists, that argued that D.C. residents have a legal right to a vote in Congress. Those suits were rejected on constitutional grounds.