Commuters, Feds and D.C.

Thursday, November 10, 2005

WHEN LOCAL activists filed a lawsuit two years ago to overturn the Home Rule Act provision that bars the District from imposing a commuter tax, we said that they faced an uphill battle in light of Washington's unique constitutional status. A U.S. district judge reached the same conclusion last year, throwing out the lawsuit. To drive a final nail into the lawsuit, the U.S. Court of Appeals for the D.C. Circuit, in an opinion written by then judge and now Chief Justice John G. Roberts Jr., has upheld the lower court ruling and made it unmistakably clear that the Constitution gives Congress "exclusive" control over the District and that the city has no authority to impose a commuter tax without congressional permission. The rulings prevent the District, which shoulders one of the nation's highest tax burdens, from capturing an estimated $1.4 billion in commuter tax revenue. But, in fairness to the judges, the financial predicament in which the city finds itself is not their fault.

In 1997, D.C. officials, bowing to inducements and pressure from the Clinton administration and its point man, Franklin D. Raines of the Office of Management and Budget, agreed to abandon the historical federal payment as a trade-off for the federal government's assumption of certain state functions then performed by the District. It was a bad deal for the city, and we said so at the time. The concept of a direct federal payment to the District was nearly as old as the city itself. Neither Democratic nor Republican administrations challenged the concept, because the federal presence in the city was acknowledged to be a unique -- and costly -- fact of life. A succession of presidents and Congresses agreed that immunizing federal property, foreign missions, several national organizations, the income of nonresidents, and goods and services sold to the federal government from District taxation placed an undue burden on city residents. Asking the city to host millions of tourists annually and protect countless others who come to the nation's capital to petition their government also comes with a high price. But in 1997 the Clinton administration induced a cash-strapped city to accept a deal that haunts the District still. The commuter tax, while politically popular in the city and a sensible policy option, was a political non-starter in Congress and thus a poor substitute for the federal payment. Now the commuter tax is off the table.

D.C. Del. Eleanor Holmes Norton (D), who championed the Clinton administration proposal -- including abandonment of the federal payment -- is touting legislation that would give the city an annual $800 million federal appropriation. Her proposal falls just short of trying to put Humpty Dumpty together again, but it's worth the effort. Of course, as Ms. Norton, Mr. Raines and their colleagues must know, Humpty should never have been pushed off the wall in the first place.


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