A Proposal to tax out-of-state residents who work in the District of Columbia was reintroduced in Congress yesterday, and immediately came under attack by congressmen from suburban Virginia and Maryland.
Rep. Steward B. McKinney (R-Conn.), ranking Republican on the House District Committee, said he again sponsored the measure, which died in committee two years ago, because a commuter tax is "vital to the financial health of the city."
McKinney added, however, that he had "no illusions as to the difficulty of convincing my colleagues of the need for a nonresident income tax." add one commuter
Rep. Herbert E. Harris II (D-Va.), who also is a member of the House District Committee, said "I will do everything I can to kill it: we stopped it before and we'll stop it again."
The bill would tax nonresidents who work in the city at one-third the rate imposed on District residents, and give those same commuters a dollar-for-dollar credit against their state income taxes in Maryland and Virginia. The proposal would yeild an estimated $66 million to the District in fiscal year 1979, and cause losses estimated at $43 million to Maryland and $36 million to Virginia. (The totals don't balance because of differing tax structures in the three jurisdictions.)
The 1975 version of the bill was approved by the District subcommitted on fiscal and governmental affairs by a vote of 7 to 0, but died when District Committee Chairman Charles C. Diggs Jr. (D-Mich.) refused to schedule it for a hearing before the full committee.
Edward C. Sylvester Jr., committee staff director and a Diggs aide, said Diggs "did not consider it politically feasible," and added that passage of such a tax would require amending the home rule act.
The No. 2 ranking member of the committee, Rep. Ronald V. Dellums (D-Calif.), however, "always has been a supporter" of a commuter tax, and as chairman of the subcommittee which will first consider the proposal "will want to see that it is fully heard," according to Robert B. Braner, staff director of Dellums' subcommittee.
Mayor Walter E. Washington "strongly supports the concept of a commuter tax," according to Sam Eastman, the mayor's press spokesman. Eastman said Washington praised McKinney for "moving in the right direction in strengthening home-rule government."
Comer Coppie, the city's budget director, said a commuter tax is "indispensible" if the District is to close a revenue gap that, according to a five-year projection released Sept. 16, will grown from more than $125 million in 1979-80 to more than $300 million in 1984-5.
McKinney said "taxation of income where it is earned is an established tenet," adding that 47 major cities and 41 states, including Maryland and Virginia, have income taxes.
Rep. Newton L. Steers (R-Md.), another suburban congressman who also is a member of the District Committee, responded to McKinney's proposal by resubmitting his bill of last summer to name a blue-ribbon commission to establish "a fair and reasonable basis" for the federal payment.
Three suburban Democrats, Reps. Joseph Fisher of Arlington, Gladys County, and Harris, joined Steers in the proposal for a study.
The federal payment, which city officials view, in Eastman's words, as "a proper contribution by the federal government in lieu of taxes" for the vast U.S. presence in the District, has been set at a maximum of $300 million, under terms of the home-rule agreement. Coppie said, however, that the Carter administration has agreed to support a request that Congress authorize $317 million for fiscal 1979.
Harris said "what the District needs more than a commuter tax is to complet the audit of its books that Congress ordered last year."
Coppie countered that while the audit "could conceivably identify some accounts receiveable, at D.C. General Hospital, for example, but it won't come up with any recurring source of income."