The D.C. Council adopted emergency legislation yesterday that will ensure that residents facing higher heating fuel prices this winter don't encounter an unintended tax increase as well.
If natural gas prices rise by a third, as expected, the city would have seen an $11 million tax windfall through related taxes. Legislation approved yesterday will change the way natural gas and propane are taxed so there will be no increase in taxes as prices rise. Gas will be taxed per energy unit instead of as a percentage of the cost.
Also yesterday, 12 of the 13 council members signed onto a proposal to strengthen the city's rent control laws. The bill would limit rent increases to 10 percent a year and restrict how much rents can go up on a newly vacant apartment in a rent-controlled building.
Sponsors said the bill proposes the first strengthening of the city's rent control laws in two decades. They said it was spurred by a rapidly declining stock of affordable rental apartments in the city because of increasing rents and rental buildings being converted to condominiums. The bill will have to go through committee.
"This was unthinkable one year ago," said council member Jim Graham (D-Ward 1), the principal sponsor. "This is a meaningful response to a red-hot real estate market."
The natural gas measure, introduced by David A. Catania (I-At Large) and others, including mayoral candidates Linda W. Cropp (D) and Adrian M. Fenty (D-Ward 4), passed 10 to 2 with Marion Barry (D-Ward 8) abstaining. Council members Kathy Patterson (D-Ward 3) and Vincent B. Orange Sr. (D-Ward 5) voted against it. Patterson said she opposed passing tax legislation on an "emergency" basis.
Orange, who also is running for mayor, introduced a rival bill that would keep the tax system the same but would take the increased tax revenue and add it to the Low Income Home Energy Assistance Program.
He painted the choice between the two bills starkly: "It's either $11 million to the poor or $11 million to the rich."
That set off an hour-long debate over the definition of rich and poor.
Cropp, the council chairman, said the income cutoff for the energy assistance program was very low -- $23,505 for a family of three. She said there are many residents who earn more but will still feel the pinch of rising heat bills.
"They are struggling every day to make ends meet," Cropp said. "Their struggle is real and constant."
Other members objected to the nature of the debate as framed by Orange.
"This is a false choice intended to divide," Catania said. "It's a tired old song we've heard before."
Council member Phil Mendelson (D-At Large) said that if the council wants to further subsidize low-income energy users, "let's do it straight-up" by approving additional appropriations. "Let's not do it on the backs of the middle class," he said.
But Orange said some city residents are forced to choose between paying for heat or eating. He questioned why the city would give a tax break to everyone, including wealthier residents, businesses and the federal government, instead of only the most needy.
Orange's measure passed by voice vote. Because Catania's bill affected natural gas and propane, the second measure will apply only to home heating oil. Orange said he does not know how much extra revenue the city is expected to raise on rising oil prices or what percentage of homes use oil or gas.
Catania and Cropp introduced a bill that they say will reduce the number of District residents without health insurance.
The legislation is aimed at helping those who earn too much to qualify for low-income health care programs but do not receive health insurance through their jobs or cannot afford it on their own.
By working with insurers to offer a stripped-down benefit plan and paying claims above a certain amount, the city could help provide basic health insurance to about 15,000 residents for about $5 million a year, Catania said.