The D.C. Council's education committee yesterday tabled a measure that would increase hotel, parking and cigarette taxes to raise additional money for school renovations after several council members complained that the affected industries had not been given a chance to comment.
Council member Kathy Patterson (D-Ward 3), who chairs the committee, agreed to postpone a vote on her legislation until a public hearing has been held allowing business leaders to give their input. Patterson later said the hearing has been scheduled for Tuesday.
"Did I consult with folks whose taxes would be raised? The answer is no," Patterson said at the meeting. "What the committee faced is a huge public need. . . . This is a package we thought we would put forward as the least bad option."
Patterson's legislation, introduced Monday, would generate an additional $1 billion over the next decade to fix the city's crumbling public schools -- twice as much as the funding currently projected for that period.
Of the new money, $640 million would be generated by delaying the final phase of an income tax reduction approved by the council in 1999. The rest would come from raising the city's hotel tax from 14.5 percent to 15.5 percent, the parking tax from 12 percent to 18 percent and the cigarette tax from $1 a pack to $1.50 a pack.
The measure was quickly opposed by members of the business community, who yesterday lobbied council members and showed up en masse at the meeting.
The Hotel Association of Washington, D.C., said the proposed hotel tax rate would surpass rates in the 18 cities with which Washington competes most directly for tourists, including Atlanta, Chicago, Philadelphia and New York.
Business leaders also expressed concern that Patterson had not consulted them before she proposed the tax increases.
"I think the intent of trying to modernize schools is worthy," Barbara B. Lang, president and chief executive of the D.C. Chamber of Commerce, said in an interview. "But to have this decision made without any public input is unconscionable."
The other committee members -- Marion Barry (D-Ward 8), Carol Schwartz (R-At Large), Vincent C. Gray (D-Ward 7) and Phil Mendelson (D-At Large) -- had similar concerns.
"I have a serious problem voting for any tax increase without any discussion" with the industries that would be affected, Barry said.
"Our economy is pretty fragile," he added. "Tourism is our number one industry. We have to be careful how we tax it."
Mendelson sought to amend the bill so that the hotel tax increase would be replaced by a provision shifting $15.5 million a year in lottery revenues to the school construction fund. But the measure was not acted on.
Patterson introduced the bill as an alternative to a measure sponsored by council member Adrian M. Fenty (D-Ward 4) that would use lottery proceeds to generate school construction funds, and legislation from council member Jack Evans (D-Ward 2) that would dedicate any new tax revenue to schools. Patterson said both of those funding sources were unreliable.
In the corridor after yesterday's committee meeting, several education activists faced off with Lang and other business leaders, urging them to support the tax increases for the schools.
"When the council says we're going to table this and everyone walks out smiling, it's difficult not to think, 'These guys don't care about anything except their pocketbooks,' " said Iris Toyer, chairman of Parents United for the D.C. Public Schools.
The school activists and business leaders exchanged phone numbers, and Toyer said she would schedule a meeting between the two sides sometime before Tuesday's hearing.