The D.C. City Council approved a 6 percent gasoline tax yesterday despite heavy lobbying by service-station owners who kept more than half of the city's gas stations closed throughout the day in protest.
The tax, part of Mayor Marion Barry's $15 million revenue package for the financially strapped city, becomes effective Aug. 1 and will raise the cost of gasoline at the pump about 8 cents a gallon, based on current prices. The measure was approved by an 11-to-2 vote, with John Ray (D-At Large) and Jerry Moore (R-At Large) voting against it.
However, in an effort to mollify the station owners, council members introduced two new bills that, if approved, would lower the tax on gasoline later this year.
The service-station owners met for two hours last night and decided to end the impromptu, two-day shutdown and open their pumps today.
Vic Rasheed, executive director of the Greater Washington-Maryland Service Station Association, said the shutdown had been a protest and was not meant to extend into the upcoming Fourth of July weekend.
He said the station owners were satisfied that the council is serious about considering new legislation to substitute for the new 6 percent tax. "I think we sparked enough interest for them to reconsider this thing -- in spite of everything that's happened," Rasheed said.
Rasheed said his group will lobby on Capitol Hill to have the new tax removed during the 30-day period in which the Congress will review the new city taxes.
Rasheed said his group also may seek a court injunction to keep the gasoline tax from going into effect next month, if the council does not approve one of the two tax-lowering bills introduced yesterday by Ray and Wilhelmina Rolard (D-Ward 8).
The other taxes that are part of the package will go into effect next month regardless of what happens on the politically sensitive issue of gasoline taxes.
There is already a 10-cent-per-gallon local tax on gas and four cents in federal tax. The District's station owners claim that the added 6 percent tax -- calculated to add about 8 cents per gallon at current prices -- would drive motorists to suburban Maryland where gas is cheaper.
While most of the other new taxes in the package -- especially those levied against the business community -- drew some criticism, it was the gasoline tax that generated the most intensive and highly visible lobbying campaign the council has seen in months. Service-station owners bought full-page newspaper advertisements, appeared daily in the halls and on the steps of the District Building and unexpectedly shut down many of their pumps Monday and yesterday in a dramatic protest of the new tax. A spot survey indicated about 60 percent of the city's 250 service stations were closed yesterday and a somewhat smaller number Monday.
The gasoline lobby, which intensified over last weekend, sent several council members scrambling to draft their own changes in the gasoline tax.
One substitute, offered by Ray and others, would replace the 6 percent tax with a flat 4-cent-a-gallon tax. The revenue lost by the lower tax would be made up by raising the tax on cigarettes from 13 to 15 cents a package; by taxing "junk food" -- potato chips, popcorn and Twinkies -- under the sales tax, and by increasing the tax on vending machine food.
Another substitute, offered by Rolark, would levy only a 3 percent tax on gas on Aug. 1, but would raise that tax an additional 3 percent next year.
Both bills have been referred to the council's finance and revenue committee for a public hearing next week.
The debate over the gasoline tax yesterday lasted nearly three hours, and was filled with high sounding rhetoric, and long speeches. Members argued in foreboding tones over who better understood the needs of the poor and the downtrodden, and even over which course of action would lead to the demise of the District government.
"The death of the government is born of its excesses," Councilman Jerry Moore (R-At-Large) said in his booming baritone. "Taxation without representation was a problem in the early colonies. That is why the Boston Tea Party took place."
Moore said that the 6 percent tax would "pour burdens on the backs of the people," would "sow the seeds of revolt" in the streets, and "would take the food out of [poor peoples'] mouths and the shoes from their children's feet."
Ray called the tax "grossly unfair to the consumer," especially poor people "who have just enough money to get to and from work every day."
Ray said his own mother still does domestic work and driving "is the only way she can get there."
Ray was challenged by Council woman Willie J. Hardy (D-Ward 7), who said, "You say let's tax junk food, which more poor people eat than middle-class people. You're spreading the tax among the poor."
Practically every council member took a swipe at the greater Washington-Maryland Service Station Association for its lobbying campaign aimed at turning public sentiment against the tax. Clarke chastized the group for its vindictiveness," and Councilman John Wilson (D-Ward 2) said "The council has to stop being blackmailed by every special interest that threatens to leave the city. I wish they would all leave."
Ray and Moore, however, became increasingly isolated in their attempt to cut the 6 percent gasoline tax. Moore, refusing to join the majority, said "I love you and I will go to the gates of hell with you, but I won't go in with you." That statement won roars of approval from the council chambers jam-packed with service station owners.
The other taxes approved in yesterday's revenue package include: an increase in the general sales tax from 5 to 6 percent and its extension for the first time to soda pop, candy and chewing gum; an increase from 1 to 2 percent in the transfer tax on the sale of real estate (with the seller and buyer each paying half); an increase from 8 to 10 percent in the hotel occupancy tax; a 16 percent increase in business real estate taxes; and a 9 percent boost in the tax on business personal property such as equipment and machinery.