The General Services Administration still plans to seek congressional veto of a proposed D.C. utilities tax increase even though the measure now before the city council would cost the agency far less than an earlier plan.
"We're not going to pay one nickel more than we are now," said Richard O. Haase, GSA's public buildings commissioner.
Haase contends that, although city officials have scaled back the impact on the federal government dramatically--from an estimated $10 million to about $924,000--it still is unreasonable because Congress makes a direct payment to the city to offset the costs of the federal presence here.
D.C. Mayor Marion Barry, who advanced the $10 million proposal, was hoping to raise $8.3 million in new city revenues. Barry's plan called for dramatically changing the formula used to collect the tax, and along the way forcing the federal government to pay for the entire increase and a portion of existing revenues now paid by other commercial city users.
Barry backed off after pressure from GSA and Potomac Electric Power Co., and endorsed an alternative proposal advanced by council member John A. Wilson (D-Ward 2) that used a different formula. Wilson's plan basically changed the gross receipts tax rate from 6 to 6.7 percent.
That proposal has passed a D.C. committee and is now before the full council.
Although Pepco has been fighting the plan, Alan G. Kirk II, the company's senior vice president, said "I now have no doubt that it will go through."
John Stanberry, GSA's assistant commissioner for public utilities, said the agency still would go to Congress to block the proposal if it is passed.
Kirk said he was "not surprised" at GSA's decision, but questioned whether the tax is now worth the fight.
"The total impact of this proposal is much larger than $1 million," Stanberry said. "It also sets up a type of double taxation. This new proposal is still unreasonable, and, when paired with Mayor Barry's plan to shift street lighting costs to District users, the federal taxpayer is going to be really hurting."
Stanberry said GSA would have to pay $3 million for its share of street lighting.
That "double taxation" is a one-year-only plan that would help bolster the sagging cash flow in the District by forcing major customers who pay some of their taxes in advance to do so twice.
Although the issue appears muddled, Pepco has told GSA that it now pays its 6 percent tax in three increments: one-half percent on Sept. 30 and March 31 and 5 percent on July 31 for the tax year ahead. D.C. denies that there will be double taxation, and GSA says the issue is still to be resolved.
Under the new plan, Pepco would have to begin paying monthly and would have to ask GSA--and other users--to pay more so it can make those payments, Stanberry said.