Correction: A Friday column by Mike DeBonis incorrectly indicated that D.C. Council member Yvette M. Alexander (D-Ward 7) opposed an income-tax rate hike. Alexander voted Wednesday in support of a budget amendment that would have raised the tax rate of the city’s highest-earning residents. This version has been corrected.
The art of the deal is alive and well in the John A. Wilson Building, and this week, Kwame R. Brown (D) is looking like Picasso.
The D.C. Council chairman made the District’s budget his own this week, not so much because of what it contained but because of what it did not contain: the addition of a new income tax bracket that would mean a 0.4 percentage-point increase on earnings of more than $200,000.
Last week, as he sought to hammer out a budget, Brown met individually with council members, quizzing them on their priorities. For at least some members, he marked their wants on a list, and asked them if they had a deal.
A deal he got: Only five of his 12 colleagues opposed his plan to eliminate the tax increase during Wednesday’s council session.
But in a budget that increased paycheck withholdings, raised parking garage taxes, raised business taxes, raised package liquor taxes and applied sales taxes to new services, why the obsession with staving off an income tax increase?
Rewind to last summer, when at-large member Brown was running for the chairmanship and facing uncomfortable questions about his personal finances. Under pressure to prove his fiscal bona fides, he presented himself in Upper Northwest salons as a budget hawk who would hold the line on tax increases.
The pressure only increased after February’s revelations that two city-paid luxury sport-utility vehicles had been ordered on his behalf. And with Mayor Vincent C. Gray’s budget targeting human services for stiff cuts, Brown has felt it on all sides. One advocacy group, Save Our Safety Net, produced a YouTube video featuring footage of a Lincoln Navigator — Brown’s preferred model — interspersed with pleas to maintain funding for homeless shelters, child care and other services.
By delaying a $21 million budgetary maneuver and leaning on a $13.4 million proposal to tax non-District-issued municipal bonds for the first time, Brown was able to offer a little something for everyone — social service advocates got $23.4 million in funding for the homeless and needy, and the income tax increase went away.
That’s not to say the District’s wealthiest residents won’t be paying more taxes. When it comes to Brown and taxation, he’s not exactly joining the tea party.
Start with the new bond tax: “If you had to come up with a tax increase in the District that really only affected the wealthy, I think they did a pretty good job,” said one financial planner of the tax. Also, Brown’s budget kept a limitation on itemized income tax deductions that Gray (D) had proposed, representing nearly half of his $35 million income-tax-raising proposal.
In explaining his opposition to a simple rate increase, he touted the establishment of a Tax Revision Commission that would undertake a “professional evaluation” of city tax policy.
“We should not do this piecemeal, in a vacuum or under budgetary pressures,” he said.
But when it comes to taxes, city politicians have always had an odd way of missing the forest for the trees. Gray’s predecessor, Adrian M. Fenty (D), famously pledged never to raise taxes, though he proposed all sorts of fee increases and signed budgets that included bona fide tax increases. In that spirit, consider Brown’s focus on eliminating the much-discussed income tax bracket — an otherwise curious choice for a city where, in many quarters, it is much more politically damaging to be seen as heartless than profligate.
Note that there was little public outcry over Gray’s income tax increase. The D.C. Chamber of Commerce objected in public hearings, saying that the rate would take a bite out of small-business owners. And council members Jack Evans (D-Ward 2), David A. Catania (I-At Large) and Mary M. Cheh (D-Ward 3) protested on behalf of their affluent neighbors. But most members have at one point or another in recent years argued for a new top income tax bracket.
But Brown got his votes: Churches in Marion Barry’s Ward 8 were granted tax exemptions for affordable housing they are developing. A church in Yvette M. Alexander’s Ward 7 also won a tax exemption, and Marvin Gaye Park in the ward got a funding boost. Barry voted against an income tax increase; Alexander voted for it.
Of course, Brown wasn’t the only one who made deals Wednesday. Vincent B. Orange (D-At Large) openly bargained on the dais, trading a $500,000 grant for the Lincoln Theatre (on whose board Orange sits) for the decisive vote on a Brown-opposed amendment to make the bond tax permanent.
The maneuver sparked discussion about whether it represented an “earmark” to a nonprofit group — a once-prevalent practice that has lately been stricken from city budgeting since revenue has dwindled and Barry was investigated in 2008 on suspicion of steering public money to political allies via earmarks.
“If there’s going to be earmarks, I’m all for it,” Evans chimed in. “I’m the king of earmarks!”
Watch out, Mr. Chairman. You’re not the only dealmaker in the building.