Gray 2012 Budget Hikes Taxes

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While an entrenched Congress faces a government shutdown April 18 due to partisan wrangling over the nation’s fiscal budget, residents in Washington, D.C., face a budget crisis of their own.

Mayor Vincent Gray (D) rolled out his fiscal year 2012 budget proposal and tax hikes and expenditure cuts are crucial ways Gray desires to seal a $322.1 million budget gap in the nation’s capital.

In a press conference April 1, Gray unveiled his $9.6 billion budget proposal and admitted that, “this is a tough budget.”

In a statement by the DC Fiscal Policy Institute, the organization said the mayor and his staff took a “balanced approach” when creating the budget, but it does not agree with cutting funds from human service programs.

“Human services programs make up roughly 26 percent of the locally funded budget, yet they account for 67 percent of the cuts, or just over $130 million,” the organization said. Cuts from homeless services, the Temporary Assistance for Needy Families program (TANF) and the Housing Production Trust Fund (HPTF) will severely affect residents, according to the institute.

“While we applaud Mayor Gray for a more balanced approach to revenue, we believe the same balance should apply on the cut side as well,” the institute suggested.

The proposed budget includes a tax increase for those with an income of $200,000 and above, generating $35 million. Overall tax increases—including parking, sales and business surcharges—will generate $127.2 million for the city, closing the budget gap by 39 percent.

Expenditure cuts from the CFO’s Fiscal Year 2012 Current Services Funding Level Budget are supposed to generate $187.0 million, closing the budget gap by 58 percent.

The budget provides an additional $51.2 million for D.C. Public Schools, $25.7 million to charter schools, $4.5 million to the University of the District of Columbia and $4 million to the Community College of the District of Columbia. Libraries will continue to function six days a week, but MLK will close on Sundays and there will be less funding to purchase new books.

For job creation, the mayor has decided to fully fund adult job training by funding the Department of Employment Services with an additional $2.6 million.

D.C. Council Chairman Kwame Brown and Councilman Jack Evans oppose the mayor’s proposed tax increase.

“I am committed to working with my colleagues to conduct rigorous oversight to ensure that any projected savings are real and that proposed tax increases do not unfairly burden any single class of taxpayers,” Brown said in an official statement.

From April 7 through May 6, committee budget hearings will be held by the D.C. Council. The first vote will begin May 24. The Council has 56 days to deliberate, hold hearings, revise and vote on the budget proposal.

On April 8, the DC Fiscal Policy Institute will hold a presentation on the mayor’s proposed budget and “walk through” the budget process.

D.C. residents can take part of the budget process by offering ideas and opinions at http://budget.dc.gov/budget-survey. Responses must be received by April 22 to be incorporated in Council’s deliberation.

To review the budget, go to http://budget.dc.gov/budget-overview.