Bowser vows to keep District’s au­to­matic tax cuts in 2018.

Crit­ics say money could be used to help with hous­ing

The Washington Times Daily - - FRONT PAGE - BY RYAN M. MCDER­MOTT

D.C. Mayor Muriel Bowser pledged Tues­day to keep in place au­to­matic tax cuts trig­gered by the city’s re­cent fi­nan­cial suc­cess, de­spite a push from pro­gres­sive groups to use that money for more af­ford­able hous­ing.

Un­veil­ing her $13.8 bil­lion fis­cal 2018 bud­get, Miss Bowser said the $100 mil­lion in tax cuts were promised and will be de­liv­ered.

“What we did was, we looked at what we needed and what we could in­vest in this year and in the whole fi­nan­cial plan and what those in­vest­ments would turn into. And this is where we landed,” the Demo­cratic mayor said, not­ing that city res­i­dents would ben­e­fit from more than half of the tax cuts.

City Ad­min­is­tra­tor Rashad Young said at a Mon­day brief­ing that tax cuts would di­rectly im­pact Wash­ing­to­ni­ans, “so the mayor thought it im­por­tant that we pro­vide those tax cuts and sav­ings to res­i­dents.”

Those cuts, set to start Jan. 1, are part of a tax re­form pack­age the D.C. Coun­cil en­acted in 2014 based on the rec­om­men­da­tions of a panel of ex­perts. The re­duc­tions were to be trig­gered only if the District’s rev­enues reach a cer­tain thresh­old.

This round of cuts will in­crease per­sonal tax ex­emp­tions and de­duc­tions for res­i­dents to meet the fed­eral level of $4,000. Busi­nesses will see a re­duc­tion in the city’s fran­chise tax from 9 per­cent to 8.25 per­cent.

The tax breaks for mid­dle- and low­in­come res­i­dents will come next year, in the midst of a may­oral elec­tion. Miss Bowser has not of­fi­cially an­nounced her re-elec­tion cam­paign, but she is widely ex­pected to run for a sec­ond term.

But a bevy of pro­gres­sive groups, in­clud­ing the D.C. Fis­cal Pol­icy In­sti­tute, D.C. Ac­tion for Chil­dren, D.C. Work­ing Fam­i­lies and the Fair Bud­get Coali­tion, say the money would be bet­ter spent on af­ford­able hous­ing, the home­less, schools and trans­porta­tion.

They said with Pres­i­dent Trump’s un­pre­dictable bud­get, the city should save that money in case fed­eral fund­ing to D.C. pro­grams is cut. City of­fi­cials last month es­ti­mated the Trump bud­get, if passed by Congress, could cost the District at least $103 mil­lion in fed­eral funds.

“The District is fi­nan­cially thriv­ing, with grow­ing rev­enues and one of the health­i­est re­serves in the na­tion. Yet cur­rent fis­cal poli­cies pre­vent new rev­enues from be­ing used to meet ur­gent needs in fa­vor of au­to­matic [tax] cuts,” the group said in a let­ter last week to Miss Bowser.

The bud­get must be ap­proved by the city coun­cil, which of­ten changes the mayor’s spend­ing plan, but there’s lit­tle in­di­ca­tion there of a push to ax the tax cuts. Coun­cil mem­ber Charles Allen said law­mak­ers would likely keep the full tax re­duc­tions in­tact.

“I don’t think there is an ap­petite on the coun­cil to change the tax cuts,” said the Ward 6 Demo­crat. “That’s real money in work­ing fam­i­lies’ pock­ets.”

In com­ing weeks, the coun­cil will wres­tle with the details of Miss Bowser’s $13.8 bil­lion pro­posal, which rep­re­sents a 3.4 per­cent in­crease over last year’s bud­get.

About $7.6 bil­lion come from lo­cal tax dol­lars and $3.3 bil­lion from fed­eral grants and Med­i­caid. The rest is al­lo­cated from en­ter­prise funds, fed­eral pay­ments for lo­cal ser­vices and ded­i­cated taxes.

Of the lo­cal op­er­a­tions bud­get, more than $2 bil­lion will go to pub­lic ed­u­ca­tion, $1.9 bil­lion to hu­man ser­vices and $1.1 bil­lion to pub­lic safety.

Miss Bowser didn’t an­nounce any large-scale, sig­na­ture initiatives in her bud­get, but did tout a fully funded $100 mil­lion Hous­ing Pro­duc­tion Trust Fund and $10 mil­lion set aside for a new Hous­ing Preser­va­tion Fund.

She pledged $11.7 mil­lion for po­lice re­cruit­ment and re­ten­tion pro­grams, in­clud­ing in­cen­tives for po­lice of­fi­cers to live in the city, and $2.3 mil­lion for a “por­tal” to link res­i­dents to job op­por­tu­ni­ties and city ser­vices af­ter they come home from prison.

The bud­get in­cludes $20 mil­lion in cap­i­tal funds to be­gin im­ple­ment­ing the city’s paid fam­ily leave pro­gram — one of the most gen­er­ous in the coun­try and the only one that will be funded via a tax on busi­nesses.

Those funds al­ready were set aside by the coun­cil last year. Miss Bowser said she is still work­ing with coun­cil Chair­man Phil Men­del­son on tweak­ing the pro­gram, which be­came law with­out the mayor’s sig­na­ture in Fe­bru­ary.

Miss Bowser has ex­pressed con­cern over the mas­sive pro­gram, which will re­quire a new agency to over­see the ben­e­fits, which likely won’t go into ef­fect un­til 2020. The $20 mil­lion in the bud­get would go to de­sign­ing an ad­min­is­tra­tive sys­tem and stand­ing up the new agency.

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