“We operate as a government very inefficiently,” said Barbara Lang, executive director of the D.C. Chamber of Commerce. “Fiefdoms” have been created to camouflage program and financial management failures, she added. That unvarnished analysis was delivered earlier this week before the D.C. Council’s Committee of the Whole public hearing on Mayor Vincent Gray’s 2012 budget proposal. The business community would be especially hard hit if the legislature rubber-stamped the executive’s budget, which includes a variety of fee and tax increases. Gray’s plan would raise the tax on garage parking and on tickets for live theatrical performances. It would assess taxes on the total or “combined” income earned by businesses. Further, it would raise the tax rate for individuals with incomes greater than $200,000; those same people would see a limit in allowable deductions.
The mayor, in other words, would kill that proverbial goose and its golden eggs.
Some social service advocates and legislators have suggested that conditions for poor people would get worse without tax and fee increases. That’s a false dichotomy that ignores the city’s fiscal reality.
With a nearly $10 billion budget, there is sufficient money to provide basic, quality services to the city’s low-income community. Money isn’t the problem. The city’s woes derive from the executive’s failure to set priorities and legislature’s puny political will.
The city initially faced only a $322 million revenue shortfall for fiscal 2012. Gray added to that problem, jacking up administrative overhead, which triggered unnecessary program cuts and tax increases.
He has proposed creating new agencies. He also has added hundreds of people to the city’s payroll at exorbitant salaries. The legislature, while investigating his hiring processes, hasn’t signaled to the executive it won’t approve those increases or sign off on compensation packages that far exceed those paid by the previous administration.
“The [mayor’s] first cut should have been to the bureaucracy,” offered at-large Councilman David Catania. “What we lack in this government is the will to go through each department and cut out excess spending.
“There is a laziness associated with the budget of the District of Columbia,” Catania continued, citing, as an example, waste in government contracts — one of which has allowed a nonprofit organization to provide staff annual salaries as high as $400,000.
Council Chairman Kwame Brown has said his budget won’t include an increase in the individual income tax rate. As The Washington Examiner’s Freeman Klopott reported, Brown intends to include the mayor’s proposal to limit deductions for those wage earners. In other words, expect some tax and fee increases. But Brown may be one vote shy of the seven needed to push through his budget revisions.
That doesn’t go far enough, however. If the legislature wants to demonstrate a new day of fiscal accountability, it should decline to impose any tax increases. It should force the executive to manage the bureaucracy based on existing revenues. That is, after all, what Gray claimed he promised folks on Wall Street he would do.
Jonetta Rose Barras’ column appears on Monday and Wednesday. She can be reached at [email protected].
