On April 1, Mayor Gray submitted his Fiscal Year 2012 budget proposal to the City Council.
The total budget for the District is $9.6 billion. Of that amount, 58% or $5.5 billion are locally raised funds, 27% or $2.6 billion are federal grants, and the remainder is enterprise funds raised and spent by entities such as the Convention Center and Water Authority. The federal money is the same amount proportionally that the states receive. I must stress that the federal government does not make any separate contribution to the District. This federal payment was eliminated in 1996.
The unique problem with the Mayor’s budget is that it calls for $300 million more in spending than the FY 2011 budget. The budget has grown by over 3% when budgets of cities and states nationwide are shrinking. The Mayor then intends to pay for this increase by cutting spending by $187 million and by raising taxes $127 million. The spending cuts are modest and do not have any measurable effect. It is interesting to note that the DCPS budget actually increases, the only school budget in the nation to do so.
The proposed tax increases are problematic. The budget increases the income tax on persons making over $200,000 from 8.5% to 8.9%, the sales tax from 5.75% to 6%, and the parking tax from 12% to 19%. It also extends the sales tax to live theatre events, implements combined reporting on corporations and doubles the Circulator bus fee from $1 to $2.
This budget marks the first time the City has proposed raising the income tax in thirty years and will once again make the District the highest taxed in the region and the fifth highest in the nation. The other tax increases are also anti-business and not competitive. None of these tax increases are necessary.
If the Mayor wants to increase spending in certain areas, he should offset those increases by making hard decisions to spend less elsewhere. This has not happened.
Absent from the budget are any funds to increase the size of our police force to 4,000 sworn officers. Because of reductions in the public safety budget, the police force is in danger of falling below 3,800 officers that Chief Lanier believes to be necessary. The City needs at least $40 million to get back to the 4,000-officer level.
I will be working with my colleagues on the Council to eliminate these tax increases and to fund our police department. Last year for the first time, I voted no on the FY 2011 budget. We cannot afford to move forward another budget in which we don’t live within our means.