The Council is now in full review of Mayor Bowser’s budget request for fiscal year 2016. The mayor transmitted her budget proposal to the Council last week, and while I am still reviewing the budget as I write this, I want to share some initial thoughts and important points.
First, I appreciate that this budget contains only a 3.2-percent spending increase over this year’s budget. In the past, the District’s spending has increased 4, 5, even 12 percent from one year to the next. This is important because it means that, while the District’s economy is expected to grow more than 4 percent this year and next year, an even larger share of the District’s growth will be enjoyed by individuals and small businesses, instead of being paid in taxes.
I applaud Mayor Bowser for instructing all of her cabinet members and department heads to undertake a thorough review of their budgets to find areas and programs where funds are being underutilized or unwisely spent. This kind of fiscal discipline will reap far greater benefits than simply increasing government spending.
Beyond the overall size of the budget, the mayor’s proposal includes much that I agree is important. For example, the mayor endorsed my position to fully commit the District’s contribution to the Washington Metropolitan Area Transit Authority’s budget, to prevent any fare increases or service reductions. Also on the transportation front, the budget increases funding to repairs streets, alleys and sidewalks, a critical area of need in Georgetown and across the city. I also support the mayor’s full funding of the Housing Production Trust Fund, to build affordable housing at the rate of $100 million per year.
What is my greatest concern in my initial review of the budget? Proposals to increase our sales and parking taxes. The District sales tax rate has been 5.75 percent for over 20 years. It only increased to 6 percent from 2010 to 2013 because the District was in a serious financial crunch due to the economic recession. The sales tax is the most regressive tax, and increasing it will hurt residents on the lower end of the income spectrum. We should save that potential revenue for when we really need it, as in 2010.
As for the parking tax increase, this proposed move follows an increase from 12 to 18 percent three years ago, along with an increase in the minimum wage, which applies to many of the city’s parking attendants. This latest increase is a triple whammy. When it’s more expensive and difficult to find a parking spot, people are less likely to go out, spend money in the District and generate tax revenue. Plus, most of these costs get passed on to residents, making it more expensive for people to park near their offices, restaurants and stores. More than a third of those parking in garages are District residents. So, in effect, we are taxing our own people again and again.
I will continue to review the budget proposal in the coming weeks, and the Council will hold hearings on each government agency, at which agency leaders will go over their plans for the upcoming year. Please share your views with me and with my colleagues about the budget and plans for the District.
Jack Evans is the Ward 2 Councilmember, representing Georgetown since 1991.