Council Overturns Ad Tax

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Council Chairman Phil Mendelson. Courtesy Council of the District of Columbia.

The District Council on Thursday, July 23, passed a last-minute amendment to withdraw a controversial new three-percent tax on the creation and placement of ads in the District. The tax, strongly opposed by The Georgetowner and other area news media, would have deeply hurt local newspapers and small businesses.

The tax had been proposed by Council Chairman Phil Mendelson (D) in the 2021 budget passed by the Council on July 6. He also was the author of the amendment to end it.

“You would think from the public outcry over the 2021 budget that was passed, we have done nothing,” Mendelson said as he opened the special session. He went on to name well over a dozen public programs in D.C. that had been increased by some $5 million in the passed budged.

“Almost half of the budget goes to education programs in the city, includes new comprehensive health facilities in Wards 7 and 8 that had never existed before and more into mental health, not counting Medicare. It keeps many of the public libraries open that are used increasingly by people without computers to apply for jobs, among many other things,” Mendelson said. “This despite the financial crisis the city, like all cities, are experiencing.”

The proposed tax on the creation and placing of ads in the District would have raised some $18 million. Instead, that hole will be filled with billing maneuvers and some budget delays.

Council member Brianne Nadeau (D-Ward 1) objected to the decrease in funding of $19.8 million for mental health and shelter services, plus an additional cut of $4 million of mental health service investments, stating: “There are some Medicaid funds available, but won’t cover it all.”

“Budgets are about making difficult choices and no one is ever completely happy,” said Council member and former Mayor Vincent Gray (D-Ward 7). He reiterated that he and others would be supporting the amendment, along with gas and other taxes, in these extraordinary times.

“Obviously, we aren’t ready to increase the sales tax, as we must someday,” said Council member David Grosso (D-At-large). “We will wait for another time.”

Everyone agreed that the budget would have to be revisited in the fall, as the District’s substantial reserves continue to be drawn down. “It is clear that we all are going to have to learn to do more with less,” said Mendelson.

By 2 p.m., the Council members were on a second round of comments, which Mendelson requested (without success) be kept to 30 seconds. “We have the votes to pass this amendment,” he commented.

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