Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!americast.com!americast.com!americast-post Newsgroups: americast.twt.news From: americast-post@AmeriCast.Com Organization: American Cybercasting Approved: americast-post@AmeriCast.com Subject: Council gives cautious backing to commuter tax Date: Sat, 21 Nov 92 17:35:41 EST Message-ID: \SE A;NATION \HD Council gives cautious backing to commuter tax \BY Jonetta Rose Barras and Vincent McCraw \CR THE WASHINGTON TIMES D.C. Council members yesterday said they will fight for a commuter tax but cautioned the mayor against relying on it to close a projected deficit they say could grow to $1 billion. Council Chairman John Wilson also warned that D.C. residents should be prepared for an increase in their taxes and for major across-the-board program cuts. "It is no major solution, and I don't think the budget ought to balance on it until we know we have it," Mr. Wilson said of the commuter tax yesterday. He offered conditional backing to Mayor Sharon Pratt Kelly's campaign for what she calls a nonresident tax. "Even if we get an increase in the federal payment and we get the reciprocal tax, we still will have to make some program cuts. . . . We have to be straight up with people," Mr. Wilson said. "It's bad, and it's not going to change without us making real difficult decisions. . . . Everybody is going to have to suffer." Since 1990, the District has faced mounting financial problems, mainly because of dwindling revenues. Mrs. Kelly in her fiscal 1992 and 1993 budgets sought to raise money by levying a variety of taxes and fees, including a gross-receipts tax on professionals and fees in lieu of taxes on universities. The council rejected those proposals and instead approved an array of taxes and mandated 12 furlough days for city workers. The second furlough day, affecting all employees except police, firefighters and other essential personnel, is set for Friday. "I'll go to bat and try to achieve it," council member Jim Nathanson said of the commuter tax. "But I'm not ready to vote for a D.C. budget that relies on it before I know it is a viable option." Those comments came a day after Mrs. Kelly announced a projected $652 million deficit by the end of 1994. Speaking on her monthly cable TV show, Mrs. Kelly warned residents of the dire financial straits and urged them to call her Office of Constituent Services to learn more about a series of town meetings set to begin Dec. 1. She urged them to support her push for statehood and the nonresident tax. "In face of this kind of financial challenge everything should go back on the table. We must re-engage the argument about who is paying for city services and who is benefiting," said Ellen O'Connor, the city's chief financial officer. She said the mayor will send the council two budgets: one with a "reciprocal, nonresident tax" and one without it. "The second budget will basically show what will happen if we don't do any of that, . . . and people can decide if this is the kind of Washington, D.C., they want to live in." The Fairfax County Board of Supervisors this week voted to oppose statehood and threatened to recruit D.C. businesses and federal agencies if the city passes a commuter tax. Leaders in other Virginia and Maryland jurisdictions have voiced opposition to a commuter tax. "The only thing we're asking for is what appropriately should be ours. We're just trying to get some parity here," City Administrator Robert Mallett said. "New York state taxes everybody, every single person. New York City has an additional tax they only place on commuters. We just want the same kind of thing." Mr. Mallett said he is not concerned with threats from suburban governments because many businesses will want to stay in the nation's capital. But he said the city is willing to pay the price for independence. "That is part of the cost of birthright. If that happens, so be it," he said. Mr. Nathanson said: "People want to be in Washington, D.C., if it is at all economically feasible. If we can achieve the commuter tax, we can make it more attractive for people to be here." But Mr. Wilson said the threat from neighboring governments is real. "It bothers me. They are already stripping us of our businesses. Look at all the empty retail spaces," he said. "The more they strip us, the more we are going to have to fight for it." Mr. Wilson said the budget deficit may be closer to $800 million, and he placed some of the blame for the crisis on the Kelly administration, charging that there "must have been some serious overspending." But he agreed with Mrs. O'Connor that previous proposals by the mayor, including a professional gross-receipts tax, will have to be reconsidered. "As deep as the situation is, all of those things have to be put back on the table," Mr. Wilson said. "Nobody wants to give up anything. . . . Nobody wants to have their taxes increased. Nobody wants to be furloughed. . . . We have to make some choices." This article is copyright 1992 The Washington Times. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM