Wrong Choices in the DC Budget

Putting Tax Cuts for the Wealthy Ahead of Housing and Schools

Mayor Bowser and the DC Council just completed the city’s budget for fiscal year 2018. People are asking us at the DC Fiscal Policy Institute, Is this a good budget or a bad budget? The short answer is that it matters how you measure it.

Politicians love to tell us their values with soaring rhetoric, and they tout accomplishments in glowing press releases. Yet it is the details of dense budget tables that show their real values and priorities. Budgets are how we measure improvements in the lives of District residents, and how we hold our elected officials accountable for the investments they have promised.

Much has been made about this being a bigger budget, but that’s not surprising and doesn’t tell us much. DC’s population is growing, more children are enrolled in schools, and because of inflation the basic costs of goods and healthcare rise from year to year. Of course, the budget should grow. To really evaluate whether the budget is good or bad, the investments it reflects should be compared with needs, and how well we are using the District’s obviously growing wealth and resources.

By that measure, the DC budget fell fall short of its potential. As one of the wealthiest and most progressive cities in the nation, we have substantial resources to address deep racial and economic inequities and to make the District a better place to live for everyone. Yet our leaders opted to put a high priority on tax cuts – including for our wealthiest residents – which limit the opportunities for inequity-levelling investments.

There were some notable budget achievements for which Mayor Bowser and the DC Council should be proud. That includes protecting over 10,000 vulnerable children by strengthening DC’s TANF income-support program, and more support for schools and residents experiencing homelessness.

But even many of these investments don’t go far enough to realize a vision of truly inclusive prosperity. This budget still leaves schools with less than they really need to help all students succeed, less than this year’s recommendation, and less than per-pupil funding almost a decade ago, after adjusting for inflation. The budget falls short of fully funding the plan to end long-term homelessness, which was supposed to be completed by now. The large number of residents still sleeping on the street is an obvious sign that there is a lot more to be done.

There are other important issues where little or no progress will be made next year. Affordable housing is the top priority of DC residents, yet the new budget is the second in a row that provides no funds to help any of the 40,000 families move off the housing wait list. The budget provides too little to ensure that infants and toddlers can be in high-quality childcare, does not do enough to support returning citizens, and maintains barriers to health insurance for thousands of immigrant residents.

Incredibly, despite this, the majority of the DC Council chose to proceed with an estate-tax cut that will benefit the city’s wealthiest residents and their heirs. This means the DC Council chose to increase income inequality and lose a progressive revenue source that could have improved critical public services. That was the wrong choice. It’s simply not right to cut taxes for millionaire estates when some DC residents have to call a tent home. Councilmembers David Grosso, Elissa Silverman, Brianne Nadeau, and Trayon White deserve credit for encouraging their colleagues to stop this estate-tax cut and instead make investments to ensure all DC residents benefit from our incredible prosperity.

District residents may wonder why an estate tax cut was even on the table. Three years ago, the Tax Revision Commission set out to improve taxes in the District, and the DC Council choose to implement most of the recommendations as a series of automated cuts. Over the last few years, the DC Fiscal Policy Institute has advocated that the Council implement the Tax Revision Commission’s recommendations with a more progressive approach, by striking a better balance between tax cuts and important services and by stopping the least justified cuts for the wealthy and big business. It’s worth noting that the commission made its recommendation even though there was no sign that wealthy residents were leaving the city because of the tax.

Some people think that just because revenues are growing, everyone is entitled to something. That’s not an equitable tax and budget approach, because it’s not an even playing field. Our resources should not go to families already thriving in the District. DC is fortunate to have the prosperity that it does, and that creates the opportunity to help those families struggling to make ends meet in the face of high housing costs, expensive childcare, and a lack of living-wage jobs. Stopping the estate-tax cut for a few wealthy families would have helped hundreds of other residents move into a decent home or helped thousands of children get more out of school.

Some say we need to stick with the tax cuts because they were part of a package adopted three years ago. But automating tax cuts robs the Council of the ability to balance the needs of a growing city in real time, and it robs the public of important debates on the District’s priorities. This year, automatic tax cuts created the absurd situation of unneeded breaks for the wealthiest estates while many have no home at all. Although all the tax cut triggers have now been implemented, the temptation to automate tough decisions remains. After the budget, DC leaders look to draw attention to what they’ve accomplished. But it’s important for the public to also know what didn’t happen and could have.

Let’s insist on a strong debate of public priorities for next year, one that starts with equity. Tax and budget policy decisions directly affect the District’s ability to reduce racial and economic disparities. We all want to live in a city where every child has a strong start, every family has an affordable home, and every individual has the opportunity to fulfill their potential. To make real progress toward that, we need bold vision, big dollars, and budget choices that reflect DC’s values.

Marlana Wallace is a policy analyst at the DC Fiscal Policy Institute (www.dcfpi.org), which conducts research on tax, budget, and policy issues that affect low- and moderate-income DC residents.


Post new comment

The content of this field is kept private and will not be shown publicly.