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Fiscal Year (fy) 2006 Budget


Guest Jack Evans, DC Council Member
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Guest Jack Evans, DC Council Member

On Wednesday, the Committee on Finance and Revenue, which I chair, made a strong case for fiscal sanity by presenting its proposal for tax relief. During the mark-up, I recommended using additional revenue projected by the Chief Financial Officer (CFO) for tax relief. In order to implement this relief, I have proposed a series of "triggers", which (if met) will result in the implementation of tax relief. For example, if the CFO identifies $15.9 million in additional revenue, legislation implementing a 5% cap on residential owner-occupied property tax increases will automatically take effect.

 

From the beginning of this process, I have expressed concerns with the growth of local funds spending in the Fiscal Year (FY) 2006 budget. The 7.3% growth in recurring local spending is unsustainable. This rate of growth outpaces DC's revenue growth from personal income, increased business profits and expansion of the tax base. The District continues to pay for increased growth of the government through real property taxes generated from a strong real estate market and low office vacancy rates. Should the real estate market level off, DC government's rate of growth will become unsustainable and substantial cuts to programs will have to be made in order to maintain a balanced budget.

 

Additional nonrecurring spending of $411.5 million was recommended, bringing the total budget growth in local funds from FY05-06 to 17.1%. The majority of this funding is not as problematic and represents a much-needed investment in the physical infrastructure and financial well being of DC -- particularly for repairing our roads, bridges, libraries and schools. Also, during the mark-up, I identified $1.1 million to redirect to the Committee on Health for important programs such as breast and cervical cancer screening, HIV/AIDS prevention, substance abuse treatment and school-based health.

 

If DC continues on its course of financial prosperity, I believe its residents (who are some of the most overburdened taxpayers in the world) should receive tax relief. The tax relief legislation I proposed is very broad-based and will truly provide tax relief to every District taxpayer. Here is the tax relief I am proposing:

 

Capping owner-occupied residential property tax growth by 5%;

Correcting the capped assessment disparity among triennial assessment groups;

Providing additional property tax relief for our seniors and the disabled;

Coupling the standard deduction and personal exemptions to the federal level and indexing them for inflation annually;

Providing tax relief for limited-equity cooperatives and low-income housing;

Allowing seniors to deduct a larger amount of their pension and retirement income;

Re-coupling estate taxes to the federal level to reduce the double taxation of this income; and

Reducing the property tax rate on residential property.

 

If last year's revised revenue estimates were any indication of what we might expect this year, I believe we may have the opportunity to do all (or a significant portion) of this tax relief. If you support my tax relief proposal, I urge all of you to call/write/fax/e-mail my colleagues to let them know the residents of this city demand responsible growth and support additional tax relief.

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