DC Council Defers Budget Vote to Thursday

Debate Stalled on Controversial Advertising Tax

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DC Council Chairman Phil Mendelson (D) speaks at the July 21 Legislative Meeting. Screenshot: DCCLive/OCTO

DC Council deferred a vote on the 2021 Budget in what some councilmembers referred to as a ‘dumpster fire’ of a meeting.

DC Council voted 8 to 5 to delay the vote on the $16.8 billion budget until Thursday, July 23. There was tremendous debate about a 3 percent advertising tax, one of several tax increases proposed and approved by DC Council on July 7. Media outlets, including the Hill Rag, opposed the increase, arguing that the tax would hurt businesses already struggling through the COVID-19 pandemic.

Council Chairman Phil Mendelson (D) told the council he was surprised by revelations that the advertising tax would be applied to stages of ad creation, and proposed amendments that clarified it would only apply to ad placement. He suggested that the resulting loss of income could be recovered with cuts to the DC Public Libraries.

Councilmembers pointed out that even with the amendment, the tax would hurt local newspapers already struggling with revenue, with Councilmember Kenyan McDuffie (Ward 5-D) saying the voice of local newspapers such as the Washington Informer or the Afro is “more important now than ever before.”

“What do we do if the Informer or the Blade says ‘we’re done’?” he asked.

When council rejected the amended proposal, Mendelson suggested a recess during which the budget office would review spending and look for places to cut the $18 million the advertising tax was expected to generate.

Ward 6 Councilmember Charles Allen (Ward 6-D) was among those who opposed the move, citing a need for public discussion and transparency. “From a good government public transparency, this just seems like an idea that I don’t think is a good way to govern at this point,” Allen said, suggesting that council vote on the amendment.

Other Matters

Council was unanimous is supporting the Vision Zero Enhancement Omnibus Act. Proposed by Councilmember Charles Allen (Ward 6-D), the bill requires the District Department of Transportation (DDOT) to develop a transit equity plan, review dangerous streets and intersections and putting in place requirements and penalties for contractors during projects. Council also passed legislation creating an office focused specifically on the needs of DC’s deaf, deafblind and hard of hearing community. The new office will advocate for laws and policies that address the needs of the Deaf, Deafblind, and hard of hearing community in the District, among other things.

Only Robert White (At Large-D) voted for a proposal by Elissa Silverman calling for a labor peace agreement at the new hospital at St. Elizabeth’s East Campus, set to replace the United Medical Center, within two years. A labor peace agreement means that a union will agree not to strike or picket if the employer allows the union concessions, such as access to a worksite. Since 2002, DC has required that all hotels that DC has a stake in as well as major construction projects, such as that for the new hospital, have such an agreement.

Although Silverman said the bill did not mandate any continuity between the two hospitals, Councilmember Vincent Gray (Ward 7) strongly opposed the change, arguing that a similar amendment had torpedoed a previous agreement to build a hospital on the site and that this amendment would do the same.

Other Budget Increases

Increases approved by council at a previous July 7 meeting included a gas tax increase of 10 cents per gallon and a $17 million reduction in a tech company tax break. Estate taxes could now be imposed at a $4 million valuation, delayed a tax break for corporations. However, at the July 7 meeting, Council had rejected tax increase of .25 percent and less proposed by Councilmember Charles Allen (Ward 6-D) on incomes over $250,000 which would have generated about $25 million annually.

It was a departure from the budget presented by Mayor Muriel E. Bowser, who did not include any tax increases in the proposed budget, instead freezing hiring and raises for government employees as well as drawing on reserve funds.

Some councilmembers expressed discomfort with the last-minute inclusion of taxes in the budget. “The way we’re doing taxation — ad hoc, a tax here, a tax there — is not the way to do tax policy,” said Ward 3 Councilmember Mary Cheh (D). Cheh suggested a revival of the DC Tax Revision Commission. Ward 2 Councilmember Brooke Pinto agreed, calling it a “very dangerous way to make tax policy.”

You can watch the entire hearing at via the DC Council stream. The DC Council Legislative Meeting reconvenes at 12:30 p.m. Thursday, July 23 online. You can watch that meeting live on the Council site, at https://bit.ly/2ooL0l1, on the OCTFME site, at https://bit.ly/2JNZIro or on DCTV (usually Channel 13).