Another DC Budget Balanced on the Backs of the Poor?

Sam Ford Interviews Homeless for ABC 7

April 17, 2012, at his Ward 7 budget town hall meeting, Mayor Vince Gray said, “Just so people are clear. We’re not cutting those things. People will tell you anything. Sometimes they even think they’re right. We’re not cutting homeless services, we’re not cutting affordable housing, we’re not cutting Medicaid, we’re not cutting TANF (Temporary Aid to Needy Families) and we’re not cutting the Summer Youth Employment Program.” Despite this, advocates for social services and affordable housing programs, like the Fair Budget Coalition who’ve been organizing around these issues, will assure you that the mayor’s proposed budget will in no way meet the growing need of DC’s low- and even moderate-income residents in these difficult economic times. In particular, the homeless families living in DC General, whose numbers continue to grow, do not believe maintaining an increasingly tenuous status quo represents their needs or wishes as taxpaying citizens of the District of Columbia. These families made their feelings known at the DC City Council Budget Hearing on April 30, 2012. Only two elected officials, Council Chair Kwame Brown and Ward 8 Councilmember Marion Barry were present at the hearing. ABC 7’s Sam Ford and the Washington Times’ Andrew Harnick covered the story.

The above videos make clear that DC’s safety net isn’t meeting the needs of many of our residents, but given the time constraints of a local news broadcast, it doesn’t go into much depth. For more insight, it doesn’t hurt to follow the analysis of folks like Howard University professor David Schwartzman, who routinely follows the DC budget.

Cross-posted from The Mail @ DC Watch written by David Schwartzman

Our Mayor proposes another DC budget balanced on the backs of the poor; should we be surprised? On April 20, we learned that our former mayor, Anthony Williams, has been appointed as Chief Executive of the Federal City Council, the leading local think tank of the 1 percent, or is it the 0.1 percent? (Note that Frank Keating, the former Republican governor of Oklahoma and now president and CEO of the American Bankers Association, is the FCC president). Anthony Williams served on Mayor Gray’s transition team and was also just appointed to head the new Tax Revision Commission. As CFO of the Control Board, Anthony Williams was a key architect of the Urban Structural Adjustment Program that balanced our budget on the backs of our poor, while favoring the wealthy with tax cuts (the Tax Parity Act). The Control Board regime closed DC General Hospital, privatized municipal functions, cut the so-called safety net, and increased our income gap to record levels, while setting the course for Mayor Fenty’s agenda that brought this assault on our working and middle class majority to a new level. And Mayor Gray has not unexpectedly continued along the same road.

While our mayor and council deserve credit for their liberal policies regarding sexual orientation and immigrants rights, their economic and public education policies should brand them as Republicans posing as Democrats. For example, our mayor just endorsed new DCPS school closings based on an IFF study funded by the Walton Foundation (Walmart), opening up new opportunities for the semi-privatization of public education. Colbert King just characterized conservative Democrats one hundred years ago as favoring “the wealthy, to whom much has been given, have no stake in anybody else’s success,” http://tinyurl.com/6twrwpf, an apt description of most of our local Democratic elected officials, and of course the Republican posing as an Independent, David Catania. When will these Democrats follow President Obama’s example by at least claiming to go on an “Offense Over Taxes on the Wealthy,” a headline from the New York Times?

Now to address the DC budget process. For FY 2013, Mayor Gray has proposed even more hurtful budget cuts in low income programs, amounting to roughly seventy million dollars, which include programs involving health care coverage for low income residents, affordable housing, homeless services. and cash assistance for families with children (for details go to http://www.dcfpi.org). This proposal comes on top of $239 million already cut from low income programs since 2008, according to the DC Fiscal Policy Institute’s budget data. And while the mayor and the council squabble about where to spend the $79 million surplus, specifically whether to pay back city employees for their four-day furlough taken at the beginning of 2011, the elephant sitting in the Wilson Building remains unnoticed, the under-taxed, now growing income of the top 5 percent of DC residents, whose family income is above $250,000 per year (note too that the furlough subtracted four days of pay from all affected, hence putting the greatest burden on the lowest paid employees). After the small tax hike on the wealthy passed last year, no one on the council is talking yet about another hike. Unless challenged by a relentless lobby, they will go ahead and pass another austerity budget, once again balancing it on the backs of the poor and near poor, including the former middle class. According to Tavis Smiley and Cornel West in “The Rich and the Rest of Us: A Poverty Manifesto,” 150 million, or nearly half, of Americans are either poor or near poor, suffering from the lack of income security. In DC more than a majority of residents fall in that category. Fifty percent of DC’s Black children are living in poverty. Meanwhile the Washington Post tells us that the 1 percent are doing better than ever, with their minimum household income being $617,000. (Note: this minimum is lower than the ITEP minimum of $1.5 million for the top 1 percent of District families, excluding the elderly because the Census figures the Post relied on are underestimating the real income because of tax avoidance.)

Here are the latest DC tax statistics, updated by the Institute on Taxation and Economic Policy (ITEP): the top 1 percent of DC families, with three million dollars of million income now pay a lower DC tax rate (6.1 percent) than the bottom 20 percent with $12,400 annual income (7.0 percent), while the working/middle class pays 9 to 10 percent, taking into account the federal deduction benefit, mostly helping the upper income families, restoring some of the money spent for their DC taxes. Yes, the total DC tax burden of the top 1 percent is now even lower than before the small hike on incremental income above $350,000 passed last year. According to ITEP, the very wealthy across the nation have found even more ways to hide their income from taxation.

There is an alternative: hike the overall tax burden of wealthy residents by no more than two cents on the dollar of family income, yielding two hundred million dollars a year in additional revenue, while at the same time tax relief for our low income and middle class residents could be provided, e.g., by coupling the District income tax deduction and exemption with the federal rates. The increased revenue should be targeted by legislation to restoring and expanding the gutted programs that serve low income residents, especially for affordable housing and income security (TANF and its supports that facilitate entry into the workforce earning living wages). And any budget surplus should likewise be targeted to restoring these programs. More badly needed revenue should come from curbing corporate welfare including unjustified tax abatements and subsidies, our mayor and council campaigning for PILOTS, payments in lieu of taxes from the World Bank, IMF, Fannie Mae, as well as making PEPCO pay its DC taxes and taking immediate steps to establish a DC Public Bank, investing our taxes into green economic development, living-wage jobs, and affordable housing. For more on the District government’s record since 2008, check out the Report on the State of Human Rights in DC: http://afsc.org/resource/report-state-human-rights-dc.