Photo: @FairBudgetDC via X

WASHINGTON — D.C. Mayor Muriel Bowser says her FY2025 austerity budget is a case of “shared sacrifice” but critics say she is once again preparing to balance the budget on the backs of D.C.’s Black and brown working class, continuing the long-standing neoliberal trickle-down policies of the last three decades.

People's World
By David Schwartzman
May 21, 2024

The Claudia Jones School for Political Education and the D.C. Statehood Green Party are supporting the D.C. Sierra Club and many other organizations in opposing the severe cuts in Bowser’s proposed budget to climate programs. They’ve joined together in the Fair Budget Coalition.

Bowser’s budget would roll back decades of progressive environmental policy and hurt low-income D.C. residents the most, the groups say. If the Council does not reject this austerity budget, they argue, D.C.’s already shockingly high racial and economic disparities, including child poverty, homelessness, income, and wealth inequality, will only increase.

They take note of the fact that the top 5% of D.C. families pay a lower fraction of their income in District taxes (11.2%) than the bottom 95% (11.6%) The D.C. Fiscal Policy Institute has calculated that “an executive with an income over $1.1 million pays on average a smaller share of their income [11.4%] in taxes than a middle-class family with two teachers earning $60,000 [11.5%]”

This continued subsidy to the District’s wealthiest residents, whom many point out are top sources of campaign contributions, is further documented by Bowser’s proposed increase in the most regressive D.C. tax, the sales tax. She proposes increasing it from 6% to 7% over three years.

Currently, families earning less than $26,300 pay 5.5% of their income in sales and excise taxes, while those earning over $1.04 million pay 0.8% of their income in these taxes. Adding insult to injustice, the mayor also proposes capping the D.C. Earned Income Tax Credit before it reaches the federal EITC in 2026, which adds badly-needed income for low-wage workers.

Also in her budget is a salary cut for early childhood teachers (pay equity fund) and reduced allocations for the Emergency Rental Assistance Program (ERAP).

Bowser’s budget earned a grade of F on the Fair Budget Coalition’s Report Card due to her refusal to fund essential programs for working-class and low-income communities. To boost this grade to an A, the FBC says the D.C. Council should follow its own example from 2021 when it backed raising additional revenue via progressive tax measures.

FBC and the group Just Recovery D.C. (JRDC) say the District has a more than adequate tax base—including wealthy residents and the big corporate and real estate developer sectors—to not only avoid budget cuts but start reducing economic disparities. They argue that the Council could start by focusing on the elimination of child poverty, a burden on Black and brown children, their families, and the whole community with an adequate D.C. Child Tax Credit.

The FBC and JRDC have offered solutions they believe would move D.C. forward with justice and economic security for its majority working-class residents. They include the following measures:

1. Raise taxes on millionaires: D.C. taxpayers earning $500,000 per year or more have an estimated taxable income of $16 billion, while millionaires alone have a taxable income of over $11 billion. A modest surtax of less than 2% on incomes over $500,000 per year could generate some $200 million in additional revenue.
   
   
2. Increase the property tax rate on the highest value homes.
   
   
3. Increase capital gains taxes on wealthy residents.
   
   
4. Institute a Child Tax Credit ($1,500 per child for families up to 300% of the federal poverty line, about $90,000 for a two-parent family of four, an important step for guaranteed income support to reduce and eliminate child poverty.
   
   
5. Improvement of property tax relief (“Schedule H”) for homeowners with lower incomes.

Warnings by opponents that such measures would drive out wealthier residents and eventually erode the local tax base are disputed by recent research. Dr. Kim Rueben, in a July 2023 presentation to the Tax Revision Commission, showed data illustrating the fact that the people leaving D.C. in recent years have tended to be young adults with relatively modest incomes, not higher-income households who have been in D.C. longer and have put down roots.

In addition, FBC says the Council should consider shifting subsidies that now go to corporate developers to programs meeting essential needs. It should also support de-commodifying the provision of housing as a human right, the coalition says. This could be done via the Green New Deal for Housing bill, which would start a D.C. social housing program keeping rents at no more than 30% of household income.

There is widespread grassroots support for the proposals that FBC is presenting as an alternative to Bowser’s budget. On May 3, 2024, the Committee of the Whole of the D.C. Council heard from over 300 residents, most of whom demanded a just budget and opposed the mayor’s proposed cuts.

David Schwartzman is a member of the Fair Budget Coalition Steering Committee in Washington, D.C., representing the D.C. Statehood Green Party and the Claudia Jones School for Political Education.