Panel Would Study D.C.’s Money Woes

Posted June 11, 2003 at 2:32pm

Sen. Mike DeWine (R-Ohio) proposed Wednesday the creation of a committee to study solutions to the District of Columbia’s annual structural imbalance of at least $470 million.

The proposal follows the release last week of a General Accounting Office study which examined the District’s ability to fund an average level of public services — such as education — based on its tax revenue and federal aid, and compared those findings with a national average for taxation and spending.

“This report is the catalyst for serious discussions here on Capitol Hill about how the federal government should protect the financial health of our nation’s capital,” DeWine said during a hearing of the Appropriations subcommittee on the District of Columbia, which he chairs.

DeWine suggested a special commission comprised either of Members appointed by Congressional leadership, or an outside group with its members selected by Congress.

“This is a problem that I think Congress as a whole will have to address,” DeWine said.

Sen. Mary Landrieu (D-La.), the subcommittee’s ranking member, requested the GAO study along with D.C. Del. Eleanor Holmes Norton (D).

“There’s no consensus on what the solutions are,” Landrieu said, “but the fact that we’re moving toward at least establishing what the chairman outlined … is progress.”

DeWine noted the report’s findings, which attributed at least some of the imbalance to restrictions on the city’s ability to levy taxes.

“Clearly, the city’s revenue capacity would be larger without restraints on its taxing authorities,” he said.

In response to the report, Norton plans to introduce a new version of the Fair Federal Compensation Act, which she proposed in the 107th Congress. That bill would have transferred 2 percent of federal income taxes paid by non-District residents who work in the city, or about $400 million annually, into a special fund to be used for infrastructure revitalization and debt repayment.

Shadow Sen. Paul Strauss (D), who lobbies Members on D.C. statehood and voting rights and attended the hearing, said he supports seeking a federal payment but would prefer to see the District create new revenue sources, through commuter taxes or bridge tolls.

“Why should Virginians get to drive across the Potomac for free?” Strauss said.

During the hearing, D.C. City Council Chairman Linda Cropp (D) also testified in support of creating budget autonomy for the District’s locally raised funds.

“At a minimum Congress should no longer approve the local portion of the District’s budget,” Cropp said. “Just like the other 50 states, the District would be solely responsible for approving its own local spending.”

The House Government Reform Committee is scheduled to hold a hearing on budget autonomy for the District on Friday.