K Street Files: Soda Makers, Gyms Ramp Up Against Tax Idea

Yoga Studios, Pet Groomers Are on Alert for D.C. Levy Proposal

Posted May 11, 2010 at 6:17pm

A new revenue study by an obscure local think tank is causing a stir among K Street heavyweights. To shore up a budget shortfall for the Washington, D.C., government, the anti-poverty Fair Budget Coalition recently proposed taxing a slew of local services and products, including pet groomers, sugary drinks, health clubs and yoga studios.

Although the proposal is still in the planning stages, the American Beverage Association isn’t taking the threat lightly. In response, the industry group slapped together a coalition, the No DC Beverage Tax, and enlisted large retailers such as Subway, Safeway and Au Bon Pain to take up the fight. Similar to its pitch in the health care debate, the sugary drink lobby is again calling it a tax on poor people.

“Anytime you single out a food item, a grocery store item, it ends up being a discriminatory and regressive tax,” ABA spokesman Chris Gindlesperger said. “At the end of the day, what it ends up doing is affecting lower- or middle-income families that can’t afford it right now.”

A fitness industry trade association is also preparing to thwart a similar tax proposal on the sector’s membership fees, if local lawmakers formally take up the think tank’s suggestions. The Boston-based International Health, Racquet and Sportsclub Association says it’s working with D.C. Council members and local gym Results to monitor tax issues.

“We’re trying to get a handle on what’s required here,” IHRSA lobbyist Amy Bantham said. “We’ve fought this in other states, and once we’ve got our facts checked, t’s crossed and i’s dotted, then we’ll look at the necessity for an advocacy campaign.”

Moving On to Other Issues

The housing industry says it’s giving Congress a break after hitting up lawmakers for a pricey subsidy to save the once-struggling sector. For two years, the U.S. Treasury gave homebuyers an $8,000 tax credit to buy a first residence.

According to the National Association of Realtors, more than 4 million homebuyers took advantage of the program, which expired April 30 after two extensions.

Despite the tax credit’s apparent popularity, housing industry heavyweights like the NAR and the National Association of Home Builders say they are not looking for another extension. Not because they wouldn’t like it, the groups claim, but because they’re concerned about wearing out their welcome on Capitol Hill.

“In theory, would we like it?” NAHB President Jerry Howard said. “Yeah, probably, but … we gave our word that we wouldn’t come back to the well again.”

Instead, the NAHB is pressuring lawmakers and federal regulators to turn up the heat on banks, which have been hesitant during the recession to make short-term loans to builders to cover land acquisition and development costs. Howard’s group is also lobbying for amendments in the Senate financial reform bill that would improve access to consumer lending for mortgages.

“The biggest issue for us right now is the lack of the availability of credit in the marketplace,” Howard said. “We’re working with both houses of Congress and regulators to see what can be done to get these financial institutions to get back in the business of making sound loans to financially stable small business.”

Immigration also continues to be a priority for the NAHB. Howard said immigrants have been “the backbone of the residential construction work force for a couple of centuries now.”

“We believe that people crossing our boarders should be here legally, but we do think there needs to be a flow of workers coming into our country,” he said. “Quite frankly, most Americans don’t want to do construction labor. … That’s why the railroads in the 1800s were built by the Chinese and the Irish.”

Holocaust Survivors’ Campaign

Mathilde Freund and Leo Bretholz are not your typical K Streeters. But that isn’t stopping the Holocaust survivors, 93 and 89, respectively, from spending today and Thursday lobbying Senate Judiciary Committee staffers to support a change to the Foreign Sovereign Immunities Act.

The legislation, sponsored by Sen. Charles Schumer (D-N.Y.) and Rep. Carolyn Maloney (D-N.Y.), would allow Freund, Bretholz and several hundred other survivors of World War II to bring suit against a French railroad company, Societe Nationale des Chemins de Fer Francais.

The railroad company, for a profit, transported thousands of Jews and others from France to Nazi concentration camps, according to a summary paper put together by the survivors’ pro bono attorneys at Akin, Gump, Strauss, Hauer & Feld and solo lawyer Harriet Tanen.

The survivors have tried unsuccessfully to sue the French railroad in federal court but are asking Congress to make a change that would allow their class-action lawsuit to go forward.

In Memory

Longtime Mortgage Bankers Association lobbyist Burton Wood, who spent more than 30 years advocating for the real estate finance industry, died Sunday after a long battle with liver cancer. He was 87.

As legislative counsel, Burton was a daily fixture at the MBA headquarters until a few months ago when he was hospitalized.

“Burton was truly an MBA treasure,” MBA President and CEO John Courson said in a statement. “He mentored several decades of MBA chairmen through the halls of Congress, through testimony and through his thorough understanding of MBA’s role in the real estate finance industry.”

Wood served as legislative counsel at the National Association of Home Builders and as director of Congressional affairs at the Federal Housing Administration before joining the MBA in 1977 as senior staff vice president and legislative counsel. The MBA created the Burton C. Wood Legislative Service Award in 1990, given yearly to an MBA member employee for sustained service to the trade group and the real estate finance industry.

K Street Moves

• Conor Yunits has joined Liberty Square Group as senior vice president for communications and public affairs. Yunits takes the place of Amy Lambiaso Goodrich, who is taking a leave of absence to join Republican Charlie Baker’s gubernatorial campaign in Massachusetts.

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