One lawmaker called it a “debacle.” Another said it was “embarrassing.” A third compared it to a dumpster fire, but later admitted on Twitter that she meant to say “shitshow.”
They were all talking about a particularly contentious — and confusing — debate in the D.C. Council on Tuesday over a particular provision of the city’s 2021 $8.5 billion local budget, which lawmakers approved on a first vote two weeks ago and plan to finalize this week.
But the issue seemed to be bigger, touching on mounting frustrations with months of legislating done virtually, tax policy written on the fly, and a D.C. budget that for the first time in years is contracting — and just as the COVID-19 pandemic has further exposed deep inequities and fissures across the city.
At issue was a new 3% tax on the sales of advertisements and personal data that Chairman Phil Mendelson inserted into the budget at the last minute before a first vote on July 7. The relatively novel tax would raise $18.4 million per year, which Mendelson said could be used to boost spending in a pandemic-battered budget that otherwise saw flat funding or cuts for many programs.
And it wasn’t the only new tax the council approved: all told, lawmakers signed off on $60 million worth of new revenue sources, though they did reject a direct tax hike on high-income households.
But news of the new tax drew fierce opposition from, well, the news industry. Print publications ranging from the Washington City Paper to the Washington Informer said the tax would “decimate” local news outlets already struggling from falling ad revenues. They also argued Mendelson’s tax was poorly worded, and would impose a duty on every step of the ad-making and selling process.
On Tuesday, Mendelson admitted the tax was confusing, and introduced an amendment to clarify that it would only apply to the final sale of an advertisement. But passing the amendment would mean the city would forego a small amount of the estimated $18.4 million in expected revenue. And that, said Mendelson, would have to come out of the public library’s budget, which the Council had otherwise increased from what Bowser initially proposed.
But what at first seemed like a routine procedural fix sparked a fierce debate over the wisdom of the new tax itself. A growing number of councilmembers said such a tax shouldn’t be imposed on the fly, even less so in an era that is seeing more and more local media outlets lay off reporters or close down altogether.
“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’s Mary Cheh.
“The voice of papers like the Informer and the Afro… is more important now than ever before,” said Ward 5’s Kenyan McDuffie. “What do we do if the Informer or the Blade says, ‘We’re done’?”
Some lawmakers also pushed back on Mendelson’s amendment for another reason — they were worried that it would mean that neighborhood libraries would be forced to cut back on operating hours, which could disproportionately impact low-income communities that rely on them for internet and other services. Mendelson denied that libraries would have to cut hours; the council had already increased their budgets, he noted, and the cut to that additional funding would be minimal.
But that left many councilmembers in a bind. Vote for Mendelson’s amendment, knowing it would bring needed clarity to the new tax but at the expense of some funding for public libraries? Or vote against it, knowing it would leave a tax they were already concerned about without a necessary tweak? And what of the fate of the new tax itself; would they be able to somehow vote it out of the budget, even though they had initially voted for it two weeks prior?
Some lawmakers floated replacing the new tax on the sale of ads with a small tax hike on high-income residents. That same tax proposal had failed on an 8-5 vote ahead of the first budget vote in early July, but a few councilmembers suggested it be reconsidered.
“This body had a choice in front of them just two weeks ago. We could have asked people who earn half a million dollars to pay just $45 more a month to chip in and help us. And now this is the solution we have left,” said Ward 6 Councilmember Charles Allen.
But Mendelson — a critic of the council’s tax increases, even though he had offered some of his own — had another idea: take an hour-long break and scour the budget for $18 million worth of cuts, enough to kill the new tax on the sale of ads. That drew immediate cries of opposition, and Mendelson instead had to settle for postponing further debate until later in the day.
But even that solution failed: When later in the day arrived, Mendelson announced he was putting off any further debate or vote on the budget until Thursday. But he did not make clear what would come of the new tax. Would he propose $18 million in cuts to effectively kill it? Or try to keep it in place, despite growing opposition from his colleagues?
“I think the process is as clear as milk,” he conceded as he gaveled the meeting done. “This gives us time to work on something.”
Martin Austermuhle