D.C. Council Throws A Change-Up

Council shifts ballpark tax surpluses to unrelated expenses

By Peter Orvetti
|  Thursday, Jun 3, 2010  |  Updated 2:00 PM EDT
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D.C. Council Throws A Change-Up

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Surplus revenue from the D.C. business tax intended to pay down the bonds on Nationals Park is being reallocated to unrelated expenses.

The D.C. Council is throwing a change-up with the revenues of the ballpark tax. 

The business tax passed by the Council in 2005 was intended to help pay down the bond on the $611 million Nationals Park. The tax has been running a surplus, which could be used to pay off the bond sooner, or to reduce the tax rate.

But with a big budget gap to fill, the Council is instead shifting the revenues to unrelated purposes.

By the close of the current fiscal year, the tax will have raised more than $135 million on top of what is being used to pay down the bond.

Councilmember Jack Evans, a major baseball booster who helped craft the bond plan five years ago, said of his council colleagues, “They took all the money. They’re spending every dime.”

Evans told the Washington Examiner that the ballpark tax “was the biggest mistake that this government has made.”

Evans says the surplus could be used to pay off the bonds in nearly half the 30 years originally scheduled. But the local business community is less concerned with the reallocation of the surplus than with fears that the “temporary” tax could become permanent.

“The deal that we had…was that any excess monies would be used to pay down the bond," D.C. Chamber of Commerce President/CEO Barbara Lang told the Examiner. "We would like to see those bonds paid off earlier to relieve us of that tax. I'm very concerned that it will become part of the city's operating budget.”

But there is no such thing as a temporary tax. Once a government finds a source of revenue, especially one that is generating more than originally anticipated, it will find means to keep it flowing.

This time, it’s the recession that’s being cited. Even though D.C. continues to lead the rankings among states in income per capita, and the city’s main industry -- the federal government -- is creating jobs like crazy, D.C. Fiscal Policy Institute analyst Ed Lazere says that the “economic downturn” means the District must “look at every revenue source that we can.”

But putting a perpetual burden on the city’s private sector -- which actually is struggling in the wake of the recession -- is no way to rebuild the economy.

The recession is just an excuse for a revenue grab by the council -- a fast one that would impress even Stephen Strasburg.

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