Gray Delivers Tough Budget as Promised

By Tom Sherwood
|  Friday, Apr 1, 2011  |  Updated 9:32 PM EDT
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D.C. Mayor Vincent Gray delivered his proposed budget to the City Council Friday.

Tom Sherwood

D.C. Mayor Vincent Gray delivered his proposed budget to the City Council Friday.

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Sales taxes on movie tickets and high income taxes for some people who make six figures are part of D.C. Mayor Vincent Gray's proposed 2012 budget. It includes cuts in social services, too.

Gray's trying to erase a $322 million deficit.

D.C. public safety agencies would be held to their current budgets with no cuts or increases, but overall, Gray's proposal is -- as he promised -- tough.

He delivered his budget proposal to the D.C. Council Friday. The council, which is divided on tax increases, will spend two months reviewing the proposal.

Gray's proposed cuts include:

  • About $113 million in social service programs like welfare and tenant assistance and homeless services
  • About $18 million each from schools and public safety
  • Another $22 million would be taken out of the city's economic development projects, which could anger neighborhoods planning on that money

Cuts in the schools would have been $75 million more except for new revenue from an improving economy.

Gray also proposed raising about $150 million in diverse taxes and fees, including:

  • $34 million from a slight increase of 1/2 percent on income taxes for anyone earning more than $200,000
  • $18 million by raising the parking garage tax from 12 to 18 percent
  • $22 million by refiguring how multi-state corporations pay tax
  • $2.3 million from charging sales taxes on movie tickets

Some council members were already warning late Friday that Gray's package of tax increases were nickel and diming city residents and businesses and would be opposed.

D.C. Council Finance Chairman Jack Evans is opposed to all of the new taxes. The city simply needs to cut spending, he said.

District officials are required by law to produce a balanced budget, which then must win congressional approval.

Evans said the District's finances are in better shape than virtually any city or state. He said the deficit can be closed entirely through cuts.

See the proposal at budget.dc.gov.

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