D.C. Suspends Tax Refunds Because of Shutdown

City looking for more funds to stay open

The D.C. government suspended all tax refunds to individuals and businesses Monday, citing a shortage of funds due to the federal shutdown.

The shutdown closed the National Mall, and tourists are making do as best they can.

But D.C. city services, including parking ticket writers, are at work, Mayor Vincent Gray having declared all 33,000 city workers essential, but the cash to pay those workers is tight and could run out in the next two weeks. Some workers -- and contractors -- could see their paychecks delayed.

“The cash issue we still are assessing at this stage, and we've been looking at whether we can access other areas of cash for the city to stretch this out if it goes further,” Gray said.

News4 learned that in heated meetings Friday and Monday D.C. Attorney General Irvin Nathan and City Administrator Allen Lew warned the mayor he can't easily shift funds to pay bills and payroll.

The city spends about $18 million per day on city services and payroll. It had only about $153 million of available cash on hand to spend -- enough to last a little more than another week.

“We've been using our contingency cash reserve,” Gray said. “We have other funds we are trying to determine if we can tap into.”

The District does have an additional $110 million emergency fund mandated by Congress, but it would last only a few more days.

The mayor's office emphasized the city can meet payroll next week, on Oct. 15, but paychecks and contracts could be delayed after that if the federal shutdown continues to hold up the city budget.

“I hope everyone understands the District of Columbia should never be caught in the middle of this,” Gray said.

D.C. gets 200-300 tax refunds to deal with every day. The next extension deadline is Oct. 15. The Office of Tax and Revenue will continue to accept all returns and tells taxpayers to continue filing and honoring all deadlines.

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