The Districts Dime

DC Council Should Pass Two Bills that Would Decrease Smoking in the District

October 7th, 2016 | by Chaz Rotenberg

The DC Council can take important steps to improve public health in the District, by raising the District’s smoking age to 21 and by barring use of electronic cigarettes in restaurants and bars. A recent Council hearing on legislation that would accomplish these goals highlighted strong reasons for moving ahead.

One bill would prohibit people under age 21 from purchasing or possessing tobacco products—effectively raising DC’s current smoking age of 18. The second bill would prevent people from using electronic cigarettes, or e-cigarettes, in areas where traditional tobacco products are already prohibited, including enclosed public spaces, such as inside restaurants and bars, public buildings, and places of employment. Currently, there is little regulation of e-cigarettes in the District.

smoking-blog-picRaising the legal smoking age would reduce smoking and improve health. Nationally, nearly nine of 10 people who smoke start their habit before the age of 19. In DC, 12.5 percent of high school students smoke cigarettes—one of the highest rates in the country when compared with states, according to the American Heart Association. Increasing the smoking age to 21 would not only make direct sales illegal, but also would make it more difficult for those underage to access cigarettes, since it would put legal purchasers outside the social circle of most high school students. Nearly all teens under age 18 who smoke get their cigarettes from legal purchasers under age 21.

This bill would cost the District about $1 million a year in lost cigarette tax revenue, but every lost dollar would stem from a good thing—a youth who is not smoking—and the costs would be miniscule in comparison to the $391 million in health care costs attributable to smoking in the District. An Institute of Medicine report estimates that raising the smoking age to 21 would result in a 25 percent drop in youth who start smoking, a 12 percent drop in overall smoking rates, and a reduction in preterm births and low birth weight babies.

Reducing exposure to second-hand smoke would also have a positive impact on the District. Currently, 13 percent of DC children have asthma—which can be caused or exacerbated by exposure to smoke—compared with 8.6 percent of children nationwide. While there is little evidence on how e-cigarettes impact health of those who use them or about the impacts of second hand vapor inhalation—since e-cigarettes are relatively new—preliminary studies have shown that these products contain nicotine, and that users of these products might be exposing others to harm through secondhand smoke. E-cigarette use among American teenagers has tripled within a year, and teens who use electronic cigarettes are more likely to graduate to traditional cigarettes. Banning e-cigarettes in enclosed public spaces can reduce the risk of “re-normalizing smoking,” thus causing fewer youth to pick up the habit.

Similar legislation has been passed in other states and cities. California, Hawaii, and over 180 municipalities including New York City, Boston, and San Francisco have raised the smoking age to 21. Additionally, 12 states and 516 cities have banned the use of e-cigarettes in enclosed public spaces.

The Council should follow the lead of these cities and states to discourage our youth from smoking and to reduce smoking-related illnesses in the District.

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With Health Plan Changes, Consumers Should Plan Ahead for 2017

October 6th, 2016 | by Jodi Kwarciany

Consumers can expect changes ahead for their health insurance – small businesses that buy health insurance through DC Health Link, the District’s health insurance exchange, will see modest cost increases next year on average, according to new rates recently approved by the District. Individuals who buy insurance will face somewhat larger, but moderate, increases. The changes in insurance premiums vary considerably by insurer and health plan, and some increases may be dramatic. With the 2017 open enrollment season starting in November, consumers should take time to review options and determine the best fit for their health and finances.

The good news is that DC Health Link offers an easy and transparent way to compare plan benefits and prices, one of the key benefits of creating a health insurance exchange under the Affordable Care Act. And many can use DC Health Link to get financial assistance to help pay for premiums.

Last week, the Department of Insurance, Banking and Securities (DISB) approved rate changes for 2017 health plans on DC Health Link. Each insurer wanting to sell individual and small group plans through DC Health Link must file preliminary rates, which DISB reviews to determine whether increases are reasonable. DISB can require insurers to adjust rates increases it considers unjustified (specifically, if they are “excessive, inadequate or unfairly discriminatory”).

At first glance, the new rates generally show good news for consumers. Premiums for individual health plans will increase 7.27 percent on average next year, and small group plan premiums will increase just 0.36 percent on average.

But a deeper dive shows more much more variation, and dramatic increases in some cases. The hardest hit are individuals who have health plans through insurer CareFirst that have a Health Savings Account (HSAs), or a tax-free savings account used to help pay for medical expenses in conjunction with a high-deductible health policy. CareFirst will eliminate its HSA-eligible plans, meaning consumers currently enrolled will need to select new plans for 2017. If not, they’ll be automatically moved into plans with premium increases of up to 75 percent.

DISB notes that is a large rate increase, but that consumers will no longer have to make health savings account contributions and that new plans will offer slightly more benefits. The problem is that it’s currently up to the consumer how much they contribute to an HSA – and some healthy people contribute very little – but they would have no choice other than paying much higher premiums in a non-HSA plan. If faced with this situation, where do consumers begin?

There are tools to help individuals and small business wade through these choices. DISB’s Consumer Guide explains the 2017 changes in health plan rates, and DC Health Link’s Plan Comparison Tool for Individuals and Families can help people determine the best plan for themselves. Additionally, consumers with incomes below 400 percent of the poverty line ($47,520 for an individual or $100,000 for a family of four) may be eligible for tax credits to reduce their monthly premium payments, and cost-sharing reductions to lower the amount they would pay for deductibles, copayments, and coinsurance. In fact, an estimated 2,000 DC residents could newly qualify for financial help to make coverage more affordable if they get insurance through DC Health Link.

Open enrollment for DC Health Link begins on November 1, 2016 and runs through January 31, 2017. No matter what situation an individual is facing, finding the right health coverage for them and their families is possible.

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DC’s Revenues Continue to Grow, but the Gains Will Not All Be Available, Due to Tax Cut Triggers

October 4th, 2016 | by Ilana Boivie

The District’s revenues are growing, but the new funds will not be fully available to fund needed services like affordable housing or TANF assistance. Instead, based on the budget passed by the DC Council in 2015 and this past summer, about a substantial portion of the projected revenue increase will be used for tax cuts.

A tax cut “trigger” policy adopted by the DC Council devotes 100 percent of revenue growth, beyond projections from last year, to a series of tax cuts recommended by the Tax Revision Commission.

DC’s tax collections are rising sharply, according to a forecast released on September 30 by the DC Chief Financial Officer. It shows higher revenues than projected just a few months ago: an additional $180 million for the 2016 fiscal year that just ended, a $36 million increase for FY 2017, and a $20 million increase in FY 2018 and beyond. The 2016 increases reflect better than expected collections from business income taxes, deed recordation/transfer taxes, and estate taxes.

The portion of the increased revenues that will continue every year—about $20 million—is enough to trigger the next step in the series of tax cut triggers, to raise the standard income tax deduction. (See this chartbook for how DC’s tax triggers work.) The standard deduction will increase from $5,200 to $5,650 for singles, $6,500 to $7,800 for head of households, and $8,350 to $10,725 for married couples. The added deduction will reduce tax collections by $9 million a year.

The new revenue forecast was not enough to trigger further tax reductions. The next step in the tax-cut series – an increase in the income tax personal exemption – would cost $13 million per year. That, along with the change in the standard deduction, would exceed the $20 million in ongoing revenue increases.

The increase in the standard deduction will help many DC households, the majority of whom claim the standard deduction. It is a progressive tax cut: most low- and moderate-income households use the standard deduction, while most higher-income households itemize deductions. However, the effect will be quite modest. For example, for someone at the 6.5 percent income tax bracket, an increase of $1,300 in the standard deduction nets only $84.50.

While the most recent triggered tax cut, and several others, are beneficial to low- and middle-income households, the automatic nature of the tax cut triggers raises concerns, because it does not allow policymakers to weigh other possible uses of growing revenue, such as schools, housing, or health care. For example, recent DCFPI analysis has found that while the city’s overall economy continues to grow, that growth has not been evenly shared. East of the Anacostia River, the poverty rate and child poverty rate remain stubbornly high, and median incomes have not grown since before the Great Recession. Rather than providing very modest tax cuts to residents, additional revenues could be put towards services to help those who need it most—homeless services and TANF assistance, for example.

The tax cut triggers have already resulted in substantial tax cuts over the past several years, contributing to a FY 2017 budget with substantial service gaps. Over $50 million in tax cuts have been triggered over the past year, including a recent elimination of taxes on estates worth $1 to $2 million and a cut in business income taxes. There are still some $128 million in tax cuts yet to be triggered. This means that without changes to the policy, the District could see several more years of stagnant revenue growth.

The tax trigger policy is affecting the city’s revenue collections and the ability to meet the demands of a growing city. Going forward, a more balanced approach to tax triggers—one that doesn’t devote 100 percent of revenue increases to tax cuts—would help the District fund necessary services. A more balanced approach could include, for example, devoting half of each dollar of new revenue above the baseline for tax cuts, and preserving half for services. We hope that the Mayor will include a revised policy in her proposed FY 2018 budget.

If you are curious as to where the rest of the surplus money will go, stay tuned to the District Dime!

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DC’s Unemployed Are Getting a Raise!

September 30th, 2016 | by Ilana Boivie

Over the weekend, thousands of unemployed DC workers will see a much-needed increase in their Unemployment Insurance (UI) benefits.

Benefits for jobless workers will increase up to $264 a month, the first increase in a decade, thanks to action by the DC Council. The changes go into effect on October 1, which marks the start of DC’s new fiscal year.

ui-blog-picWorkers get UI for up to six months when they lose a job through no fault of their own—such as in a layoff—and are actively searching for work. Without unemployment benefits, some fall back on other public assistance programs like SNAP or Temporary Assistance for Needy Families. Others face risk of increased credit card debt, eviction, and other collateral consequences of unemployment. UI is especially important for low-wage workers, who often have limited savings and are unable to rely on friends or relatives for temporary help.

A strong UI program is also important to the city as a whole. Local businesses suffer when workers lose a job, because the unemployed have less to spend on their rent or mortgage, groceries, clothing, and other needs. When unemployment rises city-wide, such as in a recession, UI helps keep businesses afloat by making sure residents have money to spend.

The UI changes included in the FY 2017 budget are:

  1. Raising the maximum weekly UI benefit amount to $425. This will increase benefits from the current maximum weekly benefit of just $359, which is below Maryland ($430), Virginia ($378), and 38 other states.
  2. Helping workers retain part-time employment to supplement their UI benefits. Workers who have part-time employment will be able to keep more of their UI benefits. For instance, a worker earning $100/week while receiving UI benefits will have her benefits reduced by $33 instead of by $64. This will make it easier for unemployed workers to take a part-time job while looking for a permanent full-time job.
  3. Ensuring that all workers can get UI benefits for 26 weeks if needed. This provision stands to help some of the most vulnerable workers in the District.
  4. Authorizing the Department of Employment Services (DOES) to adjust unemployment benefits each year for inflation. Starting in September 2017, each year DOES will be required to consider adjusting benefits for inflation, and to submit a report explaining why they did or did not choose to increase benefits for the upcoming year.

The UI coalition—which included CHOICE, DCFPI, DC Jobs with Justice, the Employment Justice Center, the Legal Aid Society of the District of Columbia, LiUNA, and the Metropolitan Washington Council of the AFL-CIO—worked hard for over a year to get these much-needed increases, and we are delighted that they will finally be going into effect.

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DC’s Black Residents Increasingly Live East of the Anacostia River

September 28th, 2016 | by Claire Zippel

The District’s African American residents increasingly live east of the Anacostia River, where the poverty rate is three times higher than the rest of DC. This reflects two important trends: continued economic depression on the east side of the river despite the economic recovery of the city as a whole, and a decline in the Black population on the west side. The city should take steps to bring more economic opportunity East of the River, and to prevent low-income and Black families who live west of the river from being displaced from changing neighborhoods.

The city has experienced significant economic gains since the recession, yet this growth hasn’t crossed the Anacostia River, which includes all of Ward 8 and most of Ward 7. As DC’s Black residents increasingly live east of the river, this means more Black residents now live in the part of the city with the greatest economic challenges.


  • Black residents are a shrinking portion of the city west of the river. 21,000 fewer Black residents live west of the river than before the recession. Just 33 percent of residents living west of the Anacostia River are Black, down from 42 percent in 2007. By contrast, nearly all residents living east of the river are African American – 92 percent – reflecting the legacy of segregation in DC.
  • Nearly half of DC’s Black population lives east of the Anacostia River. The share of the city’s Black residents who live east of the river climbed from 41 percent in 2007, to 47 percent in 2015.
  • Poverty remains very high east of the Anacostia River, while it is decreasing somewhat elsewhere in DC. The poverty rate East of the River remains stubbornly high at 33 percent in 2015, up from 27 percent in 2007. Meanwhile the share of residents in poverty west of the river stood at 12 percent in 2015, down slightly from 13 percent in 2007.
  • Nearly half of children living east of the river are in poor families. The poverty rate among children living east of the river is a staggering 46 percent, compared with just 13 percent for children in the rest of the city. Of all poor children in DC, 71 percent live east of the Anacostia River.
  • Poverty is increasingly concentrated east of the Anacostia River. The share of the city’s poor residents who live east of the river rose to 47 percent in 2015, from 40 percent in 2007.
  • No post-recession income boost for households east of the river, unlike DC overall. Median income for the city as a whole rose to $75,600 in 2015, from $62,100 in 2007, adjusted for inflation. Yet median income for households living east of the Anacostia River remained stuck at just $34,000.

The District needs to do more to ensure that DC’s economic growth reaches residents East of the River. And low-income and African American residents west of the river should be better protected from being displaced due to gentrification. In addition to enacting and strengthening citywide policies to expand economic opportunity, DC should:

  • Ensure economic development projects located east of the River provide strong community benefits and address potential residential displacement. Every economic development effort East of the River should include enforceable commitments to provide job training and apprenticeships, hire a significant portion of the workforce from within the community, and build deeply affordable housing. In addition, economic development projects should incorporate initiatives to combat residential displacement from the get-go. A great example is the 11th Street Bridge Park, which started with an equitable development plan, and is now linked to a $50 million effort to build and preserve affordable housing within the future Bridge Park area. Another promising initiative is proposed legislation to boost Schedule H, a tax credit for low-income residents with high housing costs, in “displacement risk zones” such as area around the future Washington Wizards practice facility.
  • Preserve affordable housing in transforming neighborhoods west of the river. Owners of low-cost rental housing in gentrifying neighborhoods face significant pressure to opt out of subsidies that currently keep them affordable, to hike rents, or to convert to condominiums. The Mayor’s Housing Preservation Strike Force wrapped up this spring, offering recommendations on how to combat this trend. Now it’s time to put those ideas into action by identifying at-risk properties in transforming neighborhoods, identifying needed funding, and utilizing the District’s right to buy low-cost housing that’s at risk, under the District Opportunity to Purchase Act.
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