The Districts Dime

DCFPI Welcomes Addison Larson to Our Team!

June 1st, 2017 | by DCFPI Staff

We’re excited to introduce you to Addison Larson, DCFPI’s new research policy intern!

Addison is a West Texas native who grew up in Midland, Texas. She is in DC as a Fellow in the Archer Graduate Program in Public Policy.

Addison welcome picAddison is a current Master’s student in geospatial information sciences (GIS) at The University of Texas at Dallas. In her first semester of graduate school, she won first prize in a university-wide GIS competition by using satellite imagery to estimate a city’s population within 0.4% of the actual value. She also represents the graduate student community as a Senator in Student Government.

Prior to her graduate studies, Addison graduated from The University of Texas at Dallas with a B.S. in international political economy. She discovered her passion for quantitative research when she tutored undergraduate statistics for two years. For her undergraduate thesis, she conducted a nationwide analysis of hate crime rates and reporting in U.S. cities and created a program that automatically generates maps, graphs, and statistics about crime and demographic data.

Addison is interested in urban planning and policy, especially in the ways our policies affect poverty and inequality. In the long run, she wants to use her statistical and geospatial skills to conduct policy analysis.

Addison enjoys traveling and learning foreign languages: she studied abroad in Oman and speaks French and Arabic. In her spare time, she also enjoys pottery, landscape photography, golf, and skiing.

Please join us in welcoming Addison!

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Approved DC Budget Includes Important Investments But Tax Cuts Limited the Progress

May 31st, 2017 | by DCFPI Staff

house quartersThe DC budget for fiscal year 2018, adopted yesterday on a first vote, includes important investments to protect vulnerable children, support schools, and help residents experiencing homelessness get into a home of their own. Mayor Bowser and the DC Council deserve credit for budget choices that will make a big difference in the lives of DC residents and will help build a stronger future for the District.

However, the debate over the FY 2018 budget—and the outcomes—also remind us of how much more we should be doing to help all DC residents live up to their potential and to make sure everyone benefits from a growing economy. The budget leaves schools with less than they really need to help students succeed, falls short of the goal of ending long-term homelessness, makes no progress in helping families move from the housing wait list to a home, provides too little to ensure that infants and toddlers can be in high-quality child care, and maintains barriers to health insurance for thousands of residents.

The decision by the mayor and council to allow $100 million in tax cuts contributed to these shortcomings. Over the last few years, DCFPI advocated that the Council implement the Tax Commission’s recommendations with a more progressive approach, one that struck a better balance between tax cuts and important services, and stopped the least justified cuts for the wealthy and big business.

Councilmembers David Grosso, Elissa Silverman, Brianne Nadeau, and Trayon White deserve credit for encouraging their colleagues to stop an estate tax cut for the District’s wealthiest and instead make investments that will help our growing city to thrive, and ensure that our prosperity is shared among all District residents. Councilmember Silverman said that “the District is only getting wealthier, but we have a lot of people who are challenged to live in our city. And what’s pushing them out? It’s not the estate tax that’s pushing them out. High housing costs are pushing them out. The incredibly high cost of child care is pushing them out, and a school system that’s not meeting the needs of their children is pushing them out.”  And Councilmember Grosso urged, “let us not only focus on commitments to cut taxes, but also our commitments to end homelessness, reduce mass incarceration, and ensure a high-quality education for every child in the district of Colombia.”

The highlights of the final budget for this year can be found here.

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Predatory Penalties: How Late Fees on DC Traffic Tickets Punish the Poor

May 26th, 2017 | by Linnea Lassiter

No one likes getting a parking or traffic ticket, but it’s much more than a nuisance for low-income drivers in DC. A simple ticket can result in extreme financial hardship for families struggling to make ends meet, especially since those unable to pay can face a doubling of fines, interest charges, and possible license suspension. Traffic and parking fines are needed, but the way DC administers them is pushing low-income drivers and their families further into poverty.

ticketA new bill before the DC Council aims to protect low-income residents who are effectively punished for being poor, by eliminating the 30-day late fee for DC residents. The Traffic and Parking Ticket Penalty Amendment Act of 2017 was introduced by Ward 8 Councilmember Trayon White, with the support of Councilmembers McDuffie, Cheh, Bonds, Evans and Robert White

Currently, DC traffic and parking tickets not paid within 30 days are doubled. That means that running a red light—a $150 ticket—becomes a $300 debt. If the ticket remains unpaid for 90 days, it is referred for collection and faces an added 20 percent surcharge—raising the cost to $360 in this case.

This creates a substantial burden for low-income residents and households already struggling to make ends meet. For families already paying most of their income for rent, escalating parking and traffic fines can turn into an economic crisis.

Even without doubling, parking and traffic fines act like a regressive tax, since everyone pays the same amount regardless of income. A $35 parking ticket would take up 10 percent of the weekly paycheck for someone working 30 hours a week at minimum wage, but less than 2 percent for someone making $2,000 a week ($100,000 per year). The late-payment penalty makes the fines even more regressive, because low-income residents often end up paying more for the same infraction than higher-income residents.

Eliminating fine-doubling also would reduce racial inequity:

  • Black and Latinx residents represent a disproportionate share of the city’s low-income population. As a result, they are far less likely to be able to pay, and therefore far more likely to be levied the 30-day late fee.
  • Black drivers are more likely than others to be pulled over and issued tickets, research shows.

Drivers also can have their license suspended for nonpayment. This creates a catch-22 and cycle of poverty for many: a person loses their license due to inability to pay debt from traffic tickets, and without a valid license, lose their job. Without a job, of course, they are even less equipped to pay off their mounting debts, let alone provide basic essentials for themselves or their families.

Parking and traffic fines intend to make sure drivers follow the rules, however fines and late fees shouldn’t increase DC’s substantial racial and economic inequities or contribute to the widening gaps observed between whites and blacks in this city. Reforming the policy that doubles fines for late payment – primarily levied against low-income, people of color in the District – is an important step.

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DC’s Economy Is Thriving, Which Means Business Tax Cuts Aren’t Needed to Make DC Competitive

May 25th, 2017 | by Chaz Rotenberg and Ilana Boivie

The District of Columbia’s economy is strong, increasingly diverse, and outperforming the rest of the region, DCFPI’s new report, Economic Powerhouse: DC Is Growing Faster than the Region, finds. This great news for the city means that businesses are succeeding in the District under current tax policies, and that further business tax cuts can’t be justified on the grounds that the city needs to be more competitive. Rather, business tax cuts would sap revenues that could help keep the District strong, such as investments in schools and housing.

EmpDC_MSAThe DC economy is strong on a number of important indicators:

  1. Employment in the District grew 14 percent over the past decade, from 688,000 in 2006 to 782,000 in 2016. DC’s employment growth has far outpaced the rest of the region, where employment grew 6 percent.[1]
  1. DC’s job growth has been driven by the private sector. Private-sector jobs account for 93 percent of DC’s total increase in employment since 2006. The diversifying DC economy is a sign that the city has become much more than a “government town,” and that DC is a conducive environment for robust private sector growth.
  2. Wages earned in DC are growing robustly. The earnings of people working in the District increased 21 percent over the past decade, adjusting for inflation. That’s faster than employment growth, which means that average salaries are rising.

These findings of the District’s strong economic performance call into question the need for the $28 million business income tax cut set to go into effect in 2018. Stopping the tax cut would free up funds that could be better invested to build a strong future for DC.

economy paper 2.2The proposed FY 2018 budget fails to fully fund the plan to end chronic homelessness, provides no money to take families off the housing wait list, leaves school funding well below the level considered adequate, and fails to invest in better child care for low-income infants and toddlers.

It’s also worth noting that DC’s businesses income tax already is in line with Maryland and Virginia.  A 2013 study conducted for DC’s Tax Revision Commission found that “the tax burden in the District for [corporations] is not significantly different from its Maryland and Virginia neighbors.” Since then, the business franchise tax in DC has been cut significantly—from 9.975 to 9.0 percent. Under the automatic tax cut trigger policy adopted by the DC Council, the business income tax will be further reduced to 8.25 percent—for a revenue loss of an additional $28 million per year.

A new DCFPI analysis shows that the District could preserve the tax cut for small businesses and still generate $21 million in new revenue by not cutting taxes for larger businesses.[2] With DC experiencing “soaring business profits”[3] and unfunded homeless services, now is not the time to give a tax cut to Wal-Mart and Home Depot. We urge the City Council to stop the business tax cut, especially for large businesses.

[1] Rest of the region refers to the Washington Metropolitan Statistical Area (MSA) minus DC. The Washington MSA includes the following jurisdictions: Virginia: Arlington, Fairfax, and Loudoun Counties; Alexandria, Fairfax, Falls Church, Manassas, and Manassas Park Cities. Maryland: Calvert, Prince William, Charles, Stafford, Frederick, Montgomery, and Prince George’s Counties.

[2] http://www.dcfpi.org/dc-council-can-free-up-21-million-for-better-schools-and-affordable-housing-without-hurting-small-businesses

[3] Economic and Revenue Trends Reports, DC Chief Financial Officer, https://cfo.dc.gov/node/232252

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Council Boosted Important Services during Mark-ups, But Substantial Gaps Remain

May 24th, 2017 | by Ed Lazere

While last week’s DC Council committee “mark-ups” resulted in notable funding increases for programs that meet the needs of DC residents, the markups are also notable for the gaps that remain. As it stands now, the budget for Fiscal Year 2018 still fails to fully fund the strategic plan to end chronic homelessness, raise school funding by the recommended 3.5 percent, take families off the housing waitlist, or invest in better child care for low-income infants and toddlers.

budget pieThe committee mark-ups are an important part of the budget process, but not the end. The mark-up results are sent to the Council for consideration at its vote on the full budget on May 30, where further changes will be made.

DCFPI encourages the Council to better fund services that will help ensure that all DC residents benefit from the city’s growth and build a stronger DC future. DCFPI and a number of allies are urging the DC Council stop cuts to the estate and business income tax, which would free up $40 million, if that is needed to find the resources to fully fund homeless services, schools, and other needs. (In the case of the business tax cut, the District could preserve the tax cut for small businesses, while not giving a tax cut to major corporations like Walmart, and this would still free up substantial funds.)

During mark-ups, each Council committee gets a chance to change the proposed funding for agencies and programs they oversee. Some critical services got partial funding, while other needs received no new funding at all. A handful of services were fully funded or received substantial expansions.

Mark-ups Provided Only Partial Funding for Schools and Homeless Services for Single Adults

  • Schools: The Committee on Education added funds to increase per-pupil funding in DC Public Schools and public charter schools. The increase is now 2.38 percent, still well below the 3.5 percent recommended by a working group created by the Office of the State Superintendent of Education
  • Homeless Services: The Committee on Human Services added $3.5 million to boost homeless services for single adults and nearly $1 million for services for homeless youth. This is still more than $10 million below the level needed to fully fund DC’s plan to end chronic homelessness. There was no funding increase for families experiencing homelessness.

Mark-Ups Provided No Additional Funding for a Number of Services

The budget-markups failed to address these issues.

  • Housing: The budget still provides no new funds for critical affordable housing programs, such as LRSP rent vouchers for families on the housing authority wait list or to make homes built through the Housing Production Trust Fund affordable to the poorest families.
  • Family Homelessness: The Council did not find any additional funds to help families experiencing homelessness. At this point, the budget meets just 40 percent of the estimated need.
  • Out of School-time: The budget provides flat funding for after-school and summer programming, even though DC ranks among the lowest in the nation in terms of access to afterschool programs for low-income children, and the number of children served by these programs has fallen by three-fourths in recent years.
  • Early education: The proposed budget does not devote any new resources to the child care subsidy program for low-income children. Yet there is clear evidence that lower than adequate per-child funding makes it hard to provide high-quality care for low-income infants and toddlers.
  • Health: The Healthcare Alliance program requires participants to come into a DC social service center (ESA) every 6 months to maintain their eligibility, a rule that has created a barrier to participation and led to large drop in the number of residents getting health care. The 2018 budget still provides no funding to address this problem.
  • Paid Family Leave Start-up Costs: $20 million is still needed to fully support the start-up costs of the Universal Paid Leave Act, including the costs to develop an IT system, adding to $20 million allocated last year. Chairman Mendelson has expressed strong support for finding the money for this.

Mark-ups Provided Expanded Funding for Some Key Services

  • TANF: The Committee on Human Services added funds to fully support the recommendations to reform DC’s TANF time limit, made by a 2016 TANF working group established by the Department of Human Services. This means that 80 percent of a family’s benefit will be the child’s portion and will be protected from time limit, and the remaining parent portion can be reduced if parents are not meeting TANF program requirements.
  • Adult Education Transportation Subsidies: The Committee on Workforce provided $2 million to provide transportation assistance to participants in adult education classes.
  • Mental Health Services: The Committee on Health devoted $3 million to improve payments to mental health providers.
  • Legal Assistance to Prevent Eviction: The Judiciary Committee added $4.8 million to the Access to Justice Initiative, most of which will go to fund a new legal services program for residents facing eviction.
  • Support for Returning Citizens and Residents Facing Incarceration: The Judiciary Committee added funding to the Office on Returning Citizens’ Affairs for additional case managers and to develop a strategic plan. The Committee also funded the “Ban the Box on housing” law that prohibits landlords from running a criminal background check until after they’ve made a conditional offer to the applicant. And $970,000 was allotted for the Department of Behavioral Health to create an arrest diversion program, meant to reduce the DC Jail population and help treat mental health among this population.
  • LIHEAP: The Committee on Transportation and the Environment added funds to the Low Income Heating and Energy Assistance Program to prevent the program from running out of funds by the end of the year, as it has in recent years.

Stay tuned for more budget updates in the District’s Dime!

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