Today, the US House and Senate Committee on Homeland Security and Governmental Affairs voted to approve H.J.Res. 142 and S.J.Res.102, respectively. If enacted by Congress, the resolution will overturn DC’s temporary legislation to unlink the DC tax code from a number of tax cuts in the One Big Beautiful Bill Act (OBBBA). The DC legislation does not interfere with the federal tax cuts going to people and businesses in DC. It only keeps the District from replicating these tax cuts at the local level.
The DC Fiscal Policy Institute’s (DCFPI) Executive Director Erica Williams released the following statement:
“Residents of DC have the right to decide their own local tax policies, just like the residents of Florida and Texas. If DC were a state, this kind of federal interference wouldn’t happen. At least ten other states have unlinked from tax cuts in the OBBBA, and about 18 states don’t have to because their laws require full state legislative approval before any federal tax changes are adopted. In either case, it’s common for states to choose where and where not to link to the federal tax code.
The resolution undoes DC’s fiscally responsible choice and will cost us hundreds of millions in local revenue that lawmakers had already dedicated in part to reducing child poverty. Congress has now made it so DC has less to invest in our children, families, and communities. The more than 700,000 residents of DC and the leaders they elected should be making decisions about what’s best for us and our local tax dollars, as we’ve always done and as other Americans do.”
If enacted, these resolutions would create havoc for taxpayers and could create a $400 million cash shortfall this fiscal year as filing deadlines are pushed. Mayor Bowser, Council Chairman Mendelson, DC’s Chief Financial Officer, and the local business community all oppose this act of federal interference.