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Groups Tell Council: DC Has Much Higher Priorities than Cutting Taxes for Wealthy Estates and Profitable Corporations

CONTACT: Ed Lazere, Executive Director / 202-325-8811 /

Organizations that work to address economic and racial disparities in the District called on the DC Council to address large gaps in the proposed FY 2018 budget so that more residents can benefit from DC’s growing economy, and they urged the Council to stop cuts in estate and business taxes if that is needed to find the money. The message was echoed by a chapter leader from Resource Generation DC, as a DC resident who stands to inherit wealth.

The organizations that shared this press release include Children’s Law Center, DC Alliance of Youth Advocates, DC Fiscal Policy Institute, Fair Budget Coalition, Miriam’s Kitchen, and Resource Generation.

The groups find that the proposed budget invests too little in a number of well-documented needs, where research shows that targeted investments would improve the lives and outcomes for thousands of DC residents, strengthen DC’s future, and save money in the long-term. The budget falls short in efforts to:

  • end chronic homelessness;
  • address DC’s affordable housing crisis;
  • make progress to close the school achievement gap;
  • support the healthy development of infants and toddlers;
  • help adults seeking to improve themselves through adult education; and
  • ensure access to health care for all residents.

The groups noted that these needs should be a higher priority than the $40 million in estate tax and business tax cuts slated for 2018. While investments in residents would have known benefits, there is no evidence that the tax cuts will have any economic benefit. Eliminating taxes on estates worth $5.5 million—a loss of $12 million in annual revenue—would do little to help attract or retain these residents, according to experts. And DC’s business income taxes are already in line with Maryland and Virginia, so lowering these taxes—at a cost of $28 million annually—would do little to attract thriving businesses.

The groups noted that both estate taxes and business income taxes already have been cut since 2015, and that further tax cuts are not warranted by any evidence that they would help the DC economy.

“Investing in housing, schools, and vulnerable children and families have known payoffs. They support stable communities and families, and lead to better life outcomes for children,” said Ed Lazere, executive director pf the DC Fiscal Policy Institute. “These are far more important than tax cuts that no one can show will help the DC economy.”

Monica Kamen, co-director of the Fair Budget Coalition stated: “In a year of extraordinary prosperity for the District, the DC Council has a moral obligation to prioritize the needs of DC’s most marginalized communities and significantly increase investments across a range of programs that will address poverty and inequality. Now’s the time for permanent affordable housing for people with no homes, not tax cuts for people with $5 million homes.”

Residents who stand to benefit from the estate tax cut also consider it a misguided use of DC revenues. “As a young person with access to inherited wealth, I urge the Council in the strongest possible terms to preserve the estate tax,” said Samantha Waxman, chapter leader of Resource Generation DC, a membership organization of young people with wealth leveraging their resources for economic, racial, and social justice. “I am doing well in the District, but many of my neighbors are not. Given the extent of unmet need in DC, it is irresponsible, immoral, and counterproductive to give wealthy people a tax cut.  Resource Generation’s DC chapter stands with District residents to protest this wrongheaded approach and calls on the Council to preserve the estate tax.”

The following investments missing from the FY 2018 budget would lead to better outcomes for DC residents and the DC economy:

  • Homeless Services: Housing is the solution to homelessness. Proven housing interventions based on national best practices not only save lives and improve health outcomes; they also save money due to reduced reliance on emergency and crisis services. The proposed FY 2018 budget does not keep pace with DC’s established goals to end chronic homelessness. The Council should add $23 million to keep up with goals set in DC’s plan to end long-term homelessness for youth, single adults, and families.
  • Housing: Thousands of children live in low-income families that spend more than half their income on housing. The stress this creates has negative impacts on a child’s development. The proposed budget makes little progress to expand assistance for DC’s extremely low-income families who face the most severe affordable housing challenges. The District should add $10 million in rental assistance to move families from the DC Housing Authority wait list and make newly built projects affordable to the poorest families.
  • Schools: School funding remains well below the level recommended in DC’s 2014 “adequacy” study for what DC schools need to serve all students well. Instead, funding per student has lost ground to inflation since 2009. The shortfall has led DCPS in recent years to divert funds intended to help close the achievement gap. The Council should add $28 million to increase per-pupil funding by 3.5 percent, rather than the 1.5 percent in the proposed budget.
  • Out of school time: 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. Yet the proposed budget does not address the very limited access to out-of-school time programming for low-income students. The Council should add $5.1 million to restore recent cuts and allow thousands of low-income children to participate in afterschool or summer school activities.
  • Early education: The proposed budget does not devote any new resources to the child care subsidy program for low-income children. 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. In addition, research shows that quality early learning can dramatically improve the life outcomes of low-income children. The Council should add $13 million to increase payments in the city’s child care subsidy program, as part of a three-year effort to strengthen the quality of care.
  • Job training/transportation: About one-third of adults in education classes are unable to attend classes regularly because they don’t have money for public transportation. The Deputy Mayor for Education recommends extending Kids Ride Free to adults in education. Just $1.5 million would improve success for many participants and help DC get the most out of the $80 million it spends on adult education and training.
  • Health: The Healthcare Alliance program requires participants to come into a DC social services center (ESA) every 6 months to maintain their eligibility, a rule that has created a barrier to participation and led to large drop in program enrollment when it was implemented. There is growing evidence that people eligible for the Alliance do not get preventive care and only sign up when they are ill, leading to worse health outcomes and higher costs per person. The Council should add $15 million to remove barriers to participation in the Alliance.

Now that the budget is in the hands of the DC Council, the groups called on councilmembers to adopt a budget that uses the city’s growing resources to help families left behind by DC’s rapid growth, gentrification, and rising housing costs. The Council is now holding budget hearings and will vote on the budget on May 30. The groups call on the Council to find any reasonable way to fund these clear priorities, including stopping tax cuts if they cannot otherwise support these needs.

“The District’s prosperity could create a strong safety net to protect children from falling—or even weave a trampoline so they can bounce high,” said Judith Sandalow, Executive Director of Children’s Law Center. “Tax cuts leave gaps precisely where children need to succeed: schools, housing, and child care.”

Maggie Riden, Executive Director of the DC Alliance of Youth Advocates noted that “This budget season, will the DC Council stand with the most vulnerable residents? Or will they stand with the 100 wealthy households who stand to benefit from the estate tax cut and with a business community that is thriving in DC’s status quo?  The same status quo is not tenable for the most vulnerable residents. For too many, the status quo is sleeping in a car. It is spending their most influential years in a school or child care facility that lacks the resources to truly equip them for long-term success.  It is choosing between a meal and bus fare to adult education classes.”

Lara Pukatch, advocacy director at Miriam’s Kitchen said that “While the Mayor’s budget proposes increases to parts of the homeless services system, such as shelter, it falls far short of addressing the urgent housing needs of DC’s most vulnerable residents. We urge the DC Council to prioritize investments in proven, life-saving housing interventions over estate and business tax cuts.”

For a PDF of this press release, click here.

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