DC Chamber of Commerce leader calls for sales tax cut

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Local,DC,Eric P. Newcomer,Taxes,Vincent Gray,David Grosso

There's a lot in Mayor Vincent Gray's nearly 1,800-page proposed budget, but a business leader says one big thing is missing: major tax cuts.

For years, as the District economy stumbled along with the rest of the nation, taxes went up and spending went down. In the mayor's fiscal year 2014 budget proposal, spending has rebounded with $100 million for affordable-housing programs and a $1.38 billion on construction projects.

"We got a surplus, but you got it on the backs of the business community," said Barbara Lang, president of the DC Chamber of Commerce. "We would like to see some tax relief."

Lang said she wants to see the 6 percent sales tax lowered by between half a percentage point and 1 percentage point next fiscal year. She acknowledged that it would be difficult for the city to make more permanent tax cuts this year as it faces uncertainty about federal spending.

"What we ask for, is there a one-time hit you can make to kind of throw business a bone?" Lang said.

The proposed $10.1 billion budget would eliminate two relatively minor taxes: one that affects some renters and one known as the out-of-state municipal bond tax.

The mayor's staff has said it did not hear any serious calls for tax cuts, and the mayor said he doesn't want to pre-empt the D.C. Tax Revision Commission, which is studying the District's tax code.

He emphasized that the budget contains "no new taxes and no new fees."

At-large D.C. Councilman David Grosso said he, too, thinks the tax commission needs to act before the city tampers with tax rates.

"The question is now: Can we do a better job?" he said. "I think we can, but it's going to take some changes. And I think the Tax Revision Commission will come to us with those ideas."

The 11-member tax commission is headed by former Mayor Anthony Williams and was authorized by the council in September 2011. Its mission is, in part, to make the District more competitive with its neighbors and to simplify the tax code.

Ed Lazere, executive director of the DC Fiscal Policy Institute, sits on the commission. An influential advocate for government spending to help the city's poor, Lazere said he personally thought the mayor's decision to forgo major tax policy changes made sense.

"We've done more budget cutting than we've done revenue increases," he said. "To have a budget that starts to restore services given all the cuts we've experienced makes sense."

Jim Deniger, president and CEO of the Greater Washington Board of Trade, said there's still time to lobby the city to cut taxes, but the D.C. Council votes on it in May.

Said Deniger: "Game's on."

enewcomer@washingtonexaminer.com

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