Testimony before Committee on Finance and Revenue of the Council of the District of Columbia

April 8, 2009

My name is Jacob Feinspan, and I am the Executive Director of Jews United for Justice.  Jews United for Justice is a Washington-based volunteer-driven organization, founded on the Jewish concept of tikkun olam (repairing the world), which teaches us that as Jews we have a responsibility to stand up for the principles of justice, fairness, and dignity, both within and outside our community.   

We are part of the Coalition for Community Investment, a coalition which represents more than 160 diverse organizations committed to public investments that expand economic opportunity for our neighborhoods and families, and to supporting a fair and transparent budget process.  On behalf of the Coalition, I would like to express some concerns about the proposed budget for fiscal year 2010.

We applaud the efforts of the Mayor and the City Council to find additional revenue to preserve crucial public services during this economic downturn.  However, how these additional funds are raised is just as critical as the way they are spent if they are to have the intended impact. 

In particular we are concerned about $26 million in newly proposed regressive tax and fee increases, which would fall most heavily on low-income residents, particularly on renters and the working poor.   Not only would this take money out of the hands of the low-income residents who most need it and increase demand for public services, it would undermine our economic stimulus efforts.  Public investments that support low-income individuals and families stimulate economic recovery because beneficiaries spend the money quickly and locally.  In short, using regressive taxes and fees to fund public services is (as my Christian friends on the coalition would put it) like robbing Peter to pay Paul.

Here are a few examples of regressive tax and fee increases that give us the greatest concern:

• The budget would eliminate the cost-of-living adjustments to DC's standard deduction, personal exemption, and property tax homestead deduction. Eliminating these adjustments would mean DC families will pay higher taxes than if the COLA were maintained. The effect of this will be greatest for low-income residents, for whom lower taxes made the most difference.
• Proposed new fees for streetlight maintenance and emergency services that will add a total of $61 to annual utility bills. Because the fee is the same for all households, it will take more of a bite from lower-income households.

We urge the Council to eliminate these tax and fee increases and replace them with progressive revenue sources.

Finally, we are concerned about proposals to reduce taxes further.  At a time when DC's finances are weak and many programs and services have been cut, further reductions to DC's tax base are not warranted, unless they are progressive changes that are highly targeted on low-income residents.

We hope that the City Council will take these concerns into account as it deliberates over this budget.  Working together we can harness our ideas, technical expertise and experience to chart a path through this financial crisis, by investing in the long-term strength of our families, our economy, and our communities.

Thank you.