Housing Complex

Budget Dispute Launches War of Words Between Mendelson and Mayor’s Office

mendoHow contentious is tomorrow's budget vote in the D.C. Council? Contentious enough that the mayor's office is comparing the Council chairman to the right-wing billionaire Koch brothers, and the chairman is accusing the mayor's office of stirring up false outrage.

Mayor Vince Gray delivered his $10.7 billion budget proposal to the Council last month. Council Chairman Phil Mendelson has come up with a set of his own ideas for how to alter the budget, centered largely on tax changes recommended by the D.C. Tax Revision Commission. And the two sides really, really don't like each other's proposals.

At issue are two main proposals by Mendelson. The first would exempt more households from the estate tax, raising the minimum threshold from $1 million to $5.25 million, the federal level, over the course of several years. The second would change the formula for streetcar funding, potentially cutting the streetcar network's funds by $400 million over five years.

Gray spokesman Pedro Ribeiro says Mendelson's budget amendments would take money out of infrastructure projects that benefit everyone and put it into tax breaks that benefit the rich. "It’s almost as if he’s taking a page out of the Koch brothers’ manual," he says.

Mendelson says that's completely overblown, and that Ribeiro is resorting to hyperbole to "get people riled up."

"Oh gosh," he says sarcastically, "and I think we’re also about to bankrupt the organization. It’s amazing the doom and gloom that’s about to happen."

Mendelson argues that the streetcar project hasn't spent all the money allotted to it, and that its funding mechanism—which automatically grants a percentage of city revenue increases to the streetcar—is unsustainable. "They have not come close to spending what they’ve been projecting on an annual basis," he says. "The reduction that Pedro’s complaining about is a reduction in years 2019 and 2020. And there’s so much daylight between here and that."

But Ribeiro believes that view is shortsighted. "You can’t cut five out of every six dollars out of a program and expect it to be implemented," he says. "It stretches all known logic. In essence what he’s doing here is funding tax breaks for the wealthiest on the back of transportation and infrastructure."

The Tax Revision Commission endorsed the estate-tax change as part of a compromise in developing its recommendations. In a blog post today, the progressive watchdog D.C. Fiscal Policy Institute stated that while it initially opposed the change, it now supports the overall recommendations and Mendelson's budget, which include that change. The streetcar funding formula was not part of the commission's recommendations.

Mendelson says that a rise in the estate-tax threshold to $5.25 million would benefit middle-income D.C. residents, not just the wealthy. "The fact is that the growth in housing values in the District are such that there are a lot of middle-class people and seniors that are sitting on a million-dollar house," he says. "That’s not what we typically think of as the upper class." He argues that the streetcar is a separate issue, and that he's not aiming to divert money from it so much as create a more sustainable funding system.

The Council will convene tomorrow at noon to vote on the budget.

Photo by Darrow Montgomery

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