Mayor Muriel Bowser presented her $8.5 billion budget for 2021 to the D.C. Council in a virtual session on Tuesday.(Courtesy photo/DCist)

In an unusual Thursday session, the D.C. Council voted to eliminate the proposed advertising tax it endorsed two weeks ago after several individuals and news organizations voiced their opposition.
The council voted 11-2 on July23 to end the advertising sales tax after some councilmembers said they heard a lot of resistance throughout the District. Council chair Phil Mendelson, who originally supported the tax, backed off because of the public outcry and sponsored amendments maneuvering funds in the budget to end the tax.
“The amendments I am circulating today will reverse a policy choice that I now regret—a new tax,” the chairman said in a July 22 statement. “I overestimated the effect my proposing this tax would have to discourage colleagues’ desire to raise other taxes. At issue, fundamentally, is whether our council will succumb to dubious demands to tax-and-spend.”
The amendments dealt with changing the funding source for $11 million worth of capital projects, reducing by $2.8 million, spending for implementation of the Department of Building Establishment Act that has yet to be proposed, increase by $5.5 million instead of $9.5 million the appropriation to the D.C. Department of Behavioral Health, and utilize $643,000 from two surplus balances. Mendelson said the changes “will cover the $18.4 million necessary to eliminate the advertising tax entirely.”
The July 23 session dealt with the local portion of the $16.8 billion budget. The council will take up the federal spending portion and the final version of the budget on July 28, and if approved, it goes to D.C. Mayor Muriel Bowser for her signature before a Congressional review. The new fiscal year, 2020-2021-begins Oct. 1.
The Maryland/Delaware/DC Press Association came out against the advertising tax and local owners of newspapers such as the Informer, The Washington Blade, Tagg Magazine and the Afro-American organized to stop its implementation. D.C. Councilmember Kenyan McDuffie (D-Ward 5) said he heard the voice of the small businesses against the tax.
“A number of small business owners expressed concerns about this,” McDuffie said. “The advertising tax would have a devastating effect on small businesses and the workers they employ. I don’t think this is a good idea during a pandemic. While the tax is only three percent and some people say that is not much, you have businesses limping through this pandemic and this is not a tiny tax. That three percent could make the difference on whether a business survives or not.”
D.C. Councilmember Brandon Todd (D-Ward 4) agreed with McDuffie.
“Mayor Bowser submitted a budget to the council with no tax increases and the easy way to solve a budget problem is to raise people’s taxes. But I don’t we should do that,” Todd said.
D.C. Councilmember Trayon White (D-Ward 8) said the advertising tax would hurt small business such as “Mom and Pop operations that serve people of color who live east of the river.”
The protest of the tax prompted Mendelson to commit to scheduling a hearing on re-establishing the Tax Revision Commission. D.C. Councilmembers Mary Cheh (D-Ward 3) and Robert White (D-At Large) talked about the commission during the advertising tax proceedings, saying if such a tax should be implemented, it should be by study and analysis not randomly.
However, #JustRecoveryDC, an organization of advocacy groups, criticized the council’s actions.
“His backroom deal to axe the ad tax finds another $14 million through other cuts, funding shifts and borrowing,” the group said in a July 23 statement. “Under this ad tax deal alone, there will be nearly $32 million in cuts to health and human services over the four-year plan.”

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James Wright Jr.

James Wright Jr. is the D.C. political reporter for the Washington Informer Newspaper. He has worked for the Washington AFRO-American Newspaper as a reporter, city editor and freelance writer and The Washington...

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