Greater Greater Washington

Steny Hoyer spreads myths about the District's budget

One of the predominant myths about the District is that the federal government fully compensates any costs or lost revenue it incurs as the Federal District. In reality, DC residents bear a heavy fiscal burdento the tune of about $1 billion a yearbecause of a structural deficit that Congress could fix.


Photo by jcolman on Flickr.

Rep. Darrell Issa (R-CA), the chairman of the House Oversight and Government Reform Committee, clearly understands this, stating last week that he is open to a measure that would shrink this deficit.

What about House Minority Whip Steny Hoyer? It was disappointing enough that the powerful Maryland Democrat came out immediately against Issa's proposal. Did he have to do it by evoking the myth that won't die?

The District's structural deficit begins with the fact that the largest employer and landowner in the citythe federal governmentpays no property tax. Neither do embassies, non-governmental organizations or other nonprofits. Yet the District provides all of these institutions and their employees with the same services it provides to private, tax-paying property owners. The DC chief financial officer estimates that the District loses $540 million a year because of this.

Continue reading Ken's op-ed in the Washington Post. And please congratulate Ken for his first op-ed for the Post! We hope to see more of Ken's articles on the editorial pages in the future, as well as those from other frequent contributors.

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Ken Archer is CTO of a software firm in Tysons Corner. He commutes to Tysons by bus from his home in Georgetown, where he lives with his wife and son. Ken completed a Masters degree in Philosophy from The Catholic University of America. 

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With suburban Democrats out of the majority this may be the best chance we have at a commuter tax (well there is Wolf). That means the chances go from none to slim.

However, there could be one work-around. Many people in DC claim no-income-tax states as "residence". We could probably get a commuter tax with residents of Virginia and Maryland excluded. This would bring in a lot of additional tax revenue and would also highlight the fact of MD/VA residents' special treatment (sort of like the Cornhusker amendment to the health bill).

And even with MD/VA exempted, don't underestimate how much additional revenue a commuter tax would bring in.

by Tom Coumaris on Jul 28, 2012 12:08 pm • linkreport

Tom: First of all, taxing income earned in DC by people not living in DC is, by definition, what is often called a "commuter tax." I think there is some confusion in some people's minds (and was in NYC as well) that a "commuter tax" is some kind of special tax that says "people who commute in have to pay extra money." It's not; it's just the way that in most states, you pay taxes to the state where you earn income and get a credit against your taxes to your home state for it.

When scholars say DC needs "a commuter tax," what they are really saying is that DC needs the power to do this same thing that other states do. You probably knew this but it's a little unclear from the way you phrased your comment, so I wanted to make sure that's clear for everyone else.

As for people with residences in no-income-tax states, I am not sure but I think that is mainly retirees or other people who spend a significant amount of time in another state, or else it is Congressional staffers who have a separate exemption allowing them to remain official residents of their home states. I suspect Congress wouldn't want to end that exemption. There are a lot of Hill staffers, but it's still not a big percentage of DC workers.

Retirees can pick other states for their legal residence because you have to spend most of your time in that other state for it to count. Someone who actually works a full-time job in DC probably can't do this, at least legally.

Some or even many people might do it illegally, but DC could step up enforcement. California, for instance, is very fierce about auditing people who make a lot of money (such as through a startup IPO) and then become residents of Nevada.

DC could probably get some money from having the ability to tax income by residents of states besides MD and VA that's earned in DC, but I suspect it would be extremely small compared to the structural deficit. The vast, vast majority of income earned in DC by residents of other states is by residents of the adjacent states.

by David Alpert on Jul 28, 2012 12:18 pm • linkreport

Dave- Understand I'm all for a full-blown commuter tax. I just think that if that's impossible there needs to be a Plan B.

And don't underestimate how much tax revenue is lost to "residents" of no-income tax states. To "audit" someone who has a house in Rehobeth and claims they stay there over 6 months would require an auditor looking in bedroom windows. And exemptions for Hill staffers could be preserved.

I think any commuter tax (named a "tax at source of income" tax) that gets in would lead to further expansion once we get over the hurdle of having one. And the idea of making people who now pay no state income tax through loopholes pay is especially appealing to many who would otherwise be opposed.

by Tom Coumaris on Jul 28, 2012 12:31 pm • linkreport

As native born Delawarean, first let me remind that Rehoboth only has one "e". Secondly, DE most definitely has an income tax so your comparison is off here.

by spookiness on Jul 28, 2012 12:38 pm • linkreport

As a point of comparison, when I was a student at Ohio State, my income tax was split between Columbus and the town where my parents live (where I was a nominal resident). I suspect commuter taxes like that are the norm even intra-state.

by Steve S. on Jul 28, 2012 12:48 pm • linkreport

The tax credit for your home state is not refundable. So if I make $100,000, my maximum tax rate for D.C. is 8.5% while my maximum tax rate in my home state of Virginia is 5.75%. This would mean that I wind up paying D.C. 8.5% and Virginia gives me credit up to what I would have owed them. So Virginia gets zero taxes from me and I have to pay 8.5% instead of 5.75%. So yes David, people who commute pay extra money.

by Notsofast on Jul 28, 2012 2:47 pm • linkreport

This would mean that I wind up paying D.C. 8.5%

That assumes that DC would use all of the added revenue to increase the budget, and none of it to lower tax rates. Part of the reasons our income tax rate is what it is is because our tax base is artificially low.

by Ken Archer on Jul 28, 2012 3:02 pm • linkreport

Putting aside my personal beliefs that of course, DC would use all of the added revenue to increase the budget, let's assume DC would lower the rate.

For argument's sake, let's assume DC cuts the rate in half (or sets a lower rate just for nonresidents) so it's 4.25%. That means I pay DC 4.25% and Virginia gets 1.5% from me. As a Virginia resident, I am a much bigger burden to VA than I am to DC, yet nearly 3/4s of my taxes would go to DC. How is that fair?

Talk about taxation without representation. DC gets a huge chunk of my taxes and I get zero say in how it is used.

Bottom line. I don't trust DC with my tax money. I don't cost DC nearly as much as a commuter as they would receive with a commuter tax (exactly why should I have to subsidize their motor vehicle services???). Let's move federal agencies to Arlington, Alexandria and the inner MD suburbs. I'm sure DC will be much better off without commuters and we commuters won't have to pay a commuter tax.

Also, VA has the power to do a commuter tax and chooses not to. Lots of MD residents cross the river each day to jobs in VA and yet MD and VA have reciprocity. Evidently, VA can manage without a commuter tax just fine.

by Notsofast on Jul 28, 2012 3:17 pm • linkreport

For argument's sake, let's assume DC cuts the rate in half (or sets a lower rate just for nonresidents) so it's 4.25%. That means I pay DC 4.25% and Virginia gets 1.5% from me. As a Virginia resident, I am a much bigger burden to VA than I am to DC, yet nearly 3/4s of my taxes would go to DC. How is that fair?

Talk about taxation without representation. DC gets a huge chunk of my taxes and I get zero say in how it is used.

We are not reinventing the wheel here. I forget how many states/cities have these provisions, but it ain't exactly a novel idea. The "but that isn't fair" ship sailed long ago. And are you seriously complaining about "taxation without representation" to DC residents?

by dcd on Jul 28, 2012 3:47 pm • linkreport

VA does have a commuter tax in Bristol for people who live in TN and Baltimore is currently considering one in order to lower it's sky-high property tax rate.

I'm not sure that removal of tax-exempt gov't agencies is a disaster. When IRS moved most workers to New Carrolton ten years ago the effect was minimal and I doubt FBI leaving will be much different. The HQ's and highest paid workers stay in DC.

OTOH San Francisco had mixed experiences with a commuter tax.

by Tom Coumaris on Jul 28, 2012 3:48 pm • linkreport

And are you seriously complaining about "taxation without representation" to DC residents?

Yes. Two wrongs don't make a right. Incredible that DC would be advocating what it has spent such a long time complaining about. And just because it ain't novel doesn't make it good.

by Notsofast on Jul 28, 2012 3:56 pm • linkreport

@Notsofast: So all of those jurisdictions across the country are guilty of taxation without representation?

It's worth noting - again - that it isn't DC that wants special treatment here, just the right to enact the same tax system as all other jurisdictions. It's Maryland and Virginia that are demanding (and receiving) special treatment - they don't feel like their state budgets should be subject to the same pinch as those of NY/NJ, Kansas/Missouri, etc.

Is there a principled reason for this position, or is it nothing more than "we don't want to pay?"

by dcd on Jul 28, 2012 5:09 pm • linkreport

Also, VA has the power to do a commuter tax and chooses not to. Lots of MD residents cross the river each day to jobs in VA and yet MD and VA have reciprocity. Evidently, VA can manage without a commuter tax just fine.

by Notsofast

Ummm -- what part of the taxing problem are you missing?

Notwithstanding that DC has a much greater percentage of its workforce and percentage of money earned by people from outside the city, the thing that REALLY makes DC different is the inescapable fact that most of the most valuable real estate is not taxable (either owned by federal or foreign governments (or, even international institutions)) and even a bunch of DC residents aren't taxable because of their status. Frankly, it isn't even just that these centrally-located properties and their government activities aren't taxable -- it's that all these structures are not generating as much economic activity as they would if they were in private hands. There is no city in the world where this situation exists to the extent it does in DC. The federal payment does not come close to making up that difference, but it is an appropriate mechanism that shouldn't be linked to commuter taxes. Totally separate ideas.

by Fischy (Ed F.) on Jul 28, 2012 5:54 pm • linkreport

Why no mention of the current federal payment?

by Rich on Jul 28, 2012 8:47 pm • linkreport

@Rich: Follow the link to the full op-ed, and you'll see mention of that.

by Gray on Jul 28, 2012 10:21 pm • linkreport

How is that fair?

Fairness is always a difficult thing to establish as people have differing ideas of what is fair. But it's legal and most states tax income of nonresidents earned within the state. They even have special forms for it.

Talk about taxation without representation.

Yes. Let's.

If nonresident income tax - which is what a commuter tax is - is "unfair" because a jurisdiction can tax you even though you don't have a say in their government then so are sales taxes, rental car taxes, hotel taxes etc... paid outside of your own state. But that's normal and most people don't think it unfair.

But that isn't what is meant by "taxation without representation." We aren't being denied the right to representation within a jurisdiction that we don't live in - we're being denied representation within the country that we live - and yet still being taxed. And do you know why states can charge a nonresident income tax? Because the federal government allows it. Guess what we don't have a say in?

Also, VA has the power to do a commuter tax and chooses not to.

Exactly. They CHOOSE not to. Or more accurately, they negotiated an agreement not to. DC did not choose. They did not negotiate. They had their acquiescence hoisted upon them by a government they did not elect. That's what we're talking about.

by David C on Jul 28, 2012 11:53 pm • linkreport

@dcd: The "but that isn't fair" ship sailed long ago.

It ain't fair and never will be fair.

No this ship did not sail. People take notice about the unfairness of taxation without representation, no matter how small. Just like when you burn when a vending machine takes your quarter.

Problem for sales taxes is that the burden of proving a customer is not a resident, and the paperwork required of the to distinguish such people, is far too great for most small businesses selling sundries such as candy bars. But mechanisms do exist to correct this problem. If you are a US resident traveling in Europe, you can submit your receipts to recoup the (very high) VAT taxes when you pass through customs.

by goldfish on Jul 29, 2012 1:24 am • linkreport

Reciprocity between Maryland and Virginia makes sense as the out of state income earned is probably roughly equivalent between the two.

I have a coworker whose wife was a high powered partner in a law firm here in DC. Every year he would tell me how complicated their taxes where because she had to pay income tax to every state where the firm did business. Then he would add, with the great satisfaction, they they didn't pay a single cent to DC despite the fact that probably >90% of the income was earned there.

Maryland and Virginia will never permit DC to collect a commuter tax as they would loose out in the bargain. When it comes down to principle and money money generally wins out.

I feel retrocession back into Maryland makes the most sense economically. But Maryland has a tenuous balance of power between Baltimore, the DC suburbs, and the rural parts of the states so that doesn't appear likely to happen.

Another approach I've heard that is appealing to some "low tax" Republican types would be to eliminate the federal tax altogether in the district. The federal government would end its special payment and DC could raise its state tax to offset the payment and more. I think residents still would come out ahead.

And this would end the "taxation without representation" argument and put DC on an equal footing with other US territories that also don't have representation and thus do not have to pay federal taxes.

by JeffB on Jul 29, 2012 11:00 am • linkreport

The wage taxes by most cities is much less than the state income tax rate and here is another Plan B. A wage tax of 1-2% creditable against state or DC income taxes would be easier to get and would be more equitable than the full DC income tax since non-residents don't usually use as many DC services.

Here is Wilmington's wage tax of 1.25%:

http://www.wilmingtonde.gov/government/earnedincometax

If Congress absolutely refuses any wage tax then DC has no choice but to impose user fees and these can be geared to progressive goals. We may not be able to impose tolls on bridges into DC but we could impose fees for driving in the center city. Businesses could have a public safety fee imposed per worker to help with police and emergency costs. The cost of the surface water tunnels could be placed on buildings using the most sewage. Parking taxes, especially on employer-provided parking could be increased.

by Tom Coumaris on Jul 29, 2012 11:11 am • linkreport

This article is soooooo misleading. The loss of revenue isn't because of services the city is providing to the feds and private interests -- it's because they pay no property taxes. The more private institutions allowed to establish in the city, the more property tax revenue lost.

Private institutions and the Federal Government do not get services provided by the District. If Archer is talking about roads -- the feds might have difficulty with that assertion since the FTA sinks considerable funding into our infrastructure. The NPS also sinks beaucoup bucks here every year. Surely Archer doesn't think the city is doing all this on its own dime.

[Deleted for violating the comment policy.]

by Karl on Jul 29, 2012 11:17 am • linkreport

The commuter tax ban in DC is pure gravy for Richmond and Annapolis, it would be interesting if the Tea Partiers locked onto it as the corruption that it is.

by Steve S. on Jul 29, 2012 12:24 pm • linkreport

This article is soooooo misleading.

Karl, did you click the link at the end of the intro above, the one that says "Continue reading Ken's op-ed in the Washington Post"?

by Ken Archer on Jul 29, 2012 12:25 pm • linkreport

Proposals up to re-instate the NYC commuter tax, but it doesn't seem very popular (in NJ at least):

http://www.nj.com/hudson/voices/index.ssf/2012/04/daily_poll_should_the_new_york_2.html

by Tom Coumaris on Jul 29, 2012 3:52 pm • linkreport

Why would this be good for the Greater Washington region?

by selxic on Jul 29, 2012 9:57 pm • linkreport

Why would this be good for the Greater Washington region?

Ken wrote "Either make the Hoyer Myth a reality by covering this structural deficit with an annual payment to the District of $470 million to $1.1 billion, based on the GAO’s estimate, or allow the District to tax the income of nonresident workers."

Ok so in scenario 1, the District gets more money from the federal budget which would basically be an annual revenue transfer from all Americans to the DC area. I think it's pretty clear that dumping money into DC - most of which will come from outside of DC - will be good for the DC area.

In scenario 2, the District gets more money from commuters who live primarily in NoVa and SoMa. Which means less money goes to Annapolis and Richmond. But much of that money that goes to those states doesn't come back to the DC area - especially in NoVa. So, that ends - or at least reduces - a revenue transfer from NoVa to the rest of Virginia (and the same is true of Maryland). The fact is that if you live in suburban MD or VA, you should WANT a commuter tax, because that money will be used in DC, where you spend 40-60 hours a week, instead of Havre de Grace and Roanoke.

But even if you don't see it in a zero-sum game sort of way, it's still good for Greater Washington. It does no one in the area any good to have DC schools struggling. It does no one any good to have bad roads to commute on. It does no one any good to have DC crime - like petty theft at the Metro stations that commuters use - rise. Etc...

So, that's why.

by David C on Jul 29, 2012 10:11 pm • linkreport

The District of Columbia gets the short end of the stick today both in terms of Congressional representation and in the inability to raise revenues from suburban commuters.

One limitation in incorrecting these injustices is that advocates for the District tend to push solutions that would give DC a very long end of the stick, rather than its fair share (e.g. the Senate representation and taxing power of a state). The "commuter tax" is a long end of the stick, because the Distict has a large employer that will not move in response to economic signals (such as taxing its workers) and that inherently has hundreds of thousands of workers who will never move into the District (and thus could be taxed without a corresponding need to provide services).

Giving DC the taxing power of a state is unfair to the point of being politically infeasible, unless it is phased in over a very, very long period of time. The existing bedroom community land use patterns of Prince Georges county were established based on the existing tax regime, in which PG County residents largely fund the state services they consume through the income tax. A sudden 50% drop in state income tax receipts from the County would blow a hole in Maryland's budget, and be strongly resented by the rest of the state.

It's a good bet that state legislators would consider limiting the exisiting tax credit for state taxes paid to other jurisdictions. Why would Maryland agree to let a few hundred thousand residents stop paying state income tax because of where they work? Just because that is how the code treats a handful of people who work in Delaware does not mean that the state would aquiesce in extending that arrangement to the District. Perhaps a minimum tax (e.g. 2 or 3% of AGI) would be enacted, which would be met by people with lots of investment income anyway.

All of this is doable if phased in over a period of decades. In the end, Maryland could adjust the tax credit so that the revenue loss from commuters was balanced by revenue gain from District residents. Especially if the planned urbanization of Metro sites creates economic opportunity in Prince Georges County. At the margin, some Maryland residents who work in the District could either move into the District or get jobs in Maryland, and employers in the District could raise their wages to help attract suburban workers.

Rather than chase that pot of gold at the end of the rainbow, DC advocates should look at what is politically feasible. A tax to pay for the actual services that commuters help to consume (roads, police, fire) would be fair. While local representatives might vote against it, they would not be punished for allowing such a tax to be enacted.

Conversely, Representative Hoyer would probably give up his leadership post if that's what it took to stop giving DC the taxing power of a state. He'd lose his seat anyway if such a tax was ever enacted.

by JimT on Jul 30, 2012 9:56 am • linkreport

Rather than chase that pot of gold at the end of the rainbow, DC advocates should look at what is politically feasible.

Or, perhaps Hoyer should counter-offer with what he sees as a reasonable solution, instead of pretending that there is no problem. He's chasing a pot of gold as much as DC is. And he's actually in a position to drive a deal. As it is now, he's pooping in our coffee mug and calling it ice cream.

by David C on Jul 30, 2012 11:32 am • linkreport

Food for thought: About 33,400 people work for the Government of the District of Columbia. It's a well-known fact that many thousands of these DC Government employees live in suburban jurisdictions. How much additional revenue would the government realize if it required all its employees to live in DC -- and enforced the rule?

by Publius Washingtoniensis on Jul 30, 2012 11:53 am • linkreport

How much additional revenue would the government realize if it required all its employees to live in DC -- and enforced the rule?

And how much would the quality of DC employees drop if DC took away their freedom to live where they want (because some would quit)? Or...how much more would they have to pay the same people to give up such freedom?

by David C on Jul 30, 2012 11:56 am • linkreport

Well for one, a lot of these DC workers (which includes lower paying jobs like custodians and such) would need to find housing that they can afford and unless DC is willing to put a lot money to building extra housing to ensure that the workers can afford the rents/payments I don't know how its feasible.

And fwiw I know that for a lot of positions (like the head of DDOT) that there is a requirement to become a resident of DC.

Besides, I live in Arlington and live closer to the Wilson building than I would in many of the places I could afford in DC. Or if I can afford a house or more space for my kids than I could in DC. These are all personal preferences but the more stringent requirements you have (especially for those not related to the actual job at hand) the smaller pool of qualified applicants you have which can end up degrading city services.

by drumz on Jul 30, 2012 12:01 pm • linkreport

Not sure how practical it is to create a rule at this point saying that all current employees live in DC, but I think it is quite prudent to give large hiring preference to DC residents for future positions.

Yes, I would prefer that DC government pay a custodian an extra $3 an hour if it meant it was someone from Anacostia, as opposed to New Carrolton. That means we aren't giving the otherwise unemployed guy food stamps/other assistance. In addition, he will spend that money in DC.

by Kyle-w on Jul 30, 2012 1:16 pm • linkreport

Not sure how practical it is to create a rule at this point saying that all current employees live in DC, but I think it is quite prudent to give large hiring preference to DC residents for future positions.

So...in addition to hiring preferences, do we make DC residency a condition of continuing employment? In other words, do we fire the janitor when he inevitably moves to PG County?

by oboe on Jul 30, 2012 2:07 pm • linkreport

@Oboe

I see the issue. It worked in my head :)

So to correct my statement from above. In principal, I would be happy paying an unemployed DC resident an extra $3 an hour, as opposed to employing someone from PG county.

by Kyle-w on Jul 30, 2012 2:12 pm • linkreport

Doesn't DC offer some sort of housing assistance - like cheap loans - to DC employees who live in the city. I seem to remember that, but maybe it was only teachers and MPD.

by David C on Jul 30, 2012 2:30 pm • linkreport

Can someone explain what Rep. Hoyer said that was so objectionable as to characterize as "spreading a myth" or "he's pooping in our coffee mug and calling it ice cream."?

The only statement I saw even on that issue said

“Everybody in America pays to support the District of Columbia, everybody pays that because it’s the capital of the United States of America. That’s the appropriate way to fund it.”

That statement doesn't imply that the federal government fully covers all costs and lost revenues from being the federal seat of government. He's just saying that the existing--and appropriate--mechanism is for the federal government to pay rather than suburban commuters.

Are we talking about a different statement?

by JimT on Jul 30, 2012 5:40 pm • linkreport

That statement doesn't imply that the federal government fully covers all costs

That's exactly what it implies. The Post said that 'He said that a commuter tax wasn't necessary because “everybody in America pays to support the District of Columbia"'

So it isn't even really an implication. It's what he's saying and that is complete nonsense.

If he thinks funding is inadequate he has a funny way of saying it - i.e. not saying it.

http://dcvote.org/media/media.cfm?mediaID=4337

by David C on Jul 30, 2012 5:55 pm • linkreport

I think the statement means that the nation should bear the cost, not that DC has all the money it needs, and that the commuter tax is not needed because the nation should bear the cost.

Your favorite NGO is supported by individual members and ought not take a lot of money from corporations. That does not mean that members pay 100% of the operating costs

by Jim Titus on Jul 30, 2012 11:13 pm • linkreport

He says it "wasn't necessary" because every "pays." Not that it shouldn't be necessary because everyone should pay. You're giving a terribly charitable reading to that quote.

But even if that were so, it's still BS. Because he knows better than us that it's unrealistic. Congress doesn't pay the full amount and never has. Not under Republican control, not under Democratic control. What reason is there to believe that they will? Or that they will do so reliably? He knows that they won't. Maybe for a year here and there, but not reliably year after year. He knows that.

And it forces DC into the role of begger. Can we please have money Congress? "Well I don't know. I notice you let gays marry and pay for abortions with some of your money. Are you willing to give that up?" "Maybe if you promise to spend some of that money on ethanol." Etc... I don't want to beg every year.

And a commuter tax fixes that. It puts control in our hands. But Hoyer won't give us that. And what he's offering won't work. And he isn't even really offering it anyway. Hey, but he's still our friend isn't he? Just a friend who wants us to go to Congress every year on our hands and knees and beg for enough money to educate our kids and be turned away shortchanged.

And that, I call pooping in someone's coffee cup and calling it ice cream.

by David C on Jul 31, 2012 12:23 am • linkreport

On what he meant (“Everybody in America pays to support the District of Columbia, everybody pays that because it’s the capital of the United States of America. That’s the appropriate way to fund it.”):

I think that the second sentence is his policy recommendation, which could not be clearer. I think that the first sentence is the background to that conclusion, and what he says is roughly true. The nation does indeed support the District of Columbia (though not every American). This is a common two-sentence formulation, and as far as I know, all of us agree that the nation does support the District.

If I follow Ken's argument, it is that the first sentence could be construed as implying that the federal government pays for all the costs, because the term "support" implies all of the necessary funding. So we have two interpretations of the word support: That he is saying DC has all the money he needs, or he is saying that the source of funds is the nation. Either are plausible. But then the second sentence emphasizes the source, not the sufficiency of funds.

So following ordinary rules of construction, the most reasonable interpretation of what Hoyer said is that the nation rather than suburbanites should fund the costs of operating the national capital.

Clearly, Hoyer did not take the opportunity to explode the "myth" that the federal government payment to DC is adequate. For that matter, Ken did not document that such a myth exists even in a post devoted to criticizing Hoyer for perpetrating it. Maybe that's because very few people even believe that myth.

That is: Congressman Hoyer knows everything we know, and may well assume that everybody knows what he knows. DC needs more money. As far as I know, he always supports giving DC more money, as does the entire local delegation. Given that everybody knows that he does alot to get DC more money from the federal government, why would he even think that the need for funds is an issue? Even Rep. Issa seemed to conceed as much.

The entire question that he was addressing was whether DC should be funded by a commuter tax or by the national government.

Although it is an obvious point, Mr. Hoyer comes from Prince Georges County and represents parts of it, as well as Southern Maryland. So he can not be expected to take every strategic opportunity to remind the world of the unfairness with which DC contends, the way DC's own politicians do. Conversely, I do not expect District officials to say how unfair it would be to give DC the complete taxing powers of a state.

Mr. Hoyer has been a strong supporter of the District of Columbia except on questions where the District's preferred policy would hurt his constituents. Either Mr. Hoyer or District officials could push a politically feasible commuter tax designed to cover the net costs that commuters impose on the District, that is, how much money would DC save if commuters all stopped commuting. The first step toward that end is probably a study to figure out how much money that would be.

by JimT on Jul 31, 2012 8:18 am • linkreport

The problem with his statement is that Congress doesn't really do anything special for DC, their contribution to DC is not out-sized compared to other states and is smaller than a few states:
http://greatergreaterwashington.org/post/11051/how-much-federal-money-does-dc-actually-get/

by MLD on Jul 31, 2012 8:32 am • linkreport

@JimT
The first step toward that end is probably a study to figure out how much money that would be.

You mean like the studies that have already been done by Brookings, the GAO, and the DC CFO? All of these were mentioned in the Op-Ed.

by MLD on Jul 31, 2012 8:38 am • linkreport

So following ordinary rules of construction, the most reasonable interpretation of what Hoyer said is that the nation rather than suburbanites should fund the costs of operating the national capital.

Jim, I don't agree that that is the most reasonable interpretation. I don't agree that the nation rather than suburbanites should cover the cost imposed by commuters. And I don't agree that that is a solution that is even politically possible.

by David C on Jul 31, 2012 9:04 am • linkreport

@MLD: Can you point me to the pages in those studies that estimate the costs imposed by commuters, i.e., the money that DC would save if they all stayed in the suburbs?

The article seems to focus on things like the money that DC could raise if it has the taxing power of a state, and the state-like services that DC must provide.

@David C. We'll just have to agree to disagree on what Rep. Hoyer meant. I'd say that there are two possible interpretations, and maybe I just tend to assume that when there are two possible interpretations, the speaker must have meant the one that makes the most sense.

I am quite certain that Rep. Hoyer would not fall on his sword to stop a bill that made commuters pay for the actual costs they impose on DC. People hear "commuter tax" and they think it means a 5% income tax to help pay for the DC school system.

Maybe that's the myth that really needs to be stopped. If suburbanites thought that DC just wants them to pay for the actual costs they impose on DC, alot of suburbanites would be open to it. But that myth will be really difficult to stop because it seems to be pushed by people from both sides of the border.

by JimT on Aug 1, 2012 10:02 am • linkreport

I suspect Hoyer is right there with Chris Van Hollen who said D.C. doesn't need the extra revenue.

"The federal government supports the District of Columbia in many ways through the budget, and that federal payment and support is designed to help the District of Columbia, and it does," he says.

by David C on Aug 1, 2012 11:02 am • linkreport

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