Government
Being outside a state has its advantages
Residents and officials in the District of Columbia often lay a number of the city's problems on the fact that DC is not a state nor located in one.
Photo by zeul on Flickr.
Many cities have large state governments that can help pick up the tab for various social welfare programs, education funding, and transportation costs, among other public expenses. The District, on the other hand, is left to fund all public services that a state would typically provide all while trying to squeeze as much revenue as possible from an already stressed tax base.
Further complicating the situation, the federal government does not provide the District a payment in lieu of taxes (PILOT) to help offset lost revenue on the 40% of DC's property that is tax exempt. Congress also prohibits the District from charging income taxes on the 500,000 non-residents who work in DC, a privilege regular states enjoy. This creates what DC Appleseed calls a "structural deficit."
While this does put the District at a disadvantage, it isn't totally up the creek when it comes to paying for certain state-level services. Even though Congress doesn't provide a direct PILOT to the DC government, the federal government does pay for the costs of the District's criminal justice and prison system, provides a larger share of Medicaid funding, and the District is eligible for federal grants that would typically only be available to states.
In addition, since the District collects all revenue from sales, income, and property taxes as well as municipal bonds, DC has far more flexibility in how to fund government projects and services than neighboring counties and cities. The lion's share of local revenue available to our neighboring jurisdictions is typically derived from property taxes. That constrains counties as they try to find ways to pay for teachers, police, and civil servants.
It's for these reasons that I always wonder if the District is better off than many other jurisdictions, even despite living under the shadow of Congress and despite the fiscal challenges. With the possible exception of Native American reservations, no other municipality in the country has near-total authority over all levels of local government.
Though Congress seems to enjoy interfering in purely local affairs, especially hot-button political issues, Senators and Representatives largely leave the District alone in the day-to-day operation of the city, exactly as intended by the Home Rule Act. Many state legislatures meddle even more, like New York's which denied New York City the right to even install cameras on its buses.
Nowhere can the benefits of the District's singular authority be better witnessed than in the city's transportation plans. Thanks to DDOT's authority over most aspects of transportation planning, the city has instituted a number of new projects at a breakneck pace. More bike lanes? Done. Express buses and priority corridors? Sure thing. Pedestrian safety enhancements? Intermodal transportation hubs? First in the nation to have bike sharing? Yes, yes, and yes.
Even the District's most controversial new transportation project, the 37-mile streetcar network, has been made more streamlined with only one level of government to approve and oversee construction of the new system. The District's comparatively small 13-member legislature (the 550,000 residents of Wyoming have a whopping 90 state representatives and senators) creates a local government with the potential to be very responsive to the demands of residents across the entire city. Just look at what GGW and other transportation activists were able to do in a few hours to save streetcar funding.
As stories emerge about the disconnect in priorities between our neighboring local jurisdictions and their respective state governments, the District benefits by having only a single level of local government to make decisions. The residents of Montgomery and Prince George's counties had to beg Annapolis to provide more funds for WMATA and ensure support for long-stalled infrastructure projects like the Purple Line. And, as recently reported, the state government in Richmond initiated a power grab to take away one of the last remaining vestiges of local government in Northern Virginia by demanding half the Commonwealth's seats on the WMATA Board of Directors.
If Washington were located in either state, residents might have been left waiting for decades before we saw even a single streetcar, expanded bike sharing service, or other necessary infrastructure projects due to competing state priorities. Does the District's fiscal situation have serious deficiencies? Yes. However, Washington's unique municipal government is perfect for advancing the type of progressive, forward-thinking projects in transportation, urban design, and economic development that could become a model for the rest of the nation.
 | A native Washingtonian, Adam currently resides in the Dupont Circle neighborhood. He is a graduate of the University of Maryland where he studied political science and he has a keen interest in local governance.   |
Comments
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by tom veil on Jun 7, 2010 3:13 pm • link • report
by Ward 1 Guy on Jun 7, 2010 3:24 pm • link • report
Also I don't think its minor or at all trivial that for ~10 years the US congressional overseers prevented DC from implementing needle exchange programs to combat the spread of HIV (and HepC) - even with the use of DC only public funds and even with private funds. We all know that during that time the rate of seroconversion climbed and climbed while other cities were able to control this rate. This has NOT left DC better off then other jurisdictions and indeed that extra medicaid money could be used for other purposes (then caring for people living with AIDS and HIV and HepC) had public health professionals been able to mount all known efficacious and effective interventions against the spread of HIV.
Yes DC has some freedom because its a city unattached to a state but the congressional oversight has been tragic from the perspective of lost opportunities for HIV intervention.
by Bianchi on Jun 7, 2010 3:29 pm • link • report
We have ART, networks of bike lanes, extensive pedestrian safety improvements and all that here in Arlington. I don't see Richmond standing in the way of much.
by Lou on Jun 7, 2010 3:32 pm • link • report
by Jason on Jun 7, 2010 4:15 pm • link • report
It's not just the lack of a commuter tax - DC's structural deficit is much larger than that.
As for commuter taxes, I don't know how many states actually use them explicitly, but many use them implicitly - simply via the regular redistributive effects of state income taxation. The point is that states have that option to do so, DC does not. In functionality, it probably only applies to cities that are within states near the border of another state.
The reason it comes up so often in DC is that DC has to meet all of the burdens of a State (DMV, Department of Health, etc) on the tax base of a small city - in addition to the fact that the Federal Government and its associated uses occupy the best land and pay no tax on it. It's not a sustainable situation.
by Alex B. on Jun 7, 2010 4:24 pm • link • report
by Jason on Jun 7, 2010 4:31 pm • link • report
What have we now spent, something like half of our rainy day fund in two years? Why are we spending billions on infrastructure projects at the same time as tax revenues are way down? How do we plan to pay for operations and maintenance on all these new parks, trains, and so on?
The financial control board was created, removing much of that autonomy, because we proved too irresponsible to manage it ourselves. We're heading right back there again.
It's amazing to me how supposedly progressive people can see nothing but streetcars and new buildings at the same time as we are blowing through the good credit rating that was won through such hard work. The money will run out soon enough, but nobody seems to care about that today. Doesn't anyone want to avoid what happened under Barry?
How come nobody EVER talks about the cost of all these so-called great things we are building? The future dollars that we don't have? These things will never get finished or be able to operate at the rate we are spending.
by Jamie on Jun 7, 2010 4:31 pm • link • report
Focusing the question is great, but it always must be framed in the larger context.
To answer your question directly, New York used to have a commuter tax. Philly does have one. I believe Detroit and several cities in Michigan can and do leverage a local income tax on all residents, not just commuters.
My larger point however was that a commuter tax is more of a response to border effects. Such a tax wouldn't be all that useful in a city that's landlocked by the same state, since the state government can simply be the arbiter of that tax sharing. Some places (Minneapolis/St Paul) even have regional tax base sharing, where a certain portion of the commercial tax base in the region is pooled and redistributed).
So, to your question - there are lots of examples of that mechanism in place, some more explicit than others. By the nature of DC's border situation as well as the Congressional prohibition, a commuter tax in DC would probably have to be the most explicit kind.
by Alex B. on Jun 7, 2010 4:39 pm • link • report
A brave post. DC's city-state status can make it unique. DC problems's have far more to do with elected officials catering to the poor majority in DC than any structural problems involving a toxic brew of commuter taxes, overhead wires and federal oversight.
A simple remedy: give Wards 7 and 8 back to Maryland and let them become Maryland's Arlington. You would instantly improve every statistic and ranking in DC. Bring in some streetcars and bikes and the rest of DC really starts to look like that GGW dream city, Portland.
by charlie on Jun 7, 2010 4:59 pm • link • report
Tom Veil, Bianchi, and Ward 1 Guy all bring up valid points. However, pointing out the benefits of having a unitary city-state for the purposes of local governance was not intended as an endorsement of the political status quo. I firmly believe D.C. can retain its unique system of governance while achieving full representation in Congress and achieving home rule. Another post on that later? Probably. :-)
@Jason re: Commuter tax
In most states it's not an issue; there are very few places where a metro area extends significantly over one or more states. The most cogent examples are in the Northeast, especially New York City. If you are a resident of NJ or CT and work in New York (as many do), you pay New York State taxes. Same goes for residents of NH and RI who may work in Boston; they pay Massachusetts state taxes. If D.C. were permitted to tax incomes earned in D.C., it's very likely that D.C. could reduce taxes on all people (residents and commuters) and business to spur our own industry.
Somewhat ironically, the State of New York prohibits New York City from charging its own commuter tax to fund city services, and leaves the residents of NYC with their own tax burden. That's the sort of thing is just another example of the larger point I try to make in my post.
@Jamie
I think most people are mindful of the budget and nobody wants to see a return to the financial control board. However, it's often cited that spending on education and infrastructure are the two most important things a government can do to spur and maintain economic development, which in turn spurs more tax revenue. It's no surprise, then, that those two areas were not cut with the rest of the budget. While we should be conscious of our current budget restraints and the use of the rainy day fund, we should also be mindful of the fact that we're going to be in a much worse situation without the necessary components to keep D.C. residents and businesses thriving.
by Adam Lewis on Jun 7, 2010 5:00 pm • link • report
Every year billions of dollars in income tax receipts go to Richmond and Annapolis even though DC residents pay for the infrastructure.
Do you pay Virginia state income taxes and deduct the payments from your DC return? (Look at your paystub)
by Ward 1 Guy on Jun 7, 2010 5:01 pm • link • report
I live in DC/work in VA, and my employer only withholds DC tax.
by mch on Jun 7, 2010 5:39 pm • link • report
captcha: leftmost city
by inlogan on Jun 7, 2010 5:53 pm • link • report
by Lance on Jun 7, 2010 6:19 pm • link • report
Both Maryland and Virginia have tax reciprocity with the District of Columbia. Therefore, D.C. residents who work in either state are exempt from their respective state income taxes and employers automatically file withholdings with the D.C. Office of Tax and Revenue. If D.C. were ever allowed to levy a tax on the incomes of non-residents, such tax reciprocity would likely end and D.C. residents would have to pay Maryland or Virginia income taxes.
by Adam Lewis on Jun 7, 2010 6:25 pm • link • report
by Lance on Jun 7, 2010 6:27 pm • link • report
So somebody who lives in VA and works in DC would have all of his "state" income tax paid to DC rather than VA? That hardly seems fair either. While the VA resident working in DC may use DC Streets and sidewalks on a daily basis he uses many more of VA services.
by Jason on Jun 7, 2010 7:14 pm • link • report
by Jasper on Jun 7, 2010 9:11 pm • link • report
by Lance on Jun 7, 2010 10:30 pm • link • report
DC's spending levels have increased some 70% in the past decade.
Any new revenue the city would take in would simply be spent just as quickly on either more social welfare programs (Save the safety net!) or trendy capital projects (the H Street NE monorail must be built!).
Which is why I think the streetcar program will eventually wind up in Council and congressional investigations. How to pay for it is nothing more than a dream. And yet we're still spending tens of millions of dollars on it (with minimal review by Council of those contracts) because it's the cool thing to do.
by Fritz on Jun 8, 2010 10:03 am • link • report
"The problem with commuter taxes is that they are taxation without representation - you pay taxes to a body you don't get to vote for. One would think that DC residents would understand the basic unfairness of such taxation."
We understand that quite well, having been subject to that very same unfairness for over 200 years. And not only regarding taxes; we have been Governed without Consent "in all cases whatsoever" for over 200 years. You don't like a commuter tax? I'll tell you what everybody tells me.... MOVE! Huh? YOU DON'T THINK THAT'S RIGHT? Neither do I!
by citizenw on Jun 8, 2010 12:19 pm • link • report
by citizenw on Jun 8, 2010 12:22 pm • link • report
So, in a sense, I am pretty objective here. I get taxed without representation anyway.
As far as I am concerned, the state of North-Washington (NW - or figure out any other name than Col
oumbia) secedes from DC, leaving behind the National Parks and Federal Buildings as DC. Rename the mayor governor, call the wards counties or burrows and decide that the governor/mayor will rule all counties as one unit like in New York City through a unicameral state legislation that has the exact same composition as the city council. In short, change the name tags to state-names and leave everything else the same.Hold elections for your House Rep and two senators and send them over to Capitol Hill, do this with a mid-term elections so it's a real election.
Sure, the senators will be rejected, but the question is what they would to with the House Rep, who they will call your Delegate.
And then it's a matter of applying to be a state and refusing to be denied. Just let the two senators be denied entry to the Capitol on a daily basis. Remember that circus with the senator Burris from IL? That looked terrible. This will look worse because the governor/mayor will approve their papers. Also, Congress will have to figure out what to do with the Delegate/House Rep.
I think the problem with previous applications of DC for statehood was that DC applied and then waited to be rejected.
By renaming all officials in
DCNW and sending your Congressional Delegation over on a daily basis, you can show the silliness of the status quo. Factually, the names don't matter, so what is Congress gonna do? Send in the military? I'd love to see that happen.You don't get independence by nicely asking. The Brits didn't let you go when you asked. You need to take independence and refuse to let it go.
Problem is that you'd need to real leaders with balls to pull it off.
by Jasper on Jun 8, 2010 1:45 pm • link • report
by Fritz on Jun 8, 2010 2:23 pm • link • report
by Kate on Jun 8, 2010 3:52 pm • link • report
I vote for 'burrows' ... It will leave Fenty somewhere to hide when the feds come looking ... like Saddam ... ;)
by Lance on Jun 8, 2010 9:35 pm • link • report
The justification for the NYC commuter tax was 'Infrastructure!' -- which makes some sense. We should prompt people to live where they work so we have efficient use of infrastructure instead of a 5-times-a-week population spike.
by Peter Smith on Jun 8, 2010 10:15 pm • link • report
You do realize I assume that corporations never really pay taxes, don't you? ... They just count taxes as one of their costs of doing business ... and include them in the price the consumer pays for their products ...
by Lance on Jun 8, 2010 10:44 pm • link • report
I've often wondered what the DC area would be like if it were organized like New York City, with Arlington, Bethesda, and Alexandria as "boroughs." If a larger district were organized this way, the case for full congressional representation would be better. Richmond and Annapolis are never going to let go of those prosperous DC suburbs, though -- and the residents aren't likely to be excited about the idea, either. You might have been able to make the case to left-leaning Arlingtonians before Virginia's recent history of electing moderates Democrats state wide, including Obama in 2008 -- but it's unlikely now.
Adam Lewis mentions how New York City is hampered by Albany. Readers might want to look into the history of movements for New York City secession from upstate NY. Norman Mailer was an advocate of an independent NYC. Ultimately, it might make some sense to have independent city-states of New York and an expanded District of Columbia, but like a division of California, neither seems likely.
by Lewis McCrary on Aug 16, 2010 1:50 am • link • report
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