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Volume 9, Issue 3, November 2002
3710 S Street, NW, Washington, DC 20007
(202) 338-5164 phone/fax
|Ambrose Defines Master
Business License Requirement as Business Registration
Exceptions Galore to Upped Parking Fines
Decoupling of DC Estate Taxes from Federal Law Legislated by Council and Mayor
Officers and Board
Federation Board of Directors
Comprehensive Plan Process Task Force
Council Proposal to Tax Out-of-State Municipal Bonds Is Dead
Catholic University Set to Stumble into Negative Community Impact Syndrome
Big Citywide Energy Exposition December 5
District Finances — and Deficit
Residential Permit Parking Stickers Expiration Date Extended
Good News for Metered Parkers in the District
Federation Assembly Meeting Dates
Tuesday, November 26, 2002
The Charles Sumner School
AMBROSE DEFINES MASTER BUSINESS LICENSE REQUIREMENT AS BUSINESS REGISTRATION
In an effort to establish a long-overdue database listing of District businesses as a basic regulatory tool, last year the Department of Consumer and Regulatory Affairs instituted a Master Business License (MBL) requirement. All businesses with annual gross proceeds of over $2,000 come within the requirement.
The cost of the license is $35, not a significant burden on business operators, but the finished roster of businesses, when completed, will comprise an important asset for the recovering DCRA. Supporters of the MBL were therefore surprised at the storm of protest that ensued from the business community, generally viewing the license requirement as another tax and as an unnecessary, onerous complication.
On October 23, Councilmember Sharon Ambrose, chair of the Committee on Consumer and Regulatory Affairs, held a hearing with all players present, including DCRA management, business operatives, and the public. Ms. Ambrose aimed at: "(1) whether, and how much to increase the current $2,000 trigger amount threshold, (2) whether to exempt homeowners who earn less than $20,000 in rental income from the MBL requirement, and (3) whether to extend the current amnesty period further, to May 31, 2003."
What the committee heard is that (1) the cost of the license is nominal and not a burden, (2) in principle it is an agreed-upon regulatory tool, and (3) the threshold is unreasonably low, and (4) the DCRA application process is excessively onerous and poorly administered. The committee determined that "the main caveat is to avoid throwing out the baby with the bath water or gutting the underlying principle and use of the license requirement." Ms. Ambrose noted significantly that the District "does not yet have a universal database," and observed that the Master Business License is in reality a business registration measure.
Committee members in particular wanted to address the impact of the licensing requirement on the problem of often noncompliant rooming houses in residential neighborhoods around universities. This reflected community concerns raised from those areas that any significantly increased trigger threshold could allow problem absentee landlords to slip beneath eventual DCRA regulatory radar.
Committee recommendations resulting from the hearing, inter alia, stand to be: (1) extend the current deadline for MBL compliance "to get the matter in order," (2) fix a reasonable MBL trigger income threshold, (3) keep the cost of the "license" nominal, and (4) require a simplified application process. The committee will decide on a time frame for the legislation by the end of the year.
EXCEPTIONS GALORE TO UPPED PARKING FINES
Payers of parking meter fees, tickets, and fines help bring down the District's awesome possible $323 million deficit, but may not realize that the contribution level has been raised. Under terms of recent legislation, overtime metered parking, ignoring sometimes-confusing official signs, parking in a no-parking zone, and staying longer than two hours in a residential parking area without an area sticker all carry increased penalties. Meter tickets will go from $15 to $25. The rest will be raised from $20 to $30. This is real money for the average person.
Less painful but just an interesting to city parkers is the cold comfort of knowing that a crowd of categories of persons and vehicles are exempt from all or most parking liabilities. These are:
One may wonder if the exceptions to the rules leave many who are liable. The answer is yes, in spades. The city took in over $51 million last year in parking meter fees, tickets, and fines. The figure is expected to jump appreciably with the increased levies. One may also wonder if the city is not shooting itself in the foot. If shopping, doing business, or visiting in Washington become too onerous, the obvious temptation is to drive across the border to competing jurisdictions. Officials should not exult too much over Washington's parking legislation and enforcement.
DECOUPLING OF DC ESTATE TAXES FROM FEDERAL LAW LEGISLATED BY COUNCIL AND MAYOR
In spite of opposition, including the Federation's, to the measure, the city government on October 23 passed legislation "to fully decouple District of Columbia estate and inheritance taxes from federal law to ensure the continued collection of the taxes at a level comparable to the tax collected prior to the enactment of recent amendments to the Internal Revenue Code of 1986." The upshot: decedents, especially upper income decedents, stand to pay much higher estate taxes overall than they did before, when estate and inheritance taxes were paid only to the Federal government.
Since 1986, the District has had an estate tax equal to the maximum amount of the credit for state death taxes allowed against the federal estate tax. Under this provision, the DC estate tax did not increase the total death taxes. In effect, the federal estate tax paid the DC estate tax, because 100 percent credit on the Federal estate tax was given by the federal government for payment of the DC estate tax. Now, decedents will pay both the federal and DC estate taxes, after a change in federal law.
This matter is fully discussed in the October 2002 newsletter (Estate Tax Increases from DC Act 14-486, A.L. Wheeler, Esq., p. 3).
Opponents of the District action argue that the new tax will fall most heavily and meaningfully on upper income taxpayers, to the point of encouraging upper income flight from the city and discouraging other upper-bracket taxpayers from moving into the city.
A Federal Reserve study shows that the top quintile of income earners account for 25 percent of total US consumption. So-called "rich people" also do most of the saving and investing in this country, according to the Washington Times. And dual earners making $90,000 or more pay 49 percent of the taxes, account for 25 percent of total consumption, and save and invest 30 percent of America's seed capital (Washington Times, November 18, 2002, p. A20).
After a trial interval, the new DC estate tax arrangement needs to be revisited, with a view to assessing whether it has had a net negative effect on keeping and attracting upper-bracket taxpayers and estate taxpayers.
At its November 14 meeting, the Federation Board of Directors:
COMPREHENSIVE PLAN PROCESS TASK FORCE
The mayor has appointed a 29-person task force to reform the process by which the city's important Comprehensive Plan is formulated. Laura Richards, Esq. (Penn Branch) represents the Federation, while other delegates serve from their base organizations. These are: Ann Hargrove (Kalorama), Gregory New (Federation of Civic Associations), and Richard Wolf, Esq. (Capitol Hill).
COUNCIL PROPOSAL TO TAX OUT-OF-STATE MUNICIPAL BONDS IS DEAD
In its search for feasible ways and means to make up for the whopping deficit facing the District, inter alia the city council had before it proposed taxation of all out-of-state municipal bonds. "Munis," as such bonds are affectionately known, are, however, a mainstay in the portfolios of a wide spectrum of District citizens, so that a storm of opposition exploded in reaction to the proposed tax. A prime consideration also is that only a relatively small percentage of available municipal bonds are issued by the District of Columbia, insufficient to supply demand for such bonds as investments, even locally. In the end, a number of councilmembers switched their support for the proposed taxation, and the idea was killed in committee.
CATHOLIC UNIVERSITY SET TO STUMBLE INTO NEGATIVE COMMUNITY IMPACT SYNDROME
Along with other District universities, Catholic University of America (CUA) must submit for Zoning Commission approval a ten-year campus plan projection of hoped-for expansion, development, and environmental and community impact. As a rule of thumb, universities get into trouble with their communities and, in recent years, the city, only when they fail to house on campus the full-time undergraduate students they attract and then export them into the surrounding vulnerable residential communities. Community problems with large numbers of young, transient renters, such as wild partying, noise, trash, parking, investment landlords and rundown housing, and community instability are well known.
To date, also uniquely in the District, Catholic University has guaranteed on-campus housing to its full-time undergraduate students on its ample campus, and has had good relations with its contiguous Michigan Park area community. Historically, elsewhere in the District universities have (1) hit on expansion and expansion plans in vacuo, (2) ignored DC zoning regulations and decisions concerning negative impact, (3) considered anything permissible, (4) got plans rubber stamped by an unreflecting BZA, and (5) let the devil take the hindmost — inevitably the "host" residential community. CUA is poised to make this attempt, reportedly for the extra tuition income from 800 additional students without ample on-campus housing.
But times have changed. Coincidental with the arrival of the reform city administration, the revitalization of the city zoning apparatus, and the revival of the DC Office of Planning — which contributes importantly to the campus plan approval process, the city is getting a regulatory grip on universities as they exist within the city as a whole, and is curtailing excessive campus plans.
Involved in the Catholic University campus plan case as it moves forward to a February 2003 Zoning Commission hearing are: (1) an inexperienced university with regard to the severe negative impact a large institution can have on its surrounding community, however unwittingly, (2) a vulnerable residential community not as well heeled or well organized as other DC communities contending with universities, (3) an aware, defining DC Office of Planning, and (4) an informed Zoning Commission, that has meaningfully regulated local universities for the first time, has seen through the machinations and bluster of colleges, is aware of the regulations, and is sensitive to community and city-at-large interests.
In an effort to head off for the Michigan Park community, as well as CUA, the truly awful pain, disruption, and running contention that have accompanied university export of students into residential communities elsewhere in the city, the Federation's Impacted Communities Committee will attempt to meet with Michigan Park and CUA representatives, along with a pertinent representative from a university with (some) positive experience in the area of off-campus expansion and town-gown relations. This is with a view to making CUA more aware of the bumpy road it is eying, with little apparent awareness of the consequences of community impact involved, for the extra money involved.
BIG CITYWIDE ENERGY EXPOSITION DECEMBER 5
The DC Office of the People's Counsel will hold its signature citywide DC Energy Expo Thursday, December 5, at Gallaudet University. Hours are 10:00 a.m. to 2:00 p.m. Activities will include hands-on demonstrations and group discussions on:
Contact OPC Consumer Services Division at 202-727-3071 to register.
DISTRICT FINANCES — AND DEFICIT
The General Accounting Office, the investigative arm of Congress, is doing a comparative study of DC finances vs. those in other cities, according to the Washington Times (November 26, 2002). When the report is done, "Congress next year should convene discussions on a Federal payment in lieu of taxes, cost-cutting measures and the like." The city's deficit stands at a reported $323 million. All constructive sources of revenue should be considered.
At this critical junction, what better time to consider payment in lieu of taxes (PILOT) by the city's tax-free, property-acquiring, neighborhood devouring universities. To many in the city, it is clear that the colleges are a net financial drag on the city, as they remove purchased major properties from the tax rolls, refuse to volunteer any financial help, and impinge on taxable property values in their areas. It is generally agreed that two thirds of university employees reside in surrounding jurisdictions, and are taxed there. But there seldom seems to be a shortage of university money with which to buy up neighboring, usually residential, property.
It is time for the city to at least suggest to the numerous colleges and universities in town that they make a financial contribution to the city in which they exist as a tax-free exception. Among colleges elsewhere that pay PILOT, Harvard comes to mind. (That is, it pays the city of Cambridge, MA, but it does not make similar payments to the District on its large Dumbarton Oaks Byzantine Studies branch.) Other well known PILOT contributors are Boston University, Massachusetts Institute of Technology (MIT), and Yale University.
It's time their good, and not unique, example is followed in the District.
RESIDENTIAL PERMIT PARKING STICKERS EXPIRATION DATE EXTENDED
On October 3, the city council passed DC Act 14-466, to extend the authorization to holders of residential permit parking stickers who have a change in their ward designation due to redistricting, to park in their former and new wards for an additional 3-month period.
As of October 23, there is a parking meter fee moratorium in effect in the District for all day Saturdays, and on other days between 6:30 p.m. and 7:00 p.m. However, Saturday parkers should not stay at one meter for more than three hours, "unless current signage permits parking for a longer time." The authorizing act for this moratorium is an emergency one, so that its effective duration is 90 days, or until January 22, 2003.
In the October newsletter article on "District Police Surveillance Camera Proposals Make It Through Committee" (page 2), it was reported that the Committee on Consumer and Regulatory Affairs is chaired by Councilmember Sharon Ambrose. The committee is chaired by Councilmember Kathy Patterson. The newsletter regrets the error. To report any errors of substance, please call the managing editor at 338-5164.
The Sumner School has reserved the following dates for the Federation's Assembly meetings. Each meeting will begin at 7:00 p.m. at 1201 Seventeenth Street, at the corner of M Street, NW.
Tuesday, November 26, 2002
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