D.C. Mayor Proposes Streetlight Tax, Other Taxes; Calls Them “Fees”

March 27, 2009

D.C. Mayor Adrien Fenty (D) made a promise in his campaign not to raise taxes. So it might be surprising to learn what he’s doing to balance the city’s $5.3 billion budget for 2010:

The mayor’s budget would establish a new streetlight maintenance tax that would add $51 a year to residents’ electric bills, and Fenty proposes to increase the 911 service fee on all cellphones and land lines by about $12 a year.

Homeowners, long protected by a property tax cap, will have to pay taxes on at least 40 percent of their property’s assessed value, and the mayor wants to freeze the homestead deduction and the personal exemption and standard deduction on income taxes.

I have no idea what it costs to maintain a streetlight, and perhaps imposing a surcharge on everyone’s electric bill is the fairest way to collect it. But I suspect that the numbers being proposed are more about closing the budget gap than about coming up with an actual cost of providing services to people.

At least one city council member wants some honesty in this regard:

“In terms of the particular fees, a little straight talk is appropriate. It’s a kind of tax,” said Mary M. Cheh (D-Ward 3). “We’re increasing costs on people in a variety of ways.[…]

Cheh said she supported some of the changes, including the increase to parking meter rates citywide — the council already raised downtown rates — and the improved traffic enforcement, because many drivers live in Maryland and Virginia. But she expressed concern about the streetlight maintenance fee, which could burden low-income residents.

Cheh is a law professor (and I’m one of her former students). I’d recommend two cases on point for her and the Council to peruse: one out of Washington State striking down a Seattle streetlight “fee” as a tax, and one out of California striking down a 911 “fee” as a tax.

Mayor Fenty’s standard for why his revenue increases aren’t taxes: “Because I don’t define it as one.” For those who prefer a less absurd standard, check out our brief in the Weisblat case, where we sort through cases from many states.

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A tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities.

The standard deduction reduces a taxpayer’s taxable income by a set amount determined by the government. It was nearly doubled for all classes of filers by the 2017 Tax Cuts and Jobs Act as an incentive for taxpayers not to itemize deductions when filing their federal income taxes.