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In D.C. Council session, @ChmnMendelson says he is making slight changes to the proposed new 3% tax on the sale of ads and personal data. The changes address concerns that it would tax the creation of ads.
Mendelson says he was "surprised" to learn that the initial drafting of the ad tax would have taxed the creation of ads, when he just wanted to tax the placement of ads.
But in making those changes to the ad tax, Mendelson is taking money that was being directed to @dcpl to prevent shorter hours at neighborhood branches. But he says he doesn't think the changes will impact operating hours overall.
"I think this is a very dangerous way to make tax policy," says @CMBrookePinto about the proposed ad tax, which Mendelson dropped into the budget two weeks ago at the last minute. She's asking for a full legislative vetting of the tax.
"The intent of the ad tax, which some members are uncomfortable, is that it's a sales tax like any other," says Mendelson. "Instead, what we realized was the way the language was written... it could reasonably be read that the tax was on each step of the process."
Basically, Mendelson says his intent is for the 3% sales tax to only be when an ad is sold for placement in a publication or on TV.
"The way we're doing taxation — ad hoc, a tax here, a tax there — is not the way to do tax policy," says @marycheh, adding that she wants to revive and make permanent the D.C. Tax Revision Commission. "This is not the way to do taxation."
. @VinceGrayWard7 says he's received "literally thousands" of emails opposing the proposed 3% sales tax on ads. He cites The Washington Informer: "What is going to be the impact on a paper by virtue of this? They work hard to generate ads to keep the paper alive."
"All the media are saying it will have a deleterious effect," says Mendelson. "If an ad costs $1,000, the tax would be $30 additional," he adds, saying the tax would be paid by the purchaser. He basically says that the impact won't be that serious.
"When we try to do tax policy on the dais, without a hearing... I would argue today we don't the cumulative effect of doing all these tax increases," says @kenyanmcduffie. "We have to understand there is a cumulative effect, and it's exacerbated when you do it in this fashion."
McDuffie says small newspaper he has talked to have seen revenue losses of between 50% and 75% during the pandemic, and the sales tax will only make things worse.
"What do we do if the Informer or the Blade says 'we're done'?" says McDuffie.
There's certainly a building pushback to Mendelson proposed 3% sales tax on ads. But there's a problem: it was included in the first vote of the 2021 budget two weeks ago, and would raise $18 million. That means the Council has to find $18 million to cut to make the tax go away.
"It makes D.C. less competitive," says @CMBrandonTodd on tax increases included in the first version of the 2021 budget. "At a very precarious time... we have to look at ways to remain competitive."
"We could have done something different to have a healthier balance for businesses during this tax season," says @trayonwhite on the ad tax.
"I thought that the overall sense of members is they wanted to increase spending for certain programs, especially social justice programs," says Mendelson, defending his sales tax on ads.
"I know you put the ad tax in place to provide more resources in what we agreed would be an equity budget," says @tweetelissa. "I think the flaw... this tax is trying to take money from businesses that are struggling."
Silverman goes back to her days as a @wcp reporter, when each weekly edition was more than 100 pages long. Now, she says, it's just over 20.
"There is an alternative: take money from people who are not struggling," says Silverman, again raising the prospect of a tax bump for residents making more than $250k. That was voted down 8-5 two weeks ago.
"Keep this in, and we'll swap it out next week with a tax that will get money from those who are not struggling," says Silverman.
"This body had a choice in front of us [two weeks ago]," says @charlesallen. "Closing our libraries at this time is not the right choice," he adds, about how Mendelson's tweak to the ad tax would impact libraries.
Mendelson says that @cmdgrosso, who has oversight of libraries, can handle the slight reduction in revenue the tax will bring in with Mendelson's tweaks.
It looks like a majority of the D.C. Council is lining up against a sales tax on ads that was already approved two weeks ago. But now they have to find a way to fix it by next week before a final budget vote. Could that tax increase on high-income residents come back?
"Here we are with I would say a 3% tax which I would say is modest for expanding the tax base which is good public policy," says Mendelson, adding that every business complains about any tax increase.
Mendelson accuses his colleagues of a "binge" in raising taxes... but Mendelson himself proposed a new sales tax on ads, which is not generating pushback.
"The voice of papers like the Informer and the Afro... is more important now than ever before," says McDuffie. "This is not Uber. The Informer is nowhere close to having the types of revenues like Uber."
"They don't hire people that look like me to cover City Hall," says McDuffie about certain newspapers he did not name and wouldn't be as impacted by the new sales tax on ads.
"I'm feeling a little frustrated," says Mendelson, saying that his colleagues are speaking for too long — against his proposed sales tax on ads.
"Members need to think long and hard how much we are into raising taxes as opposed to having better control over our spending," says Mendelson.
"There's a lot of confusion here," says @RobertWhite_DC. "You just criticized the Council for raising taxes, but the tax increases here are your proposals," he says to Mendelson.
"There is an alternative to these taxes: start to cut programs," adds White. "The reality is, especially as we hit a different type of economy, we're going to have make a lot of tough choices. The conversations cannot be confined to our budget debates."
"I am told library hours will be cut, and Sunday hours are most likely to get cut," says Silverman about Mendelson's minor tweaks to his ad tax.
Tensions are high in the Council over Mendelson's new tax on the sale of ads, which lawmakers grudgingly approved two weeks ago but are now trying to scrap because of concerns on impact to local newspapers and small businesses.
Mendelson is proposing an hour-long break so budget hawks can scrape together $18 million in savings from other programs and services to kill the ad tax altogether. It looks like there are 7 votes in favor of this.
But there's pushback. "I'm confused about what in the world we'd be doing," says Allen. He's concerned about the lack of transparency of the Council recessing for an hour to make $18 million worth of cuts with no real public debate.
"We can tax our way to having programs or we can cut our way to having a balanced budget," says Mendelson. "Yeah, this is a messy process. I put forth an amendment to fix a problem... members have seized upon how much they dislike this tax."
OK, so we're looking at a competing battle over tax policy AND parliamentary procedure, and there's apparently no good outcome no matter which way this pans out.
If you're just tuning in, a quick catch-up. 2 weeks ago Mendelson inserted a new 3% tax on the sale of ads into the budget, which passed on first vote. There was an outcry about wording and impact on local media outlets and businesses. (Cont.)
So today Mendelson proposed clarifying the proposed tax, which would shave into the estimated $18 million of annual revenue it would raise. And to cover that small loss, the public library budget would lose some of the additional money the Council gave it.
So suddenly a majority of lawmakers are not just fighting the new tax altogether, but also raising concerns about Mendelson's tweaks and the impact on library operating hours.
So Council members have to choose: Do they agree to Mendelson's tweaks, knowing it helpfully clarifies a new tax they don't like but could also mean libraries face small cuts? Or do they reject the amendment, leaving the unclear tax in place for now but saving library money?
Mendelson wants to split the baby, so to speak: take an hour recess and find $18 million worth of other cuts in the budget to kill the new tax altogether. But some lawmakers want to revive a tax increase on high-income residents that failed 2 weeks ago.
YOU GUYZ FOLLOWING THIS. Because it's a mess. Now, the saving grace is that today's planned budget vote isn't the be all, end all. There's one more vote on a companion budget bill next week. GOT IT?
"Everyone is going to be unhappy with something," says Mendelson, probably outlining the Council's new operating motto.
And there's a 6-7 vote on @BrianneKNadeau's motion to close debate, so DEBATE CONTINUES.
"This is why we need local newspapers," says Silverman. "Because not all of our public has the chance to watch a dumpster fire of a legislative process right now." OH SNAP.
And @trayonwhite has called today's session a "debacle."
"I am the parliamentarian," says Mendelson, laying down the... Robert's Rules Of Order, I suppose.
And I'm pretty sure Allen's kids are yelling in the background, unwittingly expressing WHAT WE ALL FEEL right now.
Now Mendelson motions to postpone debate on the budget until the end of today's legislative session. Which would solve nothing, and just delay the discussion. Motion passes 8-5.
