FOR IMMEDIATE RELEASE
John W. Hill, Chief Executive Officer
Federal City Council
202.223.4560 x110 email@example.comJim Dinegar, President & CEOGreater Washington Board of Trade202.firstname.lastname@example.org
DC business organizations disappointed with Gray municipal tax vetoDC Chamber of Commerce, Board of Trade and Federal City Council alarmed by the actionWashington, D.C.
Three of the District’s prominent business groups were shocked and dismayed byMayor Vincent Gray’s decision yesterday to pocket veto
the Fiscal Year 2012 Budget Support TechnicalClarification Act, resulting in the implementation of a tax on the interest earned from out-of-statemunicipal bonds retroactive to January 1, 2011. The DC Chamber of Commerce, Greater WashingtonBoard of Trade and the Federal City Council (FCC) believe the veto is misguided and done withoutproper notice or conversation with the business community, or other elected officials.
Mayor Gray’s office stated that the reason for the veto was because of his ―concerns
about the bond taxamendment and its potential negative impact on the reserve funds and the District's rating on Wall
Street.‖ As a result, in
order to pay for the one-year delay, the council decided to reduce the amount ofmoney it was going to put into the city's reserves by $13.4 million. The Council had already agreed to
put more money into the City’s reserves than the Mayor had originally proposed and theref
ore would nothave had an impact
on the District’s bond rating.―This veto by the
Mayor came as a shock to the business community. We did not see this coming and it
is a move we disagree with 100 percent,‖ said Barbara B. Lang, president and CEO of the DC Chamber
of Commerce, adding that the Council is on recess and there is little recourse at this point
. ―If the bond
rating is the issue as the Mayor says, we should be reducing the size of our government by exercisinggreater fiscal responsibility and discipline
,‖ says John Hill, CEO of the Federal City Council.
The result of the one-year delay
which the Council approved by a 7-6 vote
is that individuals without-of-state municipal bonds would have had the option of dumping that debt from their portfolios andreplacing it with nontaxable D.C. bonds. Gray's veto means out-of-state bond holders will have to startpaying tax on interest earned in the 2012 tax year
even if they purchased those bonds thinking theywould be tax-free. Jim Dinegar, the Board of Trade
President & CEO says ―
this is bad for the overallimage of the DC business community, and we are looking at options for next steps.