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D.C. Business Veto Response

D.C. Business Veto Response

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Published by Mike DeBonis

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Published by: Mike DeBonis on Aug 04, 2011
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08/04/2011

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PRESS RELEASE
FOR IMMEDIATE RELEASE
 August 4, 2011 CONTACT:Barbara Lang202-624-0612amiller@dcchamber.org 
John W. Hill, Chief Executive Officer
 
Federal City Council
 
202.223.4560 x110 jfernandez@federalcitycouncil.orgJim Dinegar, President & CEOGreater Washington Board of Trade202.857.5913ljohnson@bot.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.
 

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