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District residents must be feeling bamboozled. First the D.C. Council gives them a tax cut. Then it snatches it right back by moving from triennial to annual property assessments (Loose Lips, 3/2). A few councilmembers think the scam stinks.

Led by Ward 4’s Adrian Fenty, the lawmakers are trying to set things right by repealing the Tax Parity Act. Passed in 1999, that measure reduced personal income taxes, property taxes, and franchise taxes, and eliminated the “arena fee” for businesses with less than $2 million in annual income. Fenty and his allies—who include At-Large Councilmember Phil Mendelson—have been working the halls on the seventh floor at One Judiciary Square. But their proposal has been met with closed doors and pissed-off attitudes.

“We should revisit the issue,” asserts Fenty, who objects to the fact that the 1999 income-tax cut was based on a flat percentage and thus is not progressive. “It’s the same percentage whether you’re at $20,000 or $200,000. I don’t agree with that kind of tax policy.”

Adds Mendelson: “I don’t want to roll back the cuts that have already taken effect. But each year there are about $60 million more in cuts that will occur, and I do think we should revisit the impact of that.”

The repeal of the tax cuts would be in lieu of returning to annual property-tax assessments, which are particularly tough to bear in neighborhoods where property values have been rising sharply—a situation that applies in Fenty’s ward, which includes a solid base of homeowners, many of whom voted for the freshman councilmember. (Mendelson, who initially objected to the tax cuts during the 1999 discussion, may also be responding to his property-owning support base, which is largely in Wards 2 and 3).

The shock and hardship associated with what some government officials say could be 200 percent increases in some property-tax bills, along with the obvious need for additional money to improve such municipal services as schools and recreation, are reasons enough to stick with triennial reassessments and instead repeal the tax cuts, says Fenty. His argument is bolstered by the fact that in his fiscal 2002 budget proposal, Mayor Anthony A. Williams had only about $20 million to $30 million in new money to fund needed improvements. Had it not been for the 1999 tax cuts, he could have had more than $100 million available.

By fiscal year 2004, finance officials project, the tax cuts will cost the city more than a quarter of a billion dollars in revenue. Proponents of repealing the tax cuts argue that those dollars could be used to offset any losses that would result from continuing the triennial property-reassessment process, while providing additional money for public education, youth programs, and mental-health services.

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“That’s a fact,” says council Chair Linda Cropp. “You don’t have that money to spend on other programs. It’s the choice you make on how you’re going to spend your money.”

But Fenty and his allies won’t find a supporter in the chairperson. Although she says she intends to keep the city “fiscally responsible,” she isn’t touching the tax cut and is willing only to consider placing a cap on the increase any homeowner might experience on the first bill after the sunsetting of the triennial assessments. She says that if the city continues triennial assessments, it is in effect providing a cut in the tax rate, because it is taxing property at a level lower than the current market value.

Instead of keeping that confusing system, Cropp suggests, the government should switch to annual assessments but also make a “conscious decision to lower the tax rate. At least then it would be clear that our rate is lower than the books say.”

Great idea. Maybe the council ought to take Cropp up on her suggestion.

NO RELIEF

If you are poor, disabled, or a child, you can count on only one thing from the District government: being dogged. LL won’t even talk about what happens to anyone who happens to be all three.

Evidence of the city’s latest assault on the vulnerable comes from Forest Haven. Remember that hellhole where the city’s mentally retarded and other unwanted wards were housed like animals? Opened in 1925 in Laurel, Md., the facility was finally closed in 1991 by court order after decades of fighting by Forest Haven residents to be treated with dignity and humanity. Yet the abuse of former Forest Haven residents persisted even after the campus closed: Hundreds died in city-subsidized group homes without any investigation into their deaths. To add insult to injury, they were buried in unmarked graves.

Those who managed to survive were still ripped off. As the city tries to free itself from the horrific Forest Haven legacy and the class-action lawsuit brought by lawyers in 1976, questions are being raised about what happened to millions of dollars that belonged to the former residents. LL’s grandmother used to say that anyone who steals from the blind, the crazy, or the handicapped belongs under the jail. It appears that could mean some District government employees.

“Someone stole these people’s money,” says one source close to the case, speaking on condition of anonymity. “Money just doesn’t vanish into thin air.”

Many Forest Haven residents received allowances from their families, others collected Social Security supplements, and still others worked menial jobs for meager pay. But whatever the source, all those individual funds were supposed to have been placed in interest-bearing bank accounts in the residents’ names. The money was to be used to cover personal expenses for the residents to supplement the services provided by the government directly or through contracts.

“It’s a lot of people and what tends to be a small amount of money over a long period of time,” says Joe Tulman, an attorney for the Forest Haven residents. He estimates that the Social Security supplements could have been about $70 a month for each of the 760 people in the class. LL ain’t a math whiz, but she figures that could be almost $13 million, if computed for 20 years.

“I was treated real bad at Forest Haven. I want my money. Do you have any ideas how I can get it?” Diane Jackson, a former Forest Haven resident, asked U.S. District Court Judge Stanley Harris during a March 5 hearing to finalize a settlement agreement between the District and the class.

Judge Harris ordered the District government to conduct an audit of the past 10 years, tracking each of the 760 people in the class who once lived at Forest Haven and logging how much money each received annually and what happened to those allotments. He also approved the agreement between the city and lawyers for Forest Haven residents, which calls for the creation of a “Quality Trust” with a 13-member board of directors, whose responsibility it will be to monitor the quality of service received by the mentally retarded and ensure that each person has a legal representative and a “lay advocate.” The operation will be funded by $11 million from the District, which hardly erases the awful treatment these people received and doesn’t respond to the rip-off.

District officials plead ignorance about the missing money. Williams’ special adviser on court orders and receiverships, Grace Lopes, says, “We will stand by the commitments in the exit plan.”

Which doesn’t necessarily mean jack, because the city has signed agreements before and then proceeded to violate them, offering more creative excuses with each violation. And it doesn’t even begin to answer Jackson’s question: What happened to the money?

NEED NOT APPLY

On March 26, hoping to prevent yet another embarrassing episode for Williams, Ward 3 Councilmember Kathy Patterson wrote to mayoral Chief of Staff Abdusalam Omer, warning him not to even think about presenting Connie Spinner as the nominee to head the newly created State Office of Education.

Patterson reminded Omer of Spinner’s legacy as executive director of the Child and Youth Investment Trust. According to the confidential memorandum, a copy of which was obtained by LL, Patterson alleges that Spinner in fiscal year 2000 managed the investment fund into a “state of operating deficit,” forcing the trust to request and receive an additional $150,000 from the city. Further, Patterson alleges, Spinner invested federal welfare funds in short-term certificates of deposit “in violation of any number of federal strictures in terms of what can and cannot be done with federal funds.”

Spinner also directed “spending at a rate that exceeds the statutory cap of 5 percent on administrative expenditures,” wrote Patterson, adding that the action was taken with “permission” from Deputy Mayor Carolyn Graham, who approved a cap of 9 percent. And finally, Patterson alleges, Spinner improperly transferred—with Graham’s approval—$3 million of the trust’s funds to D.C. Public Schools (DCPS).

“I do not relish making this information public in the course of a confirmation hearing, but will do so if necessary,” Patterson concluded.

Patterson refused to comment on her letter but did confirm that she had been asked to provide advice “on a confidential personnel matter….I regret that senior members of the administration violated that trust.”

Reached at her home this week, Spinner disputed Patterson’s version of events, asserting that she did not overspend the trust’s budget. She admitted to investing welfare funds in CDs but said that when she realized it was illegal she “returned the money to the District with interest.” She agreed that she had exceeded the council-mandated administrative expenditure cap of 5 percent but said she had received permission from Graham, who had conferred with the city’s corporation counsel. And, Spinner said, when she transferred $3 million of the trust’s money to DCPS, she was honoring an agreement that had been made prior to her arrival.

“This is all very devastating,” continued Spinner. “It was never my intention to do anything wrong or fiscally imprudent.”

Spinner said that she is still being considered for the state education position. But Patterson’s letter may have stopped her ascent; her name has not been forwarded to the council. —Jonetta Rose Barras

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