A year and a half ago, Loose Lips warned that the city’s Tax Revision Commission looked set up to fail. About a year later, he wrote that the influential advisory group appeared to be melting down. Fast-forward another six months, and he’s about ready to stick a fork in the TRC.
Incredibly, this commission of economists, developers, lobbyists, and other D.C. bigwigs has yet again delayed its plans to fulfill its stated mission: delivering proposals to reform the District’s taxation system to Mayor Muriel Bowser and the D.C. Council. The TRC, convened by policymakers once every 10 years or so, originally hoped to have a package of recommendations ready by the end of 2023. Now its work could easily stretch through the end of 2024, if it ever delivers a final product at all.
Sources in and around the TRC have grown particularly pessimistic about its prospects for success after the group convened Wednesday, Oct. 9, for what was supposed to be a final vote on a package of proposals. But the group was met with yet another reversal from the commission’s chair: former Mayor Tony Williams, now a top business booster as the head of the Federal City Council, a nonprofit focused on economic development in D.C.
TRC members entered last week’s meeting thinking they’d at least get to vote to endorse some policy recommendations, even if a particularly controversial idea—a tax on “business activity”—remained in limbo. Instead, Williams declared that there was still no consensus among commissioners about how to move forward, and he proposed waiting another week or so to consider how to gather more research on the issues that remain in contention. He adjourned the meeting after just a little more than 15 minutes, despite objections from several members of the group.
The commission had already agreed to delays in January amid similar disagreements, and it held several additional meetings specifically focused on research in other states that have implemented the business activity tax (known as a “BAT”). Williams assured commissioners that they could still have recommendations ready within the next “three or four months,” but Bowser’s budget team is already starting preparations for the next year’s spending plan. Another delay means the TRC is in danger of missing yet another opportunity to weigh in before policymakers start making serious decisions about the city’s economic future. At this point, LL has to wonder: Why should it keep going at all?
“We’ve been prevented for the better part of a year from accomplishing what we set out to do,” says Erica Williams, perhaps the most progressive member of the TRC and the executive director of the D.C. Fiscal Policy Institute. “And it seems like behind-the-scenes conversations are what’s slowing us down, which is problematic, because we’re a publicly appointed commission with a public charge. We should be having our conversations in the public eye. We had that for a time, but I think it’s been lost.”
Specifically, the former mayor said last week that he “shopped the [BAT] proposal around throughout the civic leadership of the city,” which sure sounds like code for getting an earful from his buddies in the District’s business community. (Tony Williams did not respond to a request for comment.)
The BAT would primarily hit unincorporated partnerships and large multinational corporations that generally avoid D.C. taxes on their profits, and it has attracted scathing criticism from the firms in its crosshairs. Business-friendly members of the commission have sounded similarly skeptical, particularly councilmember turned lobbyist David Catania and Edens developer Jodie McLean, and they have repeatedly decried any attempts to include the BAT or other major tax increases in the commission’s final report.
LL’s sources around the TRC say that Bowser herself has weighed in, with her emissaries urging former Mayor Williams against any taxation plans that would spook her allies in the business class. (Bowser’s spokespeople didn’t respond to a request for comment.)
“The chair’s delay for ‘more research’ without explanation is not the transparent process this commission committed to,” Niciah Mujahid, the executive director of the Fair Budget Coalition, writes in a statement. “We are concerned it’s an attempt to give the wealthy and the well-connected greater say.”
Love the BAT or hate it, Erica Williams argues that the commission needs to do something—even if that means taking a vote on a final report and simply adjourning the group permanently if the measure fails. (The measure does not need a unanimous vote in order to pass.) Between the staunch opposition of members like Catania and McLean, and the fact that Tony Williams has repeatedly flip-flopped on the BAT, she doubts the TRC will ever find a consensus on the idea. At the very least, the commission could hand over the pros and the cons it’s documented so far to Bowser and the Council and let them sort out what to do, she says. This limbo strikes many around the commission as untenable.
“I thought, at the end of the day, it was about compromise and having things that were displeasing to everybody, at least a little bit,” TRC member Gregory McCarthy, the top lobbyist for the Washington Nationals and a former Tony Williams aide, said during the meeting. “I thought that’s where we were. And so if we are going to advance now onto another, second round of the research process, it’s not quite fair to me.”
McCarthy pressed Williams on whether this additional research he envisions conducting would focus solely on the BAT or if the commission is “going back to square one” and fully reevaluating all the work it’s done thus far. Williams never provided a clear answer. “I don’t want to get into an argument right now,” the former mayor said as some commissioners pressed for clarity. “I really don’t.”
So now the TRC has no idea when it may meet again, members say, or who will conduct this research Williams wants. The commission’s executive director, Nick Johnson, is leaving the group in the next few weeks, and it’s not clear who will replace him. The TRC’s funding is also on the verge of running out, as the group has been working for much longer than anyone anticipated at its outset. Tony Williams floated the idea of a private firm assisting the commission with its further research, but it’s not clear whether he envisions the city paying for that or if he wants to dip into the Federal City Council’s coffers instead. The commission was allocated $400,000 in the 2024 budget and was given zero funds in this year’s 2025 budget, which took effect at the beginning of this month.
“So much has changed since we started this process two years ago,” Catania said Wednesday. “The world has kind of gone upside down, and we are confronted with once-in-a-generation changes. I think it makes complete sense to take a set of fresh eyes to this. These proposals have a short shot clock of three months, with a hard stop. We either come to a resolution or we don’t.”
The latter option is looking a lot more likely these days. Past TRCs have issued full reports that the Council can vote to endorse, in part or in full, though the commission’s divisions have made such an outcome look unlikely even if the BAT is left on the cutting room floor. Council Chair Phil Mendelson said during a legislative meeting last month that Tony Williams assured him that the TRC still fully intended to issue such a report, but the Wilson Building is increasingly discounting such assurances. (Consider that Mendo also said at the time that Williams hoped to have said report ready by the end of September, another blown deadline.)
“There is essentially complete inaction,” Ward 1 Councilmember Brianne Nadeau lamented during that Sept. 17 Council meeting. “And whatever is produced will be tarnished.”
If the commission passes a report full of recommendations that don’t do anything to address the city’s structural budget issues, or, worse, if it just waves through tax changes favorable to big business, then progressives on the Council have full license to put its report in the trash. Lawmakers already included some of the TRC’s revenue raising ideas in the latest budget, in fact, as they searched for ways to stave off the worst of Bowser’s cuts.
Nadeau and some of her colleagues have proposed the creation of a full-time Tax and Revenue Commission to replace the TRC. The permanent commission review tax proposals and advise the Council each year instead of waiting for these once-a-decade reviews. The new group would be charged with, among other things, recommending a permanent funding source for Metro. That’s perhaps the single biggest fiscal issue presently facing the city and it also happens to lie outside the scope of the current TRC’s mission (much to the chagrin of lawmakers, LL hears).
Nadeau’s legislation hasn’t gone anywhere, but the past few years of mess and inaction at the TRC is giving lawmakers a good argument in its favor. At the very least, it’s clear to LL that the decision to hand over the TRC’s keys to a bunch of business boosters (not policy analysts) was exactly as misguided as it appeared two years ago.
“I feel like, for the most part, we had a good process with a respectable outcome,” Erica Williams says. “It’s unfortunate it’s been undermined in this way.”