Washington, D.C. mayor vetoes budget bill

WASHINGTON, July 11 Fri Jul 11, 2014 2:54pm EDT

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WASHINGTON, July 11 (Reuters) - Outgoing Washington, D.C. Mayor Vincent Gray vetoed the budget passed by the city council last month, saying on Friday it would harm the district's elderly and calling on the council to delay their summer recess and craft a new spending plan.

"I cannot, in good conscience, sign a budget that hurts seniors, taxes wellness, dramatically delays and drives up the cost of the D.C. Streetcar system, and ties the hands of future mayors to respond to fiscal problems," Gray said in a statement.

The council could still override Gray's veto, especially given that only one member voted against the budget.

The mayor noted that he will not be in office when the budget is implemented. Washington's fiscal year starts Oct. 1.

Gray also said the budget "guts the tax cuts we promised our seniors." Specifically, it ended property tax relief for seniors with annual household income of less than $60,000 and repealed the long-term care insurance tax deduction as well as the government pension tax exclusion.

At the same time, he said future mayors would not be able to make any spending or program proposals until a list of tax cuts was fully funded and they would not be able to reprogram funds without active approval from the council.

He said District of Columbia employees would lose interest in living in the city because the budget repealed a first-time homebuyer credit, and added the plan would discourage residents from pursuing healthy lifestyles by taxing gyms and yoga classes.

As the population of the nation's capital has grown over the last few years, so has the pressure to complete a 22-mile streetcar system. The council's cuts to the system's funding would push its completion date to 2045 and make it impossible "to attract a firm with the necessary experience and expertise to take on building the project in a piecemeal fashion and on such an extended timeframe," Gray said.

Washington and its surrounding suburbs made it through the 2007-09 economic downturn relatively unscathed, but as the federal government has pulled back on spending or deadlocked in budget fights, the area has seen its tax revenue and job growth stagnate.

The district brought in $3.692 billion in revenue for the fiscal year through May, a decline of 0.1 percent from the same period a year earlier, according to a recent report.

On June 23, the district's Chief Financial Officer Jeffrey DeWitt said the council's budget was balanced and compliant with Washington's debt cap. He also raised issues about having revenue growth trigger tax cuts, emphasizing a possible need to save money for future fiscal years. (Reporting by Lisa Lambert)

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