Stadium tax scale due for revision

District officials hurriedly are seeking changes to the gross-receipts tax that would fund the largest portion of the city’s proposed baseball stadium.

The changes come in the aftermath of Thursday’s 16-hour public hearing on the stadium bill that featured theatrics, grandstanding and unhappiness among at least five members of the D.C. Council with the legislation as it is currently written.

The structure currently offered by Mayor Anthony A. Williams and top aides calls for District businesses grossing at least $3million a year to pay a fee ranging from $3,000 to $28,200 a year. Businesses generating at least $16million a year would pay the top-end fee.

But after hearing from hundreds of citizens and trade groups, many council members and administration officials believe it is not proper to assess the same fee to one business grossing $16million a year and another grossing 10 or 20 times as much.

In the changes, which are still under discussion, businesses grossing more than $20million might be split into one or two new categories on the fee scale, with the top-end tax perhaps surpassing $40,000 a year. City officials estimate about 280 businesses in the District meet this high-end threshold. The tax as currently written would apply to 11 percent of city businesses.

“We’re working though the numbers, seeing where we can include more proportionality to the model, shifting a bit more burden to the top end,” said Steve Green, special assistant in the city office of planning and economic development. “This is a good point that’s being made, and it certainly possible to try and make this more progressive.”

Several administration officials met yesterday with chief financial officer Natwar Gandhi to discuss the potential changes.

Jack Evans, Ward 2 Democratic councilman, agreed tweaks were needed to the tax to make the stadium bill more politically viable.

“Something definitely needs to be done with that tax, and I think there are ways we can make this more equitable,” Evans said. “But we need to move fast. I want a piece of legislation we can get really comfortable with.”

The Greater Washington Board of Trade, an ardent supporter of baseball, said it likely would endorse the changes for the gross-receipts tax.

“We are comfortable with the current legislation. At the same time, we understand the possibility and perhaps likelihood of it needing modifications along the way,” said Len Foxwell, Board of Trade director of government relations. “We are willing to consider those modifications that would not place an unreasonable burden on the city’s business community.”

The stadium financing bill is scheduled for mark-up Wednesday and a first vote by the full council Nov.9. The entire bill must be ratified by Dec.31 to keep the relocation of the Montreal Expos to Washington on track.

Evans and other city officials said yesterday they remained confident the stadium measure can garner the needed seven votes to pass. But the changes being sought indicate the effort is not an open-and-shut case.

Evans, chairman of the council’s finance committee, also wants Williams’ proposed community benefit fund tabled for the time being. The mayor’s effort, announced three days ago, would create a tax-increment financing district around and north of the stadium to generate money for libraries, recreation centers and other city amenities.

The pertinent details behind the plan, however, are almost absent and several council members, most notably Ward 1 Democrat Jim Graham, are openly hostile to the idea.

“The community benefits plan is still really at an elementary stage,” Evans said. “Can this really work? I don’t think we know yet. I’d rather work it through, find something really doable, and come back to that later. It doesn’t have to be attached to the ballpark bill right now.”

While Evans, an ardent supporter of the stadium bill, withstood a steady brunt of personal attacks during the marathon hearing, he said the process was more than worth the effort.

“It may have been inconvenient for some, but we heard from everyone who wanted to testify. We stayed until the very last one,” Evans said. “I just hope they all come back during budget time when we’re actually talking about serious money.”