D.C. Council approves 2012 budget proposal

Wednesday - 5/25/2011, 1:10pm EDT

WASHINGTON - The D.C. Council has given preliminary approval to the city's fiscal 2012 budget -- a spending plan that includes an increase in some taxes as well as more money for human services.

The council met to vote on the budget after several weeks of hearings on the proposal. Members will take a final vote next month.

D.C. Mayor Vincent Gray last month introduced a budget aimed at closing a $322 million shortfall with a combination of spending cuts and tax hikes. The $9.6 billion budget for the fiscal year that starts July 1 included $127 million in tax increases, mostly on businesses, and fee hikes for assorted services.

The budget proposal the council voted on Wednesday reflects changes made to the spending plan after weeks of negotiation and discussion among council members.

The budget includes more than $20 million to restore funding for homeless shelters and disability assistance.

It does not include a tax hike for D.C. residents earning more than $200,000 that was supported by Gray, but does include a tax on out-of-state bonds, which were tax-exempt. Those bonds are included in many retirement plans.

The council also struck down a proposal by Gray to tax live theater performances in the city.

The budget additionally contains a 30 percent tax increase on parking lots and garages in the city. The District also will begin requiring big businesses like Target and Pepco to pay local taxes on their profits, rather than reporting those profits in other states.

Gray said in a statement that although he disagreed with the decision to spike the tax hike on wealthy residents, he was pleased overall with the council's vote and looked forward to signing the budget.

District officials are required by law to produce a balanced budget, which then must get congressional approval.

WTOP's Mark Segraves reported earlier Wednesday as the council's budget debate unfolded. You can check out his tweets below and follow him on Twitter here.

You also can find a draft of the budget support act that was considered by the council below.

DC Budget Support Act

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