THE ECONOMIC AND FINANCIAL IMPACT OF DC STATEHOOD

Public Oversight Hearing on “THE ECONOMIC AND FINANCIAL IMPACT OF DC STATEHOOD.”
DC Council Special Committee on Statehood and Self- Determination, chaired by DC Councilmember at-Large, Michael A. Brown
July 13, 2009

BACKGROUND: Councilmember Michael A. Brown and his committee colleagues have held hearings to educate citizens, elected leaders and the general public about the historical governance, issues, and challenges related to the attainment of full self-determination for District residents. “As the District continues its struggle for Statehood and full democratic rights, which are the birthright of every other American citizen, we must be prepared with the knowledge and understanding of the additional financial costs, as well as additional revenue opportunities, that will come with Statehood,” said Councilmember Brown.

My testimony

Others have discussed key economic and financial impacts of DC Statehood. I will focus on the economic and financial policies now in place and the changes necessary to strengthen our prospects for DC Statehood, the only status that meets the test for full citizenship rights of our residents.

Let’s first look at the economic and social status of our residents. DC has the highest income inequality in the nation compared to any state and virtually all cities, inequality which has progressively grown in the last 10-15 years, particularly from the inception of the Control Board regime. DC has among the highest child poverty and HIV/AIDs infection rates in the nation, and has the lowest or very close to the lowest life expectancy. Research demonstrates that income inequality in a community, state or nation is the fundamental driver of bad health.

I submit that the root cause of this horrific status, indeed systematic violations of the human rights of our residents, is the policy appropriately called “urban structural adjustment” coupled with the impact of Congress’s neocolonial rule, similar to SAP applied by the World Bank/IMF to countries of the global South. This policy has included the erosion of democracy (e.g., our Mayor’s change to school governance in the Home Rule Charter by Congressional action instead of referendum by District voters), tax cuts targeted to the wealthy, increasing regressivity of our local tax structure and income inequality, huge subsidies to the big corporate sector taken from our tax derived revenue (e.g., Convention Center, Baseball Stadium), gentrification coupled with reduction of affordable housing thereby depopulating DC.

Let us be clear, we have two boots on our neck, one is Congress, the other is the regional and multinational corporate sector and those elected officials beholden to this sector ‘s campaign contributions. To remove the Congressional boot, our elected DC government should seek to empower our majority, now suffering from severe economic distress, to mobilize in ever increasing numbers for DC Statehood. We must do better under the present limits of Home Rule for our residents. We demand a just budget, a fair progressive DC tax structure (apply Obama’s promised federal tax medicine locally), that will be a model for the region, thereby empowering the statehood movement, laying the basis for a progressive reciprocal income tax structure with surrounding jurisdictions. With such an approach we will surely win many allies among Maryland and Virginia commuters who now constitute 2/3 of our workforce.
Quoting from an article, written in 1993 but still very relevant on this subject: “According to a recent NLC study, "City Distress, Metropolitan Disparities and Economic Growth," economic disparities between central cities and their suburbs hurt the entire metropolitan region. The study found a direct relationship between city-suburban economic disparities and regional economic growth. Metropolitan areas with small disparities tend to be more prosperous. As disparities increase, overall regional employment growth declines. Thus cities and suburbs form a single, interdependent economic unit whose economic welfare and futures are joined. The prosperity of the doughnut and the hole are inseparable. The NLC study concluded that "the capacity and willingness of cities and suburbs to work cooperatively to effectively address their common economic needs will be an important determinant of their mutual economic future. Where suburbs turn their backs on core cities, or cities refuse to cooperate with their suburbs, they are undermining their own economic prosperity." “
(D.C. handles half million commuters daily: non-resident reciprocal income tax could bring in windfall. Nation's Cities Weekly, January 25, 1993).

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"We do not have to accept or tolerate such glaring disparities in our society. We do not have to accept or tolerate bloated Pentagon spending, unfair tax cuts, attacks on our civil liberties, and on workers' rights to unionize. We don't have to accept or tolerate our children dropping out of high school, college education unreachable because tuition is so high, or our country steeped in debt."
- Cynthia McKinney, Green Party Presidential Candidate 2008