WASHINGTON, DC — DECEMBER 11, 2008 — A new report released today by two nonprofit organizations dedicated to improving the lives of Washington, DC, residents recommends that the incoming Obama administration invest significant resources to improving the infrastructure and services in the Nation's capital city as part of the president-elect's economic recovery plan. The report concludes such investment would not only create significant jobs in the region, but also renew pride in America's national capital.  

The report by DC Appleseed Center and Our Nation’s Capitol (ONC), titled “Building the Best Capital City in the World,” was released at a press conference held at the Wilson Building in downtown Washington, DC, and attended by DC Mayor Adrian Fenty, Rep. Eleanor Holmes Norton (DC), Chairman of the DC Council Vincent Gray and DC Chief Financial Officer Natwar Gandhi.

Several authors with extensive experience and knowledge of the history and financial structure of Washington DC - including Jon S. Bouker, co-manager of the Government Relations Department at the law firm Arent Fox LLP - contributed to the report.  

“As Congress and the White House ponder spending hundreds of billions of dollars on an economic stimulus package, they should make investment in the long-neglected infrastructure needs of our capital city a top priority,” Bouker said. “Such an investment would benefit all Americans.”     

To read the full report, “Building the Best Capital City in the World,” please click here.  

The authors reveal that the United States government treats its capital city very poorly relative to the support other capitals receive from their national governments. The revenue-raising limitations the federal government imposes on the District of Columbia also preclude the DC government from building a world class capital city of which the entire nation can be proud.

The proposal that the federal government should partner with the District of Columbia government to build a great capital has long been a goal and vision of American presidents. In 1963 President John F. Kennedy declared that “Washington DC is the capital of the United States of America. Let us make it a city of which the Nation can be proud - an example and a showplace for the rest of the World.” Similarly, in 1997 President Bill Clinton said “America’s eyes and the eyes of the world constantly focus on Washington. Working together we can and we must make Washington once again the proud face of America shown to the World.”

The new report shows, however, that without additional federal support, the vision of Presidents Kennedy and Clinton will never be realized. The reason for this  is that the District of Columbia Government has significant state-like responsibilities, but does not possess the revenue-raising capabilities of a state. Instead, by law the District cannot tax the income of nonresident workers even though they account for two-thirds of the income earned in the city. In addition, the District cannot collect taxes from the biggest industry in the city – the federal government itself. The result of these limitations, as the US Government Accountability Office (GAO) has pointed out, is that the District of Columbia government faces a “structural deficit” of over $1 billion a year.

Nevertheless, the District of Columbia government has balanced its budget 11 years in a row, improved services to residents and visitors alike, and put itself on the path to becoming a better city.  But as the report also shows, these admirable steps have come at an enormous cost – the need to defer critical infrastructure investment in the Nation’s Capital. And because those infrastructure investments are both crucial to building a world class city and out of reach of the DC government acting on its own, the report argues that now is the moment for the new president of the United States to commit infrastructure funds to the city.

Specifically, the report contends that if the new president and the new Congress did nothing more than compensate the District of Columbia for the revenue limitations the federal government imposes (approximately $1 billion per year), the city could at once advance several goals: (1) make a critical investment in the economy of the National Capital area; (2) provide the support for Washington, DC that other nations provide their national capitals; and (3) help build the best capital city in the world – one to equal the greatness of the American people and worthy to present to the world as a showcase for democracy.