DC Statehood Fund, Collecting Money Proves Taxing
||Washington Post (DC)
||Sunday, March 27, 2011
The cause of District statehood may have a powerful new foe, and it’s not the Constitution, voter apathy or the Republican-controlled Congress.
For five years, city residents filling out their tax forms have had the option of contributing to the DC Statehood Delegation Fund, which helps pay the expenses of the District’s “shadow” congressional delegation and its efforts to lobby for statehood.
But after averaging $29,000 in contributions a year from 2007 to 2009, donations to the fund plummeted to $12,000 in 2010 — a 55 percent decline from the previous year — according to the D.C. Office of the Chief Financial Officer. Although there’s no perfect way to explain the drop short of polling every District taxpayer, shadow Sen. Paul Strauss (D-D.C.) has a theory.
“You know e-filing is killing us,” Strauss said.
The contribution system, he said, “works really well for paper D-40EZ filers. It works less well for long-form filers and e-filers.”
Taxpayers can contribute as much as they want to the statehood fund, with a minimum donation of $1. The selected amount is either added to their tax bill or subtracted from their refund. (They can also contribute to the Public Fund for Drug Prevention and Children at Risk and the Anacostia River Cleanup and Protection Fund.)
On the single-page D-40EZ — used by filers who don’t itemize their deductions, make less than $100,000 a year and meet a few other criteria — those voluntary contribution options appear in the middle of the form.
But the longer D-40 form used by other individual taxpayers does not mention any of the three funds. Advocates for statehood — or cleaning up the Anacostia or battling drugs — need to fill out and attach a separate Schedule U form for “Additional Miscellaneous Credits and Contributions,” which includes the three items.
The instruction booklet that accompanies the D-40 and D-40EZ forms doesn’t explain what the DC Statehood Fund is or where the money goes.
District residents can file their taxes electronically directly with the city, or they can use commercial tax preparation software. Some filing programs may make the the task more difficult than others.
Shadow Rep. Mike Panetta (D-D.C.) said that when he did his taxes last year using the popular TurboTax software, finding the statehood fund was difficult.
“It wasn’t presented to me automatically. It was something I had to go in and dig for,” Panetta said. “How many people are going to do that?”
The problem, Panetta added, is that “we’re not only asking people to give up money, we’re asking them to jump through hoops to do it.”
D.C. Council member Phil Mendelson (D-At Large), who wrote the law creating the statehood fund, said he would talk to the city’s chief financial officer about the possibility of making it “more prominent” on tax forms. (Mendelson has an accountant prepare his taxes, and he said he didn’t know whether he had contributed to the fund in recent years.)
D.C. voters may be familiar with the city’s “shadow” delegation — which includes two senators and one representative — because they’ve seen the term on their ballots. But do they know that the shadow delegation is the same as the “statehood delegation”?
“I think most D.C. residents don’t know it exists,” Ilir Zherka, head of the advocacy group DC Vote, said of the statehood fund and its presence on tax forms.
The numbers suggest that Zherka might be right.
Even in the program’s best year — 2008 — just 1,962 District taxpayers gave to the statehood fund when filling out their returns for 2007. In 2009, 1,752 filers chose to contribute. In 2010, the number of participants dropped to 601.
Those who gave were generous — contributors last year pledged an average of $22.50 apiece, and one offered $400. But in a city of more than 600,000, according to new census figures, the participation rate is low.
Although the District has fared better than many other areas of the country have, the economic downturn of recent years probably hasn’t helped the cause.
“In this economic climate, asking people to donate money .?.?. is a much tougher ask than it has been,” Panetta said.
Competition could also be playing a role. Last year — when donations to the statehood fund fell precipitously — was the first time the Anacostia cleanup fund appeared on tax forms as a contribution option.
Perhaps the statehood fund just has a PR problem.
“I think the city has done a miserable job in promoting it, and that’s what’s needed,” Mendelson said.
Strauss and his fellow shadow officials have sought to publicize the statehood fund with a campaign based on the slogan “Think Inside the Box.” The effort has included filming a public service announcement featuring actress Hayden Panettiere.
Last year, local tax preparers were invited to a reception where they were encouraged to remind their clients about the fund. Chocolates were provided featuring the “Think Inside the Box” motto, and attendance was strong, Strauss said.
The statehood fund got off to an inauspicious start. Although the bill creating it became law in November 2004, the line for it was omitted from tax forms for 2005. The head of the city’s tax office at the time called the mistake “simply an oversight.”
Taxpayers that year were permitted to write in the word “statehood” and their contribution amount at the bottom of their returns, but few did — the fund took in $1,200.
Distributing the money also was problematic. The law creating the fund also established the DC Statehood Delegation Fund Commission, which was empowered to disburse the money. But the commission never performed that function because the mayor and the D.C. Council never appointed a full contingent of nine members.
So in 2008, the council approved legislation giving the shadow delegation direct access to the money. Strauss said it has helped pay for some office supplies, stipends for non-volunteer staff and occasional lobbying expenses such as meals.
But getting about 20 bucks apiece from a fraction of 1 percent of the city’s residents can go only so far.
As Strauss puts it, “I’m the only elected official around who works for tips.”