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PRESS RELEASE

FOR IMMEDIATE RELEASE

August 4, 2011 CONTACT:

Barbara Lang202-624-0612amiller@dcchamber.org

John W. Hill, Chief Executive OfficerFederal City Council202.223.4560 x110

jfernandez@federalcitycouncil.org

Jim Dinegar, President & CEOGreater Washington Board of Trade

202.857.5913ljohnson@bot.org

DC business organizations disappointed with Gray municipal tax veto

DC Chamber of Commerce, Board of Trade and Federal City Council alarmed by the action

Washington, D.C. Three of the Districts prominent business groups were shocked and dismayed byMayor Vincent Grays decision yesterday to pocket veto the Fiscal Year 2012 Budget Support TechnicaClarification Act, resulting in the implementation of a tax on the interest earned from out-of-statemunicipal bonds retroactive to January 1, 2011. The DC Chamber of Commerce, Greater WashingtonBoard of Trade and the Federal City Council (FCC) believe the veto is misguided and done withoutproper notice or conversation with the business community, or other elected officials.

Mayor Grays office stated that the reason for the veto was because of his concerns about the bond ta

amendment and its potential negative impact on the reserve funds and the District's rating on WallStreet. As a result, in order to pay for the one-year delay, the council decided to reduce the amount ofmoney it was going to put into the city's reserves by $13.4 million. The Council had already agreed toput more money into the Citys reserves than the Mayor had originally proposed and therefore would nohave had an impact on the Districts bond rating.

This veto by the Mayor came as a shock to the business community. We did not see this coming and iis a move we disagree with 100 percent, said Barbara B. Lang, president and CEO of the DC Chambeof Commerce, adding that the Council is on recess and there is little recourse at this point . If the bondrating is the issue as the Mayor says, we should be reducing the size of our government by exercisinggreater fiscal responsibility and discipline, says John Hill, CEO of the Federal City Council.

The result of the one-year delay which the Council approved by a 7-6 vote is that individuals without-of-state municipal bonds would have had the option of dumping that debt from their portfolios andreplacing it with nontaxable D.C. bonds. Gray's veto means out-of-state bond holders will have to startpaying tax on interest earned in the 2012 tax year even if they purchased those bonds thinking theywould be tax-free. Jim Dinegar, the Board of Trade President & CEO says this is bad for the overallimage of the DC business community, and we are looking at options for next steps.

mailto:amiller@dcchamber.orgmailto:amiller@dcchamber.orgmailto:ljohnson@bot.orgmailto:ljohnson@bot.orgmailto:ljohnson@bot.orgmailto:amiller@dcchamber.org

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The DC Chamber is one of the largest Chambers in the Washington region. We provide Washington businesses with passionate advocac

valuable networking opportunities, and enlightening educational programs. We know just how special District businesses are and

everything we do is dedicated to delivering the capital they value. Please visit our website:www.dcchamber.org

The Greater Washington Board of Trade is the premier regional business network and the only local business association representing al

industry sectors. Founded in 1889, the Board of Trade enjoys a long history of helping its members businesses grow by p roviding conten

rich programs, connecting business leaders, and marketing Greater Washingtons economic opportunities. The Board of Trade addresses

business concerns that stretch across the District of Columbia, Suburban Maryland, and Northern Virginia, with a priority focus on

transportation, emergency preparedness, green as a competitive advantage, and workforce issues. Pro-business and bipartisan, the Boarof Trade develops positions on issues with the basic premise that sound, reasonable policies will benefit the economy and the community

at large. To learn more about the Greater Washington Board of Trade and its commitment to improving the regions business community

visitwww.boardoftrade.organdwww.greaterwashington.org.

The Federal City Council established in 1954 is composed of over 200 of the region's top business, professional, educational, and civic

leaders. The Federal City Council is a nonprofit, nonpartisan organization dedicated tothe improvement of the nations capital. Please vis

our website:www.federalcitycouncil.org

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