ikely future outcome of this scenario between the state governments.
Government collaboration is needed in this case because the states surrounding the District, Virginia and Maryland, are outpacing it in terms of economic growth. A small tax base, loss of tax monies from services provided to commuters, and slow economic growth compared to Maryland and Virginia are the reasons why this dispute has arisen. Collaboration among the three governments is also necessary because at present federal law prohibits the District from collecting commuter taxes. Therefore, the three governments must collaborate in order to find a manner of sharing income tax revenues.
Maryland and Virginia collect taxed from residents who work in the District, so District officials feel it is only fair those revenues are shared. The District’s narrow tax base does not afford the city with enough revenue to pursue a course of economic growth. The District government used to be able to collect taxes from nonresidents under the Home Rule Act of 1973, but all that changed in 1997 “Until 1998, the District received an annual federal payment of $660 million for property that is exempt from being taxed. The payment was eliminated when Congress passed the D.C. Revitalization Act of 1997, which transferred financial and management authority over several local functions to the federal government” (Schoenberg 2).
WHAT PARTS OF GOVERNMENT COLLABORATE?
There are various parts of government in the District, Virginia and Maryland that must collaborate on this issue. One part includes the congressmen and congresswomen of the three regions. Eleanor Norton Holmes’ plan needs the collaboration of District, Virginia and Maryland government officials and the justice system as a final resolution body. In this manner, the congress plays a vital role in inter-state disputes, mainly because each state uses its congressional representatives to lobby the federa...