After being sworn in Sunday as the sixth elected mayor of the District of Columbia, Vincent Gray coyly hinted that a tax increase was "close to the tabletop." As the former chairman of the D.C. Council, Gray knows all about financial choices, as many of the spending decisions made by him and his council colleagues directly led to the estimated $480 million budget deficit expected for the coming fiscal year. But taxing his way out of this deficit would be neither fair, nor wise. A previous council saddled taxpayers with $611 million in public debt for a baseball stadium that is almost completely controlled by the private owners of the Washington Nationals. Due to the Byzantine structure of the deal, the stadium can probably never be sold to repay the city for its contribution to the project. Two years after Opening Day, only a fourth of the promised economic development around Nationals Park has materialized. Construction is at a standstill and just two retail businesses opened this year in the stadium neighborhood. It's not fair to raise property taxes on struggling D.C. homeowners when the city just handed over a 20-year, $46 million tax break to Marriott for a luxury boutique hotel in Adams Morgan. Instead of learning from the baseball stadium mistake, council members led a $272 million bucket brigade for Marriott to build a 15-story luxury hotel next to the convention center at a time when the recession is dampening convention activity nationwide. This makes about as much financial sense as resorting to interest-only payments to keep the city's checks from bouncing, as Chief Financial Officer Natwar Gandhi surreptitiously did last year.

Raising taxes to keep this unsustainable spending party going would be a major mistake. By any measure, $7 billion in long-term debt for a city that just recently topped 600,000 residents is excessive. At $11,822 per capita, D.C.'s debt is already among the highest in the nation. It currently costs $413 million a year to service this debt, almost as much as the current budget deficit; payments will rise to $733 million by fiscal 2014. And if interest rates rise and revenue continues to fall over the next four years, as they are expected to do, Gray will have few options available if he has already taxed city taxpayers to the hilt. Better to cut the corporate welfare, reduce the size and cost of city government, and take potential tax increases off the tabletop.