Pandemic-era federal aid has dried up and commercial vacancies are severely straining city revenue and spending, Bowser administration officials said. The city faces a $4 billion budget shortfall over the next four years, including a $700 million shortfall this year.
To close the gap, Bowser (D) is proposing about $500 million in cuts to city programs this year. These include abolishing bus circulation altogether and abolishing the Early Childhood Educator Salary Equity Fund, which pays stipends to caregivers and childcare workers for their educational accomplishments. Advocates were concerned. Officials said the move comes as Chief Financial Officer Glenn Lee allocates funds to the city to replenish local reserves, which will cost the city an additional $215 million overall in its fiscal plan. The request was the trigger.
Bowser proposed her budget as “strategic investments and shared sacrifices,” combining the cuts with what she has been holding for weeks as focused investments in downtown, education and public safety.
To raise revenue, Bowser will also ask consumers to pay for a sales tax increase, which will be phased in starting in October 2025, to help with the expected increase in the cost of local public transportation. is. D.C. plans to invest $200 million this year alone as part of a regional plan to help Metro avoid drastic service cuts. Under Bowser's tax proposal, the city would increase sales tax from 6% to 6.5% starting in fiscal year 2026, then up to 7% over the next two years, for an estimated $100 million a year in benefits.
Officials informed the decision to eliminate Circulator buses, saying they have not regained the same pre-pandemic ridership as the broader Metrobus system. In last year's budget, Bowser proposed cutting the circulator's schedule in half to cut costs.
Mr. Bowser also proposes increasing the taxes that businesses must pay this year. paid family leave program, Return taxes to 2021 levels. Officials said the move could generate $250 million a year in revenue for the city's coffers. General Fund to address rising costs of social welfare programs.
As a third new source of revenue, the city plans to impose new fees on hotel reservations that will help pay for the district's widely monitored 911 call center, which generates about $7 million a year. dollars will be collected.
“I do not discount increased revenue,” Bowser wrote in a letter to the City Council on Wednesday, referring to the tax and fee increases. “If we make the right investments and implement the right interventions today, we are hopeful that we can reverse these policies in a matter of years.”
Bowser had been preparing residents for the possibility of deep cuts for months, especially after Lee last month released a grim revenue forecast that predicted flat revenue growth over the next four years.
The seriousness of the fiscal challenge is perhaps best illustrated by one notable choice. For the first time in his nine years as mayor, Bowser will not contribute at least $100 million to the city's new affordable housing flagship, the Housing Production Trust Fund. And she is one of her important initiatives. This year, she budgeted her $60 million. This shows that even Bowser's flagship program could not escape severe budget constraints.
Still, Bowser's choice to make significant new investments in public education, public safety and downtown revitalization helps shape the mayor's priorities for the remainder of his term.
In public safety, Bowser secured $8.7 million to add 40 new civilian “community safety officers” and other civilian positions to the D.C. Police Department following last year's historic crime spike. , aimed at freeing up more sworn police officers to fight crime. .
She is proposing an additional $3.1 million to increase staffing at Department of Youth Rehabilitation Services facilities, which are struggling to adequately respond to the growing number of youth in custody. And her budget allocates $4.6 million in funding for Secure DC, a newly passed omnibus crime bill that would increase security in busy commercial corridors and consider more diversion programs. This includes creating a task force to incarcerate more people charged with violent crimes while awaiting trial. .Increase in prison population This has raised concerns from the chief financial officer, who said in a letter submitted with the budget that he would be watching closely to see if this becomes a trend that could impact the city's finances.
In education, Bowser a few weeks ago increased per-pupil funding by a historic 12.4 percent, coupled with what she said are strategic investments in programs such as high-impact tutoring. Her budget also includes an expansion of her Advanced Technical Center in the 5th Ward, which offers Career Preparation Internship programs and other training, and similar efforts at the Whitman Walker Max Robinson Center in the 8th Ward. Suggested.
Proposed workforce development expansion would lead officials to cut another program entirely, D.C. They said Career Connection lacks proper infrastructure.
Investing in downtown took the banner. Bowser said the D.C. Council approved $515 million in public funds for Wizards and Capitals owner Ted Leonsis' major renovation project at Capital One Arena in the heart of downtown. The budget was announced the next day. She signed this deal after bringing Mr. Leonsis back to the negotiating table. when his plans to move the team to Virginia fell apart. In addition to the $500 million investment in Capital One (included in the capital budget against a tighter operating budget), Bowser is proposing a series of other proposals aimed at supporting downtown.
These include $68 million for three major streetscape projects and $63 million for tax incentives to convert vacant or underutilized office space to residential or other uses. Additional efforts will combine ideas from the recently announced Downtown Action Plan and Public Realm Plan to attract businesses to the downtown corridor, which officials say has the potential for significant growth, and to break the ice with pop-up retail and festivals. The focus will be on revitalizing public spaces.
Bowser's proposal also includes $64 million to build a new annex to provide permanent supportive housing and other congregate housing on the grounds of the Community for Creative Nonviolent Shelter downtown. It is.
“Our downtown investments are investments that directly benefit all eight boroughs,” Bowser wrote in the letter. “This is a critical time for our city’s economic future as we work to attract, retain and grow our business community.”
When Bowser's budget proposal was released by the CFO's office late Tuesday, the proposed cuts immediately caught the eye of those who had been advocating against it for months.
Tazra Mitchell, chief policy and strategy officer at the left-leaning D.C. Fiscal Policy Institute, focused on child care cuts, particularly eliminating the Pay Equity Fund, which would negatively impact “mostly Black and brown women” on X. He said it would be. Workers caring for young children, burning away the progress we have made. ”
Bowser's budget officials said eliminating the fund was not part of the plan. Original plan. They said Lee foresaw potential problems paying the city's bills by 2028 as revenue growth slows while spending growth accelerates, so the city has no financial reserves. It claims it took the decision only after insisting that the fund be fully replenished. In response, the authorities reduced pay equity. The fund costs about $70 million annually.
A spokesperson for Mr. Lee did not respond to a request for comment.
Council President Phil Mendelsohn (D) protested the CFO's request to replenish the reserve, saying the council would seek a separate agreement with Lee that could ease the cuts once consideration begins. I said earlier that I would look at what I could do to bring it together.
The budget also proposes eliminating around 480 district government positions, 69 of which are unfilled and could result in these employees being fired if they cannot be reassigned.
The City Council plans to hold a public hearing in the coming weeks to understand the agency's budget needs before proposing its own changes to Bowser's proposal. Lawmakers are scheduled to take their first vote on the final fiscal year 2025 budget in late May.
This is a developing story and will be updated.
