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According to Mayor Bowser’s FY 2021 budget, taxes won’t go up. Neither will salaries for D.C. employees.
Mayor Muriel Bowser By Amanda Michelle Gomez @amanduhgomez Mayor Muriel Bowser’s proposed $16.7 billion budget for fiscal year 2021 relies heavily on savings and surpluses, as well as hiring and pay freezes for D.C. government employees, to address expected revenue losses due to the coronavirus pandemic. Her plan will eliminate the need for tax increases or major programmatic cuts. The budget, subject to D.C. Council approval, still manages to invest in education and housing, increasing per-student funding by 3 percent for a total of $1.92 billion and committing $100 million to the Housing Production Trust Fund. But financial losses related to the pandemic mean the executive declines to make significant investments in these sectors, as well as others, like officials hoped and advocates demanded before the pandemic hit. “This budget really reflects our community’s priorities,” Bowser said during a Monday press conference. “This is not the budget that I expected to send to the Council early this year. It is a budget that I am proud of and that the city should be proud of.” The budget is based on a grim financial
outlook Chief Financial Officer Jeffrey supports affordable housing, and pay-go capiDeWitt offered in late April that suggests it tal, which supports government construction will take two years for D.C. to recover from projects. Now, these dollars are being redithe pandemic. DeWitt said the projected rev- rected to cover losses. For fiscal year 2020, D.C. closes the budenue loss for the current fiscal year, which ends on September 30, is $722 million; the get gap by cutting $190 million from agency projected revenue loss for fiscal year 2021, budgets, mostly through hiring and spending freezes instituted which begins October 1, is $774 million. “Because we had 24 years of i n M a rc h ; s h i f t i n g $214 million from the “The impact on our balanced budgets and AAA federal government’s revenues has been significant,” Bowser said. bond ratings, because we fully C oronav i r u s R el ief “Just as this pandemic fund our pensions and health Fund; and relying on at least $267 million has forced our resicare, and because we ended from prior years’ surdents and businesses fiscal year 2019 with 60 days pluses. For fiscal year to make difficult spending decisions, the D.C. of extra cash, it has made us 202 1, t he prop osed cuts $166 milgovernment has been more resilient and able to move budget lion from agency budforced to do the same through this very difficult and gets, with a freeze on thing.” all pay increases; shifts How did D.C. make challenging time.” $38 million from fedup for expected revenue losses? For starters, D.C. uses its entire eral resources; uses $213 million from the fisfiscal year 2019 surplus. D.C. ended FY2019 cal stabilization reserves, which is the total with a $500 million budget surplus. $324 amount in one of four local or federal reserves million of that surplus was intended to go to available to the city; and relies on at least $320 the Housing Production Trust Fund, which million in prior year surpluses.
4 may 22, 2020 washingtoncitypaper.com
“Because we had 24 years of balanced budgets and A A A bond ratings, because we fully fund our pensions and health care, and because we ended fiscal year 2019 with 60 days of extra cash, it has made us more resilient and able to move through this very difficult and challenging time,” said City Administrator Rashad Young in a press conference Sunday evening where he previewed the budget. Cuts to agency budgets appear to impact government personnel more than the services they deliver and residents depend on. There are no recommended furloughs or pay cuts in this budget, but financial planning assumes no pay increases for anyone, including Bowser, teachers, and other unionized workers. The mayor’s budget could mean the government operates slower given that a number of vacancies have not been filled and won’t be for a while. “It may have the impact of not having us move programs as fast as we would otherwise like,” said Young, “but preserve the program.” And while there are some cuts to the scope of programs, residents are assured there is no material impact in how services are delivered. The executive tries to capture all the savings it can by making hundreds of tweaks to agency budgets, finding efficiencies in programs where it could, and evaluating all government contracts so that critical services like trash pickup continue. The largest change in spending between FY2020 and FY2021 comes from funds for the highly anticipated paid family leave program, along with the unemployment insurance program. The FY2021 budget sets aside $309 million for the Council’s paid family leave law, but the CFO has yet to certify whether there’s enough money in the fund to support what’s expected to be withdrawn. That could delay the July rollout. Notably, D.C. did not tax the rich, as some progressives called for, or provide tax breaks, as a coalition of businesses called DC2021 asked for. The mayor’s budget does close at least three tax loopholes to raise revenue. It appears that tax abatement for businesses hurt by the pandemic is off the table for now, and instead the executive is looking to provide targeted support, as it did with the small business microgrant program. D.C. is also hoping for more support from the federal government, seeing as the city was cheated when it was treated like a territory instead of state in the first COVID-19 relief package. Everyone is still trying to understand the hundreds of pages of financial documents submitted to the Council. But a few shared their initial reactions to the mayor’s proposed budget. ANC 4B02 Commissioner Erin Palmer tweeted “Raise my taxes,” while Marcus Goodwin, a candidate for D.C. Council At-Large, said he was “very happy to see that [the mayor] was able to balance the budget without raising taxes,” in a campaign statement. The DC Fiscal Policy Institute, a progressive think tank, commended the mayor’s
