DC Council raises taxes, reverses some cuts in first budget vote

The Washington Council on Wednesday gave initial approval to the city’s $21 billion budget for fiscal 2025 in an 11-1 vote, including proposed tax hikes that will help alleviate some cuts to programs proposed by Mayor Muriel E. Bowser (D) in April.

Slowing district revenue growth since the coronavirus pandemic, coupled with increased spending, has once again posed a dilemma for city leaders in this year’s budget cycle, reigniting debates seen last year. last year between council members and the Bowser administration over how to fund high-demand programs. , including those who previously benefited from federal aid now exhausted during the pandemic, while stabilizing city revenues.

Before Wednesday’s vote, D.C. Council Speaker Phil Mendelson (D) said part of his goal in reviewing Bowser’s budget and considering suggestions from council committees was how the council could better protect low-income residents most vulnerable to some of the proposed cuts. This budget, he said, would help “transform people’s lives, help children and continue the war against poverty”.

Councilmember Vincent C. Gray (D-Ward 7) was absent for the vote. Trayon White Sr., board member. (D-Ward 8) was the only “no” vote. Lawmakers will have the chance to make other changes before taking a second vote on the budget next month.

Among the most significant changes the council made to Bowser’s proposal:

  • An increase in property taxes on homes worth more than $2.5 million.
  • An additional tax increase that businesses must pay for the Paid Family Leave program, on top of what Bowser proposed.
  • Reallocation of $25.4 million from the DC Public Schools central office to individual schools.
  • Restore the Pay Equity Fund for early childhood educators.
  • An overhaul of the city’s sports gaming program – using its future profits to fund the baby bond program which provides trust funds to children from low-income families.

In the area of ​​housing, the council approved:

  • 477 housing titles.
  • An additional $6.7 million for emergency rental assistance, bringing the total to $26.9 million.
  • Increase the Housing Production Trust Fund to $80 million.

The council also voted to enhance the Earned Income Tax Credit while establishing a new child tax credit, initiatives Mendelson had also proposed.

But some of the president’s proposals have drawn questions and opposition, including from Bowser, who told the board in a letter before its meeting that she had “significant concerns,” particularly regarding the tax increases that went beyond what she had initially suggested.

“My decision to raise taxes was not taken lightly, as I took a balanced approach that looked first at efficiencies and program reductions, then at tax increases . I don’t see the board taking the same approach,” Bowser wrote. She added that if the city’s revenue growth continues to lag, it would have “no choice but to initiate another round of cuts next year.” [budget] formulation.”

Bowser decided on many other changes and reductions proposed by Mendelson, including defunding a planned indoor sports complex at the RFK Stadium site, delaying the implementation of a new city jail, and cutting $28 million in dollars of new investments to revitalize the city center, a considerable effort for his administration. . Lawmakers shared some of these concerns.

Mendelson has generally defended his decisions, such as cutting $9.5 million that the mayor had allocated for the creation of a “Historic Green Triangle” to connect Farragut Square, Franklin Park and Lafayette Square, which he said would not t was not urgent enough to restore the city’s downtown. But Mendelson vowed to revisit some of them Items pending before their second budget vote.

“Nowhere in this letter does she talk about social programs or equity programs, and this continues to be a philosophical difference between all of us and the executive branch on what the budget should do,” Mendelson said in response to the mayor.

His proposal to use future revenues from a sports betting bill introduced this year by Kenyan R. McDuffie (I-At Large) to fund the baby bond program also faced some resistance from observers’ share, although it remained intact after the council’s vote Wednesday. The measure aims to end the monopoly held by Greek gaming company Intralot and open up the city’s mobile sports betting market, citing projections from the CFO’s office that a more competitive model would generate more revenue.

Intralot recently subcontracted to FanDuel to provide exclusive sports betting in Washington DC, raising $1.9 million in the first 30 days; GambetDC, the previous platform created by Intralot, brought the city a paltry sum of $4.3 million over four years. But several council members, including Christina Henderson (I-At Large), Zachary Parker (D-Ward 5) and Brianne K. Nadeau (D-Ward 1), raised issues with McDuffie’s bill; Parker and Henderson said it deserves more attention, given that the council’s 2019 vote to approve Intralot’s contract led to years of underperformance.

“I don’t want to say that baby bonds aren’t important, but the board has found itself in trouble in the past with this particular contract,” Henderson said. McDuffie argued that the bill already had a hearing and defended his committee’s work in crafting the bill. Nadeau has long been against sports betting, noting that opening the market could “worsen the growing public health crisis.”

Separately, a successful amendment from Matthew Frumin (D-Ward 3) will transfer approximately $1.9 million to Ward 3 schools to strengthen the feeder systems at Jackson-Reed and MacArthur high schools. Mendelson, McDuffie and council member Anita Bonds (Democrat-At-Large) opposed the measure, saying the decision amounted to overreach.

The budget will likely change further in the coming weeks, as intentions aim to direct funding toward remaining priorities and areas of concern. Nadeau, for example, said the additional $6 million for rental assistance was insufficient, given that Bowser’s $1 million budget cut it by $40 from the previous fiscal year . And Frumin and Councilmember Charles Allen (D-Ward 6) indicated they were interested in restoring an effort that could bring a protected bike lane to Connecticut Avenue. Parker said he is finalizing several amendments, some of which focus on Ward 5 issues.

White, explaining his “no” to the budget in a text message, said he felt the budget did not do enough to fully fund D.C.’s anti-violence programs, nor to address the needs of seniors or schools in his underserved neighborhood 8. The schools there, for example. For example, you risk losing dozens of employees.

“We’ve made significant adjustments, but we haven’t gone far enough on equity across the city,” White said.

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