DC Council Passes $21 Billion Budget with Tax Hikes, Program Cuts

In the District of Columbia, the Council unanimously approved a $21 billion budget for fiscal year 2025 after some disputes with Mayor Muriel Bowser. This budget incorporates tax hikes and reductions in certain city programs to close a $700 million budget gap. Council Chairman Phil Mendelson highlighted that the budget focuses on combating poverty and promoting social justice, while also addressing the needs of residents and attracting and retaining businesses.

The Council opposed the Mayor’s suggested cuts to several programs, including the Early Childhood Educator Pay Equity Fund, which provides salary subsidies for daycare and preschool teachers. Instead, the Council allocated $70 million per year to this fund. Mayor Bowser voiced concerns about the city's revenue growth and called on Council members to collaborate on identifying spending areas that could be adjusted to prevent future program cuts. Mendelson emphasized the budget's transformation to better serve residents in need and support business attraction and retention. 


The budget includes increases in three types of taxes: property taxes on homes valued at $2.5 million or more, a 1% sales tax increase over two years, and a higher payroll tax for paid family leave. Additionally, the Council approved two of Bowser's requests: a youth center at the RFK Stadium grounds and the construction of a new jail.

Furthermore, about 600 additional housing vouchers will be provided for those at risk of homelessness, funded by a $1 million cut from Bowser's proposed new anti-truancy program at the D.C. Department of Human Services. The budget also includes the elimination of the D.C. Circulator bus as a cost-saving measure.

Overall, the Council's budget aims to address the city’s financial challenges while safeguarding essential programs for residents in need, reflecting a commitment to fiscal responsibility and social justice.


Written by Staff Reports

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