D.C. Mayor Muriel Bowser unveiled her revised budget Tuesday that complies with congressional demands to cut the District’s budget, doing so without resorting to layoffs or facility closures.
The plan also looks to make the economy more business-friendly to help offset expected revenue drops in the coming years.
Ms. Bowser said she was able to spare the District from the full brunt of the congressionally mandated $1 billion budget cut — which threatened to hurt staffing for Metropolitan Police, emergency services and public schools — by invoking a little-known federal law that allows the city to increase spending by 6% across the board.
The “6% solution,” as she called it, helped reduce the District’s necessary cuts down to $347 million, giving the city enough cash in its $21 billion budget to fully fund the public safety and school systems through the rest of the fiscal year that ends Sept. 30.
The hundreds of millions in spending reductions will come from a citywide hiring freeze (worth $63 million), “non-personnel service reductions” in the form of grants and contracts (worth $175 million), and elimination of other initiatives, such as the Child Tax Credit which had not yet taken effect.
“We identify, first, the things that we didn’t think would affect life, safety and the core mission of the government, but others will be services that are worthy and they’re helpful, but they’re not core,” Ms. Bowser said.
Ms. Bowser, a Democrat, presented her plan to the entire D.C. Council — except for Chairman Phil Mendelson — at the Martin Luther King Jr. Memorial Library downtown.
The council had pressured the mayor to deliver her budget for nearly two months, with Mr. Mendelson at one point warning of taking legal action if it wasn’t delivered by a May 15 deadline.
Ms. Bowser had said the budget cuts imposed by the Congress’s federal stopgap legislation, called a continuing resolution, complicated her team’s usual proposal process.
The continuing resolution removed a decades-old provision that let the District fund city operations even when Democrats and Republicans are at odds over federal spending.
Without the provision, the stopgap law holds the city to the same standards as federal agencies, which had to revert their budgets to 2024 levels.
The District’s political class, which is almost entirely Democrats, held out hope for the GOP-controlled Congress to restore the local funds.
A proposal to reverse the budget cut was passed by the Senate and supported by President Trump, but it has taken a backseat in the House.
Councilman Robert White, at-large Democrat, praised the mayor’s efforts to trim city spending, but also questioned why it took federal intervention to force the District to cut fat from its budget.
Ms. Bowser countered by saying that was a question only the council could answer.
She mentioned last year’s budget discussions in which her administration identified $500 million worth of cuts that could have been made. Instead, she said the council added $1 billion in spending to her proposal.
The D.C. Council will hold its first hearing on the budget Thursday. It is expected to hold its first vote July 14.
The mayor’s proposal for fiscal 2026 leans on cutting regulations in hopes of luring new businesses to the District to make up for an anticipated loss of 40,000 federal jobs.
The city expects to lose over $1 billion in the next four years due to the Trump administration’s downsizing of the federal government.
Ms. Bowser pitched changes to the city’s zoning procedures to hasten approval for new developments, argued for pausing eco-friendly regulations for new buildings, and proposed repealing a law that requires businesses to provide employees with a transit-based stipend if the company also offers free parking.
On top of a freeze on sales tax increases for next year and establishing sales tax holidays for restaurants, Ms. Bowser also put in writing her desire to repeal Initiative 82.
The District’s minimum wage law for waiters, bartenders and similar professions has been repeatedly cited by restaurateurs as a drag on their viability.
But council members who attended the meeting opposed cuts to multiple programs that focus on health care and other quality-of-life issues.
“I am concerned about the cuts to [Temporary Assistance for Needy Families], cuts to Medicaid, cuts to paid family leave, and cuts to the Child Tax Credit,” said Charles Allen, Ward 6 Democrat.
“In my committee, I’m also really concerned about the cuts to the DC Green Bank, which looks like a 92% reduction … This is an agency we use for affordable housing to help lower utility costs. I’m not going to support a cut like that,” he said.
The proposed changes to Medicaid target eligibility requirements that would force 25,000 people to lose their coverage. The program was expected to see a $182 million increase in spending.
For Temporary Assistance for Needy Families, or TANF, the mayor’s budget eliminates a forecasted $11 million increase.
Much of the mayor’s budget proposal dedicates money to city schools, housing, transit and police.
The prospect of major improvements to Capital One Arena — home to the NBA’s Wizards and NHL’s Capitals — and investments in the RFK Stadium site that Ms. Bowser wants to be the Commanders’ new home are also included in her proposal.
The mayor defended spending more on the entertainment sector as an avenue to recoup money lost from the federal government.
“We have to have a city that grows,” Ms. Bowser said. “We can’t invest in the best schools if we don’t have the revenue to do that. We can’t have the types of human services programs that we’ve invested in if we don’t have revenues.”
