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Washington, D.C., Mayor Muriel Bowser addressed City Council members on Wednesday afternoon after publishing the city’s fiscal 2025 budget, with budget cuts garnering strong reactions from council members.
While balancing the budget, Bowser and her administration staff were dealing with a $4 billion deficit over the course of the next four years. In lieu of raising income taxes, Bowser proposed $500 million in budget cuts to city programs, such as the Early Childhood Educator Pay Equity Fund, which costs the city $70 million annually. This program subsidizes the wages of caregivers and day care workers, but with it slashed, workers will have to return to earning significantly less.
“There is no other group of women to whom we are saying, ‘There is a career path for you in early childhood, get your associate’s degree, go get your bachelor’s degree; but now we are telling you that you have to go back to accepting minimum wage,’” Councilwoman Christina Henderson said during the hearing.
Officials explain that the decision to cut programs was made at the behest of Chief Financial Officer Glen Lee, who requested reallocating funds to replenish the city’s local reserves, claiming the move is necessary as the city anticipates flat revenue growth for the next four years. This will necessitate an additional $215 million for the reserves. However, Council Chairman Phil Mendelson notably opposed the CFO’s directive regarding replenishing the local reserves.
To increase revenue, Mayor Bowser will implement a sales tax hike. The sales tax will rise from 6% to 6.5% beginning in 2026, and then further to 7% in the subsequent two years. This adjustment is expected to generate approximately $100 million in revenue annually. Bowser has additionally suggested increasing the tax burden on businesses contributing to the paid family leave program, with city officials claiming this adjustment could contribute around $250 million annually to the city’s general fund.
For the first time in nine years, Bowser’s budget does not include a minimum investment of $100 million in the Housing Production Trust Fund, which is crucial for affordable housing initiatives. Instead, the fund is budgeted for only $60 million due to mounting financial constraints. Instead, Bowser’s proposed budget prioritizes public safety enhancements and downtown revitalization efforts. The budget allocates $4.6 million to implement the recently passed Secure D.C. crime bill, focusing on measures such as bolstering security in commercial areas and establishing a law enforcement task force.
D.C. Mayor Muriel Bowser’s $21 billion budget will propose significant program cuts and some tax hikes to account for a gaping budget shortfall anticipated over the next four years, amounting to some of the most challenging fiscal terrain of her tenure. https://t.co/koXxFLI3e5
— Post Local (@postlocal) April 3, 2024
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