A few months ago, Mayor Muriel Bowser told the D.C. Council to gird itself for a difficult budget season to come. That tough time is now here – and fights over a smaller pot of money for local programs are kicking off in earnest.
Bowser unveiled her $21.2 billion budget proposal for 2027 on Friday. Unlike the rest of the budgets she presented over her three terms in office, this one is smaller than the year before, facing a nearly 4 percent cut.
The mayor says that D.C. isn’t broke (it has $2.2 billion stocked away) but the city does need to scale back spending as it retools itself for a weaker economy caused largely by the massive federal government layoffs.
The cuts she’s proposing, though, are certain to prompt significant pushback from activists, advocates, and lawmakers. Here’s some of the fights we’re already starting to see.
Pay for child care workers
Since 2022, D.C. has been funneling money from a tax on wealthy households to increase pay for the city’s roughly 4,000 child care workers. Advocates say the Pay Equity Fund, as it’s officially known, is a critical tool to professionalize and stabilize the child care sector by making wages comparable to what a public school teacher might make.
Bowser is proposing to almost fully axe the fund. Sound familiar? She similarly proposed cutting it last year, but the council restored the funding. Speaking on Friday, Bowser said that the fund hadn’t done much to bring down D.C.’s significant child care costs (among the highest in the nation), and with a tighter budget ahead that’s what the city needs to focus on.
“The idea that the Pay Equity Fund created more child care seats is false. I think the argument that it made child care more affordable is also false,” she said.
Advocates had been preparing for this moment; in late March, hundreds of child care workers rallied on the steps of the Wilson Building to urge Bowser not to cut the fund. They say that increasing pay has increased staffing and child care slots, without which prices for parents could be even higher. An ongoing study seems to bear that out: It found that, in the first two years of the fund, it increased labor supply by seven percent and added 1,500 new child care seats across the city.
“You cannot have more child care slots if you don’t have a qualified workforce to serve more families,” tweeted At-Large Councilmember Christina Henderson. “The Pay Equity Fund helped stabilize our child care market. It also ensures that our early childhood educators can live and take care of their families too!”
Bowser’s proposed cuts to the fund follow other hits to the city’s child care system. Last month, Bowser announced that D.C. would impose a new waitlist for the child care subsidy program for low- and moderate-income families as a means to contain its cost. The program currently enrolls more than 7,500 kids, but city officials say the goal is to bring enrollment down to 6,000. But the mayor is strategically floating a sweetener for the council: Should extra revenue become available, she says one of the first things she’ll do is get rid of the waitlist.
Progressive activists want more. They’re urging the council to increase taxes on wealthy residents and businesses – whether through a hike in a capital gains tax or a new business tax targeting law firms and lobbyists – to maintain funding for such child care programs.
Paid leave, emergency rental assistance, and other social programs
The fight over the Pay Equity Fund is only really the tip of the iceberg; Bowser is proposing cuts to a number of other social programs, many of which have enjoyed consistent support from the council.
Take D.C.’s paid family and medical leave program for private-sector workers, which is funded by a payroll tax and offers paid leave for births, health conditions, and caretaking. Bowser is proposing a $95 million cut to the program, largely by pausing payouts for all medical claims for a year. This means that people who currently have access to the program won’t be able to take paid leave for personal medical situations, or those involving their family members.
She’s also proposing to cap the rapid rehousing program for homeless individuals, a big cut to the program that offers free legal representation for low-income residents dealing with housing and other civil matters in court, and $7 million for emergency rental assistance (which advocates say is nowhere near enough to meet demand).
“Nobody is saying that the programs that have had to take a cut aren’t worthwhile programs,” she said after unveiling her budget to lawmakers on Friday. “What we’re saying is our level of growth doesn’t support them because they have unsustainable growth. If we want to get back there, we have to be able to invest in growth, get more people to move here, more people to start their businesses here, more people to work here, more people to go to our restaurants, theaters, our venues.”
While fights over funding for social programs are hardly new, the grim fiscal picture means that unless the council opts to find new sources of revenue (higher taxes, for one) it will likely have to make difficult decisions. And Bowser has seemed not to exempt her own priorities: She’s proposing a 50 percent cut for the Housing Production Trust Fund, the city’s main tool for financing the construction of affordable housing, after years of funneling significantly more money into it.
It’s also worth noting that one area where Bowser is actually increasing investment is on healthcare for low-income residents on Medicaid or enrolled in the Healthcare Alliance. Bowser’s budget reverses future cuts that would have seen almost all Alliance recipients kicked off the program next year, and also adds vision and dental coverage for those in the program and for residents who were switched off of Medicaid to a new city-sponsored basic health plan.
No pay raises for many D.C. government workers
One of the biggest sources of spending in the D.C. budget is the city’s 37,000 employees. Bowser says she’s not contemplating any layoffs, but she is looking to save $127 million by freezing pay hikes for pretty much everyone but teachers and police officers who have already negotiated new contracts. That’s already drawing pushback from the city’s firefighters, whose union said the flat wages could imperil quality and reliability.
There’s seemingly no appetite on the council itself for laying off city workers, but Parker in particular has zeroed in on other steps the government could take to reduce its spending on itself, from limiting purchases of new vehicles to more accurately budgeting to pay down the city’s debt.
Bowser and the council vs. the CFO
Much of the budget debate to come between now and the final council vote on June 23 will be between Bowser and councilmembers. But there’s one area where they’re already on the same side – the fate of $180 million that D.C. Chief Financial Officer Glen Lee is currently keeping aside.
That money comes from the city's decision to partially decouple from the federal tax code, which pitted local lawmakers against Congress and the White House earlier this year. Because of what he says are legal liabilities the city still faces, Lee has squirreled away the funds that will come from decoupling. Bowser and the council are equally unhappy about it, saying the CFO doesn’t have the legal authority to keep available money from being spent.
Considering the overall state of the proposed budget, that $180 million could make a significant difference. Bowser has already outlined where she would spend the money if it was made available: She’d give more city workers pay increases, lift the waitlist for the child care subsidy program, undo the proposed pause on medical claims under the paid leave program, and increase funding for the Housing Production Trust Fund.
The council, of course, may have different ideas, and lawmakers often craft their own contingency list for how unanticipated revenue needs to be spent.
What's next for the budget?
Could this be the year that the council considers raising taxes? As we pointed to above, child care advocates certainly hope so. And last year, there was a brief debate over whether to increase the capital gains tax on wealthy residents, though the proposal from Ward 5 Councilmember Zachary Parker didn’t pass. The political dynamics this year are different. Not only are the cuts bigger, but it’s also an election year – and half the council is either running to keep their seats or jump into higher office.
In the meantime, the council review of Bowser's proposed budget will officially kick off on April 20 and run through May 12. The first vote is scheduled on June 9, and the final vote on June 23.
Martin is a longtime reporter and editor in D.C. He formerly worked for WAMU 88.5 and DCist.com, and has contributed to the Washington City Paper and other publications. He's been in D.C. for 25 years, and tries to ride his bike everywhere he can.
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