Last week, Mayor Bowser released her budget and plan to put American Rescue Plan dollars to work for DC in the current fiscal year and next four years. With billions of dollars in federal aid to recover from the COVID-19 crisis and ‘build back better,’ the city has an unprecedented opportunity to: 1) target aid to people most struggling to make ends meet, 2) address longstanding racial and economic inequities, and 3) plan for the longer-term to advance an antiracist and equitable future. The Mayor’s proposal includes several meaningful investments that move DC toward a just recovery but misses several key opportunities to address longstanding and future needs.
Here are 3 key takeaways from the Mayor’s proposal:
1. Several strong proposals move us toward a just recovery. We applaud the Mayor for making several bold investments and proposing new, meaningful strategies to meet the moment. The budget commits $250 million in affordable housing both the current fiscal year and next, adding $400 million in total to affordable housing production. (For this to be truly meaningful, it will be critical that 50 percent of these funds produce housing for residents with incomes below 30 percent of the area median income.) Her plan adds $50 million in one-time funding to buy buildings to convert into permanent supportive housing or other affordable housing. The Mayor’s plan also:
- Fully funds critical street outreach for individuals experiencing homelessness;
- Directs $17 million to the Affordable Housing Preservation Fund to acquire, rehabilitate, and preserve DC’s affordable housing stock, which leverages a 3-to-1 private match;
- Sets aside funding for Tenant Opportunity to Purchase Act projects and Limited Equity Co-operatives—both key tools to help tenants stay in their homes at affordable rents; and,
- Proposes money for Douglass Community Land Trust, which seeks to develop permanently affordable resident-controlled housing on community-owned land.
In addition, the Mayor includes overdue wage increases for city workers; new innovative cash assistance pilot programs to support economically struggling residents; and increased funding for school-based mental health services to ensure every public school and public charter has at least one clinician.
2. It shortchanges some of DC’s most struggling residents and misses a key opportunity for transformative change. The Mayor’s budget fails to target aid to all those with deep need. The Mayor did not include adequate support for excluded workers, like immigrants who are undocumented and those working in the informal labor market. The Mayor’s proposal makes available a fraction of what these DC residents have called for —just $15 million—to make up for exclusion from federal relief measures in 2020 and the relatively small aid offered by the District earlier this year.
The Mayor’s budget provides no new support for about 43,000 households on the DC Housing Authority waitlist for tenant-based vouchers and other housing supports, leaving them vulnerable to eviction and homelessness. Her budget provides just 347 vouchers for families experiencing homelessness—one quarter of the need—and while the plan provides the largest number of vouchers for individuals experiencing homelessness (758) since the release of the District’s strategic plan to end homelessness, it meets just 27 percent of the need. Additionally, the Emergency Rental Assistance Program budget is set lower than last year and while there are federal funds for eviction prevention, some will not qualify (for example if they lack documentation of job loss).
And the budget underinvests in long-term needs for early education, allocating temporary federal dollars to stabilize the child care sector and fund pilot projects without increasing local funds in the next fiscal year or remainder of the financial plan. Because of this, her budget fails to provide for meaningful child care teacher raises—largely for Black, brown, and immigrant women, who are hit hardest in this crisis. Higher wages would also improve the quality of care over time and help address the unequal access to quality care for Black and brown children living on low incomes.
3. No plans for new revenue to sustain momentum built are put forward and surplus dollars are used poorly. The Mayor’s budget lacks a long-term view to DC’s future. The fiscal year (FY) 2022 fiscal year local fund budget would grow by 2.8 percent over the FY 2021 budget when adjusting for inflation, and 70 percent of the growth is due to ARP funding. It will take years for revenues to rebound, and they cannot sustain some of the increased investments made in the areas of affordable housing and rental assistance, homelessness prevention, and education, among others. Policymakers should raise taxes on the wealthiest in DC to sustain the momentum built with federal funds.
In this particular economic crisis, the highest income, who are largely white residents, have kept their jobs, worked remotely, seen their home values rise, and even added to their investments and savings. Meanwhile, all too many Black and brown residents, especially essential workers and those in the sectors losing the most jobs, have born the brunt of this crisis due to longstanding inequities in health care, employment, education, and the wealth-building opportunities.
The failure to raise revenue also forces poor choices in other areas. The Mayor uses a $526 million surplus from fiscal year 2020 to balance the budget in fiscal years 2023 through 2025. These dollars would have been better spent on the Housing Production Trust Fund, more housing vouchers, repair of public housing, and adequate support for excluded workers. And the Mayor makes poor use of a $400 million Paid Family Leave fund surplus. Instead of leaving those dollars to their original purpose or maximizing other supports for residents, her plan cuts the payroll tax for employers next year by $168.2 million. It directs another $114.5 million money to the Unemployment Insurance (UI) Trust Fund to avoid more loans—a particularly shortsighted choice given employers wouldn’t have to repay the principal on these loans through higher federal taxes until the end of next year.
The Mayor is calling for a ‘Fair Shot,’ but racial and economic equity require that the budget and four-year financial plan go further to meet today’s deep need and address longstanding inequities that left communities sidelined by racism and economic exclusion more vulnerable to this crisis. It also requires that the strongest parts of the Mayor’s plans be well-implemented and reach their intended targets. We look forward to seeing the DC Council build on the strengths in the Mayor’s proposal to ensure that the final budget sets the District up for a just recovery and future.
We are working on a series of blogs that will dig deeper into the Mayor’s budget proposals.