Yesterday, Mayor Bowser released budget proposals for fiscal year (FY) 2020 (revised) and FY 2021 that take important steps to stave off large across-the-board budget cuts that would have deepened the economic downturn. Her proposal addressed pandemic-induced budget shortfalls by employing a mix of strategies that helped her protect, and in some cases expand, vital programs. Some community needs are met while others remain un- or underfunded. In the coming weeks, we’ll work with our partners to urge the DC Council to build on the Mayor’s proposal to ensure that the final budget adequately funds crucial investments that are needed to build a stronger, more just recovery.
Here are 5 notable takeaways from the Mayor’s proposal:
1. It is weak when it comes to addressing long-term, structural inequities. The Mayor’s FY 2021 budget proposal keeps local general spending largely flat, on net*, maintaining the status quo and avoiding large cuts to social services and personnel—with some exceptions. Mayor Bowser had an opportunity to do more and address the structural inequities that leave certain communities, particularly low-wage workers and Black and brown communities, more vulnerable to the devastating harm of this crisis. However, the budget fails to adequately lay essential groundwork to address entrenched structural inequities, many of which the pandemic has amplified.
Budgets also serve as moral documents, and the Mayor could have done more to commit to a just and inclusive recovery. For example, a more equitable tax structure that makes the wealthy and profitable corporations pay their fair share would mean greater opportunities to fund crucial unmet needs, such as essential housing stabilization programs, designated ongoing financial assistance for undocumented and other excluded workers, and adequate funds for public housing repairs. To make more progress, Councilmembers should build a budget that puts the needs of our most vulnerable residents first and begins to address long-standing structural inequities.
2. It includes creative savings, cuts, and small revenue changes. To help balance the budget, the Mayor proposes a mix of strategies. For creative savings, she uses the $324 million FY 2019 surplus and other leftover dollars, some of the city’s reserves, and refinances our debt—leading to lower interest payments, among other changes. She also uses new one-time federal dollars to meet some immediate needs, freeing up pressure on the local budget. For spending cuts, she freezes vacant positions and cost-of-living adjustments for city workers, removes non-essential costs out of agencies’ budgets, and reduces or eliminates funding for some programs, as mentioned below.
For revenue changes, the Mayor raises $75 million, on net, next year in part by closing minimal tax loopholes, beefing up tax compliance monitoring, and expanding certain allowable sales at bars and restaurants. She provides an additional $1.9 million tax break to Qualified High Technology Companies, despite the program’s failings. However, she proposes no structural changes to the tax code to address the urgency of the pandemic’s challenges.
3. It makes a range of strong new investments. The Mayor made important investments in some areas of the budget, namely public education and public housing. She proposes a three percent increase to the Uniform Per Student Funding Formula for the 2020-21 school year. While a larger increase is needed to truly address the inadequacy and inequity of school funding, the Mayor came close to keeping her original promise of a four percent increase and did not slash funding for schools. The budget proposal also maintains important investments in mental health services for students by using $1.5 million of federal education stabilization funds.
To help improve crumbling public housing infrastructure, the Mayor also proposes a $40 million increase over two years for public housing repairs in the capital budget. While this is a significant increase from $0 (what the Mayor proposed for public housing repairs last year), it is a far cry from the $60 million annually that advocates are calling for to make public housing units safe and livable. She also anticipates using new federal dollars to provide a large one-time boost to rental assistance for residents who need help paying rent due to the pandemic.
4. It fails to provide much-needed funding for some vital needs. Unfortunately, the Mayor does not provide funding for several critical needs in the FY 2021 budget. She does not provide any relief for child care centers who rely fully or partially on family tuition payments. DC cannot have an economic recovery without substantial investments in child care. Without dedicated public funding support for a stabilization fund, DC is at risk of losing 20% of our current child care supply, which will prevent families from getting back to work once the city re-opens.
The budget also fails to renew one-time funding for programs within the Child Family Services Agency that supports home visiting programs specifically meant to reduce child abuse and neglect. Similarly, the Mayor’s proposal fails to fund Early Head Start Home Visiting programs within the Office of the State Superintendent for Education to support immigrant families and families experiencing homelessness.
Another glaring oversight is inadequate assistance for the 25,000 to 30,000 undocumented residents that call DC home. They were excluded from federal cash assistance and unemployment insurance. The only source of relief for undocumented residents is a $5 million fund from Events DC, far below what is needed to stave off hunger and housing costs for undocumented residents and those otherwise in the informal cash economy. And they’re still waiting for assistance—Events DC has yet to disperse any funding to residents.
5. It rejects calls from the business community to raid the Universal Paid Leave Fund. Despite calls from the business community to deplete the Universal Paid Leave Fund for other uses, the Mayor’s proposed budget preserves $69 million of it in FY 2020 and $271 million in FY 2021. The Office of Paid Family Leave’s budget would approximately double under the proposal, after adjusting for inflation, to cover administrative, benefits, and tax collection costs, and a team of 125 full time employees. This expansion will greatly assist the office’s ability to administer claims. The proposed budget doesn’t appear to fund appeals activities, so the Council should make that a priority in their proposal.
In December 2016, the DC Council passed the Universal Paid Leave Act (UPLA), which will provide up to eight weeks of parental leave, six weeks of family leave to care for an ill family member with a serious health condition, and two weeks of medical leave to care for one’s own serious health needs. The program is due to start providing benefits in July, but the Chief Financial Officer will certify whether the rollout can be sustained as planned during this pandemic by the end of this month or early June. The ReOpen DC Advisory Group is set to announce recommendations on reopening city and business operations on Thursday. This may include impacts on the program going forward, so stay tuned.
We are working on a series of blog posts that will dig deeper into the Mayor’s budget proposals.
*The term “on net” refers to the total change after accounting for both spending increases and cuts.