Report

A Resident’s Guide to the DC Budget

Photo by Ivan Samkov from Pexels

Public transportation. Community centers. Drivers’ licenses. Cash assistance to help families make ends meet. Trash collection. Affordable housing. Teachers, police officers, and firefighters. Library books. All are made possible in the District of Columbia through the city’s annual budget.

The DC budget is the cornerstone of the public services and resources residents, businesses, and neighborhoods need to thrive. To ensure all DC residents share equally in the prosperity of our city and advance racial equity, we must ensure that city leaders make the right budget choices. Together—as residents, employees, journalists, agency leaders, and policy leaders—we have the power to address the challenges our city faces and put our shared values into action. We hope you’ll use this guide to help shape this year’s DC budget.

Table of Contents
The DC Budget Can Build Stronger and Equitable Communities
How the DC Budget Works
How the District Raises Money for Public Needs
How the District Spends its Money
How to Read DC Budget Documents
How the DC Budget is Created Every Year
How DC Builds its Rainy Day Savings
How the DC Budget Differs from Other Cities and States
Further Budget Resources

The DC Budget Can Build Stronger and Equitable Communities

Many residents with low incomes, who are primarily Black and brown, worry about eviction, feeding their families, and staying safe and healthy. Meanwhile, higher-income residents, who are predominantly white, largely have kept their jobs and even seen their wealth grow as they have moved through the pandemic. While the DC budget is here to meet the needs of all residents and businesses, it is especially important to DC residents who face the greatest inequities.

DC’s Black and brown residents experience more job discrimination, inadequate access to health care, and a lack of affordable housing due to systemic racism. For example, the District’s deep history of exploitation and discrimination against Black workers—including stolen labor when DC was a hub for slavery, restrictions the kept free Black workers in the lowest-paid jobs, federal government job discrimination through much of the 20th century, and exclusion of many Black workers from New Deal labor laws—led to present-day racial disparities in many employment-related metrics including occupations, wages, employment levels, benefits, and opportunities to grow wealth.

Using the budget to pay down rent and utility debt and prevent evictions, stabilize all public school budgets, and get health care and cash to those who need it are just a few ways the budget can transform DC into a more equitable community. The budget can also advance racial equity by making our tax code fairer—eliminating ineffective tax subsidies that allow big corporations to avoid paying their fair share in taxes, for example—and better able to meet our needs.

How the DC Budget Works

The Mayor and DC Council decide how to allocate the city’s resources through the budget, with input from advocates and residents about what is important to them. Every service the city provides, from trash collection to road repairs, appears in the budget every year and new services also get added sometimes.

With so many competing priorities, tough decisions must be made every year. To reach those decisions, the Mayor presents a budget proposal to the DC Council each year for review and approval. The budget is broken out into areas which the Council reviews in committees, such as the Committee on Health and the Committee on Transportation and the Environment. The DC Council can vote to change the Mayor’s proposal, but it cannot spend more in any particular area than the Mayor proposes. However, the Council can cut spending in one area and allocate those savings in another area or raise revenue through taxes or other means. By law, the budget must be balanced, with revenue equaling expenditures (although the city can get some of those revenues by dipping into its savings).

The DC budget operates in what’s known as a fiscal year (FY) that begins October 1 and ends September 30—the same fiscal year followed by the federal government. Most states, including Maryland and Virginia, begin their fiscal years on July 1. This year, the Mayor will send her proposed budget to the DC Council on March 16. The Council then reviews the budget and holds public hearings to get input from city residents and the Mayor’s administration. The DC Council makes allowable changes and approves the final budget. There may be changes to the budget during the fiscal year; every three months, the DC Chief Financial Officer (CFO) forecasts how much revenue the city will collect during the year, and the Mayor and Council may need to adjust spending throughout that time to stay in balance with the amount of money the city collects.

How the District Raises Money for Public Needs

At the time lawmakers approved the FY 2022 budget, the District anticipated collecting $18.4 billion in revenue over the course of the fiscal year. This money comes from four general sources (Figure 1):

Figure 1
  • Local Funds (51%). This is mostly tax revenue generated from property, income, and sales taxes, as well as several other taxes and
  • Federal funds (26%). Like all other states and municipalities, the District receives federal funds to meet specific purposes, such as services for residents with HIV or grants for schools with significant populations of families with low incomes. These sometimes come in the form of matching funds, where the District and federal government share expenses for a particular program, or as grants fully funded by the federal government. In FY 2022, the District is projected to use $4.7 billion in federal funds. The largest share goes to support our Medicaid program. This does not include the significant amount of COVID relief money from the American Rescue Plan, which Congress approved in March 2021.
  • Enterprise funds (16%). Enterprise funds, which include some dedicated taxes and user fees for quasi-government agencies such as DC Water and the Housing Finance Agency, are $3 billion in FY 2022.
  • Special purpose revenues and dedicated taxes (7%).These are taxes and fees designated for a specific use. For example, the District has a nuisance abatement fund which collects fees and fines from property owners who violate building codes. In another example, 15 percent of the city’s deed recordation and transfer taxes are dedicated to a special fund to finance affordable housing called the Housing Production Trust Fund. The District is projected to collect $1.3 billion in special purpose revenues and dedicated taxes in FY 2022.

Like nearly all cities and states, DC must balance its budget each year. In other words, the money the city brings in (revenue) must be equal to or greater than the money the city spends (expenditures)—although the city can use money in its savings account to help meet its revenue needs. A budget gap occurs when revenue is less than expenditures; a surplus occurs when revenue exceeds expenditures.

A budget surplus can arise because 1) revenue collections are higher than expected, 2) expenditures are lower than expected, or 3) both occurred. DC ended FY 2021 with a revenue surplus of more than $500 million. That is because DC underestimated local revenues due in part to the uncertainty around COVID-19 and federal relief as well as a conservative outlook on the state of our economy. DC’s local revenues have grown over the past two years because wages and salaries, investment income, and business profit in the District are growing alongside increased public spending amid an unequal recovery from the pandemic. While some DC residents are moving through the pandemic the same or better off financially, unemployment and hardship remain high for Black and brown residents and those with lower incomes.

How the District Spends its Money

Photo by Allison Shelley/The Verbatim Agency for EDUimages

DC’s budget is divided into two parts:

  1. The operating budget allocates resources to run the city government day-to-day, paying for things such as the salaries of police officers and librarians, electricity and phone bills for government agencies, and health expenses for residents in one of the District’s health programs.
  2. The capital budget supports the costs associated with building and maintaining infrastructure such as roads and schools. Most of the time, when officials speak about the budget, they are talking about the operating budget. This guide also focuses primarily on the operating budget.

For FY 2022, the approved gross operating DC budget is about $18.4 billion. This includes money raised locally as well as federal dollars that DC receives. The DC budget is divided into eight clusters, known as appropriation titles (Figure 2). Each appropriation title is explained in greater detail in the Appendix.

Figure 2
  • Human Support Services (29%) is the biggest share of the DC budget, as it is in most other states’ budgets. This part of the government provides programs that keep residents safe and healthy. The majority of the spending goes to health care programs that serve more than one-third of DC residents. Other services target youth, veterans, and the elderly. Human Support Services, which also includes the Department of Parks and Recreation, accounts for $5.4 billion of the city’s budget in FY 2022. 
  • Public Education (19%) includes the city’s traditional public schools and its public charter schools, as well as private school tuition for students who have special education needs that the public schools are not able to meet. The DC Public Library system is also included in this category. The District budgeted $3.5 billion for Public Education for FY 2022. 
  • The Enterprise Fund (16%) is where the city deposits taxes and fees collected for special purposes that flow to quasi-governmental agencies, such as DC Water and Washington Convention and Sports Authority. This fund is budgeted $3 billion in FY 2022. 
  • Financing (11%) includes debt service payments on major capital projects, such as school modernization, and other types of city borrowing. It also includes various other funds, including for DC government employees’ retirement. Financing accounts for $1.9 billion of the city’s budget in FY 2022. 
  • Public Safety and Justice (8%) includes the Metropolitan Police Department and the Fire and Emergency Medical Services Department, among others. In FY 2022, the Public Safety sector has a budget of $1.6 billion. 
  • Operations and Infrastructure (7%) includes trash collection, transportation, and motor vehicles. It includes agencies such as the Department of Public Works and the Department of Transportation. Operations and Infrastructure accounts for $1.3 billion of the District’s budget in FY 2022. 
  • Government Direction and Support (5%) includes many of the agencies that help manage, run, and support the general operations of the government, including the Office of the Mayor, the DC Council, CFO, and the Office of the Chief Technology Officer. It makes up $1 billion in spending for FY 2022.
  • Economic Development (4%) provides funding for affordable housing, workforce development, and economic development and planning. It includes agencies such as the Department of Housing and Community Development, the Department of Employment Services, the Office of Zoning, and the Office of Planning. The District has allocated $800 million to Economic Development for FY 2022. 

How to Read DC Budget Documents

A general guideline for examining budgets is to see how they have changed from year to year. Look for big spikes and big declines. And ask, did costs jump or fall in one area? Why? When you compare budgets from year to year, make sure that you compare “apples to apples,” or similar categories of spending. Sometimes, for example, the general fund amount may change from year to year, but gross funds might remain the same because of an increase or decrease in federal dollars.

Let’s say you regularly use your neighborhood library and want to understand how much DC invests in the library system. What do you do? First, there are certain questions to find answers to: 1) What is the library system’s budget? 2) Did it get cut last year or did it increase? 3) How does the library system spend the money it receives?

These questions can be answered by looking at the library budget published on the Office of the Chief Financial Officer’s (OCFO) website. If you are looking for an answer between March and June, you’ll find information on the Mayor’s proposed budget for the upcoming year, in addition to information on the current-year budget and last year’s. Once the budget is approved in June, the documents will reflect the final budget as approved by the DC Council for the fiscal year.

The OCFO provides budget documents for every DC agency. These are the city departments identified by the service provided: Department of Transportation, Fire and Emergency Medical Services, Department of Housing and Community Development, etc.

Let’s take a closer look at the agency budget chapter for the DC Public Library, using the Mayor’s FY 2022 budget as an example. It is found under the Public Education System appropriation title. There are several key tables that show up in the budget chapter for every agency to help explain the agency’s funding trends. The title of each table also includes a three-letter code for the agency. The code for the DC Public Library is “CE0.” When you find the library chapter, you will see this table, CE0-1. What does it tell you?

  • The previous year’s actual spending by the agency, and the number of workers at the agency (full-time equivalents, or FTEs) (FY 2020 Actual).
  • The current year budget and FTEs (FY 2022 Approved).
  • The percentage change in dollars and FTEs between the current year and next year.

FY 2020 reflects the actual dollars spent on the library system, based on the city’s annual audit of its books. FY 2021 denotes spending that has been approved, but not the actual spending number, which will be available once the Mayor releases her proposed budget for FY 2023.

You see that the city spent $66.1 million on libraries in FY 2020. Approved funding increased by $7.1 million for FY 2021, to $73.2 million. For FY 2022, library funding increased 3.2 percent, to $77.5 million. These numbers have not been adjusted for inflation. As a library advocate, you might be curious as to why the additional money was allocated. Before answering that question, it’s helpful to know where the additional money comes from in the first place.

Table CE0-2 shows the sources of library funding, including the possible streams of revenue: local, special purpose, federal, private, and Intra-District funds. For the DC public library system, a majority of funding comes from local tax dollars, which you can see by looking at the Total General Fund line. Total general fund support was $63.5 million in FY 2020, and federal funding was $1.1 million. Note that the mixture of funds varies from agency to agency. Federal dollars are more available for certain programs in human services, for example, than for public works.

How does all this library funding get spent? Table CE0-2 also shows how many full-time equivalent positions (FTEs) in the Library System are funded by various revenue sources. Table CE0-2 shows, for example, that 544.9 positions were funded with general fund dollars in FY 2020. FTEs include librarians and other staff.

The next chart, Table CE0-3, details spending by personal services and non-personal services. Personal services include associated with employees. Nonpersonal services include the costs of office supplies, rent (if the agency rents space), contracts for services, etc.

Next, table CE0-4 examines the agency by what is known as the program and activity level. These are the detailed line items that show how the library’s budget is spent.

Now say you want to know whether any new neighborhood libraries will open. That question is answered in Table CE0-5 and the accompanying narrative, Agency Budget Submission. This section describes the major changes proposed in the budget. Sometimes the explanations are very clear, and sometimes they’re not. If you have questions, you might consider making a call or sending an email to the DC Council committee that has oversight over a particular agency.

At the end of the agency budget documents are various performance measurements that seek to assess how well the agency is delivering services. They also contain general facts about the agency, such as how many books were circulated in the library system that year. The performance information for some agencies is better than for others. Pushing for better measures is an important role that residents can play.

How the DC Budget is Created Every Year

Budgeting is a year-round process. There is involvement from the Mayor and the executive branch, the DC Council, the city’s CFO, and residents and interest groups. Each October, as the fiscal year is starting, DC officials begin planning for next year’s budget. This is a process that requires agency budget requests, agency performance hearings, a proposed budget from the Mayor, review and voting by the DC Council, and final approval by the US Congress. Then, at the end of the budget planning process, laws are adopted to enact the budget and the CFO produces budget documents for each agency that help the agencies execute the new budget.

September – December: Agencies Develop Budget Requests

  • CFO’s Role: The CFO calculates how much it will cost the city to maintain the current level of services and obligations, which is known as the Current Services Funding Level (CSFL). The CFO calculates the CSFL for the operating budget and for local funds only. It reflects changes in salary expenses, utilities, and other fixed costs, as well as any changes required by previously adopted laws, but does not reflect any potential new policy decisions. The CFO publishes the CSFL early in the fall and it serves as the starting point for all agencies’ Local funds Maximum Allowable Ceiling Requests.
  • Agency’s Role: Agencies provide the CFO with information needed to calculate the CSFL and, taking into consideration the Mayor’s citywide strategic plan, formulate their budget requests and submit them to the Office of Budget and Planning in December.
  • Mayor’s Role: The Mayor’s office, through the Office of the City Administrator, gives each agency a target budget number for local funds, which the agency’s operating budget request cannot exceed. This target number is often set below the current budget, to encourage agencies to look for savings. Agencies develop budget requests that meet those targets but are also allowed to submit requests for targeted service enhancements or new initiatives.

January – March: DC Council Holds Agency Performance Hearings

  • CFO’s Role: In February, the CFO issues a revenue forecast, one of four issued during the year to project expected revenue collections for the current year and upcoming three years. When the Mayor submits her budget, she cannot propose expenditures that are greater than the CFO’s February revenue forecast.
  • Mayor’s Role: The Mayor’s budget review teams meet with each agency to review their budget requests. In particular, the Mayor considers enhancements she will include. If the revenue forecast is less than the CSFL, the budget must be adjusted to remain within the revenue limits. Adjustments can include policies to increase revenue, such as additional taxes or fees, or cuts to spending. If the revenue forecast is higher than the CSFL baseline, the Mayor can make choices to enhance funding in selected areas.
  • DC Council’s Role: While the Mayor is preparing a budget proposal, the DC Council starts holding performance oversight hearings on the performance of each agency, to review the agency’s operations and effectiveness in implementing its budget over the last year. The DC Council is divided into a number of committees, which have oversight over a set of related agencies. The Committee on Transportation and the Environment, for example, reviews the budgets of more than a dozen agencies, including the Department of Public Works, Department of Transportation, and the Department of Motor Vehicles. In the hearings, Councilmembers ask questions about how the agency spent its money.
  • Agency’s Role: The head of the agency is also required to discuss the agency’s performance and expenditures in the past fiscal year and answer oversight questions from Councilmembers. Before each performance oversight hearing, each Council committee submits a detailed set of questions to the agencies they oversee. Those questions and the answers are posted on the DC Council website. You can contact the Council’s Office of the Budget Director, or the committee clerk for any committee of interest, if you need help finding these documents.
  • Residents’ Role: DC residents and advocates have a chance to inform the Council about how you see dollars being spent and to make recommendations for improving how an agency is funded. Residents are encouraged to testify on any aspect of an agency’s performance or budget. Consider libraries again, for example. If your neighborhood library has stopped purchasing new books, the oversight hearing may an opportunity to ask why that decision was made. Residents can also submit questions for the Council committee members to ask agency officials at the performance oversight hearing. As noted, each Council committee submits a detailed set of questions to the agencies they oversee before each oversight hearing. There is no formal process for residents to submit questions, but you’re welcome to share your questions with staff of the relevant committee and encourage the committee to include your questions in their submission to the agency. You should contact a committee in January if you have questions to submit to the agencies. DC Council committees, their chairperson and members, and the agencies they oversee can be found on the DC Council website by clicking The Council,” then “Committees

March- Early May: Mayor Submits Proposed Budget to DC Council

  • Mayor’s Role: The Mayor submits a proposed budget to the DC Council in mid- to late March. Many of the Mayor’s key budget decisions—whether to cut funds, increase funds, cut taxes, or raise taxes—are made in the few weeks before the budget is submitted. The Mayor submits two proposed budgets: the operating budget and a capital budget.
  • DC Council’s Role: After the Mayor’s budget is released, each Council committee holds budget oversight hearings on the portion of the budget the committee oversees. For example, the Committee on Human Services holds hearings on the budget for the Department of Human Services, Child and Family Services Agency, and the Department on Disability Services, among others. As in the case in the performance oversight hearings held earlier in the year, each Council committee submits a detailed set of questions to each agency they oversee prior to the budget oversight hearings. Those questions and the answers are posted in the Budget Oversight page on the DC Council’s website. If you need help finding these documents you can contact the office of the DC Council’s Office of the Budget Director, or the committee clerk for any committee of interest. After the budget oversight hearings are held, each DC Council committee meets to markup the portion of the budget they oversee. The markup is the process through which the committees make changes to the Mayor’s budget. While the committees can shift funds from one program to another or from one agency to another, they cannot propose spending more than the total amount in the Mayor’s proposed budget for the agencies overseen by that committee, unless they identify a new source of revenue, such as an increase in taxes or fees, or receive a transfer of funds from another committee.
  • Residents’ Role: DC residents and advocates play an important role in shaping the DC Council’s budget decisions on how to alter the Mayor’s budget request by testifying at budget oversight hearings about portions of the budget they like or do not like. In addition, residents can submit questions to the committees to pass on to agencies. Residents also meet with Councilmembers to encourage funding increases for programs that are important to them. You can contact Councilmembers individually, by calling or sending emails. You may also want to join a group that advocates on your issue.

May- June: Budget Gets Voted on and Sent to Congress

  • DC Council’s Role: In May, the entire DC Council votes on the Local Budget Act, the Federal Portion Budget Request Act, and the Budget Support Act. In order to do that, the entire Council meets to reconcile actions taken at the Committee level and to deal with any outstanding issues. Like all DC legislation, the budget has a second vote, or “second reading.” The second votes—on the Local Budget Act and the Budget Support Act—are held in late May or early June, and the final budget then is submitted to the U.S. Congress for a 30-day review. Notably, Congress very rarely changes anything. (The Council holds only one vote on the Federal Portion Budget Request Act, which Congress then incorporates into the federal budget.)
  • Resident’s Role: DC residents and community leaders should continue to advocate for their budget priorities throughout the Council’s voting process. These last-minute efforts can make a big difference in the final budget.

How DC Builds its Rainy Day Savings

Another important part of budgets, rainy day funds help states and cities manage a crisis. They can help maintain public services during an economic downturn, when rising unemployment and falling incomes lead to both declining tax collections and increasing need for government services. They can also limit the need to raise taxes and provide a stimulus to the local economy—all of which can help mitigate the effects of a recession.

The District’s rainy day reserves totaled $1.2 billion at the start of FY 2021 and are spread across four different funds. These reserves would allow DC government to maintain its operations for an additional 60 days, a target recommended by the Government Finance Officers Association. This standard ensures that governments have the resources they need to continue their critical work during challenging times, such as in a recession.

  1. The Fiscal Stabilization Reserve: During the pandemic, the mayor and DC Council tapped this entire reserve. It currently has $0. It is the only reserve that is easily available for use in a recession because repayments come from future budget surpluses.
  2. The Cash Flow Reserve Account: This $728 million reserve (half of DC’s savings and about 31 days of revenue) is used only for short-term cash flow needs; any money used must be repaid in the same fiscal year. It, therefore, cannot be used in a recession, when the fallout of shrinking revenue and increased demand for services stretch beyond a year.
  3. The Emergency Reserve: This reserve is federally mandated and includes $161 million (or 7.3 days of revenue) that can be used to meet “extraordinary needs of an emergency nature, including a natural disaster or calamity,” or in a state of emergency declared by the Mayor. Given this restriction, the District rarely uses this reserve, including during the pandemic.
  4. The Contingency Reserve: Also mandated by Congress, this $321 million (14.6 days of revenue) can be used for “unforeseen needs that arise during the fiscal year,” such as a natural disaster, public health or public safety needs, or a five percent drop in revenue collections. While this allows the reserve to be used in a recession, the rapid repayment requirement makes it difficult to use as a rainy day fund. While Mayor Bowser uses the Contingency Reserve to front funds that will be paid for with federal funding or DC budget surplus, the DC Council has never initiated steps to use it is a rainy day fund. State fiscal policy experts recommend against requirements to rapidly replenish rainy day funds for this reason.

How the DC Budget Differs from Other Cities and States

Photo by Yeon Choi on Unsplash

Washington, DC is a city, but also has to act like a state in a way that’s different from Baltimore, Milwaukee, or San Francisco. The District, which is not a state or located within one, is in charge of many programs that Maryland, Wisconsin, or California would normally administer for their largest cities. These programs include Medicaid, unemployment insurance, and TANF. And while the District has more responsibilities than many cities, it has less autonomy over its budget and other areas of governance. This is because the U.S. Constitution gives the U.S. Congress broad authority to oversee the city. In fact, the District did not have an elected city government until the passage by Congress of the Home Rule Act of 1973. The law handed day-to-day administration of the city government to an elected Mayor and a thirteen-member City Council.

While most residents are aware that the District lacks voting representation in Congress, many may not be aware that Congress also deprives the city of full budget autonomy. Indeed, every law passed by the DC Council and signed by the Mayor can be modified or even rejected by Congress, with the DC budget being a special case. In 2013, DC voters approved and the Superior Court of DC later upheld the Local Budget Autonomy Act, officially giving DC control of its locally funded budget after a 30-day Congressional review period. Put simply, Congress has 30 days to reject and change the budget, but after that period, DC has the authority to spend its local funds as outlined in its budget.

Congress also mandates that DC budget not only for the upcoming fiscal year, but for four years out through the financial plan. And in 2014, the federal government showed its powers again when District voters approved a ballot initiative to legalize possession of a small amount of marijuana. While the US Congress did not overturn the law, it did vote to prohibit the District from spending any money to regulate marijuana use in DC, such as rules for buying or selling or taxing sales.

Further Budget Resources

DC’s Budget & Financial Plan
Office of the Chief Financial Officer
The OCFO’s budget page contains links to the current budget, the current services funding level baseline budget, and an archive of prior year budgets dating back to FY 2007.
www.cfo.dc.gov/budget

Quarterly Revenue Forecast
Office of the Chief Financial Officer
Four times a year, in February, June, September, and December, the OCFO issues a revenue forecast for the current fiscal year and next four fiscal years. The February revenue forecast sets the groundwork for the Mayor’s proposed budget.
www.cfo.dc.gov/page/quarterly-revenue-estimates

Budget and Performance Oversight Resources
DC Council
The DC Council website posts the questions posed by each Council Committee to agencies as part of the performance and budget oversight hearings, as well as the agencies’ answers.
https://dccouncil.us/budget-oversight-2021/

Committee Reports
DC Council
Each DC Council Committee prepares a report on their agency budgets. The reports are available online on the Council’s website.
https://www.dccouncilbudget.com/fy-2021-budget

CFO Info Interactive Dashboard
The CFO Info page is an interactive web-based budget and expenditures dashboard. In addition to viewing each agency’s budget in depth, users can filter by fund and expense type.
http://cfoinfo.dc.gov/

DC Council Committee Staff
Get to know them and don’t be afraid to ask them questions and use their resources.
www.dccouncil.us/committees

DC Fiscal Policy Institute Budget Toolkits
Each year, DCFPI writes summaries of what’s in the Mayor’s proposed budget and the approved DC budget for issues including education, homeless services, and health care.
www.dcfpi.org/resource/budget-toolkit/

Glossary

Agency: Division of city government in charge of service delivery, such as Department of Public Works.

Appropriation titles: The seven clusters in which DC agencies are grouped together based on their general function.

Budget autonomy: A law giving DC control of its locally funded budget after a 30-day Congressional review period, which originated with a 2013 ballot initiative.

Budget oversight hearings: After the Mayor’s budget is released, each Council Committee holds budget oversight hearings on the portion of the budget the Committee oversees

Budget Support Act (BSA): Legislation covering budget changes that require a change in law, including tax changes, policy changes, and new program rules.

Budget: A spending plan that outlines revenues and expenditures for a given period of time.

Capital budget: Spending plan for infrastructure, such as roads and schools.

Committee: The DC Council is divided into a number of Committees which have oversight over a set of related agencies.

Current Services Funding Level (CSFL): Amount of funding needed to maintain current services.

Dedicated tax: A tax whose revenue is directed for a specific purpose. Dedicated taxes are part of the city’s General Fund.

Expenditure: Payments for personnel, goods and services, and other expenses needed to carry out the functions of the DC government.

Federal funds: Funding received from the federal government.

Federal Portion Budget Request Act: Legislation that sets federal funding for certain functions paid for by the federal government, like DC courts. This Act goes through the congressional budget process.

Financial plan: Budget for the city’s current fiscal year and three years beyond. The four-year financial plan is mandated by Congress.

Fiscal year (FY): Length of time the budget is allocated. In DC, the fiscal year runs from October 1 through September 30.

Full-time equivalent (FTE): One or more employment positions in which the combined work is equal to one full-time year-round worker (40 hours and 52 weeks).

Fund balance: The District’s accumulated resources, including various reserve funds and other sources. The city’s rainy day fund is part of the fund balance.

General Fund: Expenditures funded with locally raised taxes and fees. Local revenue, special purpose revenue, and dedicated taxes are part of the General Fund.

Gross funds: Combines all the sources of funding, including the General Fund, federal funds, and any private dollars.

Intra-District funds: An accounting mechanism to track payments for services provided by one

Local Budget Act: Legislation that sets the budget for each agency for the fiscal year. automatically becomes law after a 30-day congressional review period.

Local funds: Includes tax and non-tax revenue that is generated by the District and is not earmarked for a particular purpose. Local funds are part of the General Fund.

Markup: Changes to legislation or the Mayor’s budget proposal made by a DC Council Committee.

Nonpersonal services: In an agency budget, includes costs not associated with employees, such as contracts for services, office supplies, and rent.

Operating budget: Spending plan for day-to-day government operations, including programs, services, and government employee salaries.

Performance oversight hearings: The hearings DC Council Committees hold in January- February to examine each agency’s operations and effectiveness in implementing last year’s budget.

Personal services: In an agency budget, includes pay and other costs associated with government employees.

Rainy day fund: Informal term for financial reserves set aside by cities and states to address unforeseen circumstances. DC’s rainy day fund includes the federally-mandated emergency and contingency cash reserves, as well as a locally-mandated fiscal stabilization reserve.

Revenue forecast: The Chief Financial Officer’s estimate of how much revenue the city will take in, for the current fiscal year and next four fiscal years.

Revenue: The annual income or receipts of the District from all sources, including taxes, fees, grants, and investments.

Special purpose revenue: Fees and other non-tax revenues where the funds are designated for a specific use. Special purpose revenues are part of the city’s General Fund, along with local funds and dedicated taxes.

Tax: A financial charge or levy assessed on income, property or other goods and services to support government services.

Uniform Per Pupil Student Funding Formula (UPSFF): Amount of local funds allocated to each DC public school and public charter school based on student enrollment and selected student characteristics.

Appendix: An In-Depth Look at the DC Budget’s Seven Appropriation Titles

The following summarizes the gross funding in FY 2022—including both local and federal funds—for each of the major functional areas of the DC budget.[1]

Human Support Services

The biggest slice of the overall budget is Human Support Services, with gross funds of $5.5 billion in FY 2022. This cluster of agencies includes many charged with caring for our most vulnerable residents.

  • The largest agency within the Human Support Services cluster is the Department of Health Care Finance(DHCF), which administers the city’s Medicaid program, a federal-state program that acts as a health insurer for many of our city’s poorest residents. It is also in charge of the DC Health Care Alliance, a city-run health care provider for uninsured residents who don’t qualify for Medicaid. Nearly 280,000 residents receive health care services through DHCF. The FY 2022 budget for the agency is $3.7 billion, making it the largest portion of the District’s Human Support Services cluster. Most of its funding comes from the federal government, which covers 70 percent of the city’s basic Medicaid expenses, plus higher shares of certain Medicaid components resulting from the Affordable Care Act.
  • The Department of Human Services delivers many services and programs critical to the city’s safety net, including Temporary Assistance for Needy Families, Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps), and homeless services. It is a front-line agency that gives direct assistance to the District’s most economically disadvantaged and vulnerable residents. The budget for the agency is $723 million for FY 2022.
  • The Child and Family Services Agency investigates reports of child abuse and neglect and provides services to protect at-risk children. Services include foster care, adoption, and programs for at-risk youth. The agency’s budget in FY 2022 is $220 million.
  • The Department of Health concentrates on three priority areas: HIV/AIDS prevention and awareness, health and wellness, and public health systems. A majority of the agency’s $282 million budget in FY 2022 came from federal sources.
  • The Department of Behavioral Health works with contractors in a variety of settings to provide services for DC residents in need of mental health care, and it operates St. Elizabeth’s Hospital, a psychiatric facility. The agency’s budget in FY 2022 is $356 million.
  • The Department of Disability Services coordinates care and housing for city residents with physical or mental disabilities. The FY 2022 budget for this agency is $197 million.

Public Education

The next biggest chunk of the DC budget goes to Public Education, which includes the DC Public Schools and DC public charter schools, as well as the public library system and the University of the District of Columbia. Gross funds for public education total $3.9 billion in FY 2022.

DC Public Schools provides general classroom instruction, as well as vocational, early childhood, English language learner services, and summer school for about 50,000 students in 2022. In FY 2022, DC public schools were allocated $1.3 billion in gross funds.

A growing portion of public education funding is going to charter schools. of FY 2022, there are 68 nonprofits who operate 133 charter schools, which enroll about . In FY 2022, DC Public Charter Schools will receive funding of $1 billion to meet both their operating and facility expenses.

Both the traditional public schools and public charter schools are funded through the Uniform Per Student Funding Formula (UPSFF). The formula provides a basic amount of money for each student. There are additional weighting factors, such as grade level, special education, and students who are low-income or otherwise at-risk of academic failure. Charter schools also receive a per-pupil allotment for facility expenses, while DC Public Schools gets some support from other agencies, such as building maintenance services provided by the Department of General Services.

The per-pupil funding formula is used to set the overall local funding level for the DC Public School System. The Chancellor then develops a plan to allocate funding among schools and to central office and other functions. For public charter schools, the amount of money each school receives is dependent upon enrollment.

The Public Education sector also includes the Office of the State Superintendent of Education, the University of the District of Columbia, DC Public Library, and the Deputy Mayor for Education:

  • The Office of the State Superintendent of Education (OSSE) sets academic policies and requirements. OSSE is also in charge of early childhood care services, school nutrition services, and adult education. The agency’s budget for FY 2022 is $743 million.
  • The Special Education Commission includes both the category “non-public tuition” and special education transportation.  
    • Non-public tuition is the cost of legally mandated special education services for DC residents provided by private schools, when the DC Public Schools are not able to meet a child’s special education needs. (The District also serves many students with special education needs within DC Public Schools and DC Public Charter Schools, and those funds are reflected in the DCPS and DCPCS budgets.) Non-public tuition also funds students with disabilities who are District residents and placed into foster care and public schools in other jurisdictions. In FY 2022, they were budgeted $59 million. 
    • Special education transportation is managed by the Office of the State Superintendent of Education, Division of Student Transportation (OSSE-DOT). They transport eligible students to and from school and were budgeted $118 million in FY 2022. 
  • The University of the District of Columbia will receive $93 million in FY 2022. This supports both the university-level functions of UDC and its community college.
  • The DC Public Library system includes the flagship Martin Luther King Jr. library downtown and . The system’s budget for FY 2022 is $75 million.
  • The Department of Employment Services provides job skills training, labor market analysis, and enforcement, and it runs the city’s youth summer jobs program. In FY 2022, $226 million is dedicated to the agency.
  • The Department of Parks and Recreation acres of public park land. The FY 2022 budget for this agency is $72 million.

Public Safety and Justice

Two agencies make up most of the Public Safety cluster: the Metropolitan Police Department and the DC Fire and Emergency Medical Services. Gross funds for public safety in FY 2022 totals $1.6 billion.

  • The Metropolitan Police Department has 3,500 police officers who patrol the city, which is divided into 56 police service areas in seven police districts. The agency’s budget for FY 2022 is $517 million.
  • DC Fire and Emergency Medical Services (DC FEMS) runs 33 firehouses across the city. Most of the city’s firefighters are also trained as emergency medical providers. DC FEMS answers more than 200,000 fire or medical incidents each year. The DC FEMS budget for FY 2022 is $307 million.
  • The Homeland Security and Emergency Management Agency concentrates on four areas: preparedness and protection, incident and event management, homeland security, and agency management. In FY 2022, the agency budget is $108 million.
  • The DC Department of Corrections operates the DC Jail and houses inmates at a correctional treatment facility. The department also contracts with private companies that operate two halfway houses. The agency’s budget for FY 2022 is $188 million.
  • The Office of Unified Communications answers and directs calls to the District’s emergency number, 911, and non-emergency number, 311. The agency’s FY 2022 budget is $55 million.
  • The Office of the Deputy Mayor for Public Safety and Justice coordinates and provides oversight of the various public safety agencies in this cluster. The FY 2022 budget for the Deputy Mayor for Public Safety is $2.4 million.
  • The Office of Victim Services and Justice Grants coordinates and funds programs in the District that serve crime victims, prevent crime, and improve the administration of justice for victims and offenders. The FY 2022 budget for this agency is $106 million.
  • The Office of the Chief Medical Examiner investigates and certifies all unexpected deaths and deaths in which violence is suspected. The FY 2022 operating budget for the agency is $16 million.
  • The Department of Forensic Sciences provides independent analysis of evidence and samples submitted by agencies within DC and its federal neighbors. The FY 2022 budget for this agency is $36 million.

Financing

This appropriation title does not consist of agencies that actually provide services to residents or oversee programs; it includes a variety of funds that are used to make debt service payments for capital improvement projects, payments on loans and interest, settlements and judgments, and funds to pay for the improvement of school facilities, just to name a few. In FY 2022, the District dedicated $1.9 billion in gross funds to financing.

  • Debt Service or “repayment of loans and interest,” includes the interest and principal repayment of bonds the city issues to support infrastructure projects. The FY 2022 expenditures for debt service is budgeted at $866 million. (The District also engages in short-term borrowing to help manage its cash flow during the year. Other debt service costs include the expenses associated with issuing bonds and a small school modernization fund.)
  • The District Retiree Health Contribution includes funds for the District to make payments for health and life insurance for retired DC government employees. In FY 2022, $50 million is dedicated to this purpose.
  • The Convention Center Transfer fund holds a portion of the District’s sales taxes that are automatically transferred to the Convention Center to support its operations. $180 million was transferred for this purpose in FY 2022.
  • The Pay-As-You-Go Capital Fund provides the District with funding to do capital projects and improvements without borrowing. The FY 2022 budget for the Pay-As-You-Go Capital Fund is $355 million.
  • The Settlements and Judgments fund is a reserve set aside for court judgments and rulings against the District of Columbia. In FY 2022, $28 million is allocated to the fund.

Governmental Direction and Support

This cluster consists of several agencies that help manage, run, and support the general operations of the DC government. In FY 2022, gross funds for governmental direction and support were $1.3 billion.

  • The Department of General Services was established in 2012 to centrally manage services related to government facilities, including DC public schools. DGS manages the capital improvement and construction program for District government facilities, acquires and disposes of real property, and provides building services such as custodial, security, utilities management, maintenance, inspection, and repairs. In FY 2022, DGS will receive $494 million.
  • The Office of the Chief Financial Officer (OCFO) provides financial management services to the DC government. The OCFO makes sure spending remains within approved budgets or expected revenues so that deficits do not occur. The FY 2022 budget for the agency is $203 million.
  • The Office of the Attorney General (OAG) handles legal matters for the city. The OAG represents the District in civil litigation, prosecutes certain criminal offenses, advises the Mayor, Council, and other agencies, and represents the city in other legal proceedings. The District allocated $147 million to the OAG for FY 2022.
  • The DC Council is the legislative branch of District government. It comprises 13 members, including one elected representative from each of the city’s eight wards, four at-large members elected citywide, and one chairperson, who is elected citywide. The operating budget for the DC Council in FY 2022 is $31 million.
  • The Office of the Inspector General conducts independent audits and investigations into the use of District funds and resources. Its budget for FY 2022 is $23 million.
  • The Office of the Mayor is divided into five core offices: executive office of the Mayor, boards and commissions (MOTA), community affairs, volunteerism (Serve DC), and the agency management unit. The operating budget for the Office of the Mayor in FY 2022 is $18 million.
  • The Board of Elections runs the city’s elections. The board is in charge of voter registration, election administration, and election operations. A three-person board makes policy decisions and supervises the activities of the agency. In FY 2022, the agency’s budget is $12 million.
  • The DC Auditor helps the DC Council assess spending and improve efficiency in programs. Its budget for FY 2022 is $7 million.
  • The Office of the City Administrator provides support, oversight, and leadership over the city’s agencies. The operating budget for the city administrator’s office in FY 2022 is $11 million.
  • The Office of Campaign Finance is the regulatory agency policing the conduct of public officials and candidates regarding campaign finance laws. The Office of Campaign Finance will receive $23 million in FY 2022.
  • Advisory Neighborhood Commissions (ANCs) are unpaid, grassroots elected representatives who advise the District on decisions involving planning and zoning in specific areas. The commissioners review and make recommendations on liquor licenses, zoning changes, and permits. The operating budget for the ANCs in FY 2022 is $1.9 million.

Operations and Infrastructure

The Operations and Infrastructure cluster has some of the most visible, quality-of-life government services agencies. In FY 2022, $1.3 billion is dedicated to operations and infrastructure.

  • The Washington Metro Area Transit Authority(WMATA) provides public transportation, under the direction of the Department of Transportation. The District’s contribution to WMATA is $457 million in FY 2022.
  • The Department of Transportation maintains the city’s streets and bridges as well as operates the District’s Circulator buses and runs the Urban Forestry Administration. The agency’s budget for FY 2022 is $170 million.
  • The Department of Consumer and Regulatory Affairs is responsible for licensing and permits, conducting building inspections, as well as enforcing building, housing and safety codes. The agency’s FY 2022 budget is $90 million.
  • The Department of Public Works is responsible, among other things, for one service many residents appreciate, and one that some do not: solid waste management and parking enforcement. The department also maintains the city’s fleet of vehicles. The public works budget for FY 2022 is $207 million.
  • The Department of Energy and the Environment is the lead agency for creating and enforcing DC environmental standards, in addition to implementing federal environmental laws and regulations. It also provides certification services to the DC government and residents and develops programs designed to improve sustainability in the District. In FY 2022 it has a budget of $242 million.
  • The Department of Motor Vehicles(DMV) has an agency budget of $49 million in FY 2022. The department manages 637,000 licensed drivers and identification holders as well as collects fines for approximately 2.6 million parking tickets each year. DMV also conducts 178,000 vehicle emission inspections per year.
  • The DC Department of For-Hire Vehicles regulates approximately 100,000 drivers, 60 taxicab companies, and more than 20 limo companies. The agency’s FY 2022 budget is $23 million.

Economic Development and Regulation

The agencies in this appropriation title set the direction for economic development in the city. Not only does it encompass planning and zoning functions, but it also includes workforce development, affordable housing development, and small business development. Gross funding for economic development is $788 million in FY 2022.

  • The Department of Housing and Community Development manages a variety of programs—both local and federal—to finance, develop, and preserve affordable housing and homeownership for low-income DC residents. The agency also contracts with community-based organizations to help provide housing counseling, tenant assistance, and small business technical assistance. The agency’s FY 2022 budget is $150 million.
  • The Deputy Mayor for Planning and Economic Development sets the city’s development priorities and policies, with a FY 2022 budget of $142 million.
  • The DC Office of Planning is in charge of developing plans to execute the comprehensive plan, historic preservation, and planning for the city’s public facilities, parks, and open spaces. In FY 2022, the agency will receive $18 million.
  • The DC Commission on the Arts and Humanities provides grants that support arts organizations in the District as well as individual artists. The Commission’s budget is $38 million in FY 2022.
  • The Office of the Tenant Advocate conducts education and outreach on city laws involving rental housing and represents the interests of tenants in legislative, regulatory, and judicial matters. The FY 2022 budget for the agency is $4 million.

Enterprise and Other Funds

This appropriation title includes budget and accounting units created for particular purposes, such as water and sewer or other self-sustaining operations, to separate the revenue and financial control of such operations from the District’s General Fund. Enterprise and Other Funds total

  • The Ballpark Revenue Fund is a non-lapsing special fund that was established to pay certain costs of the development, construction, and renovation of a stadium that has as its primary purpose the hosting of professional athletic events in the District. This fund was allocated $31million in FY 2022.
  • The DC Retirement Board is an independent agency that has exclusive authority and discretion to administer the District’s retirement funds for teachers, police officers, and firefighters. In FY 2022, the Board total was $49 million.
  • The Water and Sewer Authority distributes drinking water and collects and treats wastewater for DC. In 1996, DC Water gained financial independence from DC government. Their budget for FY 2022 is $658 million.
  • The Green Finance Authority works to increase private investment in clean energy, clean transportation, clean water, stormwater management, energy efficiency, water efficiency, and green infrastructure projects in DC. This fund totals $31 million in the FY 2022 budget.
  • The C. Health Benefit Exchange Authority is a quasi-governmental agency of the DC government charged with implementing and operating the District’s Health Benefit Exchange. In FY 2022 their budget is $33 million.
  • The Housing Financing Agency issues taxable and tax-exempt mortgage revenue bonds to lower the costs of financing single-family housing and of acquiring, constructing, and rehabilitating rental housing. Their budget for FY 2022 is $15 million.
  • The Housing Production Trust Fund is the city’s primary tool for building and preserving affordable housing by funding initiatives to build affordable rental housing, preserve expiring federally assisted housing, and help provide affordable homeownership opportunities for low-income families. This fund totals $250 million in the FY 2022 budget.
  • The Not-For-Profit Hospital Corporation is commonly known as United Medical Center (UMC) and United Medical Nursing Center. In FY 2022 their budget is $155 million.
  • The Office of Lottery and Gaming generates revenue for the city by selling lottery games .Their budget total for FY 2022 is $544 million.
  • The Other Post-Employment Benefits Administration agency is used to account for expenditures related to the administration of a trust fund that receives the District’s annual contributions toward health and life insurance benefits for District employees who have retired, as well as premium payments from retirees. Their fund totals $10 million in the FY 2022 budget.
  • Repayment of PILOT Financing is a program through which the District provides economic development project funds by borrowing against the future receipts from Payment-in-Lieu-of-Taxes. The program total is $48 million in FY 2022.
  • Tax Increment Financing is a program through which the District provides economic development project funds by borrowing against future tax receipts expected to be generated as a result of the construction and operation of projects partially funded by these funds. Their budget for FY 2022 was $42 million.
  • The Unemployment Insurance Trust Fund, administered by the Department of Employment Services, represents the proceeds from unemployment taxes paid by private sector employers and reimbursements from the District and federal governments deposited in the Unemployment Trust Fund. The Fund is used to pay benefits for private and public sector employees during periods of unemployment. The fund has $267 million in FY 2022.
  • The Universal Paid Leave Fund supports paid-leave benefits to private employees in the District for up to eight weeks of parental leave, six weeks of family leave, and two weeks of medical leave for every fifty-two weeks worked. This fund has $340 million in FY 2022.
  • The University of the District of Columbia offers postsec­ondary education to District of Columbia residents. The University was allocated $171 million in FY 2022.
  • The Washington Aqueduct is owned and operated by the U.S. Army Corps of Engineers and collects, purifies, and pumps water to the distribution system managed by the District of Columbia Water and Sewer Authority (DC Water), Arlington County, and Fairfax County Water Authority (Fairfax Water), in Virginia. The aqueduct has $71 million in FY 2022.
  • The Washington Convention Center and Sports Authority, or Events DC, is responsible for managing and operating the District’s convention center and for bringing national and international conventions, trade shows, and meetings to DC. The Authority’s budget totals $228 million in FY 2022.

[1] All FY 2022 budget figures in this appendix are from Fiscal Year 2022 Budget & Financial Plan. See https://dcgov.app.box.com/s/5sz8y3wequcgtxqjfxsquqam8bpivy5m