DC Council gave initial approval to a fiscal year (FY) 2026 budget that makes improvements over Mayor Bowser’s proposal but, as a whole, fails to provide vulnerable residents shelter from the coming storm as it fails to reverse the majority of her cuts to social safety net programs. If Council doesn’t go further to shore up local programs, this budget will leave the District’s most vulnerable residents—who because of a long history of racism are primarily from Black and brown and immigrant communities—to fend for themselves amid Congressional Republicans’ historic cuts to health care and food assistance.
Notably, Councilmembers proposed no new revenue, despite the projected $1 billion reduction in revenue over the next several years triggered by federal layoffs. The Council still has time to restore local programs that build economic security and mitigate the harm of the recession and federal cuts before their second budget vote on July 28.
Through budget shifts, DC Council was able to substantially or fully restore funding for several programs and make important policy shifts. They advanced:
- Full funding for Access to Justice, a program that funds pro-bono legal support for residents facing eviction or other forms of precarity, for FY 2026.
- Nearly full funding for the Pay Equity Fund (which provides higher pay and health care to early educators), falling short by $400,000 even with the $4 million bump added.
- Increased funding for child care subsidies by $15 million. However, without an additional $5 million, DC will be forced to institute a waiting list for the first time in decades.
- An increase to the Personal Needs Allowance to $300 per month, up from $138 per month, to improve living standards for residents who use Medicaid to pay for assisted living.
- Funding for universal paid leave benefits, rejecting the mayor’s program cuts but keeping minor administrative funding changes, as she proposed.
- A successful amendment to reject the effort to roll back of the tipped minimum wage as approved by voters and instead set in place a new, unvetted structure for tipped worker pay.
Councilmembers only partially addressed cuts for several other core services. For example, Council:
- Increased funding for Emergency Rental Assistance from $5 million to more than $11.5 million, which is still woefully short of the $100 million needed.
- Removed the mayor’s proposed new sanctions and time limits to the Temporary Assistance for Needy Families program, which goes to DC’s poorest families with children. The Council also restored the cost-of-living adjustment (COLA) for FY 2026 only, but funding for the COLA in future years remains unfunded.
- Reduced burdensome recertification rules for the DC Healthcare Alliance program and ensures that the program covers durable medical equipment. However, the program will no longer cover adults over the age of 26 or dental and eye care or specialty services like chemotherapy.
- Added $10 million to the Affordable Housing Preservation Fund, which will be transferred to the Housing Production Trust Fund (HPTF) intended to support the financing of affordable housing preservation. An amendment to set aside 30 percent of HPTF funds to expand much-needed preservation failed.
Because they failed to raise revenue, several other priorities went completely unfunded. Their budget thus far:
- Failed to fund any new Permanent Supportive Housing vouchers for individuals experiencing chronic homelessness, some of whom may die without housing and services.
- Eliminated the local Child Tax Credit that would provide a critical support to families with children, especially those likely to be most harmed by new work requirements and eligibility redeterminations for federal safety net programs.
- Failed to ensure dental, vision, and comprehensive behavioral health benefits for Medicaid beneficiaries being rapidly transferred to a basic health plan on the DC health care exchange.
- Maintained the mayor’s repeal of DC’s “baby bonds” program, which aims to reduce the racial wealth gap by providing children in economically disadvantaged families savings that they can access in adulthood.
- Failed to allocate $4.2 million to improve nutritional standards and workforce training for people incarcerated in the Department of Corrections, as prescribed in the SECURE DC Omnibus Amendment Act.
DC Council rejected several of Mayor Bowser’s wasteful “trickle down” economic strategies that squandered DC’s limited resources, including the restaurant “sales tax holidays” and the revival of the disproven Qualified High Technology Company tax incentive. Councilmembers also removed the authorizing language for the RFK stadium deal for the Commanders but set aside funds in the budget at the funding level in the agreement proposed by the mayor.
Councilmembers still have time to consider revenue proposals to restore damaging cuts in the areas of health coverage, housing and homelessness, and economic security. Now is the time. DC’s top 5 percent stand to get $568 million in federal tax cuts, annually, from the tax bill just adopted by Congress. Council can and should ask DC’s wealthiest households to contribute more through higher taxes on wealth or high income to restore and strengthen critical services that mitigate harm and support healthy communities and equitable growth.
