DC Fiscal Policy Institute Staff: Budget Shows DC Needs Bolder Investments to Put Plans into Action

The budget just adopted by the DC Council chips away at the major problems our city faces, with some investments that the District leaders can proudly point to. Yet in too many ways it does not go far enough to really tackle the challenges of our rapidly gentrifying and racially divided city — in housing, schools, health care and more.

The District’s strong economy has created unprecedented prosperity, but not everyone is benefiting. The average income of the top fifth of DC households is 34 times larger than the bottom fifth ($320,000, compared to $9,000), and black median household income is now less than a third of the white median income, according to the Census Bureau. Rising housing costs are squeezing longtime residents and causing a shocking level of homelessness. Our school system is falling far short of putting every child on the path to success.

DC residents want and deserve better. As we end the discussion on this budget and look ahead to the next, we need a bolder vision for how an increasingly prosperous DC can find the revenue to really solve these problems. While these are complex challenges, we actually know what to do to address them. We just need to make the necessary investments. Here are a few of the most pressing issues to solve.

  • Ending chronic homelessness: DC’s strategic plan to end long-term homelessness lays out what’s needed to make homelessness rare, brief and non-recurring. We simply haven’t devoted the needed resources. For example, the budget provides long-term affordable housing for 459 individuals, while the plan says we need to help 1,220 individuals. In other words, our leaders are making budget choices that we know will leave many DC residents without the dignity and safety of a home.
  • Removing barriers to health coverage: Thanks to our bold approach, DC’s uninsured rate now stands at under 4 percent. Yet even amid this progress, DC’s policies are leaving thousands of eligible District residents — many of them immigrants — without needed care. While the DC Council unanimously passed legislation to improve access, the money for it was not put in the budget.
  • Investing in early childhood development: Early childhood education lays the foundation for a lifetime of learning, yet too many parents can’t afford care, and too many children don’t receive the quality education they deserve. The DC Council recently enacted “Birth to Three For All DC” legislation that would set every infant and toddler up for success, and the budget partially funded it. But more revenue is needed to fully realize the comprehensive vision of the legislation and to adequately invest in early childhood development.
  • Providing an excellent education to every student: In 2013, the Office of the Deputy Mayor for Education identified in its Education Adequacy Study the true cost of providing a quality education to every DC student. Yet five years later, even with increases in this year’s budget, we still have not reached the recommended funding level, adjusted for inflation.
  • Create more affordable housing: There are 27,000 extremely low-income DC households who pay half or more of their incomes for rent each month — which can put them one misfortune away from becoming homeless. To address these severe housing challenges over a decade, the District would need to make a first-year investment of $233 million to build new subsidized homes, and $60 million to operate those homes and help some households pay the rent in private-market apartments (per a recent DC Fiscal Policy Institute report). The 2019 budget makes new investments but doesn’t come anywhere close to putting the District on a path to providing affordable housing for the DC households who need it most.

    The District is long overdue for a conversation about raising revenue for essential investments. One place to start would be using DC’s tax code to recapture some of the revenue from federal tax cuts and put it to good use for District residents. The new federal law gives a $254 million windfall to DC households with incomes of $500,000 or more in 2019, according to DC’s Office of Revenue Analysis. Raising DC taxes to recapture some of that windfall — by, for example, raising DC’s top marginal income tax rate on the wealthiest residents — would give the District a real opportunity to meet our most pressing needs without leaving any residents worse off financially when both federal and DC taxes are taken together. The DC Council took an important first step by moving to block a local estate tax cut caused by the federal law, but this is only a small piece of what is needed.

    Our city is facing challenges in affordable housing, homelessness, education and health care — but we are well-equipped with solutions to address them. We have the ability to put our plans into action and make DC a place where all residents can succeed.

    We need bolder investments to do so.

    DC Fiscal Policy Institute staff members Marlana Wallace, Claire Zippel, Simone Holzer, Ed Lazere, Jodi Kwarciany and Kate Coventry contributed to this piece. DCFPI, part of the Center on Budget and Policy Priorities, promotes budget choices to reduce economic and racial inequality and build widespread prosperity in the District of Columbia through independent research and policy recommendations.

    This post originally appeared in the DC Line.

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