Two months after unveiling a plan for DC’s economic comeback, Mayor Bowser’s fiscal year (FY) 2024 budget cuts vital lifelines for DC residents struggling to make ends meet and backtracks on existing commitments aimed at advancing racial justice. Her proposal includes expansions in some key programs such as affordable child care but hits the pause button on key initiatives to end homelessness and prevent eviction, expunge records, and pulls back on affordable housing. It also ends or cuts other programs aimed at ensuring that struggling DC residents aren’t left behind and instead locks in spending that benefits commercial developers.
Despite claims that DC residents no longer face an emergency, many households experience significant economic insecurity, especially with the cost of basic needs like food and housing on the rise. Since 2019, the number and share of people living below the poverty line, which is $27,740 for a family of four, has increased. At the same time, Black residents in the District are more than five times as likely to live in poverty and have roughly one-third the income relative to white residents. And, while the overall unemployment rate in DC is low, it masks big disparities by race and ward. Nearly 10 percent of Black workers in DC were unemployed as of the 4th quarter of 2022, and as of January 2023, the unemployment rates in Wards 7 and 8—largely Black communities East of the River—remain on par with the high Districtwide recessionary monthly unemployment rates of much of 2020 and 2021.
A striking blow in the Mayor’s proposal is an 80 percent cut to Emergency Rental Assistance (ERAP), which helps residents with low incomes avoid eviction by helping them pay overdue rent and related legal costs. With more than six months left in the 2023 fiscal year, the District has already stopped taking applications for assistance due to projections funding will run out by May, demonstrating continued, urgent need.
Bowser’s budget fails to provide ongoing funding for the Child Wealth Building Act, or “baby bonds,” effectively ending the program before the government was able to launch this support, which the DC Council first approved in FY 2022 to help reduce intergenerational poverty and close the racial wealth gap. And, despite a commitment to end chronic homelessness in DC, the Mayor keeps funding flat for the key program to do so. At the same time, the Mayor’s budget locks in a major increase to an untested, and likely ineffective, tax break for developers to convert downtown office space into residential buildings starting in FY 2028. In addition to subsidizing what would largely be market rate units downtown, the budget would exempt developers from First Source and certified business requirements that ensure DC residents and businesses benefit from such subsidies, as well as tenants’ first right to purchase buildings for 15 years after conversion, should they be sold.
Although local revenue growth is slowing and federal relief funds are soon expiring, this budget proposal fails to adequately support struggling residents and advance racial equity. DC Council must make significant changes to the budget to ensure that residents’ urgent needs are prioritized.
The Mayor’s proposal:
Makes Important Investments in Some Key Programs
- Invests $54 million in public housing repairs in FY 2024 and $61 million in FY 2025 to improve housing conditions and reduce racially disparate health risks for DC’s largely Black public housing residents.
- Allocates an additional $8 million to implement recommendations from the Black Homeownership Strikeforce, including support for the Heirs Property Legal Services, the Single-Family Rehabilitation program, and the Home Purchase Assistance Program.
- Invests in guaranteed income pilots, including $1 million in one-time funding to grow Strong Families, Strong Futures, which offers direct cash assistance to 100 new and expecting mothers in Wards 5, 7, and 8 during the first year of their child’s life. Provides $13 million for Career MAP, which offers cash and other resources to families participating in DC’s Rapid Re-Housing program to help them work toward a career or education goal without loss of public benefits due to increased earnings.
- Increases the Uniform Per-Student Funding Formula (UPSFF), which allocates funding to public schools and public charters based on student number and needs, by 5.05 percent. Sets aside a $20 million Recovery Fund, though it will not be enough to offset expiring federal funds and will leave many schools—particularly those in schools with declining enrollments—without funding used for critical services and programs. Also raises teacher pay with $116 million for DC Public School and Public Charter School sectors to support educator wellbeing and retention. Increases access to affordable child care to moderate-income families by increasing the income eligibility level for the child care subsidy program to 300 percent of the federal poverty level, up from 250 percent.
Pulls Back on Key Initiatives and Backtracks on Promises to Residents
- Locks in a substantial future increase in a yet-to-be implemented 20-year tax abatement for commercial property owners—a policy adopted last year to subsidize office-to-residential conversions or rebuilds. Also weakens the abatement’s affordable housing requirements and sets a dangerous precedent by exempting commercial property owners from equity provisions set in the law for businesses receiving public subsidies, including requirements for hiring DC residents and contracting with certified DC businesses, and ensuring tenants’ have the first right to purchase a residential property that’s being sold.
- Grossly underfunds ERAP, the program that helps households pay past due rent to avoid eviction, by cutting funding to only $8.2 million from $43 million in FY 2023.
- Fails to fund new vouchers for individuals and families experiencing homelessness for the first time since the Mayor was first elected.
- Provides just $100 million for the Housing Production Trust Fund (HPTF)—a large reduction from previous years that will slow the District’s ability to address its affordable housing crisis.
- Fails to add local funding for vouchers through the Local Rent Supplement Program, which would provide stable, affordable housing for Black and brown residents with low incomes.
- Fails to designate funding specifically for preservation, either through a set-aside within HPTF, or through additional money for the Affordable Housing Preservation Fund, which the Mayor reports is now self-sustaining.
- Fails to add new funding to the District’s baby bonds program, the Child Wealth Building Act of 2021, which the OCFO is in the middle of launching.
- Cuts funding in the early education budget, including $9 million in federal funding for child care subsidies, $4.4 million from the Pay Equity Fund, and $3.3 million from the Early Childhood Development Fund by permanently diverting dedicated sports wagering revenue to the general fund.
- Delays until FY 2025 the start date of the Second Chance Amendment Act that initiates a process for the sealing and expungement of resident citations, charges, arrests, or conviction records for activities that have been decriminalized or legalized.
