Here in DC—the wonkiest of places—residents value data. Mayor Bowser has said policies should be evaluated so we know what works. However, her proposed fiscal year (FY) 2026 budget and four-year financial plan heavily invest in unproven and disproven economic development strategies like tax breaks and subsidies for developers, technology companies, and sports teams, while cutting health coverage for residents, affordable child care, and other programs that research shows create healthy communities and a stronger economy.
This is part of a persistent double standard in policymaking. On one hand, lawmakers often require a mountain of evidence to be persuaded to invest in programs supporting residents with low incomes—and even then, they often cut them first in tight budgets. And on the other hand, they often swiftly enact business subsidies without solid research evidence they will benefit the District and renew them each year with little oversight.
Business Subsidies Should Be Evaluated on Whether They’re Actually Needed to Generate Desired Activity
Lawmakers should evaluate economic development incentives on whether they spur desired activity that would not have happened “but for” the incentive and if the benefits outweigh the cost. However, Council generally does not publicly interrogate whether incentives meet the “but for” standard. And the Office of the Deputy Mayor for Planning and Economic Development (DMPED) offers little more than output data, such as how many businesses receive subsidies, as program results.
A prime example of a business incentive that has not been evaluated—but that Mayor Bowser and the Council continue to increase funding for—is the Housing in Downtown (HID) program. The program provides 20-year tax abatements with the goal of spurring office building to housing conversions in certain neighborhoods. During a 2025 Council Committee on Business and Economic Development (CBED) performance oversight hearing, when asked to report on program results, DMPED officials stated that four conversions had been approved, but did not explain whether HID was a determining factor in the conversions. In fact, DMPED officials said that 40 office-to-residential conversions were in process outside the HID program, which begs the question—unasked by lawmakers publicly—of whether HID is truly necessary.
Councilmembers are now moving forward with increasing the HID tax break by $36 million to $41 million in FY 2028 and 4 percent annually thereafter, and expanding the program to other neighborhoods, after CBED reported, “the Committee heard from property owners and Council colleagues recommending the inclusion of existing and planned conversion projects just outside the expanded eligible areas.” The abatement is unnecessary if projects are already “existing” or “planned” and Council should require a higher standard of evidence for need than a property owner’s request.
Mayor Bowser is Proposing New, Disproven Economic Development Initiatives
The mayor’s proposed deal with the owners of the Commanders would offer them nearly $2.2 billion in direct subsidies, tax breaks, and land giveaways for the new stadium and mixed-used district. This is in spite of the preponderance of research indicating that NFL stadiums do not drive significant local economic growth. The economic impact analysis the mayor’s team provided to the public fails to provide a detailed methodology and does not account for forgone tax revenue—meaning the cost to DC is actually higher than what she claims. Plus, the firm that conducted the analysis, CSL, has a track record of overinflating benefits and had to retract a $70 million calculation error in a DC United stadium report in 2014.
The mayor also proposed several sales tax “holidays” for restaurants, with the goal of enticing more DC residents to dine out on those days. Research shows that sales tax holidays have significant downsides. When Councilmember Kenyan McDuffie asked Deputy Mayor for Planning and Economic Development Nina Albert for data on the economic impact of the proposal at a CBED budget oversight hearing, she responded, “We did not run a specific economic impact study on this.” This unresearched proposal would have cost DC more than $6.6 million, though CBED cut it from the budget proposal passed out of committee.
Proven Programs for Workers and Residents with Low Incomes are Facing Cuts
While touting disproven strategies, the mayor is ushering forward cuts to programs with strong evidence and results, such as:
- Zeroing out the Pay Equity Fund that boosts pay for early educators and provides low cost health care beginning in FY 2027, despite research showing a 23 percent return on investment;
- Reducing paid leave benefits despite adequate funding and decades of research on economic benefits including boosting women’s labor force participation;
- Eliminating DC’s Child Tax Credit though research shows that it reduces child poverty, improves child outcomes, and improves families’ economic stability; and,
- Decrying a planned cost of living adjustment and reinstating a 60-month time limit for TANF and imposing work sanctions despite evidence that sanctions don’t increase compliance with work requirements or cut poverty but do increase hardship for adults and children.
The Council restored some cuts, such as delaying TANF cuts to FY 2027, but overall, the Council has spent a lot of time questioning cost growth in safety net programs while not applying similar scrutiny to business subsidies, at least publicly.
DC Lawmakers Should Increase Oversight and Redirect Funds to What Works
The mayor is asking the Council and DC residents to take a leap of faith that her costly agenda not backed by research will spur economic activity and fill revenue holes in future years. If that growth doesn’t materialize, DC’s lowest-income residents—who are disproportionately Black and brown due to systemic racism—will suffer the most harm, after already bearing the brunt of cuts in FY 2026.
DC lawmakers should focus on proven public investments that support residents and raise the standards for expenditures on economic development programs, including by:
- For new proposals, asking for a summary of existing research on similar programs from reputable sources and running the proposal through the “but for” standard.
- For existing programs, conducting robust oversight and working with The LAB @ DC or Office of Chief Financial Officer (OCFO) to evaluate their efficacy.
- Adding clawback provisions to programs to safeguard resources for funds that are misused or if recipients do not meet requirements (e.g., if developers fail to deliver the required number of affordable housing units), and ending automatic annual program cost increases.
- Requiring more frequent tax expenditure reviews by the OCFO and holding at least one standalone hearing per Council period assessing DC’s incentives and whether they are still needed as economic conditions change.
