The DC Council cast its second and final vote on the Local Budget Act and Budget Support Act for fiscal year (FY) 2026. Overall, the Council-approved budget fails to adequately meet the moment, underfunding programs that will help residents meet their basic needs amid historic federal cuts to health care and food assistance as DC enters a recession.
Despite complaining about the difficult decisions in front of them—cutting funding from programs that support children or civil rights, for example—Council rejected Councilmember Zachary Parker’s amendment to tax wealth to reduce extreme rates of child poverty and fund housing vouchers for residents facing homelessness. Taxing capital gains would have also narrowed DC’s outsized concentration of wealth and racial wealth gap, an important element of any agenda for economic growth. Parker’s amendment would have created a surcharge on capital gains income above $150,000 for high-wealth residents, with most of the increase falling on the top 1 percent of taxpayers. Chairman Mendelson and Councilmembers McDuffie, Bonds, Henderson, Pinto, Frumin, and Felder voted no on the amendment, and Councilmembers Parker, White, Lewis George, and Allen voted yes on the amendment.
DC’s Chief Financial Officer (CFO) Glen Lee once again overstepped his authority by refusing to allow the Council to spend $60 million, or a small portion, of the projected revenue overcollections for this year. Lee said the money is needed to cover FY 2025 overspending and unbudgeted expenditures and replenish reserves. As a result, Council Chair Phil Mendelson introduced an amendment to cut $30 million from the FY 2026 budget proposal. In the event there is revenue growth later in the year, the amendment requires the revenue to undo these cuts before being allocated elsewhere. Lee’s refusal is part of a pattern of overreach and denies DC Council the opportunity to better meet the needs of DC residents in a tight budget year.
“Too few residents will have access to high quality child care, housing supports, and affordable health care under the Council-approved budget because of lawmakers’ refusal to face the reality of the moment we’re in and raise needed revenue,” said Tazra Mitchell, Chief Policy and Strategy Officer at the DC Fiscal Policy Institute. “Once again, the CFO waded into budget decisions that led to the reversal of several small improvements that Council made to anti-poverty programs, leaving DC residents with a budget that demands the biggest sacrifices those with the least resources. Over and over again, we hear Councilmembers say that ‘now is not the time to raise taxes on the wealthy.’ If an unprecedented transfer of wealth from the poor to the rich is not the time, when is? Exacerbating DC’s already extreme level of inequality and increasing hardship isn’t good for growth or creating a strong, equitable economy.”
For further analysis of the FY 2026 budget, see Budget Resources