As Mayor Bowser prepares to submit a proposed budget to the DC Council in the coming weeks, and as the Council then reviews and modifies it, we call on the Mayor and Council to prioritize the basic needs of DC residents, families, and small businesses and protect our most vulnerable. Our leaders can and must avoid an austerity budget that would hurt the very residents already suffering under the pandemic and devastate our economy in the long run.
The District is at an inflection point. With Black and Brown communities bearing the brunt of deaths and job loss from the coronavirus crisis, DC’s leaders must ensure this budget reflects our DC values to lift up and protect those most in need. We must not hurt communities further through severe budget cuts to public services. Protecting DC residents is not only the right thing to do, it’s also the best path toward rebuilding our communities, making our economy stronger than ever, and addressing the inequities in housing, health care, education, and transportation, that have only grown starker as a result of this crisis.
In short, in responding to this pandemic, we cannot fathom why the Council would cut critical safety net programs like paid family and medical leave to fund the tax breaks for the wealthy that were recently and shamelessly requested by big for-profit developers and other corporate special interests.
In fact, a sober review of the numbers reveals that through a combination of ending ineffective and unjustified corporate tax giveaways and utilizing a portion of the FY 2019 surplus and our $1.4 billion rainy day reserves, the Mayor and Council can close the shortfalls for this and next fiscal year without making deep cuts to the services and programs that are essential to our workers, families, and small businesses.
The revenue shortfall for the current fiscal year, which ends September 30, is $476 million when compared with the approved FY 2020 budget, and the revenue shortfall for FY 2021 is $770 million below the amount initially projected. Most of this can be addressed in the following ways:
- Raising $100 million by ending wasteful corporate tax loopholes, including eliminating the Qualified High Technology Companies (QHTC) corporate tax subsidies that the Chief Financial Officer has found are completely ineffective.
- Using part of the FY 2019 surplus, which included $324 million beyond what was needed for reserves. Of that, $162 million was set aside for the Housing Production Trust Fund, but the remaining $162 million could be used to close the budget gap.
- Using 50 percent of the $1.4 billion in reserves, leaving half for FY 2022 and beyond when our economy is expected to be much stronger. The Mayor and Council should reform the rules that require local “rainy day” reserves to be replenished before the “storm” is even over, which is an outlier compared with the practices in most states. More sensible rules would require the reserves to be replenished as soon as revenues and the economy rebound.
These resources should be combined with vigorous oversight of spending to pare back ineffective or wasteful services. This is always important, but especially important now to ensure that DC’s resources are being used as effectively and efficiently as possible.
The latest figures on DC’s budget also highlight the urgency of fighting for our fair share of federal aid to states, starting with securing the $750 million that DC was shortchanged in the CARES Act. DC is virtually always treated as a state for federal appropriations purposes, but shamefully was not in this package. Congress must provide the $1.25 billion that every other state received as a minimum in the CARES Act, in addition to any additional assistance included for states in future federal legislation.
We reject the attitude that the District cannot afford safety net programs and services, that we cannot help all of our neighbors in need, or that the road to recovery runs through trickle down tax breaks for those with the most well-connected lobbyists. None of that is true. What we truly can’t afford at this critical moment is to forgo investments in our city’s schools, affordable housing, seniors and more.