The D.C. Council officially wrapped up the 2024 budget season with its unanimous approval of the Fiscal Year 2025 Budget Support Act on June 25. This milestone didn’t come without some discussion around hot-button issues that dominated much of the budget cycle.
Below is a (relatively) short recap of what transpired in Room 500 of the John A. Wilson Building.
NOTE: D.C. Councilmember Vincent C. Gray (D-Ward 7) was absent due to a physical therapy session related to a mild stroke.
Questions about the Future of the Early Childhood Educator Pay Equity Fund
At the very beginning of the 2024 budget season, D.C. Mayor Muriel Bowser (D) issued a warning that the Early Childhood Educator Pay Equity Fund, which she decimated in her budget proposal, wouldn’t be sustainable in the coming years if the council chooses to fund it.
The D.C. Council restored funding to the Early Childhood Educator Pay Equity Fund, though not at its original levels. As the pay equity task force mulls how best to allocate those funds, the council approved a provision of the Fiscal Year 2025 Budget Support Act lowering the salary that childhood educators with bachelor’s degrees would receive through the fund.
As D.C. Councilmember Christina Henderson (I-At large) explained, this change would likely stay in place until the fall, when the task force compiles its recommendations. She told her colleagues on Tuesday that Chief Financial Officer Glen Lee expressed a desire for fiscal predictability that couldn’t be ensured while the task force continued to meet.
“The chief financial officer felt uncomfortable with the amount of things we left to the task force,” Henderson said. “The council will come back in September to replace this language with something else. So the task force can make a different recommendation if this is something that they choose.”
Some Glimmer of Hope for Housing Security
The Fiscal Year 2025 Budget Support Act includes a provision that no longer obligates the District to provide permanent supportive housing as a means of meeting the long-term needs of homeless people and families. That help, according to the legislation, would stop upon a person’s exit from rapid rehousing.
Earlier this year, the Bowser administration circulated notices to rapid rehousing clients who’ve exceeded the timeline that they would soon have to exit the program. D.C. Councilmember Robert White (D-At large) said that efforts to reverse much of the mayor’s budget cuts and legislative changes proved unsuccessful.
White however pointed to an outcome in which his council committee, the Committee on Housing, secured housing vouchers for 3,000 of the 3,200 clients leaving rapid rehousing this year. He also mentioned a provision within the Budget Support Act that allows Bowser to shift policy based on cost savings that accumulate during Fiscal Year 2025.
Those extra funds, he said, could be found once a newly formed council office scours the budget for possible cost savings.
In recent weeks, Bowser, in response to Informer inquiries about housing instability, referred to programs within D.C. Department of Human Services that unhoused residents could use in place of rapid rehousing. White said that those overtures wouldn’t suffice in the face of market forces that disadvantage working-class people.
“The administration usually talks about [the] Career Map [program] but it implies that people aren’t trying hard to find work that takes over their rental payments,” White told The Informer on Tuesday. “A lot of people in rapid rehousing are working but they don’t make enough. It’s a function of our economy. The cost of rent has gone up higher than incomes in the past decades.”
The Council Settles the Sports Wagering Debate, and Councilmember McDuffie Solidifies Baby Bonds Funding
As promised, D.C. Councilmember Kenyan McDuffie (I-At large) circulated an amendment to the 2025 Budget Support Act that ensures that small business owners in contracts with sports wagering vendors would always have kiosks, even in the event that a vendor fails to provide one, as mandated by contract or law.
McDuffie said he worked on this amendment in collaboration with D.C. Councilmember Matt Frumin (D-Ward 3), the D.C. Council Budget Office and other entities. That work took place amid concerns by D.C. Councilmember Zachary Parker (D-Ward 5), an opponent of the budget amendment that opened the sports wagering ecosystem to all vendors, that small businesses would be disadvantaged under these circumstances.
The D.C. Council ultimately approved McDuffie’s amendment 10-1-1-1. Parker ended up being the sole “no” vote, but not before evoking South Capitol Liquors and Ivy City Smokehouse as part of an effort to personalize the discussion. D.C. Councilmember Brianne Nadeau (D-Ward 1), a vocal critic of sports wager, voted present.
Starting Oct. 1, the funds from D.C.’s sports wagering program will fund the Child Trust Fund Program, popularly known as Baby Bonds. Babies born after October 1, 2021 to families meeting the income requirement for the program stand to benefit. By their 18th birthday, they will have access to $25,000 to be used for postsecondary education or entrepreneurship opportunities.
Much to McDuffie’s chagrin, Bowser defunded baby bonds in her budget proposals for two consecutive budget cycles. Since at least February, McDuffie endeavored to secure a funding source for what he called a hallmark program.
Hours after the close of the June 25 legislative meeting, he reflected on the significance of the budget votes that brought his vision to fruition.
“What we did in this year’s budget restores funding that had been cut once again, but it also demonstrates the council’s commitment to those young people whose families today are holding out hope for that investment when their babies turn 18,” McDuffie said. “It’s an additional tool in the District’s tool kit to help fulfill that vision that I’ve laid out to make D.C. more racially equitable, more socially just and more economically inclusive.”
Hints of a Tax Battle on the Horizon
The D.C. Council finalized the Fiscal Year 2025 Budget Support Act with a provision that removes the exemption on local taxation on municipal bonds issued by other states.
On Tuesday, D.C. Councilmembers Brooke Pinto (D-Ward 2) and Matt Frumin (D-Ward 3) had much to say about this development — more than likely on behalf of their elderly, well-to-do constituents who purchase municipal bonds.
In her comments about the Budget Support Act, Pinto, much like Bowser, warned her council colleagues against creating a tax system that burdens D.C. residents and discourages economic growth. As legislation that Nadeau and Parker introduced to make the Tax Revision Commission permanent makes its way through the council, Pinto expressed her hope that the bill reflects a holistic view of progressive tax structure, tax burdens and regional competition.
For the time being, Pinto said she’s setting her sights on rectifying what she describes as unsound tax policy.
“I’m continuing to identify potential options that aim to mitigate taxes on seniors, low-income residents and those on fixed incomes,” Pinto told her council colleagues on Tuesday. “We have the greatest responsibilities as a body and it’s one we’ve taken seriously. We’ve come a long way to meet residents’ concerns and move forward a District that provides fundamental safety and a competitive opportunity rich place to do business.”
