The Fiscal Year 2027 Budget Support Act (BSA), as unanimously approved by the D.C. Council allowed for, among other things, the potential creation of a U Street business improvement district, the full restoration of paid family leave, a definition of certified business enterprises of benefit to local businesses, and specific allocation of local funds to the Rock Creek Tennis Center.
As D.C. Councilmember Matt Frumin (D-Ward 3) explained, the legislation also raised questions about what has become a strategy in raising revenue throughout the four-year financial plan. He said as much during a recent legislative meeting where D.C. Council members Charles Allen (D-Ward 6) and Trayon White (D-Ward 8) discussed how best to prevent utility rate increases.
“I do think that it can be a moment to step back and think about our propensity to impose fees…in the utility context, in the delivery context,” Frumin said on the dais on the afternoon of July 7, referring to a public inconvenience fee (PIF) that D.C. Mayor Muriel Bowser imposed on DC Water in the BSA, and a 20-cent surcharge on deliveries that D.C. Councilmember Brianne Nadeau (D-Ward 1) proposed.
“We do it in a lot of different places,” Frumin continued, “and it’s a way in which we raise revenue, and it doesn’t look like a tax, but I think part of what this amendment is, is a recognition that these fees end up getting passed on to our residents, and so they kind of work as a tax.”
The amendment in question was one that Allen, chair of the council’s Committee on Transportation and the Environment, successfully advanced to give DC Water a 60-day grace period before they receive a PIF for construction projects taking over public space.
Though the amendment also included a Fiscal Year 2030 sunset for the PIF, Ward 8 D.C. Councilmember White questioned whether DC Water would refrain from passing on expenses from the PIF onto ratepayers. He later presented an amendment specifying that DC Water wouldn’t be able to do so after the sunset, though the council’s Office of the General Counsel (OGC) would deem it an imposition on DC Water’s legal authority to set rates.
Several moments before White made his move, Frumin issued a warning to his colleagues.
“I think we need to be careful because utility prices are going up,” Frumin said. “They’re not just going up because of fees that we impose, but the fees that we impose contribute to what is a real problem area.”
More Discussion About Fees
During its July 7 legislative meeting, the council struck down a motion that would’ve provided Ward 8 D.C. Councilmember White time on the dais needed to work with the OGC to make his amendment to Allen’s DC Water PIF amendment legally sufficient.
This happened despite White’s insistence on a roll call vote.
“We don’t know if they failed or not,” Ward 8 D.C. Councilmember White said to D.C. Council Chair Phil Mendelson (D) after the vote. “We don’t even know what the roll call was.”
Throughout the legislative meeting, White, a lawmaker representing a jurisdiction with a significant proportion of low-income District residents, repeatedly expressed skepticism that the oversight process would prevent rate increases related to the PIP.
“So essentially, I asked a question earlier,” White said to Allen on July 7, “‘How do we ensure after we sunset this that the rates for the rate payers sunset as well?’ The answer… was we would have oversight. I’m not sure what oversight is gonna do after it’s already been done.”
Allen, whose committee has purview over DC Water, stuck to his main talking point throughout much of the exchange, even inviting White to witness what unfolds during an oversight hearing.
“We have multiple spaces where we can exert our oversight influence to ensure that when the PIF sunsets, those rates accrue to that are no longer reflected in rate payers bills,” Allen said.
After the dust settled on the discussion about utility rates, the council quickly moved on approving Mendelson’s amendment in the nature of a substitute, before approving the BSA altogether on second reading.
The document, which has legal and statutory guidelines for implementing the budget, included Nadeau’s 20-cent surcharge on deliveries made on third-party platforms. In speaking about Frumin’s misgivings about fees, Nadeau told The Informer that she’s responding to the chaos of a job left undone.
“The reason these concerns keep coming up at different times throughout the budget process is that the Tax Revision Commission completely imploded,” Nadeau said. “I’m glad that we’ve got this commitment to a roundtable in the fall because that’ll be the place to bring up all these ideas.”
In addition to the roundtable, the council will also have a business activity tax feasibility study and two of Nadeau’s standalone bills as opportunities to weigh in on tax policy this fall. The bills concern a tax on passive income and the establishment of a permanent tax and revenue commission. As one member of the local business community explained, the 20-cent surcharge on deliveries should have received similar treatment.
“It was never really introduced as a stand-alone legislation and never really received a public hearing, so residents, workers, and affected businesses had no opportunity to testify,” Chinyere Hubbard, president of the DC Chamber of Commerce told The Informer. “There’s a ripple effect on every food, on groceries, on medication, on household goods, through DoorDash, Instacart, Uber Eats, and everyday essentials that many seniors and middle and working-class families rely on.”
Since coming into her role early last year, Hubbard has represented a constituency perturbed by what she described as the council’s insistence on taxing various aspects of businesses activity. She recounted meeting with a Nadeau staffer, telling The Informer she’s since attempted to get some facetime with the council member.
“I hope that council members realize that these taxes are not popular,” Hubbard said. “This is the worst possible time when families are stretched by rising costs. D.C. restaurants are closing at a record pace. A 20-cent tax on every D.C. delivery… would hurt all the restaurants and workers and families that [council members] think they’re trying to help.”
For more than a year, D.C.’s restaurant industry has experienced numerous losses. The Bowser administration, as outlined in her budget proposal, has attempted to revive downtown and other commercial areas hampered by building vacancies, and more recently, the hemorrhaging of the federal government via DOGE cuts.
Hubbard said that tax proposals, including the delivery surcharge, don’t help businesses or consumers.
“We’re being increasingly driven out of businesses by a million little cuts,” Hubbard said, “and this delivery tax is a regressive tax that represents yet another in a million small cuts that will hit lower income residents the hardest. This is the worst possible timing for restaurants and it really backfires on workers and climate and access.”
Nadeau dismissed such an assertion.
“One thing that’s really important to me is to make sure that we’re all being rooted in data,” Nadeau told The Informer. “If someone orders dinner for delivery once a week for a year, at the end of the day, that’s going to cost them $10 for the year. So I really do think we need to be realistic about what we’re talking about here, which is a very small cost.”
D.C. Government Employees Celebrate a Crucial Win
Allen and D.C. Councilmember Janeese Lewis George (D-Ward 4) moved BSA amendments aimed at fully restoring paid leave at the end of the four-year financial plan and protecting government workers’ ability to negotiate telework policy.
The debate around D.C. government telework, an issue of significance in the post-pandemic era, reached a critical juncture earlier this year when Bowser included a subtitle in the Fiscal Year 2027 BSA preventing collective bargaining around telework.
In defending her amendment, Lewis George said that D.C. workers deserve a chance to shape their professional experiences.
“We’re doing a lot of piecemeal things because we should technically be handling this in a hearing and getting feedback and doing the appropriate measures,” Lewis George said on the dais. “My amendment seeks to reduce some of the harm from the route that we are taking in this subtitle moving forward.”
The “piecemeal things” Lewis George referenced included Allen’s introduction of an amendment exempting Office of the People’s Counsel and Public Service Commission from mayoral telework requirements. As noted by D.C. Councilmember Christina Henderson (I-At large), those exemptions, once approved, follow similar deference given to: the Office of the Chief Financial Officer, the D.C. Zoning Commission, the Real Property Tax Administration, and Tax Appeals Administration.
While Henderson questioned whether to strike the BSA subtitle, D.C. Councilmember Brooke Pinto (D-Ward 2) expressed concern about what would happen in the absence of a telework policy to which all government employees maintain fidelity.
“I’m just uneasy in thinking about a lot of examples of staffing challenges that we’re having and needing people to be in person,” said Pinto, chair of the council’s Committee on Public Safety and the Judiciary. “I know we’ve made a lot of changes as was previously discussed in the amendment [of] this budget to chip away at some of those changes, and many of those may be the right approach, but I worry about adding this tool in the context that we’re finding ourselves in right now with staffing.”
For one D.C. government employee, Lewis George’s amendment leveled the playing field between labor and management.
“The mayor could have easily zeroed out telework for all agencies with the exception of all these exemptions that many council members put in there and left us without a voice and a place to have a discussion at the bargaining table,” said Dr. Kofi Onumah, first vice president of the American Federation of Government Employees (AFGE) Local 2725.
When Bowser issued a mayoral order in 2024 reducing telework from two days to one, Onumah represented his colleagues in a demand that the mayor prove that telework reduction economically benefits the District. He credited the District’s telework program as an essential means of balancing his obligations to work and family, while ensuring that the D.C. government efficiently utilized public resources, including electricity in buildings.
On the afternoon of July 7, shortly after the conclusion of the council’s legislative meeting, Onumah reiterated this point as he heralded telework as an affordability tool.
“The fact that you might not need to commute to work and have to pay for Metro, parking or gas, or being closer to home and able to pick your kids up quicker after your shift ends is meaningful,” Onumah told The Informer. “These camps and daycares charge a hefty amount when you’re just a few minutes late, so just having that peace of mind to be able to work at home… is important to us.”
