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D.C. Budget Season Under COVID-19 Begins

Fiscal Improvement Overshadowed by Widespread Residential Need

A sagging D.C. economy reeling from COVID-19 will force major adjustments by the D.C. Council to the fiscal year 2021-2022 but community leaders and human service advocates say whatever is done must aid the needy.

On Feb. 4, Council member Trayon White (D-Ward 8) convened an online meeting with more than 100 District residents on the heels of news of the city’s financial status for the upcoming fiscal year 2021-2022.

The council member, as well as his council colleagues and Mayor Muriel Bowser, are seeking residents’ views on the estimated $16.9 billion budget knowing that a balanced budget won’t be achieved without tough decisions.

District officials said Bowser will present her fiscal 2021-2022 budget to the council and the public at the end of March.

D.C.’s Financial Standing

White told his audience “the District is in a strong financial position.”

“Even though we are dealing with the effects of a coronavirus pandemic and the hospitality and entertainment industry are struggling, we have experienced income and property tax growth,” the council member said, referring to a briefing he and his colleagues received from Jeff DeWitt, the District’s chief financial officer.

White said DeWitt told the council members the fiscal year-end audit of the District government as of Sept. 30 showed a surprising increase in revenue even though it still operates in a deficit due to the pandemic.

DeWitt, according to White, said the net gain in the District’s budget collections came out to approximately $526.8 million. The council member said the audit “was clean” — without any serious financial discrepancies — and said the District’s “AAA” bond rating, which makes it easier to borrow money from Wall Street firms, remains intact.

White said the District also has healthy reserve funds. Nevertheless, he said some problems exist with the District’s finances.

For example, Council Chairman Phil Mendelson said in his Feb. 8 e-newsletter to residents that based on the Sept. 30 audit, the District will have to close a $426 million deficit in the city’s 2021-2024 fiscal year plans.

White said the council has addressed the fiscal year 2021 deficit.

“We had to tap into our rainy-day fund to finance operations last year due to the pandemic and its impact on the economy,” he said. “We are also looking for more money from the federal government because in the previous CARES Act voted by the Congress, D.C. was treated as a territory instead of a state and that cost our city millions of dollars.”

However, on Feb. 12, White’s hopes for equitable federal funding for the District soared Feb. 12 when the House Oversight and Reform Committee announced the city will receive an estimated $1.49 billion from the latest coronavirus relief bill and along with a back payment of $755 million sought by the District last spring

“We know how critical this dedicated funding will be toward our shared recovery,” the mayor said in a statement. “With this relief, the District can focus on meeting the needs of our residents and local businesses so that, together, we can build back better and come back stronger and more resilient than ever. We urge the Senate to similarly pass legislation that provides this critical state and local funding.”

District’s Poor Need Help

Despite the District’s somewhat upbeat financial picture, White said too many residents are struggling to make ends meet.

“We don’t want just equality but equity, jobs and the chance for business ownership,” the council member said. “We need to build on people, not just buildings. We have residents who are struggling to get by every day and don’t see the prosperity.”

Tazra Mitchell, the policy director for the D.C. Fiscal Policy Institute, a think tank that studies the District’s indigent population, said the city’s $1 billion-dollar-plus reserves, which are restricted by law, should be used to aid needy residents.

“It wouldn’t make fiscal, economic or moral sense to leave most of our reserves in the bank in this deeply painful recession when that money could help struggling residents and businesses and limit the recession’s damage to the D.C. economy,” she said.

Ward 8 advisory neighborhood commissioner Salim Adofo, who represents District 8C06, said District lawmakers should support programs that will keep people from being evicted when the public health emergency’s grace period has expired, due to lack of payment of rent or mortgage. In addition, he wants more support for public safety and public health programs and increased funding for the D.C. Department of Behavioral Health.

“By increasing funds for the Behavioral Health Department, more mobile crisis units will be available to resolve conflicts in the community,” he said.

Teanna Willis, the budget organizer for the Fair Budget Coalition, a group of mainly progressive organizations who favor strong funding for social and human services programs, said wealthy residents should pay higher income taxes to assist the city’s poor, many of whom are African American.

“Currently, lower-income D.C. residents are paying a higher rate in taxes than high-income earners,” Willis said. “This is the time to raise taxes progressively and fund programs to recover from this pandemic and repair systemic issues Black residents face.”

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