The Council of the District of Columbia has granted preliminary approval for next year’s budget, which includes tax hikes and the reversal of some of the proposed major program cuts.
Wednesday’s initial vote marks the first of two, with the second scheduled for June 12, before the proposed budget is sent to Washington Mayor Muriel Bowser.
Council Chairman Phil Mendelson and Bowser agree on the need for program cuts and tax increases to address the district’s $700 million budget gap, but they disagree on which programs to cut and which taxes to raise.
In the approved proposal, Mendelson suggested raising the property tax rate for single-family homes and condo units valued at more than $2.5 million, which would affect around 2,800 homes.
He also proposed an amendment to increase the tax businesses must pay toward the Paid Family Leave program and to reinstate $70 million to the Early Childhood Educator Pay Equity Fund, which was initially planned to be cut under Bowser’s plan.
“I wouldn’t say I’m happy. I don’t like the fact that there are a lot of social justice programs like affordable housing where we are still falling short of the mark,” Mendelson said.
“There’s still some controversy with regard to public education. I’m not sure I ever characterized the budget as something ‘happy’ but this reflects a lot of input,” he added.
In a letter to the chairman obtained by the Washington Examiner, Bowser warned that Mendelson’s proposal would cost taxpayers $530 million in new taxes and fees.
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In addition to Bowser’s proposed tax hikes, which involve increasing the sales tax from 6% to 6.5% in fiscal 2026 and up to 7% in the following two years, the chairman’s plan aims to generate approximately $100 million in city revenue through new taxes.
Mendelson’s budget proposal also reallocates $25.4 million to schools, adds $3.5 million for new teaching positions, increases housing vouchers to 477, and boosts funds for emergency rental assistance and homelessness prevention services. It also restores Access to Justice’s budget to $31.7 million, reversing cuts from Bowser’s proposal.