Money, Money, Money
DC Mayor Muriel Bowser hasn’t formally announced whether she will run for a third term. However, the decisions behind her proposed $17.5 billion fiscal year 2022 budget and financial plan — $9.12 billion of which comes from local revenues — represent some smart public policy but lots of shrewd politics. With the document released Thursday, she partially fed advocates for education, returning citizens, violence prevention and mental health services while potentially reducing serious scrimmages with the DC Council, which will make final spending decisions later this summer.
“We’ve approached this budget in a fiscally responsible way,” Bowser said during a press conference on Thursday, after presenting her “A Fair Shot” budget to the council at an in-person meeting inside the newly renovated Martin Luther King Jr. Memorial Library.
Bowser seemed to get an early nod from some legislators: “This allows us to not only recover but to reimagine and improve some of the stuff we’ve been doing,” said Ward 3 Council member Mary Cheh.
“I’m really excited by what you have done to this budget,” said at-large Council member Anita Bonds. Regarding the mayor’s proposed investments in affordable housing, Bonds added, “I’ll do everything I can to hold onto the money.”
The mayor is scheduled to go before the council in a formal public hearing on June 2. There, legislators will undoubtedly have more pointed questions and comments.
Bowser has proposed using for the budget and the three-year financial plan at least $2.5 billion of the $3.3 billion in federal funds made available to the city through the American Rescue Plan Act, according to the mayor’s budget director, Jenny Reed. (She said the remainder of the funding “is being used for specific priorities” identified by the federal legislation.) That decision would facilitate a spending increase of 3.9% in the gross budget. The local portion jumps by 4.9%.
Clearly, the mayor is attempting an aggressive economic growth plan. However, the heavy reliance on federal money raises the question of how multiyear spending increases can be sustained after the American Rescue funds have dried up.
From the federal pandemic money, the mayor has proposed spending $273.3 million on affordable housing in fiscal 2022, according to government documents. Preempting herself, Bowser announced earlier this week, before the budget release, that she intends to invest $400 million through FY 2022 in the city’s Housing Production Trust Fund, the principal vehicle for producing low-cost rental units or affordable condominiums. Based on budget documents released on Thursday, the total amount appears to be nearly $436 million over the next two years.
“The COVID-19 pandemic has shown how fragile our housing ecosystem is and how much our residents depend on us to add more safe and stable affordable housing,” she said at the time she made that announcement. “We are doubling down on six years of work to preserve and create affordable housing and expediting progress toward our 12,000 affordable housing unit goal. Our residents cannot wait for housing affordability, so we are pushing forward right now.”
As much as $345.3 million in federal funds is budgeted in FY 2022 for economic recovery for businesses and residents. Bowser also included in her budget fee waivers and tax cuts for businesses, including a one-time reduction in the payroll tax that will result in “returning $168 million” to local companies.
She proposed using $111.8 million of the stimulus package to accelerate learning for public school students. As shown in actual gross fund budget documents on the website of the Office of the Chief Financial Officer, the mayor has proposed charter schools receive a total of $1,010,608,000 (yes, that’s a bit over a billion dollars); all of that comes from local revenues. DC Public Schools (DCPS) would receive $1,321,356,000; of that amount $1,015,253,000 would come from local funds. For each sector, however, much of this year’s budget increase comes from the previously announced 3.6% hike in the per pupil spending formula; that money will especially help at-risk and immigrant students.
Bowser also used the American Rescue funds to provide at least $68 million for affordable child care, $8 million to expand school-based mental health services for traditional and charter schools, $13 million for “high impact tutoring,” $13 million for students to access affordable bachelor’s and associate degrees, and $5.6 million to increase availability of summer academic enrichment programs.
Her smoothest maneuver in the budget may be the way she has threaded the needle in the “de-center” or “defund” police reform movements. Bowser said she added 135 new officers to the Metropolitan Police Department (MPD) and moved to fund 100 new positions in the cadet program. Despite those personnel additions, the total gross police budget, including federal subsidies, is $514,176,000, down from this fiscal year’s budget of nearly $546 million, according to government documents.
Equally important, Bowser has funded $45 million of new investments in public safety while shifting some responsibilities from the police. For example, even before she released her budget, she launched a pilot shifting some 911 calls from automatically going to police to “a dispatch inclusive of a mental health crisis response.”
The program “builds on all our efforts to make sure we are providing residents the right care at the right time. The sooner we can identify what a person needs — whether that is an ambulance, a doctor’s appointment, or in this case, a visit from a behavioral health expert, the sooner we can help them,” Bowser said at the time of that announcement.
That program will cost $21 million over the next three years, according to the budget document; $7 million is budgeted for fiscal year 2022.
She also proposed new spending of more than $8 million on violence interrupters and the “credible messengers” program; another $11 million will be used to support returning citizens. For FY 2022, Bowser has budgeted a total of $59.3 million for gun violence intervention, according to her budget PowerPoint presentation.
Has the mayor danced fast enough? Will her moves over the past two weeks and in the FY 2022 budget proposal satisfy critical far-left-leaning legislators?
Don’t count on it.
The Metro DC chapter of the Democratic Socialists of America on Thursday praised the mayor’s police cuts but demanded the council reduce the MPD budget by 50%. Ward 4 Council member Janeese Lewis George, during her campaign last year, identified herself as a democratic socialist. She may take up that fight.
Further, teacher advocacy group EmpowerEd has called for the legislature to shift $1.3 million to help fund the Representation in Education Pipeline Project. Those funds would be used to train students and paraprofessionals to become licensed educators, the organization said in its release.
Then, there is the fact that Bowser did not include any revenue enhancements or tax increases in her budget. Some council members have been chomping at the bit to put the squeeze on wealthy residents, among others.
Recently, Ward 1’s Brianne Nadeau and five of her colleagues, including Chairman Phil Mendelson, introduced the Nutrition Equity Amendment Act of 2021. The measure would establish an excise tax of 1.5 cents per ounce on distribution of so-called sugary drinks. They have argued the tax will help address health care disparities and improve health outcomes in key communities, in part by discouraging the purchase of high-sugar drinks and by targeting revenues to new health- and nutrition-related initiatives.
While the bill uses “equity,” the term du jour, many business leaders have mounted an offensive. At least 200 DC business owners, who are members of the Alliance for an Affordable DC, signed a letter to the council in opposition to the tax while 396 small businesses, restaurants, employees and residents submitted written testimony against the measure for last week’s public hearing.
Joe Park Chau, owner of Menick’s Market in Northeast, is one of them. In a prepared statement from the Alliance, he said he was “appalled at the proposed beverage tax. It’s already expensive to run a business in DC, especially as we continue to recover from the pandemic.
“A new tax could determine whether or not our business survives. Our neighbors rely on us to bring groceries to the neighborhood and this tax threatens these residents’ access to the groceries they need,” added Chau.
Nadeau is also part of another group, led by Ward 6 Council member Charles Allen, that has consistently sought to increase the income tax rate for so-called wealthy residents. This effort is also cloaked under the guise of doing more for the city’s most “vulnerable” residents.
It’s true that DC will continue to feel the brunt of the pandemic. A tax hike on behalf of social services is a red herring. A wealth tax and hitting the beverage industry have been on the public policy agenda of so-called progressives for years. They likely will cry pandemic poor mouth as the reason to act now.
With $3.3 billion in federal funds and a total budget of $17.5 billion, the District has more than enough money to serve all of its 700,000 residents — unless, of course, you’re one of seven legislators who might be running for reelection. In that case, it’s helpful to gather a few extra dollars to entice a few more voters. You can never have enough of them.
This article first appeared in TheDCLine.org