A Budget that falls short

Much has happened since we testified at the DC Council’s Committee of the Whole [click here for our testimony]. The Council committees have marked up the committee budgets, and we have got some good news regarding some of our budget priorities. 

• Charles Allen has provided full funding for the Campaign Finance Reform Amendment Act of 2018. This law, which the Council enacted unanimously, is a major step toward dismantling the systemic corruption that allows the wealthy and well-connected to dominate public policy. Allen provided the funding required by the Office of Contracts & Procurement.

• Charles Allen also improved the Fair Elections program (public financing of local elections) by making child care expenses allowable. 

• Anita Bonds has provided $191,000 to fund the Voluntary Agreement Moratorium Amendment Act of 2020 over the 4-year planning horizon. We do not believe this act should have a cost, but the Chief Financial Officer used a very questionable approach to say that it would. We are glad the VA moratorium will finally be implemented, and will continue pushing to eliminate VAs, as members of the Reclaim Rent Control coalition.

While the above funding is not assured and subject to final vote by the Council, we are heartened that the committees have included them in their budget reports.

Furthermore, Mayor Bowser provided $20 million for a community center at the historic Alexander Crummell school and surrounding park, in response to decades of agitation by the Ivy City community. 

Despite these positive developments, most of our major budget priorities remain unfunded or significantly underfunded.

HOUSING

End Homelessness

We can end chronic homelessness with adequate funding for permanent supportive housing (PSH). According to the Washington Legal Clinic for the Homeless, the Mayor’s proposed budget fully funded permanent supportive housing (PSH) for only 527-687 individuals and 280-327 families (depending on how far federal funds will stretch), with all funding coming from federal relief funds. The Council should  fund PSH for 2,074 – 2,234 additional individuals and 105 – 152 additional families, and should use local funds to supplement federal funds. 

The Mayor’s budget also contains none of the funding sought by advocates for Targeted Affordable Housing — 928 units at $23.3 million — and LRSP tenant vouchers — 800 units at $17.3 million. The DC Council also needs to raise revenue to sustain these investments when federal relief funds run out. 

Protect Tenants & Vulnerable Populations

The pandemic has only worsened an already difficult situation for DC tenants and vulnerable populations. Gentrification, which has been actively promoted and subsidized by government policy, has pushed rents far past affordability for many DC families. The burden falls hardest on Black and brown families, who suffer from stark racial gaps in income and wealth. 

We call for the DC Council to fund the following in the FY22 budget, none of which was provided  by the Mayor in her budget submission:

• Rental Assistance: provide $100 million in additional local funds for rent and utility relief via the Emergency Rental Assistance Program (ERAP) to assist households living at or below 30% of the Area Median Income. The DC Council needs to raise new revenue to sustain this investment.

• Returning Citizens: $1.8 million for the Reentry Housing Pilot to provide intensive services and housing for returning citizens.

Eviction Protection

The DC Council is to be commended for instituting a very strong eviction moratorium during the public health emergency. However, there is a looming threat of mass evictions as the Council contemplates lifting the eviction moratorium.The DC Council must prevent mass evictions and needless trauma to tenants by retaining the current moratorium on evictions until the enactment of comprehensive legislation to protect tenants from eviction, eliminate rental debt, compensate landlords, and stabilize rents, as called for by the Cancel Rent Coalition, of which DC4D is a member.

Invest in Truly Affordable Housing

The lack of truly affordable housing is the root cause of the displacement of native DC residents and the racial imbalance (overwhelmingly white) in the new arrivals to DC. We will not remain “Chocolate City” for long unless the Council makes a serious and sustained commitment to build housing that is affordable to Black residents. Current housing policies are skewed by the focus on Area Median Income, which ignores the racial gap in income and wealth. Despite the Mayor’s historic levels of investment in the Housing Production Trust Fund in the FY22 budget, more must be done to focus the investments on programs that promote racial equity. The Mayor’s HPTF investment, while notable, will generate just 675 units of deeply affordable housing in each of the next two years.  The DC Council must make additional investments, as follows:   

• Commit a minimum of $60 million for public housing repair and renovation each year. Only $22M is funded in the Mayor’s budget, all for Claridge Towers.

• Maximize use of Housing Production Trust Fund (HPTF) funds for housing for families earning 0-30% Area Median Income (AMI) level, and provide adequate funding for Local Rent Supplement Program (LRSP) vouchers to support families qualifying for such housing. 

• Use federal relief funds to purchase properties for publicly owned and permanently/deeply affordable housing, including $140 million to purchase the Marriott Wardman hotel. The Mayor has provided $50 million for hotel acquisition in the budget; the Council must find the remaining funds to take advantage of this unique opportunity to improve racial diversity in Ward 3. Given the very poor track record of DCHA, we recommend that the property be purchased on behalf of the Douglass Community Land Trust with funds from the Deputy Mayor for Planning & Economic Development (DMPED) budget. 

• Maximize the use of surplus public land for permanent and affordable housing for families at the 0-60% AMI level, with a focus on households below  30% of AMI.

CHILD CARE

Childcare is a heavy burden on DC families, especially low-income families. The childcare industry, which employs a high percentage of Black and brown women, has also been particularly hard hit by the pandemic. Assisting this industry, through funding for the Birth-to-Three program,  will have multiple benefits: ease the burden for families, boost wages for Black and brown women, and allow women to return to the workforce. Funding should include:

• $60 million increase (recurring) in subsidy for child care providers to raise wages for educators

• $975K for the Department of Behavioral Health, consisting of $300K for Healthy Steps (pediatric primary care) and $675K for Healthy Futures (licensed mental health professionals provide on-site mental health consultation to early childhood educators)

The Mayor has failed to provide adequate, sustained funding for this vital program, or completely failed to fund critical aspects, such as Healthy Steps. The DC Council must fully fund Birth to Three over the long-term.

FOOD EQUITY

Food is a critical component in health, and the racial disparities in COVID fatalities is proof that DC needs to promote food justice by doing the following: 

• Invest a minimum of $9 million over 3 years in the Nourish DC Fund, a loan and grant program for food businesses in Wards 7 and 8 to address food deserts and health inequities. If federal relief funds can be used for the Nourish DC Fund, invest significantly more

• Increase DC food stamp (SNAP) benefits by 30% at a cost of $58 – $70 million

• Provide $500K for nutrition education in the Department of Parks & Recreation’s  Community Recreation Division. This is a funding priority of DC Greens that we support.

DIRECT ASSISTANCE

Cash Assistance for Excluded Workers

Two major groups of DC residents have been excluded from the federal stimulus relief and enhanced unemployment benefits: undocumented workers and returning citizens. Undocumented workers are a critical labor force in the hard-hit hospitality industry, and returning citizens are victims of a racist criminal justice system.  As members of the DC Jobs with Justice coalition, we are asking for $200 million in excluded worker cash assistance. This would allow each of the 13,000 workers served by the first round of funding to receive an additional $12,000 each — $1,000 per month for the first year of the pandemic — and allow approximately 1,900 additional excluded workers to receive this same sum. Mayor Bowser has provided a mere $15 million, and Councilmember Silverman has allocated an additional $20 million in her committee. The DC Council must find the remaining $165 million for these workers.

Direct Assistance to Needy DC residents

Councilmember McDuffie has proposed investing $100 million to study, develop and pilot a guaranteed income program for families whose incomes fall below the Federal Poverty Level. He has also proposed a $20 million proposal for “baby bonds” to build wealth for DC families with incomes at five times the poverty level. Councilmember Silverman has proposed $10,000 stimulus checks for DC residents who qualified for unemployment insurance and Pandemic Unemployment Assistance. We endorse these proposals, or similar alternatives, that provide direct assistance to DC residents who are financially insecure. Such investments will benefit families are largely Black and brown, and thereby further racial equity. 

PAID FAMILY LEAVE

As a member of the DC Paid Family Leave Coalition, we are outraged that the Mayor proposes raiding the Paid Family & Medical Leave (PFML) fund to dole out tax breaks to businesses. One of the reasons the fund currently shows a surplus is because so many workers, especially Black and brown people, were laid off or otherwise disqualified from using the program during the COVID pandemic. This fund should be used to expand benefits for working families who need them, as called for by the PFL coalition and Councilmember Silverman, as well as by allowing funds to be used for cash assistance to excluded workers.

REVENUE

Even with historic amounts of federal funds, the Mayor’s proposed budget falls short in the critical areas identified above.  Since federal funds are time-limited, it is vital that the DC Council raise recurring revenue that can maintain these needed investments. 

We join the Fair Budget Coalition in calling for new revenue through higher income tax rates, raising property taxes on luxury homes, adjustments in the estate tax, and the elimination of wasteful tax breaks. The most significant revenue increase is by raising marginal income tax rates. The DC Council should create a new tax bracket from $250,000 to $350,000 and raise the marginal tax rates on the new bracket, as well as the top existing two brackets as follows:

• $250,000 – $350,000: 9.5%

• $350,000 – $1,000,000: 10.75%

• $1,000,000 plus: $11.95%

Those with less than $250,000 in taxable income per year would see no changes to their income taxes. Overall, only the top 3 percent of households would see a tax increase, and in fact, those earning about one million dollars or more would be responsible for paying about 90 percent of the tax increase under this plan. This tax increase would make barely a dent in the lifestyles of these taxpayers, but they can mean all the difference to the families who benefit from the additional funding. 

By tapping federal relief funds as well as by raising new revenues, the DC Council can make make significant improvements to the FY22 budget, and thereby boldly tackle longstanding racial inequities that have been further aggravated by the pandemic. The only question is: will they?