Janeese Lewis George, who won last week’s Democratic primary for mayor, will inherit a fiscal mess if she and other members of the D.C. Council use gimmicks to balance this year’s budget.
Outgoing D.C. Mayor Muriel E. Bowser (D) is warning her likely successor that the city will face a “foreseeable and preventable” $800 million shortfall next year if the council forges ahead with plans to raid reserve funds when it meets on Tuesday.
And that’s before factoring in the price tags of Lewis George’s ambitious plans, such as constructing thousands of publicly owned “social housing” units and expanding child care subsidies.
To balance the budget, as required by law, Bowser proposed more than $460 million in spending cuts to paid family leave programs, child care and housing. But council members, including Lewis George, rejected almost all those reductions two weeks ago. Instead, they moved to tap $150 million of reserve funds and limit local deductions for federal tax cuts that took effect this year.
But using reserve funds is a one-time fix, so the city would need to find new revenue to cover that spending in its next budget. D.C.’s chief financial officer, Glen Lee, blasted the move on Monday as “imprudent,” since the reserves are needed to preserve the city’s liquidity.
Council members will be tempted to keep raising taxes. That could include, for example, reviving some version of a proposal from council member Brianne K. Nadeau (D-Ward 1) to go after nonwage income. The council tabled that idea amid backlash before the primary.
Aside from the fact that D.C. already has some of the highest capital tax rates in the country, such a strategy ignores the reality that any major tax increase would inevitably cause residents to move to Maryland or Virginia. “We cannot afford to damage the District’s competitiveness,” said Bowser.
The difficult budget battles ahead underscore the constraints and trade-offs facing Lewis George, assuming she becomes mayor next year. Acknowledging such limits might frustrate her progressive base, but the bills will come due sooner than later.
The post Bowser’s warning to Janeese Lewis George on D.C. fiscal cliff appeared first on Washington Post.
