Tax increases and cuts to higher education are part of D.C. Mayor Muriel Bowser's $12.9 billion budget proposal, which includes more money for homeless services, school modernization and the streetcar program.
Bowser’s first budget proposal would raise the sales tax from 5.75 percent to 6 percent, equal to the sales tax in Maryland and Virginia, and raise the tax on parking lots and garages by 4 percent. Bowser said she wants to raise those taxes rather than income taxes, which would only affect D.C. residents.
“It’s one of those taxes that allows us to spread the base of the tax to many more people,” she said.
Bowser’s budget includes cuts to the University of the District of Columbia and Medicaid reimbursements to hospitals.
“We have to dedicate $100 million every year to affordable housing and we have to close D.C. General and we have to end homelessness,” she said. “And the additional revenue will allow us to do that.”
Bowser included $1.3 billion for modernization of eight public schools
The budget provides more money to put more police on the street as well as more fire trucks and ambulances. There is $5 million to equip police officers with body cameras.
Bowser’s budget also provides funding for Metro as well as $335 million for the streetcar system.
The budget must be approved by the D.C. Council before any taxes go up or programs are cut, and that could prove to be a challenge for the new mayor.
“I don’t think it’s appropriate to be raising taxes when the economy is good,” D.C. Council Chairman Phil Mendelson said.
“I’m always averse to raising taxes,” Council member Jack Evans said.
Bowser said she has to raise taxes to give residents what they want.
“While I wish we didn’t have to do it, it allows us to do the new things that residents say to me, ‘Fix the homeless problem,’” Bowser said.
Fiscal watchdogs who advocate for more funding for social programs are optimistic
“The good news is the mayor took a difficult situation and came out with a budget that invests more in education and a lot more in affordable housing and starting to address our serious homeless crisis,” said Ed Lazer of D.C. Fiscal Policy Institute.
Bowser did not rule out the possibility that budget cuts could mean layoffs and said layoffs at public school headquarters are likely.
“We don’t know if any current workers will be affected, but we announced some weeks ago the chancellor is moving to reduce the number of employees in the central office,” she said.