D.C. Mayor Unveils Budget Plan Aimed at Easing Pain of Congressional Cuts

New York Times

27-05-2025

After waiting nearly three months for Congress to fix what even many of its own members agreed was a mistake that left Washington facing a surprise $1.1 billion budget cut, city officials announced on Tuesday a plan to deal with the sizable shortfall on its own.
At an public budget presentation, Mayor Muriel Bowser said that her administration would not need to lay off workers or make substantial cuts to municipal services, as the city had feared might be necessary. Instead, local officials were able to use a 2009 federal budgeting law to boost this year's spending by hundreds of millions of dollars. They closed the rest of the gap by temporarily freezing new hiring and making piecemeal cuts to the 'thousands' of contracts, grants and other expenditures across dozens of city agencies.
'We have really blunted what could have been a catastrophic situation for city services this summer,' Ms. Bowser said.
The plan, which still needs to be approved by the City Council, addresses a question that has been looming over the city for weeks. On March 8, the U.S. House of Representatives unveiled a resolution to temporarily fund the federal government while mandating a federal spending freeze. Though the District of Columbia's budget has to be approved by Congress, such resolutions have for decades exempted the city from spending freezes, since the money it spends on services comes from locally raised taxes, not federal funds.
But that carve out was not in the House's resolution, suddenly saddling D.C. with a $1.1 billion shortfall with the fiscal year already half over.
The U.S. Senate unanimously passed a bill allowing D.C. to keep operating according to its current budget, a measure that President Trump explicitly endorsed. But the House needed to approve the bill and in the weeks that followed nothing happened, besides some talk from right-wing lawmakers about possible amendments on unrelated issues like bans on abortion funding or reparation payments to Black residents.
In mid-April, the mayor announced that the city was going to address most of the shortfall by invoking a 2009 federal law that gives the city the authority to increase its appropriated funding by up to 6 percent.
That provided significant budgetary breathing room for the rest of the current fiscal year and on Tuesday, officials outlined how they would close the remaining gap. Some payments would be pushed into the next fiscal year, which begins in October; some debt would be refinanced; open positions would temporarily go unfilled; and certain individual programs would face cuts.
The mayor made clear, however, that the city was still urging Congress to restore its ability to spend according to its initial budget. 'This is still a matter of the autonomy of the district's budget,' she said, 'so we will continue to work on that.'
While the city may have averted the immediate crisis, the larger fiscal threat remains — namely, an administration that is hostile to the federal bureaucracy, the city's largest employer. Mass layoffs of federal workers have lowered the city's revenue estimates by more than $1 billion over the next three years and has prompted the ratings firm Moody's to downgrade the city's credit rating.
Repeatedly citing these challenges, the mayor said that her budget proposals for the years ahead were designed to 'shift our economy from one that is so reliant on federal jobs to one that is more reliant on growing private sector investment and jobs.'
These proposals include tens of millions in spending reductions to programs and services, paired with substantial expenditures and policy changes aimed at attracting jobs outside of government, in areas like tech, entertainment and sports.