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Washington Post
29-07-2025
- Business
- Washington Post
D.C. Council struggles with final vote on nearly $22 billion budget
The D.C. Council approved the city's nearly $22 billion budget Monday evening after taking up a flurry of last-minute amendments, including the controversial partial repeal of a ballot initiative that gradually phases out the tipped minimum wage and an unsuccessful proposal to fund a child tax credit through a tax hike on wealthy residents. Lawmakers also took an initial vote on major legislation intended to attract investment in affordable housing, quickening the eviction process while rolling back a law that gives tenants a seat at the negotiating table when their building goes up for sale. The council approved the budget after a significantly longer than usual, and fiscally challenging, budget season, which began when Congress slashed the city's 2025 budget. During the hours-long debate Monday, lawmakers were still trying through 11th-hour amendments to find ways to enhance programs including a child care subsidy, housing vouchers and health care for low-income Washingtonians and undocumented immigrants — efforts that largely were not successful. Council member Janeese Lewis George (D-Ward 4) said she could not 'in good conscience vote for a budget that does this much harm,' highlighting the partial repeal of Initiative 82's tipped minimum wage, the failed vote on tax hike to fund the child tax credit, cuts to a student mental health program, cuts to violence intervention services and 'serious holes in our social safety net for the city's most vulnerable residents.' 'If we are honest with ourselves, I think and hope we know we could have done more even in light of the challenging circumstances we faced,' Lewis George said. She and council member Zachary Parker (D-Ward 5) were the two no votes among the 12 members. Lawmakers, through amendments, tried to reverse cuts to programs serving the city's poorest residents — particularly as a disagreement with the city's chief financial officer led to $30 million in last-minute reductions to programs including affordable housing production, child care subsidies and emergency rental assistance. The council had added that $30 million during its initial budget vote in July, after Mendelson said the funds were available because chief financial officer Glen Lee had identified additional revenue. But Mendelson said Lee was revoking the funds to replenish the city's financial reserves and to address overspending by the mayor's agencies, which Mendelson said had expended about $300 million beyond what was budgeted for this fiscal year. 'I am moving this amendment under duress,' said Mendelson, who said he still believed the council had the right to spend the $30 million. Eric Balliet, a spokesman for the CFO's office, said in an email that Lee told council members that surpluses from agency savings are expected to be less than usual this year, and the excess revenue in June would be needed 'to address all FY 2025 expenses and obligations,' including replenishing and growing the reserves. Throughout the day, lawmakers wrestled with the uncomfortable realities of a tighter-than-usual budget year. In one case, programs serving low-income residents competed for money, as council members Brooke Pinto (D-Ward 2) and Parker unsuccessfully proposed cutting funds from legal services for the poor to pay for child care subsidies and a child tax credit for low- and moderate-income families. Parker also proposed to reverse some budget cuts with tax increases — one on capital gains taxes for wealthy residents, and another that would close what he called a 'loophole' that allows people to avoid paying taxes by passing income through businesses. Parker's office said the tax changes would generate an additional $15 million in revenue next year, which he wanted to direct to the child tax credit along with housing vouchers, oversight of the juvenile justice system, mobile psychiatric care for children and a commission to examine city taxes and expenditures. 'This is about fighting for working-class Washingtonians,' Parker said. 'We must raise revenue and protect the District's safety net.' His amendment was defeated by a vote of 7-5, with some lawmakers saying they did not want to revise the tax code in a piecemeal fashion and preferred to revisit adjustments in the fall, after the impact of significant tax changes at the federal level is more fully understood. The council also debated additional changes to how residents vote. Lawmakers narrowly defeated an amendment from Pinto that would have funded the part of Initiative 83 that would open up D.C.'s primary elections to independent voters. Council member Wendell Felder (D-Ward 7) unsuccessfully sought to delay the other half of that initiative — implementing ranked-choice voting — by first funding a needs assessment for the D.C. Board of Elections, allowing the new voting method to move forward. Toward the end of the debate, the council chambers erupted in protest, as Mendelson asked the chamber be cleared and about 20 protesters yelled at lawmakers from outside the chamber to decry the cuts to social services, chanting 'funding the rich, killing the poor' and 'shame on you, council.' Sophia Bos-Shadi, lead organizer with the Fair Budget Coalition, said the protest was necessary because council members opted against tax increases that would have restored cuts to housing and child care programs — and instead moved forward with a budget that would cause tens of thousands of D.C. residents, including many undocumented immigrants, to lose or see cuts to their health care coverage. 'This budget was so bad, it failed the people so completely,' said Bos-Shadi, 24, who added that she felt people had no choice but to interrupt the proceedings because they had spent months ahead of the budget vote going through regular channels in an effort to convince lawmakers to reverse the cuts. Law enforcement escorted the protesters from the building but did not make arrests. Before the budget discussion, the council advanced an amended version of Bowser's Rental Act — or the Rebalancing Expectations for Neighbors, Tenants and Landlords Act. The bill comes at a time when permits for new construction of multifamily housing have dramatically declined in D.C. in recent years — dropping about 80 percent. Lawmakers and affordable housing developers have described a serious problem with a ballooning backlog in eviction court and pandemic-era protections that lengthened the eviction process and contributed to a citywide problem with unpaid rent. 'The D.C. housing market is in crisis,' said housing committee chairman Robert C. White Jr. (D-At Large), noting that this was 'not a regional problem' but was strictly happening in D.C.'s policy environment. 'The Rental Act is not a silver bullet — it is one of many things that we have to do. But it is a balanced, data-driven step to increase housing supply, preserve affordability and ensure fairness.' The amended version of the Rental Act that advanced Monday would speed up the eviction process when a landlord is seeking an eviction for public safety reasons after a person is accused of a violent or dangerous crime, reduce the notice to vacate timeline from 30 days to 10 days and require a judge to hold a hearing within 20 days. It would similarly streamline the process if the reason for the eviction is nonpayment of rent, changes that have drawn concern from tenant advocates but that affordable housing developers have said are necessary given the serious financial strain they are facing, putting some affordable buildings at risk of foreclosure or causing deferred maintenance. But the provisions that drew the most debate are those that would overhaul the Tenant Opportunity to Purchase Act, a four-decade-old law designed to give tenants the first right of refusal when their building goes up for sale. The law allows tenants to organize to purchase it or, far more common, to agree on a buyer whose vision for the building, rent or improvements aligns with theirs. Lawmakers spent weeks debating new exemptions to TOPA — Bowser had proposed a 25-year exemption for all new construction, along with exempting all buildings that have an affordability covenant attached to them. White's amended version would instead exempt all newly constructed buildings for 15 years, preserving the exemption for buildings that have affordability covenants while making other changes intended to allow investors to enter or exit from a development more easily. White said since data has shown that the overwhelming majority of TOPA transactions involve buildings that are more than 50 years old, the 15-year exemption would have a limited impact but will 'help spur investment in D.C.' Several lawmakers, however, argued the legislation went too far in some areas in eroding tenants' rights in favor of investors. Council member Matthew Frumin (D-Ward 3) said he doubted TOPA was a key driver of the lack of investment in new housing — but either way, he argued the 15-year exemption for new construction should only apply going forward, not retroactively. 'Even if TOPA was having an effect on chilling investment going forward, I don't see why we would apply the exemption going backward,' he said. 'Going backwards, it would take TOPA rights from a category of tenants in buildings constructed in the last 15 years.' Frumin's amendment failed, as did another that would have struck the TOPA exemption for all buildings with an affordability covenant. Council member Brianne K. Nadeau (D-Ward 1) said it was a loss for tenants' rights and that she would be working on more changes before the final vote. 'There's so few opportunities as a renter to actually have a voice in what happens to the property you're living in. TOPA is still really one of the only ways for that to occur,' Nadeau said, arguing that ensuring a building's affordability should come through TOPA, not by rolling it back. She and Lewis George voted no. Bowser said she appreciated White's compromises but strongly opposed lawmakers' additional amendments. She wanted to see the 25-year exemption for new construction — and any substantial renovations on a building — restored, along with other objections. The legislation is expected to go up for a final vote in mid-September.
Washington Post
05-06-2025
- Business
- Washington Post
Eliminating the tipped minimum wage was a mistake. Repeal Initiative 82.
One can sympathize with D.C. residents who, in 2022, overwhelmingly voted to eliminate the tipped minimum wage in the city. Proponents sold the measure — known as Initiative 82, which passed with nearly 74 percent of the vote — as a policy to guarantee restaurant servers a 'living wage.' Instead, it is proving to be an economic disaster. With restaurants closing, laying off workers or warning that they are on the verge of financial ruin because of rising payroll costs, the D.C. Council voted 8-4 on Tuesday to pause minimum-wage increases for tipped workers, which have been rolling out in phases since May 2023. The next raise, to $12, was slated for July. Pausing the policy was the right call. Now, the council should take the next step and repeal it entirely, as D.C. Mayor Muriel E. Bowser (D) proposed in her 2026 budget. D.C. lawmakers should rarely overturn voter-approved policies. Should a repeal pass, it would be the second time the council overturned the will of voters on the issue, having repealed a measure that passed in 2018 with 56 percent of the vote. The council's vote on Tuesday provoked intense backlash from activists, who disrupted the meeting multiple times with booing and yelling. One declared the decision a 'betrayal' of service workers. Council member Brianne K. Nadeau (D-Ward-1) stressed that D.C. residents were 'counting on' the raise. Yet Initiative 82 is a case study example of when council action is justified — indeed, essential, if the D.C. hospitality industry is to survive. The argument that District restaurant employees failed to receive livable wages was never accurate. Nor is it true that eliminating tipped wages would make servers more financially stable. Before the initiative went into effect, the minimum wage for tipped workers was set at $5.35 an hour, with tips covering the rest of their income to reach the city's standard minimum wage, which is now $17.50. If that didn't happen, employers were legally required to make up the difference. Some servers now complain that the initiative has resulted in them making less money because many customers now pay less in tips. And that's if they're eating at D.C. restaurants at all. Many restaurants are adding irritating service charges to cover the higher payrolls costs, which has pushed fed-up diners to competitors outside the city. Most restaurants — especially smaller ones — operate on thin margins, so multiple increases in pay for their staff within a short period can be toxic. Initiative 82 it hitting them as other economic factors bite into their business: inflation, tariffs and a sagging regional economy due to widespread job losses among federal workers. Proponents of the initiative often point out that the number of D.C. employees working at restaurants has grown since the policy took effect, according to data from the Bureau of Labor Statistics. But many factors can affect job numbers, including the industry's long-term recovery from the pandemic — which might have been more robust without Initiative 82. In fact, the data suggests that job growth in full-service restaurants slowed significantly in the District as soon as the policy was implemented. That fact should make all elected officials uneasy. Beset by new economic challenges, the city needs a pro-growth agenda. A haphazard attempt to restructure how restaurants have long done business is the opposite of that.
