Takeaways from the DC Budget

Bolder investments would empower DC to put plans into action

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The budget that the DC Council just approved gives our city the tools to chip away at the problems we face, but not the tools to solve them. With limited dollars, District leaders crafted a budget that makes some important investments but does not go far enough. DC residents deserve a bolder vision for how to think beyond those artificial limits and generate the revenue to go from planned commitments to fully implemented solutions.

The District has a strong economy, vibrant population and unprecedented prosperity, but that prosperity has not been widely shared. Our city faces longstanding – and worsening – economic and racial inequities. The average income of the top fifth of DC households is 34 times larger than the bottom fifth ($320,000, compared to $9,000), and black median household income is now less than a third of the white median income, according to the Census Bureau.

Meanwhile, rising housing costs are squeezing long-time residents and low-wage workers, and too many families and individuals are facing homelessness. Our school system is falling far short of putting every child on the path to success. Too many of our low-income residents lack health insurance.

These are complex challenges, but we are not short on solutions – we just need to make the necessary investments.

The fiscal year 2019 budget makes some progress, but we have the power, and the plans, to go beyond incremental gains. With increased revenue, the District will have the tools to put our plans into action.

Ending Chronic Homelessness
Many single adults in DC are chronically homeless, meaning they have been homeless for a long time and suffer from life-threatening health conditions and/or severe mental illness. The strategic plan of the DC Interagency Council on Homelessness to end longterm homelessness lays out what it would take to make homelessness rare, brief and non-recurring. But our investments have not kept pace with the plan, meaning that individuals experiencing chronic homelessness will continue to live without the dignity and safety of a home. This year, the budget only invests enough to provide longterm affordable housing for 459 individuals rather than the 1,220 individuals that would have put us on a path to meet our goals.

Removing Barriers to Health Coverage
Since passage of the Affordable Care Act, DC has made huge gains in insurance coverage. Thanks to our bold approach, our uninsured rate now stands just under 4 percent. But because of misguided reenrollment requirements in the DC Healthcare Alliance program, thousands of eligible DC residents, many of whom are immigrants, are going without needed care. While the DC Council unanimously passed two pieces of legislation to improve the alliance’s reenrollment process, the budget fails to include the $17 million necessary to implement the legislation.

Investing in Early Childhood Development
Early childhood education lays the foundation for a lifetime of learning. To strengthen the quality of early education, we must invest in the healthy development of young children on a much larger scale. Pending legislation known as “Birth to 3” would set every infant and toddler up for success by making high-quality early childhood education, developmental screenings, mental health consultation and home visiting services available to families that need them.

In the 2019 budget, the mayor and DC Council significantly increased local funding for childcare subsidies – one piece of the puzzle addressed by the legislation – by $10 million, but that still falls far short of the estimated $65 million needed to align childcare subsidies with the true cost of care. The budget includes an additional $1 million toward other pieces of the legislation but fails to fully fund the comprehensive system DC needs.

Providing an Excellent Education to Every Student
Because of funding constraints, budget increases for DC public schools and public charter schools have been arbitrary and not connected to what’s needed to provide quality education. In 2013, the deputy mayor for education released the Education Adequacy Study, which took a detailed look at what it really costs to provide a quality education to every DC student. It is five years later, and even with the 3.9 percent increase to per-pupil funding in this year’s budget, we still have not reached the recommended funding level adjusted for inflation. It’s time to update our understanding of what it costs to provide a quality education for every student, and then meet those requirements.

Create More Affordable Housing
There are 27,000 extremely low-income DC households who pay half or more of their incomes for rent each month, which can put them one misfortune away from becoming homeless. To address these severe housing challenges over a decade, the District would need to make a first-year investment of $233 million to build new subsidized homes and $60 million to operate those homes and help some households pay the rent in private-market apartments (per a recent report by the DC Fiscal Policy Institute).

The 2019 budget makes meaningful new investments in affordable housing: it maintains DC’s annual $100 million investment in the Housing Production Trust Fund and also provides $4.75 million for new project- and tenant-based rent subsidies through the Local Rent Supplement Program – the largest increase since the 2014 budget. Yet we know that this falls short of putting the District on a path to having sufficient affordable housing for the DC households who need it most.

We can make the District a place where homelessness is rare, brief and nonrecurring, and where residents can access health coverage without facing reenrollment barriers, all students receive a quality education and the lowest-income residents have safe and affordable homes. But we cannot do it by budgeting based on whatever tax revenue comes in the door.

The District is long overdue for a conversation about raising revenue for the essential investments. One place to start would be using DC’s tax code to recapture some of the revenue from federal tax cuts and put it to good use for District residents. The DC Council took an important first step by moving to block a local estate tax cut caused by the federal law, but this is only a small piece of what is needed.

Our city is facing challenges in affordable housing, homelessness, education and healthcare, but we are well-equipped with solutions to address them. We have the ability to put our plans into action and make DC a place where all residents can succeed.

We need bolder investments to do so.

 

Marlana Wallace is the education policy analyst and Simone Holzer is the communications manager at the DC Fiscal Policy Institute (www.dcfpi.org). DCFPI promotes budget and policy solutions to reduce poverty and inequality in the District of Columbia and increase opportunities for residents to build a better future.