NOTE: This article was updated at 11:20am on June 14, 2024 to clarify the funding of 40 vouchers for families leaving rapid rehousing.
On its second reading, the D.C. Council unanimously approved the Fiscal Year 2025 Local Budget Act of 2024 on Wednesday, thus (almost) concluding a budget season defined by concerns about growing expenditures and what the future holds for a jurisdiction bouncing back from a pandemic.
The council’s vote on the Fiscal Year 2025 Budget Support Act of 2024 is scheduled for June 19.
In his opening remarks, D.C. Council Chairman Mendelson said this budget season proved to be difficult due to what he described as inaccuracies on the part of D.C. Mayor Muriel Bowser about the fiscal impact of removing due process for residents leaving rapid rehousing. Mendelson also criticized the Office of the Chief Financial Officer’s (OCFO) insistence on replenishing the Fiscal Stabilization Reserve, and more recently Chief Financial Officer Glen Lee’s refusal to include in the FY 2025 budget $40 million that the Office of the Attorney General secured in a settlement.
“Even though we have to balance the budget on the latest revenue estimates, the CFO argues that we have to consider June revenue estimates that won’t be out for two weeks,” Mendelson said on the dais on June 12. “There could’ve been a way to work with us instead of impeding on appropriation authority.”
Though D.C. Mayor Muriel Bowser (D) called her FY 2025 budget proposal a shared sacrifice, some D.C. residents saw it as anything but. In the days preceding the council’s second reading of the FY 2025 budget, advocates continued to demand more housing vouchers and other safety nets to be funded via tax increases on the District’s wealthiest residents.
“D.C. residents have enough wealth to provide housing security. We don’t need to move people out of housing permanently,” said Charlottie Simpson, a Ward 5 resident of nearly 60 years and one of three people who interrupted D.C. Council Chairman Phil Mendelson’s press briefing on Monday in demand of more housing vouchers. “This is life or death. None of us should accept this. Changes need to be made to the budget.”
On Wednesday, the council deliberated on an amendment in the nature of a substitute (ANS) that included an allocation of $2.2 million to the Department of Human Services for 80 additional permanent supportive housing vouchers.
This was on top of the 435 additional housing vouchers that Mendelson and D.C. Councilmember Robert White (D-At large) secured in the budget that made it before the council on May 29. Those changes, along with an additional allocation of $595,380 to the D.C. Housing Authority for local rent supplement vouchers, brought the total amount of new vouchers funded in the FY 2025 budget up to 577.
The council also set aside $21 million for the Housing Production Trust Fund. Another $250,000 to the D.C. Department of Human Services will fund the protection of due-process rights for those exiting rapid rehousing this year. In his remarks, At-large Councilmember White made note of an additional 40 Local Rent Subsidy Program vouchers for families exiting rapid rehousing.
Facilitating these changes meant, in part, reallocating $1 million in funds Bowser gave to DHS for its truancy initiatives, leaving $3.2 million in one-time funding left in that part of the budget.
The council would ultimately approve At-large D.C. Councilmember White’s ANS 11-2, with D.C. Councilmembers Brooke Pinto (D-Ward 2) and Anita Bonds (D-At large) being the “no” votes. Minutes before the vote, Pinto and D.C. Councilmember Christina Henderson (I-At large) expressed concern about whether the changes would hinder Bowser’s efforts to curb truancy, especially with a bevy of truancy bills that’s currently before the council.
On the dais, Pinto expanded on her viewpoint.
“Sixty percent of our high school students are now chronically absent or truant. That’s a crisis. Absolutely unacceptable,” Pinto said. “I think that [we need to move] these investments into DHS to make sure we’re being holistic about the services we’re providing to families. I understand the intersection between housing and truancy, but we need supports to let our kids know we need them in school.”
Given the expiration of rapid rehousing, estimated to affect 3,200 District families (and more than 5,000 children) over the next three months, Simpson and others are pressing for what they call deeper housing investments. As she spoke to The Informer on Monday afternoon, Simpson evoked memories of neighbors on Rhode Island Avenue in Northeast who moved to West Virginia when the cost of living in the District became too much to bear.
“It’s terrible to lose neighbors,” Simpson said. “There’s no reason for D.C. not to provide assistance when people could pay their fair share. It can be done through taxes being raised on the wealthy and capital gains. I shouldn’t pay the same amount of taxes as a millionaire.”
Last Minute Changes, Bowser’s Concerns about Taxes
While Bowser commended the council for its reinstatement of funds for a new correctional facility, along with an indoor youth sports complex at RFK, and investment in Downtown revitalization, she reiterated concerns expressed in an earlier letter about the council’s decision to raise property and income taxes, along with the Paid Family Leave tax.
“Let’s be clear: by opening the door to increasing some property taxes this year, the council has set the stage for more property tax hikes for our residents and businesses next year,” Bowser said in her June 12 letter.
Other elements of Mendelson’s ANS included an increase of $796,000 from the extension of the repeal of the Qualified High Tech Company capital gains tax cut; $2.7 million in one-time funds to the Department of General Services that restores security; and $580,000 toward program evaluation initiatives that will, in addition to what the council secured during first reading, fund two full-time positions.
An ANS by At-large Councilmember White changed language that allows public school leadership in Ward 7 and Ward 8 more latitude in hiring an additional permanent substitute teacher, wellness coordinator, or a full-time staff member. Despite concerns about the diminishment of the D.C. Public Schools (DCPS) enrollment reserves and further council member infringement on school affairs, the council approved by a 9-4 vote an amendment by Pinto that restored positions at School Without Walls for a theater teacher and world language teacher via the transfer of $111,000 from those reserves.
In the realm of traffic safety, Ward 6 D.C. Councilmember Charles Allen’s ANS redirected funds for D.C. Department of Transportation (DDOT)’s metering contract toward the production of signage that lowers the speed limit on collector roads and the production of a report by the Commission on Climate Change and Resiliency. Meanwhile, an ANS by D.C. Councilmember Brianne Nadeau (D-Ward 1) funds two civil engineer positions within DDOT and changes the U Street Streetscape project between 14th and 18th streets to better prioritize traffic safety and transit improvements along the corridor.
Capital enhancement funds in Mendelson’s ANS include $22 million to renovate the Central Cell Block in the Henry J. Daly Building on Indiana Avenue in Northwest, along with $463 million for a new correctional facility. D.C. Councilmember Brooke Pinto heralded these investments as paramount, especially amid the string of deaths at D.C. Jail.
“D.C. Department of Corrections has a fundamental responsibility to protect residents,” Pinto told The Informer. “It’s something we work with them on regularly… at every hearing. It’s why it’s urgent for them [to have] additional check points. In the budget, it’s important for a new jail, renovation of the Central Cell Block and funds for additional guards.”
Questions Surrounding the Sports Betting Ecosystem
The council, once again, mulled over whether to open the District’s sports gambling ecosystem to several vendors, instead of maintaining the sole-source monopoly that’s been in place for years. This question pitted D.C. Councilmember Zachary Parker (D-Ward 5) against D.C. Councilmember Kenyan McDuffie (I-At large).
Parker (D-Ward 5) floated an ANS that, in conjunction with an upcoming amendment to the Fiscal Year 2025 Budget Support Act, would free $1.83 million in local funds from the Housing Production Trust Fund to ultimately remove a subtitle that allows the District to open the sports betting ecosystem to any vendor.
The council struck down that amendment in a 4-9 vote with Parker, Nadeau, Bonds and D.C. Councilmember Vincent C. Gray (D-Ward 7) voting in support.
On Wednesday, Parker told his colleagues that an issue like whether D.C. maintains a sole-source monopoly in the gambling ecosystem must go through the legislative process, which includes a committee mark-up, and ultimately a vote before the entire council.
“This is the third time in recent history that we’ve been asked to fast track something related to gambling. I’m not suggesting nefarious intent, but more time scrutinizing the proposal to make sure business concerns are met and the District wins,” Parker said on Wednesday during his trip down memory lane. “In addition to grave concerns about the process, I recall the chairman mentioning when the mayor sent her budget, we removed proposals that didn’t have a hearing because of the process. What’s the difference between what the mayor proposed, the reparations commission and sports betting?”
As of earlier this year, FanDuel serves as the exclusive contractor in the local gambling ecosystem. This vendor’s arrangement with the District ensures that the District receives 40% of any proceeds. FanDuel also contractually guaranteed at least $10 million in revenue over the next two years, regardless of proceeds accumulated.
Within the first two months of FanDuel’s contact with the District, the vendor brought in $3 million of revenue — more than what the previous vendor generated in 17 months.
Parker noted that, per OCFO, revenue from a two-year extension of the city’s existing sports wagering contract with FanDuel is projected to exceed the projected revenue from the subtitle in question.
Another concern that Parker expressed, as he had done on May 29, centered on whether small businesses operating gambling kiosks would be protected under the subtitle. Later, Allen expressed his dismay that funds from the Housing Production Trust Fund would be taken, even if temporarily. Nadeau, reiterating comments she made a couple weeks ago, said that a gambling ecosystem poses long-term health risks for D.C. residents.
In his remarks, McDuffie noted that, contrary to prevailing beliefs, a dozen council hearings allowed ample opportunity to discuss a sole-source monopoly in the gambling ecosystem. He said that time was of the essence in breaking the monopoly, given what he recounted as concerns he heard from other gambling vendors.
McDuffie went on to challenge the assertion that small businesses stand to lose access to kiosks if there’s no longer a monopoly. He told his colleagues about an ANS to the Fiscal Year 2025 Budget Support Act to prevent business owners from losing kiosks if vendors don’t follow through on their contact with the District.
“The record shows I’ve been an advocate for small businesses,” McDuffie said. “We want [gambling] contractors to honor their contracts. We will protect our small businesses. Some of the kiosk operators have been without [kiosks] since April, and no communication [about] when they would receive additional machines.”
