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WASHINGTON (AP) — On Friday, Washington Mayor Muriel Bowser introduced her final budget proposal before leaving office later this year. The $21.2 billion gross operating budget is expected to ignite debates both in the District Council and on Capitol Hill, where Republicans have increasingly expressed interest in influencing local governance.
The budget proposal prioritizes funding for education and healthcare, yet it also suggests cuts in several areas. Notably, it reduces $127 million allocated for upcoming collective bargaining agreements and pay raises for non-union city employees.
One significant aspect of the budget is the reduction in the general funds budget, which is set at $12.7 billion—a 3.3% decrease from the 2026 projection. These general funds are crucial for financing city services. Mayor Bowser attributed these cuts to diminished revenues resulting from federal workforce downsizing and rising costs, including increased Medicaid expenses and higher administrative costs for the Supplemental Nutrition Assistance Program (SNAP) due to recent federal law changes that shifted more financial responsibility to states.
Addressing the Council, Bowser asserted that the city remains financially stable and outlined what she describes as the three phases of her administration: the growth era, the COVID-economic period, and the post-COVID phase.
“We are adapting to the changes the DOGE has made to our workforce and commercial areas,” she explained, referencing the previous administration’s efforts to reduce federal government size. She noted that the rising expenses and reduced revenues have resulted in a projected budget shortfall that needs to be addressed.
“I think we all have to be clear headed about where we are and what it will take to keep growing,” said Bowser, who has served as mayor since 2015 and has announced she will not be running for reelection this year.
Members of the council questioned Bowser and members of her staff on proposed targets, including taking aim at programs intended to help defray the cost of child care in a city where a family pays on average more than $25,000 a year for infant care, according to the advocacy group Child Care Aware of America. It would cap the District’s child care subsidy program, which helps the city’s poorest families afford care, at 6,000 children. Families currently receiving the subsidies would continue to receive them. And it would eliminate a program that supplemented the wages of child care providers, a measure passed during the pandemic to help attract and retain workers to a field with historically low wages.
Council Chairman Phil Mendelson said the council would likely vote on the budget in June.
Washington’s budget has been complicated in the last two years, including in 2025 when the House passed a federal government funding bill that would force the district’s government to revert to its 2024 budget parameters, effectively cutting $1.1 billion from its previously balanced budget midway through the financial year.
The remaking of the federal workforce by the Department of Government Efficiency heavily impacted the Washington region. Terry Clower, director of the Center for Regional Analysis at George Mason University estimated more than 50,000 jobs were lost in the region. Clover said those job losses would be more than lost salaries and income taxes for the workers, also hitting businesses that support those workers, meaning additional lost revenue for localities.
The D.C. Office of Revenue Analysis estimated that Washington had a net loss of 22,000 federal jobs at a combined annual pay of more than $3 billion.
City Administrator Kevin Donahue said said one area where revenue was hit was the impact of the reductions in the federal workforce, primarily by the Department of Government Efficiency, that cost about $325 million in lost revenue from job cuts and the accompanying consumer spending. Those losses will be even higher in the 2027 fiscal year.