Next week, the DC Council is expected to take the first of two votes on Mayor Muriel Bowser’s proposed $21.2 billion Fiscal Year 2027 Budget and Financial Plan. Don’t expect a smooth landing.
The budget, combined with concerns raised in recent reports released by DC Auditor Kathy Patterson and DC Chief Financial Officer Glen Lee, suggests the District’s finances, fiscal management processes and overall economy are a mess.
Additionally, DC Council Chair Phil Mendelson is on the hunt for money to prevent fee and tax increases being contemplated by his colleagues, including mayoral candidate and Ward 4 representative Janeese Lewis George and Ward 1 Councilmember Brianne Nadeau, who opted not to run for reelection.
In 2025, legislators approved the mayor’s proposal for a phased increase in the retail sales tax in future years; the rate is now slated to hit 7% in October 2027 under the current budget plan. Sales taxes have long been considered regressive
Now, they are talking about a “wealth surcharge” on income from interest, dividends, capital gains, rental property, residential property sales, and “passive business incomes,” among other areas.
In a letter to Mendelson dated June 2, Bowser complained about some of the actions taken by the council during their committee deliberations, as well as proposals still under consideration. “Unfortunately, some of the Council’s proposed changes would undermine the progress we’ve made over the past 12 years in educational achievement, weaken public safety strategies that have resulted in the lowest violent crime rates and highest case closures in decades, discourage the economic growth that is absolutely vital to our recovery from the impacts of DOGE, and add new burdens that reduce affordability for our residents and businesses by once again hiking taxes and fees,” she wrote.
Among specific issues, Bowser took aim at the tax increase floated for council consideration, arguing — with one phrase notably in bold italics — that the plan is “deeply unfair and inequitable to our residents. It is also terrible public policy: Making major tax policy on the fly with no public input, no public hearings, and no public scrutiny.”
Members seemed either unfazed or more focused on potential pushback from vocal advocates, who could affect the outcome of the June 16 primary election, in which ranked choice voting will be used for the first time.
Given all these variables and players, there’s little doubt that the coming fights and debates as they head to a final vote won’t be pretty.
