Council Passes FY 2015 Budget Proposal – Chairman Phil Mendelson

Council Chairman Phil Mendelson praised the Council’s adoption this afternoon of the Fiscal Year 2015 budget for the District of Columbia.

“The Council’s budget proposal focuses on sustaining important investments in affordable housing, workforce development, public schools, and infrastructure,” said Chairman Mendelson. “The budget adopted today builds on the hard work by the Mayor’s team in the budget originally proposed, and with the cooperation of the Mayor and Chief Financial Officer, the Council was able to build on that foundation to make changes that will benefit the District significantly.”

The Fiscal Year 2015 budget adopted by the Council contains a number of increases to fund important services and programs, as well as new initiatives to strengthen economic and community development in the District. Specifically, the budget:

Funds the majority of the recommendations of the Tax Revision Commission, providing tax relief aimed at addressing disparities in personal income tax, the estate tax, business taxes, and sales tax. The Council’s plan phases in the recommendation over five years, but with immediate relief for low- and moderate-income District residents. This includes expansion of the Earned Income Tax Credit, increase of the personal deduction and personal exemption to federal level, and the addition of a new middle income tax bracket.

Increases budget transparency, by urging Congress to enact the Contingency Cash Reserve Transparency Amendment Act and impose more meaningful guiderails on the use of the District’s Contingency Fund.

Makes significant investments in the area of Human Services, by enhancing the funding available for the Local Rent Supplement Program; providing application assistance for those applying to SSI; identifying funding for the Homeless Prevention Program Establishment Act to help families stay in their homes; funding family case managers at DC General; and funding a coordinated entry system for homeless families.

Follows the advice of the United Medical Center turnaround consultants to fund fully the capital investments necessary to improve the current UMC facility, so as to attract an operating partner that can rebrand UMC and encourage more residents to use the facility.

Maintains a six-year, $400 million investment in Streetcar capital projects, providing a priority to the H Street Line, dedicating $45 to $65 million of operating funds to the projects annually, and supplementing the dedicated funding stream with other paygo or GO/IT bond financing, as needed. This funding exceeds DDOT’s annual expenditure on streetcar projects to date, and corrects a funding mechanism that would see as much as $740 million of project funding diverted from future operating budgets.

Requires close monitoring of a potential imbalance in the financial plan with the inclusion of the Financial Reporting Act of 2014. The Mayor’s estimates that a gap in the out-years of $166 million, or approximately 8 percent of non-personal services expenses, excluding those associated with Medicaid, schools, retirement, and debt service. The subtitle in the Council’s budget mandates that the OCFO report to Council on a quarterly basis the progress made toward resolving the potential FY 2016 gap.