Fearing DOGE recession, D.C. mayor bets big on new pro-business budget
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Mayor Bowser unveils her budget to the public on Tuesday. Photo: Cuneyt Dil/Axios
With DOGE cuts pummeling D.C.'s economy, Mayor Muriel Bowser proposed a business-friendly budget on Tuesday. It caters to restaurants by calling for a repeal of Initiative 82, slashes construction industry regulations and frees up money from other city projects to redevelop RFK Stadium.
Why it matters: D.C. is bracing for a DOGE recession due to federal job cuts.
Driving the news: Bowser's attack plan is a "growth agenda" to replace a "possible loss of 40,000 jobs."
- Her $21.8 billion budget proposal for next fiscal year, subject to D.C. Council approval, coincides with a forecasted "mild recession."
- "It's a profoundly uncertain time," Chief Financial Officer Glen Lee tells Axios.
Zoom in: To help businesses, Bowser proposes delaying a planned sales tax increase and reviving a tax incentive for tech companies, alongside a $52 million venture capital fund sourced from private and public dollars.
- Nearly $35 million is proposed for a project to boost foot traffic between the National Mall and downtown businesses.
- To jolt the lagging construction sector, Bowser seeks zoning reform to "reduce time and cost," and a pause on clean energy requirements.
Doubling down on sports and entertainment, the budget sets aside $1 billion over several years for the RFK Stadium redevelopment and $6 million to restore D.C.'s historic theaters.
- Bowser wants to expand legalized gambling, with commercial bingo and live blackjack games at places like hotels.
Meanwhile, D.C. is investing more in education. Bowser budgeted $2.8 billion for its school system, a $123 million increase as public and charter school enrollment rises to more than 101,000 students.
Between the lines: Call this a turnaround plan. Bowser is betting that pro-business initiatives will rejuvenate the jobs market and economy, after a dire warning that the city's revenues will decline by $1 billion over the next four years.
- But if the plan fails, Bowser envisions bigger cuts in the years ahead.
The other side: To save money, D.C. would remove roughly 25,500 people from Medicaid and eliminate programs that were expected to launch in the near future, like baby bonds and a child tax credit.
- Rising energy costs would also curtail transit electrification and clean energy programs, Bowser warned in her budget proposal.
What we're watching: The full scale of the cuts will become clearer in the hours and days to come — say, neighborhood projects that may be delayed or specific public programs that may have been cut.
What's next: The D.C. Council will pore over the mayor's budget books before making changes and giving final approval by late July.
Editor's note: This is a developing story. Check back for updates.