D.C. is in its pro-business era
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Hate to say it, but D.C.'s economic forecast just went from bad to worse. City Hall's answer is a pro-business pivot.
Driving the news: D.C.'s top financial official predicts a "moderate recession" (escalated from a "mild" one) through the next 12 months, with more anticipated job losses than once thought.
By the numbers: Employment would decline 3.9% over that period, aka fiscal year 2026, D.C. chief financial officer Glen Lee projected in his new analysis released Tuesday. (His same prediction in February was a 2.6% drop.)
- Over the next five years, 40,000 federal jobs are expected to evaporate in D.C., coinciding with lagging private sector job growth, per Lee's office.
The big picture: The bleak forecast comes as Mayor Muriel Bowser is trying to evolve D.C.'s brand from government town to one that's open to new business.
Between the lines: In April, I wrote that D.C.'s progressive era is over. A decade-plus of wonkish experimentation and spending on social programs is crashed by conservatives micromanaging D.C. and the reality of, well, there's less cash to spend.
- What's that mean for a liberal city government? A throwback to a business-friendly era, with the $3.7 billion RFK Stadium redevelopment, a revival of old ideas like sweeteners for tech startups, and new bets like legalizing poker and blackjack games.
- With a conservative Congress breathing down their necks, the progressive D.C. Council is more likely than ever to follow the lead of the mayor on public safety, economic development and cutting government regulations.
- "We need to do things differently," Nina Albert, the deputy mayor overseeing economic growth, tells me.
One silver lining in Lee's report was that revenue projections were revised up by about $200 million, after the city took in more money through September than originally forecast.
- Bowser called that news "good momentum." But she added: "We need to be serious about keeping our companies and attracting new ones."
What I'm watching: Bowser isn't exactly making it rain on the private sector. There isn't talk of commercial tax cuts (yet, at least). It's more of a sprinkle of incentives. Grants for startups here and there. One proposal would reduce friction for construction projects.
- Another: Make D.C. more like Puerto Rico.
- Bowser floated it at the end of her testimony to Congress last month, asking for D.C. to have a federal tax incentive program like Puerto Rico's Act 60, so that D.C. businesses and residents would pay less in income and capital gains taxes.
- It's a pie-in-the-sky idea, but it says a lot about the pressure to reinvent the city's economy.
💠Town Talker is a column about money and power in Washington. Tell me about the talk of the town: [email protected].