Mayor Bowser Presents Fiscal Year 2026 Budget: Grow DC

(Washington, DC) – Mayor Muriel Bowser shared Grow DC, her Fiscal Year 2026 (FY26) Budget. Grow DC is a bold, proactive growth agenda to generate new economic activity, create new jobs for DC residents, and increase revenue to support city services and programs.
 
“With this budget, we’re not waiting for change to happen – we’re making change happen. The Growth Agenda is about creating jobs for DC residents and generating the economic activity we need to keep DC a world-class city,” said Mayor Bowser. “This budget acknowledges the challenges we are facing, but also includes bold, forward-thinking solutions to change our economic trajectory.”
 
Washington, DC continues to thrive as a world-class city, welcoming record numbers of visitors, balancing budgets for 29 consecutive years, having the fastest-improving urban school district in the country, and driving crime down to historic lows. However, recent federal actions have resulted in a shifting economy – both for the city and the entire region. The Chief Financial Officer’s February revenue estimate forecasts revenues to be reduced by $1 billion over the next four years, driven by the expected loss of 40,000 federal government-related jobs, reduced income, and lower consumer spending.  
 
To meet the moment, Grow DC focuses on growing DC’s economy, rightsizing government spending, cutting red tape and making it easier to do business in DC, and investing in shared priorities. Mayor Bowser’s budget avoids any tax increases and strengthens DC’s long-term economic outlook by protecting critical programs and services. 
 
More than half of local funds are invested in public education and human support services. The $2.6 billion FY26 capital budget prioritizes DC Public Schools facilities, transportation networks, and WMATA.
 
Below are the highlights of investments and initiatives in Mayor Bowser’s FY26 budget proposal: 
 
Advancing a Transformational Growth Agenda 
With the city facing economic uncertainty caused by a shrinking federal presence, including the possible loss of 40,000 jobs, Grow DC invests in a transformational growth agenda to attract new businesses, create new jobs, generate new tax revenue, and quickly grow the local economy. 
 
The Growth Agenda will help the District attract new jobs and cut red tape by: 

• Balancing attraction dollars to include tourism and business attraction
• Making it easier to open a new business in DC: 
  •  Reforming zoning procedures to streamline reviews of new development projects
  •  Pausing Building Energy Performance Standards and Net Zero requirements
  •  Repealing the Parking Benefit Equivalent Program
  •  Reforming the Tenant Opportunity to Purchase Act to encourage new investment in housing production 
  •  Repealing Initiative 82 and establish sales tax holidays for restaurants
• Making it easier to keep a business in DC by cutting taxes and supporting local businesses:  
  •  No sales tax increase in FY26
  •  Reduce Universal Paid Leave tax from 0.75% to 0.72% 
  •  Expand eligibility for DMPED retail grant programs

It doubles down on DC’s fast-growing sports, entertainment, and tech industries:  

• $171 million for Capital One Arena improvements
• $6 million to support the historic National Theatre, Lincoln Theatre, and Howard Theatre
• $2.2 million to revive the Qualified High Technology Companies tax incentive
• $2.4 million to create the DC Technology Ecosystem Fund to invest in business accelerators and incubators for start-up tech companies in DC
• $681 million to support horizontal construction and parking costs at RFK (and $175 million in FY32, which is outside the plan)
• $202 million for utilities, roadways, and a WMATA study at RFK

 The plan also includes important investments to build on the success of DC’s Comeback Plan and Downtown Action Plan: 

• $1.1 million to support businesses in Chinatown and Gallery Place while the Capital One Arena redevelopment project is under construction  
• $17 million for the Gallery Square project and the revitalization of Farragut Square, McPherson Square, and Lafayette Park
• $250,000 to support the Chinatown Renewal Initiative to rejuvenate and preserve the cultural identity of Chinatown

Investing in Shared Priorities 
Grow DC continues to invest in important shared priorities—programs, services, and investments that keep DC a world-class city and a place where people want to live, work, and visit. 
 
Investing in our Schools: 

• $2.8 billion, a $123 million increase from FY25, to support more than 101,000 DC Public School (DCPS) and DC Public Charter School (DCPCS) students
• $270 million to support pay raises for DCPS and DCPCS teachers 
• $2 billion for 30 school modernizations 
• $148 million for small capital improvements at schools such as HVAC and window replacements and athletic field improvements  
• $10.7 million to replace and modernize technology equipment and upgrade IT infrastructure 
• $3 million to continue High Impact Tutoring 
• $25 million to demolish Building 41 and begin planning and design for new student housing for the University of the District of Columbia 
• Full funding for core childcare programs including the childcare subsidy, PKEEP, and the pay equity fund 

Investing in a Safe DC: 

• $30 million increase for MPD to hire more officers, create a new horse mounted unit, and purchase crime fighting technology and equipment 
• $2 million for Safe Commercial Corridor grants 
• $7.3 million increase for FEMS for critical firefighting gear and continuation of the life-saving pre-hospital blood infusion program 
• $1.3 million to raise salaries of 911 and 311 call takers to $61,313 annually and $1 million for call taker recruitment and retention bonuses 
• $1.6 million for 258 mobile cameras and 111 license plate readers that can be used to increase safety for major events 
• $46 million to purchase FEMS fleet such as ambulances and fire trucks, and $33 million for a fireboat replacement  
• $18 million to purchase MPD fleet, including cruisers and motorcycles 
• Maintained funding for a new DC Jail  

Investing in a Clean DC: 

• $4.6 million to support our Clean Corridors initiative with 80 DPW staff 
• $2.3 million to expand curbside composting to 12,000 households 
• $5.1 million for stormwater management infrastructure like green roofs, meadows, and medians 
• $687,000 for a DPW swing shift crew to focus on collection of household trash/recycling, public litter cans, and bulk trash pickup 
• $244,000 for DLCP vending enforcement team to work nights and weekends – especially for large special events downtown 
• $1.8 million for DOB nuisance abatement fund to help address residential property maintenance and housing code violations 
• $22.3 million to purchase new DPW heavy, medium, and light duty vehicles for trash/recycling collection and snow plowing 

Investing in Housing and Economic Development: 
Affordable Housing  

• $100 million to fund the Housing Production Trust Fund (HPTF)  
• $1 million to continue the Heirs Property program 
• $23 million for the Home Purchase Assistance Program  
• $52.4 million to support DC Housing Authority public housing improvements  
• Funding for new communities 
  •  $119 million for Barry Farm 
  •  $18 million for Bruce Monroe  
  •  $5 million for Park Morton  
  •  $35 million for NW One  

Economic Development  

• $32 million for Fletcher Johnson infrastructure site improvements  
• $15 million for the East Capital Gateway grocery infrastructure  
• $20 million for continued Hill East infrastructure and $15 million for Saint Elizabeths continued infrastructure site improvements  
• $820,000 to support the America 250 Celebration through planning and engagement  
• $750,000 to support small area planning including: 
  •  $300,000 for implementation grants at 
    • Deanwood 
    • Nannie Hellen Burroughs Avenue NE 
    • Pennsylvania Avenue NE 
  •  $275,000 for an H Street NE neighborhood small area plan 
• $202 million for utilities and infrastructure at RFK campus 

Investing in Libraries and Recreation Centers: 

• $166 million to complete the modernization of six DCPL libraries 
• $188 million to support modernizations of 22 recreation centers, pools, and parks and $3 million to fund planning and design for a new Olympic size, heated, outdoor pool at Carter Barron
• $26.3 million for small capital improvements at recreation centers such as HVAC replacements, playground equipment updates, and roof repairs
• $400,000 to provide a stipend to DPR volunteer coaches to offset transportation, time, and other out-of-pocket expenses incurred with volunteer coaching 
• $89 million to create a new indoor year-round youth SportsPlex at the RFK Campus that will allow for indoor track and gymnastics 

Investing in Health:  

• $97 million increase to support increased costs for Medicaid services, including:
  •  $8.3 million to support increased utilization for services for individuals with developmental disabilities
  •  $8 million increase in Medicaid reimbursement rates for dentists providing the first step in adjustments to rates that haven’t been made in 15 years
  •  $2.2 million to cover sickle cell anemia coverage and treatment 
• $3.9 million increase to fully fund a new animal care contract
• $300,000 to increase Safe at Home and serve 795 seniors on the waitlist and $425,000 to expand DACL’s Home Delivered Meals program to approximately 150 seniors 
• $175,000 to support access to fertility services through the DC Health Exchange  

Investing in Human Services: 

• $18.9 million increase to support the continuum of care for homeless services including 24/7 access to shelter 
• $7.6 million for Permanent Support Housing for approximately 156 families to support exit pathways from Family Re-Housing Stabilization Program (FRSP) 
• $5.6 million for DC Flex for approximately 460 families to create new exit pathways from FRSP and short-term family housing 
• $5.1 million to provide an alternative site to assist with exit and diversion path to families seeking services from Virginia Williams 
• $2.9 million for the Homelessness Prevention Program 
• $57.5 million for Federal City Shelter redevelopment, $43 million for NY Ave Shelter redevelopment, and $5 million for Naylor Road shelter renovation  

Investing in Transportation and the Environment:  

• $76 million in additional funds for WMATA to support bus and rail service
• $57 million to continue to build out Bus Priority Lanes 
• $45 million to create a new pedestrian tunnel for WMATA in NoMa 
• $6 million to provide transportation for students attending schools in Ward 7 and Ward 8 Safe Passage zones 
• $402 million in local capital funds for bridge replacements and improvements:
  •  H Street Bridge 
  •  Benning Road Bridge 
  •  Long Bridge Pedestrian  
  •  Bicycle Bridge
  •  11th Street Bridge Park
• $402 million to maintain roads, sidewalks, and alleys in a state of good repair and $105 million to build out the roadways at the new RFK campus
• $11 million to support Anacostia River dredging and clean up 
• $13 million to expand Capital Bikeshare and $73 million to build out the pedestrian and bicycle trail network  
• $106 million to make roadway safety improvements along the High Injury Network  

Investing in Government Operations: 

• $7.9 million for DCPS schools’ repairs and maintenance over the summer 
• $1.9 million to pilot in-house security services at some DC government facilities  
• $16.9 million for critical system replacements at DC government facilities such as HVACs and boilers 
• $2.1 million to enhance cybersecurity, $853,000 for cybersecurity infrastructure buildout, and $792,000 for cybersecurity hardware maintenance  
• $11.5 million to support a new CBE online marketplace and PASS modernization and maintenance  
• $4.9 million to make improvements to the Sumner School as the new home of the DC Archives and $23 million to build a state-of-the-art facility for storage in DC  

Rightsizing 
To afford critical investments in students, teachers and schools, the budget eliminates programs that had not begun, saving $31 million annually, including Child Wealth Funds and the Child Tax Credit.
 
DC’s Medicaid costs were forecasted to grow by $182 million. To lessen the increase, the budget includes proposed changes to eligibility, benefits, and provider rates: 

• Eligibility: shift childless adults and adult caregivers between 138% - 200% of the federal poverty level to a new health plan run by the DC Health Benefits Exchange with largely the same benefits, minimal to zero premiums and out-of-pocket costs, and ability to utilize existing managed care organizations to avoid coverage disruptions 
• Benefits: long-term care and Home and Community Based Reform, Drug Rebates for zero pay claims, and reform of durable medical equipment 
• Provider Rates: pause inflationary adjustments for rates and implement a targeted efficiency level for managed care organizations  

DC’s locally funded Temporary Assistance for Needy Families program expenses have grown 48% since 2020 and were forecasted to grow by $11 million more in FY26. Making the following changes eliminates this $11 million increase and saves $2 million on an annual basis:  

• Pause the COLA increase for benefits
• Adjust the temporary reduction in benefits for households who don’t meet their requirements for four consecutive weeks without good cause  

Overtime costs have risen significantly due to staff shortages, increased demand for service, and leave usage, costing DC $29 million more in FY26. In addition to recruitment and retention, this budget proposes the following changes to DC’s Paid Family Leave program: 

• Limit family medical leave for caretaking of a family member to 2 weeks 
• Define family member to include immediate family  
• Create waiting period for family/personal medical leave  
• Require 12-week work commitment upon return from paid family leave 

Closing the FY25 CR Gap
The District faced two challenges when building a FY 2025 supplemental:

1. Based on the Continuing Resolution (CR) passed by the House, DC was required to reduce its previously approved budget authority by $1.13 billion.
2. As happens every year, the District also needed to address $167 million of current year spending pressures as well as make $180 million resources available to meet year-end obligations.

To address these two issues, the District:

• Instituted a hiring freeze saving $63 million in personnel costs
• Made $175 million of non-personnel services reductions  
• Shifted $202 million of spending and costs that could wait from FY25 to FY26 or FY27 in workforce investment and HPTF and $160 million of local funds into special purpose revenue funds in FY 25
• Captured $117 million of excess special purpose and dedicated tax revenues

In doing so, DC will avoid the most devastating cuts that would have had a significant impact on residents, businesses, and visitors. With these changes we were able to ensure:

• No furloughs or layoffs
• No facility closures
• A fully funded public safety & public education ecosystem
• No changes to summer programming

See the full budget presentation at budget.dc.gov.  
 

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