The DC government is facing almost $1 billion in cuts to vital services because Congress has failed to honor the District of Columbia’s right to the money it collects from DC residents and businesses. The House of Representatives can and should restore these funds to DC by passing the D.C. Local Funds Act, which the Senate passed on March 14.
While passing the D.C. Local Funds Act will give DC access to the urgently needed revenue in its FY25 budget, District of Columbia leaders and advocates know that a long-term solution depends on repairing the flawed relationship between DC and the federal government.
For the first 30 hears of DC’s Home Rule government, DC’s budget was treated like the budget of a federal agency, even though 75 percent of the funds came from local DC taxes. Any Congressional delay in passing the federal budget prevented DC from spending DC tax dollars. But starting in fiscal year 2004, congressional appropriators realized this posed a serious and unnecessary problem for DC, and they began adding a provision which gives DC access to local funds as soon as the DC budget becomes final. But this provision was not included in the continuing budget resolution (CR) passed by the House on March 11.
After hundreds of DC residents of all ages took DC’s budget crisis to receptive Senators, the Senate unanimously passed the D.C. Local Funds Act. It is now up to the House to promptly pass this legislation and make it possible for the DC government to use its locally raised revenue in the budget that Congress has already approved. Locally raised revenue is still 75 percent of DC’s annual budget. The failure of Congress to pass the D.C. Local funds Act will deprive DC of its revenue, but it will not save the federal government any money.
It’s important for the House to pass the DC Local Funds Act as soon as possible and to prevent CRs in the near future from depriving DC of its local tax revenue. But the ultimate solution is to end the relationship between DC’s budget and the federal budget by ending DC’s status as a federal district and making the residential and commercial areas of DC the 51st state.