Speaker numbers apply only to this recording.
The Committee of the Whole of the Council of the District of Columbia held a public hearing on Friday, October 16, 2026, in Room 412 of the John A. Wilson Building to examine revenue proposals for the Fiscal Year (FY) 2028 budget. Chairman Mendelson opened the hearing by noting the district faces an estimated $650 million structural gap due to the use of one-time funds to sustain programs in the FY2027 budget, alongside declining federal revenue. The hearing was designed to thoroughly vet the pros and cons of seven specific tax proposals before the budget season begins. The hearing featured four panels of invited expert witnesses followed by a presentation from the Chief Financial Officer (CFO). The record remains open until October 30, 2026.
Thank you. I'm going to order this hearing. This is a public hearing of the Committee of the Whole of the Council of the District of Columbia. Today is Friday, October 16, 2026. The time is 1016 in the morning, and we are in room 412 of the John A. Wilson building. The subject of today's hearing is revenue proposals for the fiscal year 2028 budget. This hearing was noticed, I believe, back in August, and we limited the witnesses to those who were invited, although we were somewhat loose about that, as in if somebody contacted us representing an organization and asked to be invited, then they were invited. So we have about 30 witnesses. Maybe I'm a little off on that. We've divided them by panels because this is we've limited the witness list. We're going to give more time to witnesses than I ordinarily do when we have a committee of the whole hearing. That does not mean that necessarily we are going to be raising revenues or raising taxes. But what we have seen in recent years, I would say the last maybe six years, is that whenever we have the budget, which is typically in April, May of the year, there is considerable testimony about the need to raise revenues. Some years we've done this. Actually, every year, the mayor, when she proposes her budget, has included some revenue raising measures, even though generally the rhetoric is that there are no tax increases in the mayor's budget, but there have been, I would say pretty much in each of the last several years. But their proposals or requests or lobbying or testimony or insistence that the council raise taxes. And for the council to actually consider and adopt a significant change in our taxes, ought to have more discussion opportunity to understand the pros and cons. So reading from the hearing notice for this hearing, in the mayor's proposed fiscal year 2027 budget, many critical programs such as the early childhood educator pay equity fund, the health care alliance, out-of-school time grants, and temporary assistance for needy families were either eliminated or reduced in the out years, that is fiscal years 2028 through 2030. And the out eliminated or reduced in the out years of the financial plan in order to balance the budget. The council was able this year to reverse cuts to many of these programs when it adopted the fiscal year 2027 budget. However, this was done with one-time funds and with projected revenue growth failing to keep pace with inflation, existing revenues may not be sufficient to sustain these critical programs moving forward. Let me say a little bit more before I go back to the hearing notice. So my estimate is that in one-time spending, which is both budgeting that the council adopted for programs where we funded it for FY27, but not through all the years of the fiscal plan, or in the mayor's proposals, which she did not call one-time spending, she called it out-year reductions, but it's actually the same thing. The total and an example of that in the mayor's proposal was the um the funding formula for public education, the UPSFF, which uh she cuts, if I remember correctly, something like 15 percent beginning in FY28. Uh by my rough estimate, this these one-time spendings, whether from the mayor or the council total about $650 million. If we want to sustain those programs, we have a $60 and fifty million dollar gap plus inflation and other increased costs in operating our programs. And I'll add further that the chief financial officer intends to be releasing fairly soon a current funding services level budget. That is his calculation excluding the one-time expenditures of what it will cost to fund existing programs at the same level of program next year. And we're gonna see that there's some gap there. Rather than wait until budget time next spring to visit this situation, the committee of the whole would like to thoughtfully examine revenue proposals now that may be used to address funding shortfalls in the fiscal year 2028 budget. To that end, the committee of the hold is having the committee of the whole is having this hearing. The purpose is to hear and consider the pros and cons. I want to emphasize to consider the pros and cons of various revenue proposals, including, so we may get testimony for other proposals, including the following: a new business activity tax, a new wealth proceeds tax, transitioning to a land value tax, a new Pieditaire tax, a sales tax increase, a real property tax increase, and an income tax increase. The purpose of this hearing is to hear from expert witnesses on the potential revenue impacts of these proposals, as well as whether these proposals advance guiding principles of sound tax policy, such as equity and fairness, simplicity, economic efficiency, stability, and transparency. In the hearing notice, we referenced several bills, but this is not a technically a hearing on those bills. Where a bill is not referenced, the committee has posted draft legislative language and background materials on the website, the council's website, and so those were available for witnesses to analyze. The record in this matter will be open for two weeks. We're required to file a record after our hearings. And that which we receive, testimony, comments, written oral testimony today, but any other comments that anyone is welcome to submit. If we receive them by 5 p.m. on Friday, October 30th, we'll include them in the record. That doesn't mean that's the end of discussion. This is a political body, so we will be receiving comments and testimony and lobbying, maybe I shouldn't say testimony, but comments and lobbying, I'm sure for the next six months. But the idea with today's hearing is to hear the pros and cons of these different proposals and to have a better understanding of what the implications would be and um uh and also to stimulate conversation over the next five months before we get the budget so that uh we're in a better position to understand these proposals uh if and when we need them. I want to emphasize today's hearing is not to raise taxes, but to understand these different tax proposals. Again, the record will close in two weeks, 5 p.m.