The District is facing major revenue shortfalls as the coronavirus continues to halt economic activity, and Mayor Muriel Bowser Monday released her proposal for cutting the city’s spending.
Bowser’s proposed Fiscal Year 2021 budget would reduce funding for the city’s main affordable housing fund, and it would cut the budget for the Office of Planning, two areas that will impact the commercial real estate industry if the cuts are approved.
While it cut funding to some agencies, the budget avoided major layoffs and tax increases, and the budget retains funding for some of the District’s largest developments, transportation projects and new hospitals. The District is projecting revenue losses of $722M for FY2020, which ends Sept. 30, and $744M for FY2021.
The largest causes for the revenue shortfall are the decreased sales tax from hotels, restaurants and retailers, the economic sectors hit hardest by the pandemic.