It could be two years before D.C. recovers from most of the economic impacts of the Covid-19 pandemic, according to a newly released budget forecast by D.C. Chief Financial Officer Jeffrey DeWitt.
The District expects to lose as much as $721 million in revenue by the end of this year, largely due to the loss of sales tax from the hospitality industry, DeWitt said Friday. The federal aid currently provided – significantly less than what the city had hoped to get because the first federal stimulus bill deemed it a territory rather than a state — will not offset the revenue loss, he said.
Indeed, he painted a bleak picture of the District’s finances, which he said have been essentially turned upside down. Wages, which were expected to grow 4%, are now expected to drop 1% this year and rise by only 0.6% next year. Unemployment is expected to rise by 5.1%.
“This is what a recession looks like,” DeWitt said. “The D.C. economy won’t be able to catch up to previous projections. This is a recession no matter how you look at it.”