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Proposed D.C. Council budget would fully fund trust accounts for low-income children

correction

A previous version of this article incorrectly attributed a proposal to lower business license fees in the fiscal 2022 D.C. budget. The item was in Mayor Muriel E. Bowser’s proposed budget. In addition, the article had misidentified the political affiliation of D.C. Council member Robert C. White Jr. He is a Democrat. The article has been corrected.

The D.C. Council is set to vote Tuesday on a budget proposal written by chairman Phil Mendelson (D) that reallocates funds toward new initiatives aimed at closing the city’s racial wealth gap — including legislation that would kick-start a trust-fund program for low-income children.

But his proposals will probably not go far enough for some left-leaning advocates and members of the council, who have said they plan to pitch a tax increase Tuesday on the city’s wealthiest residents in hopes of producing millions in additional funding for child care and to address an affordable housing shortage.

Mendelson unveiled his proposed fiscal 2022 budget Monday after the council spent weeks revising the $17.5 billion budget Mayor Muriel E. Bowser (D) originally presented to the council in May. Her version boosted funding across many sectors, such as more affordable housing and alternatives for policing, thanks in part to more than $2.3 billion in federal coronavirus relief funds that must be used over the next four years.

Mendelson kept most of Bowser’s spending recommendations, but said his proposal goes a step further to mitigate gaps in wealth and resources. To do so, he suggests spending an additional $75 million on affordable and public housing; another $11 million for the Access to Justice Initiative, which provides civil legal services that protect residents from eviction; and creating a public trust-fund account, commonly known as a baby bond, for children born into low-income D.C. families.

“Several council members said to me that they think we have an opportunity, because of the federal dollars, to be transformative — not just with programs that we like or are even essential,” Mendelson said. “And one of the biggest challenges with equity is wealth, and what we can do to change the wealth gap.”

The baby bonds legislation, introduced earlier this year by Council member Kenyan R. McDuffie (D-Ward 5), would cost roughly $32 million over four years and apply to children born into households whose income does not exceed 300 percent of the federal poverty level, or about $79,500 for a family of four.

Starting on Oct. 1, eligible children would have at least $1,000 placed into their fund that they could withdraw once they turn 18 for specific purposes, such as education, business ownership and other investments.

Day care is expensive in D.C. Some say the city should spend millions more subsidizing it.

Mendelson is also seeking to fund legislation he proposed that would create a new deputy auditor for public safety to review internal police investigations; a bill passed this year that would split up the D.C. Department of Consumer and Regulator Affairs into two agencies; and a bill from Council member Robert C. White Jr. (D-At Large) that would allow D.C. to pay housing providers to convert existing rental units into affordable housing. He also wants to establish a reentry program for recently incarcerated people that would provide short-term housing with wraparound services.

Amid capital projects, including the redevelopment of the H Street bridge adjacent to Union Station, Mendelson’s draft includes money to address a disaster that had not yet happened when Bowser wrote her budget proposal: $25 million to replace a pedestrian bridge over Interstate 295 that collapsed last month.

Bowser revealed in May that the city’s family leave program, which funds parental leave for workers through a tax on their employers, was overfunded by more than $400 million — possibly because the coronavirus pandemic curtailed the number of workers eligible for the benefits. She proposed using the excess funds to reduce the tax rate on businesses by more than half for one year, while allowing workers to claim the benefit in more circumstances, such as two weeks of paid leave to recover from sexual assault or domestic violence.

But Mendelson said that his draft budget instead uses about $80 million from the program’s surplus to provide additional relief for hotels, restaurants and small businesses, and puts the rest of the surplus to use on other programs, like baby bonds.

To allow workers to use the family leave program in more circumstances, he also accepted a proposal from Council member Elissa Silverman (I-At Large) that would temporarily expand the amount of time that workers can use for their own medical care from two weeks to six weeks.

D.C. to pour a record $400 million into affordable housing this year and next

The council will hold the first of two votes on the chairman’s proposed budget Tuesday, when members will have the opportunity to recommend their own changes in the form of amendments.

Some left-leaning members of the council plan to propose increasing the income tax on wealthy residents. They say that although the city seems flush with federal money right now, the District needs a long-term source of revenue, not just the one-time injection of stimulus funds, to pay for major social service programs.

They have floated ideas for spending the revenue from their tax that may include a more immediate and costlier investment in child-care workers’ salaries than Bowser and Mendelson have recommended, and higher spending on housing programs.

Mendelson has made it clear that he vehemently opposes a tax increase, and in the realm of child care, suggested moving up an $18.5 million pilot program that tests whether higher subsidies actually lead to higher teacher pay from 2023 to 2022. Mendelson will also propose a task force to work on child-care legislation.

“We’re going to address that issue in a deliberative way because it’s an important issue,” he said.

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