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Winter Board Meeting: Fiscal Risks on DC’s Horizon?

The District of Columbia's economy remains remarkably strong and resilient, but some of the District’s top civic and elected leaders believe that the economy will face challenges on multiple fronts in the near and distant future.

“We’ve gotten used to the good news about the fiscal situation in the District of Columbia,” said Alice Rivlin, an FC2 trustee and senior fellow at The Brookings Institution. “For quite a number of years we’ve had an improving fiscal situation, but there are risks.”

Describing those risks was the focus of a panel discussion at the Federal City Council (FC2) Winter Board Meeting on February 1. Rivlin, the moderator, asked Mayor Muriel Bowser, DC Council member Jack Evans and DC Chief Financial Officer Jeff DeWitt what kept them up at night when it came to the District’s economy?

“I worry about the notion that we can forget where we came from,” said Bowser. “We can start policies and initiatives thinking that it’s always going to be good times. We have to be careful about undertaking new initiatives and investments. We have to be careful we aren’t writing a check now in 2018 that a future mayor and council won’t be able to cash.”

Evans said a number of pending financial and policy issues concern him. He noted that coming up with subsidies for the financially strapped United Medical Center, District infrastructure needs, ongoing labor contracts, financing the paid family leave act and funding Metro are looming fiscal challenges.

“Our finances are the envy of every city in every state in America,” said Evans. “But what worries me is No. 1 that we have to come up with $125 million this year that is unfunded right now in order to match what Virginia and Maryland are going to come up with to have a dedicated funding source for Metro.”

DeWitt said that the District’s finances are in good shape today. Reserves and revenues are up. Capital is building. The city’s pensions are 100-percent funded. Its health care responsibilities are 100-percent funded. But he still worries about the impact of federal decisions.

“What is the federal government going to do in terms of [federal] employment?” asked DeWitt. “What is the impact going to be on us in terms of the employment and things like Medicare and other programs that benefit our less fortunate citizens in the District?”

The Board meeting featured a conversation with former IRS Commissioner John Koskinen, as well. Asked about the IRS, he said it is a professional operation devoid of politics, no matter who is president.

“There’s not a Republican or Democratic way to run the filing season,” said Koskinen. “To that extent, you end up with an esprit built into the system.”