On Tuesday, May 28, 2019, the DC City Council passed Mayor Bowser’s $15.5 billion FY2020 budget with a second unanimous vote on both the FY20 Local Budget Act and the FY20 Federal Portion Budget Request Act. The budget provides funding for the next fiscal year, from October 1, 2019 to September 30, 2020.
The final budget retains Mayor Bowser’s proposal to increase the deed transfer tax and deed recordation tax on commercial and mixed-use real estate transactions valued over $2 million from a combined 2.9 percent (1.45 percent each) to a combined 5 percent (2.5 percent each). The tax does not impact residential real estate transactions. The Office of the Chief Financial Officer estimates that this will raise an additional $80 million in 2020 and an additional $94 million in revenue in 2023.The budget also retains the Mayor’s proposal to undo the $25 million cut to the commercial property tax rate passed by the Council in December 2018. Both changes take effect on October 1, 2019 and sunset in 2023.
The final budget is the culmination of two weeks of negotiations that resulted in additional funding for the District’s public hospital, United Medical Center, and for public housing repairs, as well as a compromise related to the location where Banneker High School and Shaw Middle School will be built. The budget also cuts $15 million from the Qualified High Technology Companies (QHTC) tax incentive program and redirects the funding towards child care and early child care education, mental health, lead remediation, and housing and homelessness programs.
The budget now goes to Mayor Bowser for signature, which initiates the 30-day congressional review period. Upon the expiration of the congressional review period, the budget becomes effective as law.