D.C. projects $1B deficit due to federal workforce cuts

Washington, D.C. is facing an estimated $1 billion budget deficit over the next few years, primarily due to the Trump administration's cuts to the federal workforce, which are expected to result in a loss of 40,000 federal jobs. Mayor Muriel Bowser acknowledged the economic impact of these job losses, emphasizing the need to attract new industries and private employers to offset the downturn. The D.C. Chief Financial Officer has revised revenue forecasts downward, predicting a significant decline in tax revenues resulting from reduced employment and consumption. Discussions are underway about potential budget cuts and strategies for maintaining essential services, while some residents have suggested increasing property taxes on high-value homes and implementing congestion taxes on rideshare services. Council Chairman Phil Mendelson noted that tax increases may be limited due to already high rates in the region. The financial outlook indicates that the city may experience a minor recession by fiscal year 2026, with a gradual recovery expected thereafter.