D.C. Policy Center Testimony on PR24.754.June 16

Main sources of economic vibrancy and resiliency in the city are showing significant signs of weakness, impacting District’s key revenue sources: Loss of population and income taxes: Three sources of data–the Census,1 the IRS migration files,2 and change of address from the US Postal Service3–show that outmigration from the city has become the norm. [...] The District’s income tax revenues remained strong during the pandemic, driven by the stock market performance on the asset side, and growing wage and salary income reflecting high-wage jobs replacing low-wage jobs on the withholding side. [...] 3 Given this picture, strong leadership at the Office of the Chief Financial Officer will be all the more important in the coming years. [...] Lee to expand the existing efforts for improvement in the following areas: • Tax administration, especially in the areas of customer service and commercial property tax assessments. [...] While the difficult job of cutting spending would fall on the Mayor and the Council, a detailed expenditure analysis from the OCFO can certainly help elected officials make informed decisions and codify such cuts in the budget and financial plan–as a contingency–so the city has a clear plan that preserves spending priorities.