PROJECTDistrict of Columbia

State Fiscal Briefs

May 2022

Looking for District of Columbia data related to the pandemic? We have health, economic, and fiscal data on our new tool, How the COVID-19 Pandemic is Transforming State Budgets.

The District of Columbia’s budget basics

According to the National Association of State Budget Officers (NASBO), the District of Columbia’s total expenditures in fiscal year (FY) 2021 were $15.1 billion, including general funds, other state funds, bonds, and federal funds. NASBO reported that total expenditures across all states in FY 2021 were $2.7 trillion, ranging from $4.7 billion in Wyoming to $512.8 billion in California.

Each state allocates spending and taxes differently among different levels of governments, and local governments often administer programs with state funds, so combined state and local government data show a more complete picture of individual benefits and contributions when comparing states.

Per the US Census Bureau, the District of Columbia’s combined state and local direct general expenditures were $14.9 billion in FY 2019 (the most recent year census data were available), or $21,066 per capita. (Census data exclude “business-like” activities such as utilities and transfers between state and local governments.) National per capita direct general expenditures were $10,161. The District of Columbia functions as both a state and locality, but the Census Bureau classifies all its expenditures and revenues as local government.

The District of Columbia’s largest spending areas per capita were public welfare ($5,779) and elementary and secondary education ($4,188). The Census Bureau includes most Medicaid spending in public welfare but also allocates some of it to public hospitals. Per capita spending is useful for state comparisons but is an incomplete metric because it doesn’t provide any information about a state’s demographics, policy decisions, administrative procedures, or residents’ choices. Further, although the District of Columbia functions as a state and locality, its population and economic activity (and thus per capita spending) resemble a major city more than a state.

The District of Columbia’s general revenues were $14.3 billion in FY 2019, or $20,142 per capita. National per capita general revenues were $10,563. The District uses all major state and local taxes. After federal transfers, The District’s largest sources of per capita revenue were property taxes ($3,955) and individual income taxes ($3,246). The District’s federal transfers are high partly because it is the nation’s capital and receives funds that support the federal workforce (who are not counted in the state’s population).

The District of Columbia’s politics

The District of Columbia’s government functions as both a state and locality. For example, it both funds Medicaid and administers school spending. However, its elected offices parallel a municipality, with a mayor and a 13-member council.

Mayor Muriel Bowser, a Democrat, was elected in 2018 with 76 percent of the vote. The next mayoral election is in 2022.

The DC Council is composed of eight members representing the city’s eight wards, four at-large members representing the entire city, and a council chair. All current councilmembers are Democrats except for two at-large members who are independents. The District requires that no more than two of the at-large members be nominated by the same political party.

The District of Columbia’s budget institutions, rules, and constraints

The District of Columbia uses an annual budget. The DC Council must pass a balanced budget and is prohibited from carrying a deficit over into the following year. The District has no tax or expenditure limits and no supermajority requirements for raising revenue or passing a budget. However, it limits its debt service , and its tax- and fee-supported debt is limited to 12 percent of general fund expenditures and transfers.

Further, although the DC Council and mayor prepare and approve the District’s budget, Congress has authority over the District of Columbia and must authorize its budget. As such, the District’s fiscal year begins on October 1 (the same as the federal government). Congress can also overturn legislation passed by the Council.

(Note: Some states have informal budget institutions that constrain overall spending growth or a specific expenditure’s growth.)

The District of Columbia’s current budget

Mayor Muriel Bowser plans to release her FY 2023 budget proposal in March 2022. She has not given her state of the District address.

The District of Columbia enacted its FY 2022 budget in August 2022. The enacted budget included $18.4 billion in total spending. As part of the budget, the District raised individual income taxes for high-earning residents, including increasing the District’s top tax rate from 8.95 percent to 10.75 percent, and expanded its earned income tax credit from 40 percent of the federal credit to 70 percent in 2022 and 100 percent in 2026.

Under the American Rescue Plan, the District of Columbia will receive $2.4 billion in fiscal aid from the federal government. The District will also receive $755 million in additional funds to make up for the federal dollars it lost out on when Congress classified the District as a territory and not a state in the CARES Act. As of January 2022, the District of Columbia had spent part of its state ARP funds on housing assistance, K-12 education, and economic development.

According to NASBO, the District of Columbia’s recent expenditure totals (general fund spending/total spending, including federal transfers) were:

  • FY 2021: -Inf billion/-Inf billion (NASBO did not publish data.)
  • FY 2020: $8.3 billion/$15.1 billion
  • FY 2019: $7.8 billion/$13.7 billion

For more on the District of Columbia’s budget, see