D.C.’s chief financial officer released a new revenue estimate noting a potential shortfall of $180 million due to “uncertainty” over the outcome of Congress’ move to stop the District from collecting certain taxes.
The D.C. Council, along with several states, rejected some tax cuts called for in President Donald Trump’s Big Beautiful Bill Act last year, arguing they have the legal right to set their own taxes.
In the fall, the D.C. Council voted to uncouple the District from the Trump cuts, which include business taxes and taxes on tips and overtime. But Congress passed a resolution to block D.C.’s move.
D.C.’s attorney general argues Congress’ resolution isn’t legal.
CFO Glen Lee’s latest revenue estimate notes a $180 million estimated shortfall.
Now, D.C. Mayor Muriel Bowser tells him the revenue estimate is either incomplete because he has not determined his legal position on the status of the “uncoupling law” or inaccurate because it does not account for all taxes to be collected.
“I request that you clarify by March 3, in writing, how you will apply District law to the collection of Calendar Year 2025 taxes,” Bowser wrote.
Jacqueline Johnson of Free DC is outraged by the congressional interference.
“Their goal is to bankrupt our city; their goal is to cause the District of Columbia harm and take away home rule bit-by-bit, piece-by-piece,” she said.
The CFO’s report also notes D.C. has seen a decline in sales tax and hotel tax revenue.
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