Washington, D.C. budget delayed as congressional action stalls

The Washington, D.C. government is pumping the brakes on submitting a 2026 budget as Congress dithers on restoring an estimated $1 billion budget cut caused by the continuing resolution that forces the city to submit to its 2024 numbers.

"We need clarity from Congress on a legislative fix to the Continuing Resolution before submitting a balanced and certified budget to the Council," said City Administrator Kevin Donahue via a statement. "The Executive looks forward to submitting our fiscal year 2026 budget focused on schools, a clean and safe D.C., and a robust growth agenda."

Washington is required by law to submit four-year balanced and approved budget plans that are subject to Congressional oversight. The mayor was expected to submit the proposed 2026 budget on April 2.

Washington, D.C. Council Chairman Phil Mendelson has made statements that Congressional gridlock should not prevent the mayor from submitting her budget proposal on time.

The city's Chief Financial Officer Glen Lee warned the City Administrator's office of possible budget approval delays via a letter in early March.

"To meet the April 2 deadline with an OCFO attestation, your team will need to submit a complete Budget and Financial Plan to the OCFO's Office of Budget and Planning by March 23, 2025, commonly referred to as the 'pencils down' date."

The chain reaction of delays could be caused by the Trump administration's budget cutting frenzy that spilled into the city's budgeting process. The CR left out language that would allow the city to access its own money and spend it as planned, using the already approved 2025 budget.

After an intense lobbying effort, the Senate restored the right to spend the money via a unanimous vote on legislation sponsored by Sen. Susan Collins R-Maine, and Sen. Chris Van Hollen D?Md.

"The Congress doesn't dictate how state legislatures decide to spend their taxpayer dollars. We don't dictate to other cities around the country how they can raise their funds and spend their funds, and we shouldn't do it with respect to the people of the District of Columbia," said Van Hollen.

The city has a contentious history with President Trump who announced on Friday that the House should take the Senate's recommendations about which budget the city should abide by.

Ongoing turmoil in the federal workforce and a glut of downtown office space is causing jitters with the ratings agencies as Fitch Ratings put the city on a "rating watch negative," with Moody's Ratings also pondering a downgrade.

S&P Global Ratings has the city's general obligation debt at AA+ Stable, Moody's has the issuer rating marked at Aaa, Fitch Ratings has the District of Columbia General Government rating at AA+.

The city was facing a budget crunch before the House passed the CR partially due to a predicted $342 million revenue drop also revealed early March.

In early January the CFO reported a $169.7 million boost in revenue as compared to expectations from one-time litigation proceeds and year-end accounting adjustments.