DC Action’s FY26 Budget Letter to Mayor Bowser

December 12, 2024
Advocacy Letter

The Honorable Muriel Bowser, Mayor
1350 Pennsylvania Avenue, NW
Washington, DC 20004 

December 12, 2024

Dear Mayor Bowser,

As the District prepares for a change in federal administration, DC children, youth, and families will need your leadership more than ever to guard against attacks on the District’s autonomy and to protect public vital investments in our residents’ well-being. We hope you will use your Fiscal Year 2026 budget proposal as an opportunity to demonstrate your commitment to DC values by preserving the District’s best-in-the-nation early childhood education system, expanding safe and enriching opportunities for students beyond the classroom, and charting a new course to end youth homelessness. Our budget requests seek to strategically tackle the disparities impacting far too many children and youth and people who care for them. Specifically, DC Action’s Fiscal Year 2026 priorities include:

  • Advance High-Quality, Affordable Early Childhood Education (add $20 million)  
    • DC Action calls on you to protect the Early Childhood Educator Pay Equity Fund and HealthCare4ChildCare by adding $10 million to ensure these programs can keep pace with growing demand. In total, the Pay Equity Fund will require $80 million (a $10M increase) to maintain recently approved formula adjustments and keep salary and health care coverage at pace with OSSE’s 1.43% projected growth in the early education workforce, compensate for educator credential earnings, and provide for a modest 2% cost of living adjustment. Of the $10 increase, educator salary adjustments will require an $8.4 million increase, and HealthCare4ChildCare will require a $1.4M increase, both recurring. 

      The Pay Equity Fund and HealthCare4ChildCare ensure early educators are fairly compensated for providing developmentally enriching early learning experiences for infants and toddlers District-wide without requiring the costs of high-quality care to be passed onto parents. Investing in our educators is already paying off by incentivizing ECE workforce growth and retention and generating new economic activity, including a 23% return on investment. The District’s long-term recovery depends on working families’ access to high-quality child care, and meeting the naturally occurring growth demands of the Pay Equity Fund is the foundation of a stable, high-quality early childhood education system in the District. 

    • Restore at least $10 million in local funding for the child care subsidy program to ensure families earning less than 300% of federal poverty can afford to enroll in early childhood education programs. Since 2021, local allocations for the subsidy program have decreased by over $20 million before adjusting for inflation. Meanwhile, the per-seat cost of care has increased, caseloads have resumed growing, the proportion of quality and high-quality ranked programs meriting higher reimbursement rates have increased, and eligibility criteria for subsidy participation have expanded. In FY24, OSSE spent $105.5 million on child care subsidies, but the budget for FY25 is only $96.3 million, leaving a $9.2 million gap to maintain caseloads. We are grateful for the positive improvements to the subsidy program that have occurred under your leadership, yet without restoring local investments, the compounding cost pressures on the subsidy system will displace lower-income families from needed access to early education and lead to a subsidy waitlist for the first time in 30 years. The total FY26 appropriations required for OSSE to operate the child care subsidy program will be at least $106.3 million, a $10M increase over FY25, including the $24M transfer from DHS.
  • Increase Out-of-School Time Grants (add $3.1 million)
    • DC Action calls on you to add at least $3.1 million in grant funding to the Out-of-School-Time Office to increase the capacity of community-based nonprofit organizations that operate OST programming. Our ask represents a 10% increase in funds available for grant awards, inclusive of the $6.9 million included one-time last year in the DME’s budget to replace OSSE’s loss of local funds that complemented their 21st Century federal awards. The OST Office must receive at least $33.7 million in FY26 to ensure funding stability in the sector and put community-based organizations on a path to serving additional youth after school, before school, over the summer, and during school breaks. Providing constructive, fun, and nurturing spaces for youth to spend time outside school can improve youth attendance and academic outcomes, boost social-emotional well-being, and reduce youth-involved crime, creating a safer and more prosperous District for all. 
    • Protect OST partnerships with DCPS schools by fully covering OST building-use security costs in your school budget. Further, we urge you to include a subtitle in your proposed budget that annually commits the District to absorbing OST-related security costs any time a nonprofit OST provider uses District government facilities for their programs. These costs are a small fraction of the District budget but create significant barriers to OST providers reliably running or expanding affordable programming in every District neighborhood.
  • Analyze Strategies to End Youth Homelessness (invest $600,000 over two years)
    • DC Action calls on you to require a comprehensive data analysis of Solid Foundations, the District’s 2017-2022 strategic plan to end youth homelessness. Solid Foundations DC called for the District to end youth homelessness by 2022. However, the District has seen an increase in youth ages 18-24 experiencing homelessness and housing instability since the initial commissioning of the report. DHS’s count of 18 to 24-year-old youth served in the youth system went from 461 in fiscal year 2016 to 1,516 in fiscal year 2023. Based on the wide variety of methods of counting youth, we estimate these significantly underrepresent the true number of youth affected by homelessness. The District should contract with an organization with local subject matter expertise to complete a comprehensive analysis of youth homelessness services and trends to identify where the Solid Foundations framework succeeded or fell short. This contract should also fund the convening of youth homelessness services providers and system stakeholders to lay a new foundation for solutions that will yield greater effectiveness, efficiency, and coordination toward eliminating youth homelessness. We estimate that the data analysis and coordination of a two-year strategic planning process will require a contract of at least $600,000. A small investment upfront in strategic planning and evaluation can ensure the District maximizes its long-term resources to achieve its goal of ending youth homelessness. 
  • Implement the Nonprofit Fair Compensation Act
    • We request your administration fully implement the Nonprofit Fair Compensation Act (L23-185) by compensating nonprofit service providers for indirect costs on top of the direct costs they are contracted or granted to provide. Our local nonprofits provide vital services to hundreds of thousands of individuals and families each year. Comprehensive, quality services that positively impact people’s lives can only be provided when nonprofits receive full compensation for the cost of doing business. That is why the District must ensure that payment for indirect costs are budgeted into every contract and grant that DC agencies award to nonprofit organizations, without supplanting funding for direct service costs.

DC Action appreciates that the District’s FY26 budget and 4-year financial plan will likely be oriented toward maintaining core services. With that in mind, we urge you to protect the following local investments in programs that are essential for raising the next generation of healthy, well-rounded, and resilient District kids. DC Action’s requests for the following  programs reflect a 3% increase over FY25 local funding levels to ensure services are able to keep pace with inflation; if necessary, we urge you to leverage progressive revenue streams to maintain these important programs:

  • Education
    • Pre-kindergarten Enhancement and Expansion Program (PKEEP): $21.8 million
    • Strong Start Early Intervention: $8.6 million ($12M including federal funding) 
    • Quality Improvement Network: $1.96 million ($6.16M including federal funding)
    • Early Stages: $11.1 million 
    • Healthy Tots: $477,048 
    • Community Schools: $9.27 million (cumulative across OSSE and DCPS grants)
    • DPR youth recreation services, including site-based and mobile afterschool programs, summer camps, and teen OST engagement activities: $44.9 million
  • Economic Security
    • Earned Income Tax Credit: maintain the 85% local match for FY25-28 and ensure the 100% match can take effect in 2029, if not sooner.
    • Child Wealth Building Trust Fund Baby Bonds Program: protect existing trust investments and ensure at least $6.6 million is invested in the program for FY26, even if sports wagering revenue does not materialize as planned 
    • DC Child Tax Credit: $14.7 million
    • Paid Family and Medical Leave: $166.5 million ($24.5 for administration at DOES and $142 through the Universal Paid Leave Fund)
  • Health 
    • Home Visiting: 
      • $1.55 million for DC Health
      • $1 million for CFSA (including transitioning the FY25 one-time enhancement of $400,000 to recurring)
      • $225,000 for DHCF to implement the Home Visiting Services Reimbursement Act through a State Plan Amendment which will save the District money by enabling us to bill Medicaid for nurse-provided home visiting services
    • Healthy Futures: $3.9 million
    • HealthySteps: $1.39 million
    • DC Alliance: $136.63 million
    • Immigrant Children’s Program: $18.83 million 
    • School-Based Behavioral Health Clinicians: $28.6 million
  • Housing
    • Youth Homelessness Provider Contracts: $23 million 
    • Rapid Rehousing for Families: $62.5 million
    • Permanent Supportive Housing for Families: $55.8 million
    • Emergency Rental Assistance Program: at least $27.8 million

We also urge you to fight to protect critical federal programs that sustain District families. Federal funding and local matching dollars for Medicaid (DC Healthy Families), TANF, SNAP, CHIP, and WIC provide necessary economic stability and health care access to more than 116,000 children and their caregivers in the District. The importance of these programs cannot be overstated: more than 1 in 3 DC children rely on Medicaid for health insurance, 95% of whom are Black or brown children. Should the incoming Federal administration move to reduce or eliminate these programs, we hope you will join executives nationwide in pushing back to protect the well-being of all kids and families. 

The investments and preservation of funds we are calling for will help ensure that our residents and workers – especially Black and brown children, young people, families, and caregivers – can continue living, working, and thriving in the District of Columbia. We share your belief that every DC family deserves a fair shot. That is why it is more important than ever to leverage both budget efficiencies and progressive revenue streams to generate the resources necessary to uplift DC families and advance economic equity and racial justice. When we work together to break down structural barriers that stand in the way of all kids reaching their full potential, we live out our DC Values.

Thank you for your consideration of our requests. We look forward to meeting with you in the new year to discuss our FY26 budget priorities. As always, I am available to answer any questions or clarify the contents of this letter. 

Sincerely, 

Kimberly Perry
Executive Director