The Honorable Phil Mendelson
Chairman, Council of the District of Columbia
1350 Pennsylvania Ave, NW, Suite 502
Washington, DC 20005
May 13, 2026
Dear Chairman and Members of the DC Council,
We urge you to reject the most harmful elements of the Mayor’s proposed Fiscal Year 2027 (FY27) budget and instead pass a budget that truly cares for and invests in children, youth, and families. While we recognize the fiscal constraints facing the District, the Mayor’s proposed budget goes far beyond belt-tightening—it instead takes aim at core programs that make it possible for children and families to live, work, learn, or thrive in our city. At a moment when families are already stretched thin, the Council must act boldly to restore funding, protect core services for children and families, and fortify District revenues to create budgets that break down barriers to all kids reaching their full potential.
DC Action Urges the Council to Prevent Harm from the Mayor’s Proposed Budget By:
- Adding $63.1 Million to the Child Care Subsidy Program (OSSE)
- Investing $82.2 Million in the Pay Equity Fund to Restore Pay Parity with DCPS Pay (OSSE)
- Making Grant Funding ($27M) Recurring for the Office of Out-of-School-Time (DME)
- Reversing $2.5 Million in Cuts to the Youth Homelessness System (DHS)
- Undoing the $1.35 Million Cut to HealthySteps (DC Health)
- Reinstating the New Heights Program with $304,000 (DCPS)
- Fully Restoring Paid Family and Medical Leave Benefits ($95M, DOES)
- Removing Restrictions on TANF Benefits ($20.5M, DHS)
Fully Fund Early Childhood Education
This is not a time to mince our words: the Mayor’s proposed FY27 budget will collapse the District’s entire early childhood education system. By eliminating the Early Childhood Educator Pay Equity Fund and deeply underfunding the Child Care Subsidy Program, child care providers will be forced to make impossible choices—cut staff, reduce capacity, raise tuition, or shut down entirely. Once educators leave the field and classrooms close, they cannot quickly reopen. The Mayor’s budget will cause the District to lose its supply of highly-skilled early childhood educators, early learning programs, and affordable child care seats that took years to build, causing a multitude of immediate harms to children and families. Further, without stable child care, the District cannot sustain a functioning workforce or a growing economy.
The Pay Equity Fund and the Child Care Subsidy Program are interdependent pillars of the same nationally-leading early education system; both require full investment to guarantee families can continue to access safe, affordable, and high-quality early learning opportunities for their children. The Council must prevent system collapse and reverse cuts; specifically:
- Restore Pay Equity Fund salaries at $82.2 million, recurring, in addition to preserving the $12 million already budgeted for the HealthCare4ChildCare program. At $82.2 million, the Pay Equity Fund can 1) return to the FY25 early educator salary scale with minimum salaries that achieve parity with DCPS wages, 2) cover anticipated and recent growth in the number of early educators and their credentials, and 3) allow for a modest 2% cost of living adjustment in annual salaries. Full funding requires the Council to adopt a budget with $94.2 million for the Fund, inclusive of salaries, health care, and programmatic administration costs. See Appendix 1 for a breakdown of our Pay Equity Fund ask.
New Mathematica research shows that the Pay Equity Fund delivers a 21% return on the District’s investment with the majority of benefits (78%) flowing to families through more qualified, experienced, and financially stable educators who, in turn, have increased the supply of higher quality early learning seats in the District, all without driving up costs for parents, making the Pay Equity Fund a critical affordability investment for families . Defunding the Pay Equity Fund means educators losing $10,000-$25,000 in wages and it is unrealistic to expect educators to stay in these demanding jobs after suffering such a significant pay cut; it is equally unrealistic for parents to make up the difference in pay if the Fund remains eliminated. Pay cuts will push thousands of educators out of the classroom, forcing programs to close and leaving parents scrambling for care this fall. It is therefore no wonder that 82% of District voters are concerned about budget cuts to early educator pay: voters rightly understand child care is both real education and critical economic infrastructure for working families, neither of which can be sustained without fair pay for the predominantly Black and brown women who make up the ECE workforce. - Add $63.2 million to the Child Care Subsidy Program to eliminate the need for a waitlist in Fiscal Year 2027 and preserve quality-tiered reimbursement rates for child care providers. In total, the budget for the subsidy program must be $177.1 million, funded across OSSE and DHS. See Appendix 2 for a full breakdown of our subsidy funding ask.
The Mayor’s budget seeks to take the District backward by serving just 6,000 children through the subsidy program in FY27, forcing child care programs to operate with high levels of seat vacancies and 2-8% cuts to their already too low reimbursement rates. Currently, more than 7,900 children are enrolled in the subsidy program; by OSSE’s own admissions, we cannot expect the program to shrink to 6,000 children next year through natural attrition necessitating the Council to enhance funding so the program can comply with federal requirements to serve all currently enrolled families through their 12-month eligibility period (see page 30 of OSSE’s Subsidy Policy Manual).
The Council must go further, too, and guarantee all children needing access to subsidized child care can benefit from strong early education foundations. Implementing an enrollment freeze or a waitlist means denying or delaying lower income children early learning experiences that will retrench lifelong disparities in educational, social-emotional, and economic outcomes. A freeze and waitlist also mean financial hardship for families and child care operators. Parents will be locked out of the workforce, unable to plan if or when they can accept a job. Child care operators will similarly be unable to keep classrooms open with empty seats, lost revenue, and budget instability driven by unpredictability in enrollment. Child care is a thin-margin industry, with many providers operating on margins of 1% or less and even small funding disruptions can push programs into insolvency. The only thing the District accomplishes by shutting off access to the child care subsidy program and forcing subsidy-participating providers to close their doors is shifting short term so-called savings into costly long term consequences.
- Ensure the Subsidy Program is Sufficiently Funded to support all currently enrolled children through the remainder of fiscal year 2026. The Mayor’s revised FY26 budget augments subsidy payments to roughly $135 million but our projections – detailed in Appendix 2 – indicate the program may require as much as $148 million, even with a waitlist in place, if pre-waitlist enrollment matches growth trends recorded during the first half of the fiscal year. We urge the Council to press OSSE and DHS for accurate, real-time data on subsidy enrollment and spending to ensure the supplemental budget will fully support all children, families, and providers through September 30, 2026. Underbudgeting for this program will only create further stress, anxiety, and uncertainty for those already being harmed by the implementation of a waitlist.
The Mayor’ budget proposal is a triple threat to child care by creating subsidy vacancies and rate cuts combined with the elimination of the Pay Equity Fund – the DC Council must now make a different choice. Saving the District’s first-rate early childhood education system is an all-hands-on-deck moment and every Councilmember and Committee must do their part. We urge every Council committee to identify $3–5 million in funding within their Committee purview to contribute toward closing the funding gap in the child care subsidy program. And to restore the Pay Equity Fund, and the District’s other budget cuts, every Councilmember must champion new revenue along with smart savings. We look forward to working with you to meet this moment.
Continue to Hold Harmless Investments in Afterschool and Summer Programming
While we appreciate that out-of-school-time (OST) funding in the Deputy Mayor for Education’s budget is maintained for Fiscal Year 2027, we are concerned about $12 million in grant reductions included in the FY28-FY30 financial plan (See page 376 of FY27 Budget Books: Volume 1). Further, after three consecutive years of flat funding for OST grants as costs of running programming have increased, flat funding is effectively a cut. We encourage the Council to consider increasing the OST Office’s grants budget by 10% – approximately $3 million – and to ensure all funding for the OST Office is recurring throughout the financial plan. When grant funding is only available one-time, it creates instability for community-based OST providers and limits their ability to retain staff and expand quality programming to reach universal access for all public school students.
Invest in Youth Experiencing Homelessness
The Mayor’s FY27 budget makes cuts to youth homelessness services that are deeply concerning and counterproductive. The Council must prioritize restoration of $1.5 million for permanent supportive and extended transitional housing programs and restoration of $755,000 for youth transitional housing; restoring the youth transitional housing budget includes restoring funding for workforce development for transgender and gender nonconforming youth who face unique barriers to employment and housing. Transitional and extended transitional housing programs serve youth with the highest needs and always have the longest waitlists, demonstrating unmet need. Service cuts of this magnitude will only deepen youths’ instability and increase long-term spending on more expensive housing, medical, and mental health interventions for years to come. Further, after 5 years of nearly flat funding, the overall budget for the youth homelessness system at DHS should increase by 15% to compensate service providers for inflation and enable them to meet growing needs among youth ages 18-24. In total, we recommend funding the youth system at $28 million in FY27 to ensure all portions of the system can continue to deliver hands-on housing and wrap-around services that meet the needs of youth experiencing homelessness.
Reinstate Two-Gen Supports for New Parents
HealthySteps and New Heights are place-based programs that provide critical support to expectant and new parents as well as their children; the Mayor’s proposed FY27 budget is shortsighted to eliminate funding for programs proven to improve health, education, and social wellbeing of two generations of Washingtonians. HealthySteps co-locates specialized social workers in pediatric care settings to help Medicaid-enrolled families navigate prenatal health, postpartum depression, child development concerns, public benefits, and more. The program has operated successfully in the District since 2018 and serves thousands of children and parents across 8 locally funded sites each year. Similarly, New Heights coordinators leverage their position within DCPS’s central office to support pregnant and parenting students across 14 high schools and two middle schools, keeping young parents connected to school, on track for graduation, and supported with case management to promote positive outcomes for both parent and baby. These programs are transformative for young families and can be restored with just $1.35 million for HealthySteps (DC Health grants) and just $304,000 for 3 New Heights employees at DCPS Central Office.
Reverse Harmful Cuts to the District’s Safety Net
An economically vibrant DC requires economically stable families and communities. Restricting access to public assistance programs when families are facing serious medical challenges, extreme poverty, housing crises, and more will only deepen economic and racial inequalities. That is why DC Action stands in solidarity with our partners in the Fair Budget Coalition and demands the Council fully restore paid family and medical leave benefits ($95M), remove limitations on TANF ($20.5), increase age and income eligibility for the Alliance and Basic Health Plan ($74.3M), invest at least $30M in ERAP, and reverse the many, many other harmful cuts the Mayor’s proposed budget makes to the District safety net. These programs are not optional—they are essential components of a functioning, caring, and equitable city that enable children and families to remain stable and healthy. A budget that leaves our public benefits and safety net in tatters will have cascading, costly consequences across all District communities.
To fund the magnitude of essential programs that must be restored in FY27 – and across the financial plan – DC Action calls on the Council to raise revenue through both wealth taxes and a business activity tax. Closing these loopholes to raise new revenue and strengthen our tax base must be done alongside identifying inefficiency savings, eliminating ineffective giveaways, redirecting reserves, and leveraging revenue already collected through decoupling. All these strategies will be needed to pass a budget that truly reflects DC’s values, enables families to care for their children and themselves, and ensures every young person has the support they need to thrive.
The Mayor’s budget is balanced on the backs of our children, early educators, and families, most of whom are Black and brown and already struggling to make ends meet. The Council must make a different choice. District residents and workers are the true economic engines of this city – only a budget that cares for the people of DC can grow DC. We look forward to working with you to enact an FY27 budget that prioritizes children, youth, families, community, and equity.
Sincerely,
Kimberly Perry
Executive Director, DC Action