The Fiscal Year 2026 budget and four-year financial plan that was proposed just over a month ago created an avalanche of threats to the physical, emotional, educational, and financial wellbeing of working families with children. The DC Council was able to buffer the budget against many of the worst of these threats, but work remains to be done as the DC Council now advances the FY26 budget to its second and final reading on July 28th. Here are the toplines you need to know about following the DC Council’s initial FY26 appropriations votes:
Good News First:
Supporting Youth Experiencing Homelessness: Mayor Bowser’s FY26 budget had proposed extreme cuts to housing and workforce services that create long-term stability for some of the District’s most vulnerable young people. Fortunately, due to the advocacy of the Youth Economic Justice Coalition, the DC Council not only reversed those cuts, but they also made a one-time enhancement to grants for organizations operating permanent supportive and extended transitional housing for youth ($1.5M in reversed cuts and enhancements); the DC Council also reversed cuts ($600K) to a successful grant program that helps transgender and gender nonconforming youth experiencing homelessness develop workforce skills and gain exciting career pathways. The Budget Support Act also advances a law requiring the Department of Human Services to execute grant agreements and payments quicker which will improve the financial stability and quality of direct service providers.
- Preserving Out-of-School Time (OST) Opportunities: The Mayor’s proposed budget guaranteed level $27M funding for OST grants, ensuring more than 17,000 children and youth will continue to have safe, enriching after school and summer programming. Thanks to the steadfast advocacy of the DC Out-of-School Time Coalition, the DC Council also secured a commitment from the Deputy Mayor for Education and DCPS Chancellor to continue absorbing the facility costs associated with the use of DCPS buildings for community-based programming.
Related, the DC Council’s budget restored funding for the community schools program which provides wraparound services and enrichment to youth and families with acute need. Most community schools program operators are also OST operators so the restoration of funding helps ensure providers maintain funding.
- Sustaining a Comprehensive Early Childhood Health and Education System: Despite public promises to protect early childhood investments, Mayor Bowser’s fiscal year 2026 budget proposal failed to fully fund core early childhood programs that young children, families, and the early childhood workforce depend on. Fortunately the DC Council was responsive to many of the concerns raised by members of the Under 3 DC Coalition and was able to secure one-time increases of $4 million for the Pay Equity Fund, $15 million for the child care subsidy program, $200,000 for CFSA home visiting programs, and $300,000 for Nurse-family partnership home visiting models (recurring enhancement). Early childhood and maternal health programs like HealthySteps, Healthy Futures, Help Me Grow, and other home visiting programs maintained level funding in the Mayor and Council’s budgets.
- Enabling Economic Stability: The Mayor’s budget proposed devastating cuts to numerous programs District families depend on for financial and housing stability, including TANF, ERAP, rapid rehousing, safe shelter options for families, paid family and medical leave, the child tax credit, baby bonds, and more. The DC Council was able to lessen some of these harmful choices, many only for a year though; even in a tight budget year, the DC Council must still go further to meet the needs of District families. Notable improvements the DC Council made at first budget votes this week:
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- $6.6 million enhancement to the Emergency Rental Assistance Program (ERAP), an important but still insufficient investmen
- $7.5 million added for housing vouchers for families to ease exits from rapid rehousing coverage
- Benefits for paid medical and family caregiving leave were reinstated, along with the weekly pay benefits of DC’s Paid Family Leave program
- Protections against congregate shelter for families were partially restored. Learn more and take action with our partners here.
- Removal of time limits and work requirements associated with Temporary Assistance for Needy Families (TANF) and reinstatement of TANF benefits’ cost-of-living adjustment for FY26.
- Restores $304,122 to fund three coordinator positions at DCPS to support the New Heights program, which provides critical support for student parents across the District to stay connected to school, graduate, and plan for college or career.
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- Maintaining Health Care for Kids: In an effort to reign in spending pressures, the Mayor proposed major Medicaid and Alliance changes to DC’s public health insurance programs, removing coverage and treatment services for thousands of lower income and immigrant individuals and families. The DC Council was able to increase eligibility for the DC Health Care Alliance to cover immigrant youth up to age 26, from age 21 as proposed by the Mayor, and reinstate annual and virtual recertification rules, reducing burdens and risks associated with the Mayor’s planned rollbacks. While helpful, the DC Council’s efforts do not go far enough to truly protect the health of all families and communities.
What’s Still Needed
Short of raising revenue, the DC Council has limited options to resolve the glaring budget gaps that remain for FY26 and beyond. Still, DC Action and our allies continue to urge the DC Council to use all options available to them to pass a budget rooted in racial equity that meets the needs of working families. We are specifically concerned about:
- $6.6 Million Gap for the Early Childhood Educator Pay Equity Program. Without additional funding, the Pay Equity Fund will not be able to pay all educators commensurate with their credentials or enroll new educators or facilities in the program, risking workforce retention, program quality and affordability. We are additionally concerned that the four-year financial plan still maintains elimination of the Pay Equity Fund in FY27 and beyond, a drastic setback to all the achievements of the District’s early education system.
- $5-$20 Million Gap for the Child Care Subsidy Program. The District is poised to spend more than $120 million on subsidized child care this year, based on need, yet the Mayor’s budget only proposed $86 million for the subsidy program. Without additional investment, the District will not be able to afford to support new families seeking child care or make full or fair payments to child care providers.
- Federal Uncertainty for Out-of-School-Time Grants. Annually, the District of Columbia receives more than $6.5 million in grants supporting afterschool and summer programming for more than 6,800 youth. If the Federal government withholds these resources, District leaders must take urgent action and use local dollars to replace that loss. If parents can’t count on afterschool programs, they can’t work; and if kids can’t count on afterschool programs, they lose out on critical safe spaces and experiences for personal growth.
- Limiting Access to Comprehensive Health Care: Some Medicaid enrollees are at risk of losing access to dental, vision, and behavioral health benefits services as they are forced to quickly transition to a Basic Health Plan on the DC Health Care Exchange. DC Health Care Alliance participants will also lose health plan coverage as well as other specialty care coverage in the coming year, and all current Alliance participants over the age of 26 will lose health insurance coverage entirely after FY27. This is just plain wrong.
We will continue to urge the DC Council to maintain the important restorations and additional investments they have made in working families to date and to go even further before final votes. One way to close the remaining funding gaps is by asking District residents with the greatest wealth to contribute more so that all DC residents have the opportunity to thrive. The top 5% percent of households in the District of Columbia stand to get $568 million in federal tax cuts, annually, from the tax bill just adopted by Congress. By adjusting our local tax code to account for these giveaways, we can restore and strengthen critical services and programs for working families.
Let’s not let up. It’s not over until the final vote on July 28th. Please continue making personalized phone calls, emailing, and visiting your ward and at-large Councilmembers. Raising our voices right now is needed and can be more powerful than ever.