An independent forecast from the Office of the D.C. Auditor finds that job losses, economic uncertainty, congressional spending cuts and plunging commercial real estate values have decreased projected revenue from $12.2 billion to $11.8 billion.
The 3% drop in expected gross revenue for the fiscal year ending Sept. 30 adds to post-pandemic woes that have prompted tax increases and program cuts in recent years.
The $11.8 billion projection from EY/Qualitative Economics and Statistics is slightly above the city’s official February forecast of $11.7 billion for fiscal 2026, but $400 million less than the firm expected in March.
Auditor Kathy Patterson, a former Democratic member of the D.C. Council, said she hopes city lawmakers will consider this downward trajectory as they weigh tax hikes and budget cuts this fall.
“For residents and anyone who might want to advocate for spending for a particular priority, it’s important to understand our revenues are flat,” Ms. Patterson said Thursday in an email. “So if you want to ask your elected officials to spend more on X, where do you recommend that they spend less?”
Her report cautions that the Iran war could hurt D.C. tax revenues even more in the coming fiscal year.
Ms. Patterson said the analysis fulfills her office’s responsibility to certify the estimates of Chief Financial Officer Glen Lee, who decided two months ago not to revise the city’s February numbers.
The office of Mayor Muriel Bowser, a Democrat who leaves office at the end of this year, referred questions to Mr. Lee’s office.
Brianna Jordan, a spokeswoman for Mr. Lee, said the CFO would release a revenue projection on Sept. 30 and “does not explain nor comment on outside studies of the District’s economy and fiscal condition, including those of the DC Auditor.”
“Any questions on the Auditor’s report should be directed to the Office of the DC Auditor,” Ms. Jordan said in an email. “However, please note that the DC Auditor’s report is not the official forecast for the District.”
The office of D.C. Council member Janeese Lewis George, who will likely succeed Ms. Bowser as mayor, did not immediately respond to a request for comment.
Ms. Lewis George, a democratic socialist, won the Democratic primary for mayor in June.
The District’s gross revenue was $12.75 billion in fiscal 2025, which ended last Sept. 30. That’s roughly $1 billion more than either the CFO or auditor expects in fiscal 2026.
The D.C. Council in June approved a $21.2 billion operating budget for fiscal 2027. That’s down from $21.8 billion for fiscal 2026, but uses reserve funds to restore up to $600 million that Ms. Bowser urged cutting from social services.
The council must address a projected revenue deficit of $1.1 billion. Proposed remedies include raising taxes and utility fees, which would add to several years of tax increases.
Factors driving the shortfall include fallout from pandemic-era telework, plunging commercial real estate values and Trump administration cuts to the federal workforce.
Yesim Sayin, executive director of the nonpartisan D.C. Policy Center, said the reports from Ms. Patterson and Mr. Lee agree that the economy is worsening. She noted that private-sector job losses have “really ramped up since January,” severely restricting the city’s revenue base.
“We cannot stop the bleeding of employment losses, and I’m very pessimistic,” Ms. Sayin said. “We are having fewer babies, fewer people are moving into the district, and the job market is continuing to decline.”
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