Washington, D.C., Mayor Muriel Bowser unveiled her economic growth agenda for the country’s capital as part of her priorities for the District of Columbia’s fiscal 2026 budget.
The mayor has announced plans to surge educational spending in the new budget, proposing a $123 million increase over the last fiscal year. Last month, she unrolled a package centered on childcare and early learning programs that would funnel $19.5 million for Washington’s Pre-K Enhancement and Expansion Program, $86 million for the D.C. Child Care Subsidy Program, and $70 million for the Early Childhood Educator Pay Equity Fund.
On Monday, Bowser continued to unpack the 2026 budget, focusing on the economy and calling on the City Council to pour funding into downtown D.C., sports, entertainment, and tech industries. The mayor also called for repealing a controversial tipped wage law that has been heavily criticized by restaurants.
“I want Washingtonians to know that this growth agenda is about our future. In FY26, we’re not standing still; we’re being bold and making catalytic investments that will bring new jobs and new revenue into DC,” Bowser said in a statement. “We know that our economy is shifting, and we know the challenges we are facing. Thousands of Washingtonians have already been impacted by those challenges. This is a budget that recognizes that we can’t just sit on our hands and hope something changes – we’ve got to make change happen.”
The proposed investments include $34.8 million to improve public spaces and “attract people from the National Mall to downtown,” $171 million for improvements to Capital One Arena, $500 million for changes to Robert F. Kennedy Memorial Stadium, and $2.4 million to launch a Technology Ecosystem Fund, which would fund business accelerators and incubators for start-up tech companies in D.C.
Also on Bowser’s agenda is the repeal of Initiative 82, a measure passed by district voters in 2022 that required bars and restaurants to pay tipped employees the full minimum wage instead of relying on customer tips to make up the difference.
Before the initiative passed, D.C. employers were not required to pay restaurant workers the minimum wage, which is set to reach $17.95 per hour in July. Instead, restaurants were allowed to use employee tips to cover the difference between their baseline wage and D.C.’s minimum wage.
Initiative 82 overhauled the system, requiring that the tipped wage credit system be phased out by 2027 and mandating that the base minimum wage for tipped restaurant employees be increased to $12.00 per hour by July 1, 2025.
Bowser revealed Monday that under her 2026 budget, she will move to repeal I82, as well as install three tax-free holidays for restaurants.
“If restaurants close, there are no jobs,” the mayor warned.
Her words come as a number of restaurants have shuttered their doors in recent days, citing I82 as one factor.
Haikan, a popular restaurant in the district, became one of the latest to close last month. On social media, it posted that “the challenges of food costs, Initiative 82, and the economic climate in the city brought us to this decision.”
Bowser’s efforts to repeal I82 could face hurdles in the City Council. D.C. Council Chairman Phil Mendelson has signaled opposition to a repeal, although he suggested he could be persuaded if Bowser wins over other council members, per 51st News.
The district has warned it is facing a roughly $1 billion shortfall after a recently passed federal spending deal reverted the local D.C. government’s 2025 budget to 2024 spending levels.
While the Senate passed a bill resolving the funding gap, the legislation has yet to be pushed forward by House Majority Leader Mike Johnson (R-LA), who is facing opposition over the matter from fiscal hawks in his conference.
Bowser initially said she would not roll out her fiscal 2026 budget proposal until Congress passed a solution to the 2025 debacle. However, last month, the mayor announced she would take action on her own to address the $1 billion budget cut. In a letter to Congress, Bowser revealed she was using a 2009 statute to boost the 2025 budget’s shortfall by nearly $700 million. The city is still facing approximately $400 million in current budget deficits.
Bowser has pinned some of the blame for her city’s economic situation on the Trump administration’s move to slash the federal workforce through Elon Musk’s Department of Government Efficiency. However, she has remained largely amicable to the president, highlighting hopes that his back-to-the-office push for government employees could bring workers back to downtown D.C.
“With the city facing economic uncertainty caused by a shrinking federal presence, including the possible loss of 40,000 jobs, the Mayor’s budget invests in a bold, proactive growth agenda to attract new businesses, create new jobs, generate new tax revenue, and quickly grow the local economy,” she said Monday.
BOWSER PROPOSES $123 MILLION INCREASE IN SCHOOL FUNDING AS DC MAKES BUDGET CUTS
Trump has praised Bowser for sealing a deal with the Washington Commanders to take over the old RFK Stadium site. The move will boost economic development, the president said in a post to Truth Social last month, “creating more Jobs and, hopefully, leading to less Crime in the area.”
Bowser appeared with Trump in the Oval Office on Monday as the president announced that D.C. would host the 2027 NFL Draft for the first time in over 80 years.
