The District of Columbia is 75% registered Democrats. Residents expect a robust local government that provides many services to many people. That is their right and they’ve voted into office a group of candidates who execute on that mandate. Economic Growth DC exists to raise awareness of the fact that it is private sector economic activity that generates the tax dollars that pay for these robust government services. Local policymakers, in their zeal to provide new services, sometimes forget that the private sector is the straw that stirs their drink.
There has been much hoopla around the District’s roughly $400 million budget surplus. The CFO’s office has not broken down where that surplus comes from. Our guess is that it is primarily the result of increased commercial property tax collections. The District has the second most expensive commercial rental market in the country, behind only midtown Manhattan. It is likely that commercial real estate is in a bit of a bubble and we do not expect these surpluses to continue on their own. At 2.19% for the last decade, economic growth in the District is too low accommodate all of our spending ambitions over the long term. The rate of growth of the District’s economy must reach the 4-5% level and stay there in order to maximize the tax revenues that allow us to maintain and expand District government services. Without that level of growth there will be difficult choices ahead.
Economic Growth DC exists to promote policies that will set the stage for the private sector to achieve 4-5% growth.