A New Federal Contribution to the District of Columbia? The Need, Likely Impact, and Some Options

The District of Columbia confronts a significant structural imbalance in its fiscal capacity, due largely to its status as a city without a state and from revenue limitations caused by the federal presence. A compelling solution to this ongoing problem is some form of annual federal contribution to the District. Legislation designed to accomplish this objective, sponsored by DC Congresswoman Eleanor Holmes Norton, has been pending in Congress for several years. David Garrison, Deputy Director of the Brookings Greater Washington Research Program and Ed Lazere, Executive Director of the DC Fiscal Policy Institute, co-authored a paper which reviews the District’s fiscal challenge, discusses the proposed legislation, and considers the likely impact of the federal contribution should it be approved. Garrison and Lazere also describe one possible alternative to determining the size of the annual federal distribution.