It could be two years before D.C. recovers from most of the economic impacts of the Covid-19 pandemic, according to a newly released budget forecast by D.C. Chief Financial Officer Jeffrey DeWitt.
The District expects to lose as much as $721 million in revenue by the end of this year, largely due to the loss of sales tax from the hospitality industry, DeWitt said Friday. The federal aid currently provided — significantly less than what the city had hoped to get because the first federal stimulus bill deemed it a territory rather than a state — will not offset the revenue loss, he said.
The outlook right now assumes that D.C. will lose some $3.2 billion in revenue by the end of fiscal 2024, with the biggest revenue loss, at $773.6 million, projected for fiscal 2021.
Indeed, he painted a bleak picture of the District’s finances, which he said have been essentially turned upside down. Wages, which were expected to grow 4%, are now expected to drop 1% this year and rise by only 0.6% next year. Unemployment is expected to rise by 5.1%, with an expected 93,000 jobs lost from January through July, mostly in the hospitality sector.
