DC Council Passes Final FY 27 Budget Support Act

This alert summarizes the BSA’s most significant provisions in five key areas: education, health care, housing, transportation and infrastructure, and the arts.

Education

The FY 2027 budget makes substantial investments in education at every level. The BSA raises the Uniform Per Student Funding Formula — the mechanism through which the District allocates operating funds to both DC Public Schools and public charter schools — to a foundation level of $15,648 per student, a 3.84% increase over fiscal year 2026, driving a total formula-funded budget of approximately $2.66 billion across both school systems.

The budget’s largest single education investment is $73.5 million for the Early Childhood Educator Pay Equity Fund, which supplements childcare teacher salaries to bring them closer to parity with public school educators. The budget also invests in removing the waitlist for the Child Care Subsidy Program and directs DC Public Schools to study the feasibility of establishing early childhood microcenters within school buildings to serve the children of educators and staff.

The budget creates a new Advanced Technical Centers Fund to support open-enrollment sites where high school students can pursue career and technical education while remaining enrolled in their home school. The BSA provides $2.4 million for the Community Schools Grant Program and establishes a task force to recommend how to scale community schools programming District-wide. It also establishes a “Fifty Dollar a Week Pilot Program” to provide direct cash stipends to high school students at high-need schools to assess the impact on attendance and academic achievement.

The budget includes a $1.4 million grant to the Washington Literacy Center for adult literacy and workforce training and a $150,000 grant to train District high school students to become certified nurse aides.

Health Care

The BSA proposes substantial investments in health care access, behavioral health services, and public health infrastructure. The budget restores and expands the DC Healthcare Alliance, a locally funded program providing health coverage to residents who are ineligible for Medicaid or Medicare. Between October 1, and September 30, 2027, the mayor will resume providing the full range of Alliance medical services — including primary care, hospital services, prescription drugs, dental, and vision — for adults aged 21 and older. This restoration is explicitly limited to one fiscal year.

The budget also invests $2.5 million to respond to federal changes that have stripped health insurance subsidies from lawfully present residents and provides $800,000 for grants to federally qualified health centers to care for uninsured patients.

The BSA creates a new 988 Lifeline and Crisis Services Fund, funded by telecom fees, which allocates $2.4 million in its first year for crisis stabilization beds, the Children and Adolescent Mobile Psychiatric Services program, and 988 Lifeline operations. The budget also stabilizes the School-Based Behavioral Health Program with minimum funding levels and uniform clinician standards.

To address high prescription drug costs, the budget establishes “ArrayRx DC,” a drug discount card program giving all District residents, including those without insurance, access to lower-cost medications, with a focus on independently owned pharmacies in underserved areas. The BSA also directs funding for direct medical education at teaching hospitals, invests in prenatal and postpartum remote patient monitoring, and extends Temporary Assistance for Needy Families (TANF) eligibility to pregnant individuals beginning in their second trimester.

Housing

The FY 2027 budget delivers significant new funding and policy changes to housing across the District. The budget invests approximately $28.2 million in fiscal year 2027 and $142.7 million over four years to prevent the loss of up to 1,020 housing vouchers, funds 277 additional vouchers, and requires any vacated voucher to be reissued within 60 days.

The BSA also authorizes a Rent Payment Reporting Program under which landlords would report a tenant’s on-time rent payments to consumer credit bureaus, enabling tenants to build their credit. Tenant participation would be entirely voluntary, but landlords receiving financial assistance from the District could be required to participate as a condition of that assistance.

New tax abatements, including the Workforce Housing Opportunity Tax Abatement and incentives for developments on former federal properties and near Metro stations, aim to spur construction and preservation of affordable rental housing. The Housing Production Trust Fund would require that at least 50% of units in newly funded projects serve extremely low-income households, and the mayor must dedicate 15% of the fund in FY 2027 to preserving existing affordable rental housing.

The budget further funds emergency housing assistance for displaced tenants, expands bridge housing capacity, and restores $3.5 million for community legal services in housing disputes.

Transportation and Infrastructure

The BSA includes several provisions affecting transportation and infrastructure. The budget increases the adult learner transit subsidy from $70 to $100 per month and establishes a new tax abatement for joint development properties near Metro stations on current or former WMATA-owned land.

The BSA extends by three years the District’s fleet electrification deadlines for transitioning government vehicles to zero-emission models. It also establishes an Automated Curbside Management Program using cameras and sensors to manage curbside space and enforce parking and loading zone rules and directs the mayor to install at least three new truck-restricted route enforcement cameras in Ward 5 by September 30, 2027.

Arts and Culture

The BSA makes target investments in the District’s arts and creative economy. The Commission on the Arts and Humanities received $47.5 million from the Local Budget Act, which the Council passed in June. The BSA directs the Commission to issue a $2 million grant to the Ford Theatre, a $100,000 grant to Levine Music for accessible music education, and a matching grant of up to $500,000 to the Woolly Mammoth Theater Company. The BSA establishes an Art All Night Fund with unlimited sponsorship authority and creates the Go-Go Support Program to preserve the history of go-go music. The budget also provides a matching grant of up to $1.5 million for the 2027 National Cherry Blossom Festival and optimizes the Film, Television, and Entertainment Rebate Fund.

The Government Relations group at ArentFox Schiff will continue to monitor the Fiscal Year 2027 Budget Support Act and publish follow-up legal alerts as developments warrant. If you would like to engage in a more detailed conversation about any of the provisions discussed above, please contact your ArentFox Schiff attorney or any of the authors of this alert.