District of Columbia
Economy and Revenue Forecast
"What's in Store for the FY 2016 DC Budget?"
Presentation to the DC Fiscal Policy Institute
March 19,2015
Steven Giachetti: Director of Revenue Estimation
Office of the Chief Financial Officer
1
Current State of the District’s Economy
District of Columbia
Labor Markets & Employment

Personal Income
The District’s resident employment in December
2014 was 14,566 (4.3%) more than the same period
last year, measured by the 3-month moving average

The unemployment rate was 7.3% in December 2014,
down from the high of 10.4% in 2011

December 2014 wage and salary employment in the
District was up by 13,433 (1.8%) from one year
earlier, measured by the 3-month moving average
350
339.7
340
345.9
12%
10%
331.5
330
8%
314.2
The District’s per capita personal income was 168.3%
of the U.S. average in 2013

In the quarter ended September 2014, the District‘s
personal income grew by 4.2% and estimated wages
of District residents grew by 4.1%, as compared to
same period one year earlier

Most of the wage increase was due to growth in the
private sector, but federal government wages also
increased for the first time in 2 ½ years.
District Per Capita Personal Income
($ in billions)
(in thousands)
District Employment and Unemployment

$76,000
$72,000
6%
$70,000
310
4%
$68,000
300
2%
$66,000
0%
$64,000
320
311.3
290
2010
2011
2012
DC Resident Employment
2013
2014
Unemployment Rate
$74,480
$74,773
$74,000
$74,513
$69,769
$68,008
2009
2010
2011
2012
Per Capita Personal Income
2013
Source: U.S. Department of Labor, Bureau of Labor Statistics, U.S. Department of Commerce, U.S. Census Bureau,
Bureau of Economic Analysis
2
District of Columbia
Jobs in DC: Year-over-year change (December 2014)
3,033
2,667
2,533
Other Professional and technical
Food service
Retail trade
2,034
Education
1,967
Local government
1,867
Other Business services
766
Employment services
733
Construction
500
Personal and miscellaneous ser.
466
Health
100
Finance
67
Amusement and recreation
34
Information
-100
Other private
-100
Wholesale trade
Legal services
-333
Organizations
-534
Accomodations
-867
Federal government
-1,400
-2,000 -1,000
0
1,000
2,000
3,000
4,000
3
District of Columbia
Jobs in DC, DC suburbs, US: 2-year Trend
4
District of Columbia
Jobs in DC, DC suburbs, US: 10-year Trend
5
Current State of the District’s Economy (Continued)
District of Columbia
Housing / Commercial Office Market


A Diverse Economic Region
The number of single family home sales in CY 2014
decreased by 0.9% and the average sales price
increased 5.6%, as compared to CY 2013

One of the most popular tourist destinations, with
350 historic sites and major cultural attractions

Washington Metro represents the 2nd busiest rapid
transit system in the nation, behind New York City
Subway

Home to many institutions, including over 9 colleges
and universities, more than 50 museums, 206 foreign
embassies, and a number of international
organizations
Direct vacancy rate of commercial office space was
9.7% at year-end 2014, up from 9.6% in 2013
The Housing Market Is Strong and Growing
The District’s Population Has Been Growing
•
9,000
8,000
7,000
$538,400
$601,000 $630,100
$712,800 $748,023
7,466
7,717
6,968
6,269
$800,000
$600,000
$400,000
6,347
6,000
$200,000
5,000
$0
2010
2011
Number of Home Sales
2012
2013
2014
D.C.’s population has grown by 53,904 since 2010
690,000
660,000
646,449
658,893
632,323
630,000
604,989
619,020
600,000
570,000
2010
2011
2012
2013
2014
Average Home Sale Prices
Source: February 2014 Revenue Estimates Certification Letter, U.S. Census Bureau
6
District of Columbia
Outlook and Risks
 National economy. Generally favorable national economic environment—GDP growth has
picked up, and Blue Chip and other forecasts are for stronger growth in FY 2015 and FY 2016.
 Federal government. Most likely will continue to be a stabilizing influence for DC; slower decline
in spending will lessen the negative impact of this sector on DC’s economy.
 Private sector diversification. With the federal government moving to the sidelines, the private
sector is expected to drive job and wage growth in an increasingly competitive national economy.
 Population. Population has grown 9 years in a row, adding 91,757 (16.2%) over that time.
Population growth is set to continue to boost the tax base. The extent of future population growth
depends on job opportunities, the quality of public services, and affordability of housing.
 Stock market. The recent gains in the stock market, which has risen rapidly over the past year,
underscores the importance of national and international capital markets to DC’s tax base.
 Office market. The strength of this sector’s contribution to DC’s tax base growth depends on its
ability to obtain tenants, remain profitable, and attract international investors.
7
February 2015 Revenue Estimate
District of Columbia
Actual
Local Source, General Fund
Revenue Estimate ($M)
December 2014 Revenue
Estimate
February Revision to Estimate
February 2015 Estimate
Percent Change from Previous Year
Estimate
Projected
FY
2014
FY
2015
FY
2016
FY
2017
FY
2018
FY
2019
6,307.4
1.7%
6,577.6
36.5
6,614.0
4.9%
6,829.8
37.3
6,867.1
3.8%
7,047.3
47.7
7,095.0
3.3%
7,332.7
11.3
7,344.0
3.5%
NA
NA
7,576.2
3.2%
8
District of Columbia
Revenue Estimates for FY 2015-FY 2016 ,
Taxes 000s
Preliminary
Estimate
Revenue Source
FY 15
FY 16
Total Property (net)
2,242,095
2,363,301
8.1%
5.4%
1,110,136
1,157,966
6.2%
4.3%
2,172,268
2,267,384
3.7%
4.4%
year-over-year % chg
Total Sales (net)
year-over-year % chg
Total Income
year-over-year % chg
Total Gross Receipts (net)
year-over-year % chg
Total Other Taxes (net)
year-over-year % chg
TOTAL TAXES NET OF DEDICATED TAXES
year-over-year % chg
250,440
0.2%
381,639
256,344
2.4%
375,614
3.3%
-1.6%
6,156,578
6,420,609
5.5%
4.3%
9