Introduction

The U.S. Constitution provides Congress with plenary legislative authority over the District of Columbia (DC) as the federal capital. With the passage of the District of Columbia Self-Government and Governmental Reorganization Act of 1973 (Home Rule Act; P.L. 93-198), Congress granted DC limited home rule authority and empowered DC residents to elect a mayor and city council. Congress retained its authority to review and approve all DC laws, including DC's annual budget and capital budget.¹ In addition to its budget authority, generally, Congress annually appropriates a series of federal payments to DC for a variety of purposes, funded through the Financial Services and General Government (FSGG) appropriations bill.²

The provisions in annual federal appropriations acts related to the DC budget typically include the following three components:

• 1. Federal payments for specific purposes;³ 
• 2. Approval, disapproval, or modifications to DC's operating budget;⁴ and
• 3. General provisions pertaining to fiscal, budgetary, and policy directives, controls, and restrictions.⁵

District of Columbia Budget Process

The DC Home Rule Act codifies the process by which the Executive Office of the Mayor and Council of the District of Columbia (DC council) develop DC's operating budget. Under this process, the mayor establishes a proposed budget, consistent with guidance on funding levels from the DC Chief Financial Officer. The mayor's budget also considers agency requests and other analysis by the Executive Office of the Mayor.

The DC council serves both oversight and deliberative legislative functions related to the budget process. Each DC council committee holds performance review hearings and budget hearings for each agency under its jurisdiction. Committees compile information and recommendations from this oversight process into committee reports, which provide the basis for the development of a unified balanced budget at the council level.⁶

As required by the Home Rule Act, the DC council must approve a budget within 70 days after receiving a budget proposal from the mayor.⁷ The budget consists of a federal portion and a local portion, which are adopted by the DC council in two separate bills. Once approved, the mayor transmits the federal portion to the President, who forwards it to Congress for review, possible modification, and approval through the annual appropriations process. The local portion is submitted by the chair of the DC council to the Speaker of the House of Representatives and the President of the Senate, for review by Congress.⁸

Since the passage of P.L. 109-115 for FY2006, DC appropriations have been included in a multi-agency appropriations bill. In FY2006 and FY2007, DC appropriations were included in Transportation, Treasury, Housing and Urban Development, the Judiciary, the District of Columbia, and Independent Agencies appropriations bills (P.L. 109-115 and P.L. 110-5, respectively). Since FY2009, DC appropriations have been included in the Financial Services and General Government appropriations bill (FSGG). Before FY2006, DC appropriations were provided by the House and the Senate in a stand-alone bill.

Local Budget Autonomy

Prior to 2013, Congress reviewed and approved the DC local budget through the federal appropriations process. Some DC political leaders had expressed concern about the effect of delays in the annual appropriations process on the ability of the DC government to manage its affairs and deliver public services. In 2013, DC enacted the Local Budget Autonomy Amendment Act of 2012 (D.C. Law 19-321).⁹ The act amended DC's home rule charter to allow for enactment of DC's local budget after a 30-day congressional review period (also known as the layover period), similar to most other DC laws.¹⁰ The DC Board of Elections placed the proposed charter amendment on an April 23, 2013, ballot. DC voters approved the local budget autonomy charter amendment with 83% of the vote in support of the amendment. The act faced legal and federal legislative challenges.¹¹ A 2016 DC Superior Court ruling upheld the act.¹² The DC government has observed the act in its budget process since 2016.¹³ Congress has continued to include language in continuing budget resolutions allowing DC to expend local funds on programs and activities included in its general fund budget (revenues generated by DC), and has continued to authorize the DC budget in appropriations acts.

FY2023 Appropriations of Federal Payments for the District of Columbia

The President's FY2023 Budget Request

On March 28, 2022, the Biden Administration submitted its full FY2023 budget request. The President's proposed budget for federal payments to DC was included in an appendix for Other Independent Agencies.¹⁴ The Administration's proposed budget included $773.9 million in federal payments to the District of Columbia for activities including, but not limited to, court services, offender supervision, and public defender services.

District of Columbia FY2023 Budget

On March 16, 2022, the DC mayor submitted a proposed budget to the DC council.¹⁵ The council approved a budget of $19.6 billion on May 24, 2022, and transmitted it to the mayor on July 5, 2022.¹⁶ The mayor signed a version of the budget on July 13, 2022.¹⁷ The mayor transmitted the federal portion of the DC budget to President Biden on August 1, 2022.¹⁸ Also on August 1, 2022, the DC council chair submitted the local budget to the Speaker of the House and the President of the Senate for congressional review, in accordance with the Local Budget Autonomy Amendment Act of 2012 (D.C. Law 19-321).¹⁹

Congressional Action

The House Financial Services and General Government Appropriations Act, 2023 (H.R. 8254), was marked up in subcommittee on June 16, 2022; marked up in full committee on June 24, 2022; and reported (H.Rept. 117-393) on June 28, 2022. On July 26, 2022, the House passed a version of the FSGG appropriations bill in Division D of H.R. 8294.

The Senate Committee on Appropriations did not hold hearings on the FY2023 budget request for federal payments for DC before the beginning of FY2023. However, the committee chair released a draft bill and draft explanatory statement on July 28, 2022.²⁰

Continuing Resolution

On September 30, 2022, the President signed the Continuing Appropriations Act, 2023 (P.L. 117-180).²¹ Section 132 of the Act provided congressional approval of the DC government's general fund budget and capital budget for FY2023.

Full-Year FY2023 Appropriations

Full-year FY2023 FSGG appropriations were enacted in Division E of H.R. 2617, the Consolidated Appropriations Act, 2023. The President signed the bill into law on December 29, 2022, as P.L. 117-328. Title IV, Division E of the act included $791.9 million in federal payments for DC. Table 1 details the FY2023 proposed and enacted amounts of federal payments for the District of Columbia, as compared to the FY2022 enacted amounts.²²

General Provisions: Key Policy Issues

Generally, FSGG appropriations acts include a series of general provisions pertaining to federal payments and other sources of DC budgetary funding. These provisions can be grouped into several distinct but overlapping categories, with the most predominant being provisions related to fiscal and budgetary directives and controls. Other provisions include administrative directives and controls, limitations on lobbying for statehood or congressional voting representation, congressional oversight, and congressionally imposed restrictions and prohibitions related to social policy. The following sections provide an overview of some proposed and enacted provisions restricting or prohibiting the use of federal and/or local funds for particular local social policy initiatives in DC.²³

Abortion Services

The use of public funding for abortion services in DC is a perennial issue debated in Congress during annual deliberations on DC appropriations.²⁴ President Biden's FY2023 budget request did not include any provisions that would restrict the use of funds by the DC government for abortion services.²⁵ The House-passed version and the Senate Committee Chair's draft did not include limiting provisions related to abortion. As enacted, Division E, Title VIII, Section 810 of P.L. 117-328 prohibits the use of any funds by the DC government to provide abortion services, with certain exceptions, stating:

No funds available for obligation or expenditure by the District of Columbia government under any authority shall be expended for any abortion except where the life of the mother would be endangered if the fetus were carried to term or where the pregnancy is the result of an act of rape or incest.

DC Voting Representation in Congress

For several years, the general provisions of annual appropriation acts have prohibited the DC government from using federal or local funds to lobby for voting representation in Congress, including statehood.²⁶ P.L. 117-328 Division E, Title VIII, included three specific provisions in sections 802, 804, and 806(a) limiting this type of activity:

• 1. SEC. 802. None of the Federal funds provided in this Act shall be used for publicity or propaganda purposes or implementation of any policy including boycott designed to support or defeat legislation pending before Congress or any State legislature.
• 2. SEC. 804. None of the Federal funds provided in this Act may be used by the District of Columbia to provide for salaries, expenses, or other costs associated with the offices of United States Senator or United States Representative under section 4(d) of the District of Columbia Statehood Constitutional Convention Initiatives of 1979 (D.C. Law 3–171; D.C. Official Code, sec. 1–123).
• 3. SEC. 806. (a) None of the Federal funds contained in this Act may be used by the District of Columbia Attorney General or any other officer or entity of the District government to provide assistance for any petition drive or civil action which seeks to require Congress to provide for voting representation in Congress for the District of Columbia.

These provisions were included in the Biden Administration's proposed budget.²⁷ The House-passed appropriations bill and the Senate Committee Chair's draft did not include such limiting provisions.

Needle Exchange

Addressing the spread of HIV and AIDS among intravenous drug abusers has been a policy issue of ongoing debate in congressional appropriations for DC.²⁸ Some appropriations acts have included provisions to prohibit or restrict the use of funds to establish a needle exchange program designed to reduce the spread of HIV and AIDS among users of illegal drugs.

The prohibition on the use of both federal and local funds for a needle exchange program was first approved by Congress as Section 170 of the District of Columbia Appropriations Act, 1999 (Division A of P.L. 105-277). The FY1999 act did allow private funding of needle exchange programs. The Financial Services and General Government Appropriations Act, 2008 (Division D, Title VIII of P.L. 110-161) contained language that further modified the needle exchange provision included in previous appropriations acts. This act allowed the use of local (but not federal) funds for a needle exchange program, a provision that has been continued in subsequent fiscal years. Under the Consolidated Appropriations Act, 2010 (Division C, Title VIII of P.L. 111-117), the provision was further modified to prohibit the use of federal funds in locations deemed by local professionals in public health or law enforcement to be "inappropriate" for needle exchange.

The President's FY2023 budget would continue a provision restricting the use of federal funds for the distribution of needles or syringes "for the purpose of preventing the spread of blood borne pathogens in any location that has been determined by the local public health or local law enforcement authorities to be inappropriate for such distribution."²⁹ The House-passed appropriations bill and the Senate Committee Chair's draft did not include limiting provisions related to needle exchange programs in DC. Section 807 of P.L. 117-328 Division E, Title VIII, continued the provision restricting the use of federal funds for this use, as stated below:

None of the Federal funds contained in this Act may be used to distribute any needle or syringe for the purpose of preventing the spread of blood borne pathogens in any location that has been determined by the local public health or local law enforcement authorities to be inappropriate for such distribution.

Schedule I Substances

Several general provisions included in appropriations acts have restricted or prohibited the DC government from implementing local laws related to the legalization or decriminalization of schedule I controlled substances, including marijuana.³⁰ These provisions have varied depending on the legislation that they were designed to restrict, ranging from legalization to decriminalization of such substances for medical or recreational purposes.³¹

In 2014, the DC council passed the Marijuana Possession Decriminalization Amendment Act of 2014.³² The act decriminalized the possession of small amounts of marijuana by making such activity a civil violation subject to a civil fine of $25.³³ The act went into effect in July 2014. Also in 2014, almost 65% of DC voters voted to approve Initiative 71 to legalize the possession, growth, and exchange of certain amounts of marijuana among individuals aged 21 and older in DC.³⁴ Subsequently, the Consolidated and Further Continuing Appropriations Act, 2015 (P.L. 113-235) included a general provision prohibiting the use of funds contained in the act to carry out such laws or regulations. Similar provisions have been included in subsequent appropriations acts. In November, 2020, approximately 76% of DC voters voted to approve ballot Initiative 81, to decriminalize some psychedelic plants and fungi.³⁵

The President's FY2023 budget included provisions that would continue to prohibit the use of federal or local funds to enact or implement the legalization or decriminalization of schedule I substances.³⁶ The House-passed appropriations bill and the Senate Committee Chair's draft did not include limiting provisions pertaining to the legalization of schedule I substances. As enacted, Section 809 of Title VIII of Division E of P.L. 117-328 continued the provision prohibiting the use of federal and local funds for the legalization or decriminalization of schedule I substances in DC, as stated below:

(a) None of the Federal funds contained in this Act may be used to enact or carry out any law, rule, or regulation to legalize or otherwise reduce penalties associated with the possession, use, or distribution of any schedule I substance under the Controlled Substances Act (21 U.S.C. 801 et seq.) or any tetrahydrocannabinols derivative.

(b) No funds available for obligation or expenditure by the District of Columbia government under any authority may be used to enact any law, rule, or regulation to legalize or otherwise reduce penalties associated with the possession, use, or distribution of any schedule I substance under the Controlled Substances Act (21 U.S.C. 801 et seq.) or any tetrahydrocannabinols derivative for recreational purposes.

Concluding Observations

Congress maintains plenary authority over DC legislation and budgets, as granted under the U.S. Constitution. The general provisions in annual appropriations legislation described above are one mechanism by which Congress has exercised its authority. The Home Rule Act also establishes a mechanism by which Congress may review and disapprove of most laws enacted by DC before they take effect.³⁷

Some Members of Congress have proposed legislation that would modify the role of Congress in passing local DC laws. For instance, in the 118^th Congress, Delegate Eleanor Holmes Norton introduced the District of Columbia Legislative Home Rule Act (H.R. 268), which would amend the DC Home Rule Act by eliminating a process of congressional review for legislation passed by the DC council.

Other proposed legislation related to voting representation in Congress for DC residents would also likely change the role of Congress in local legislation and policy decisions. For information on selected recent proposed legislation, please see CRS Insight IN11599, District of Columbia Voting Representation Proposals in the 117th Congress, by Joseph V. Jaroscak.