structural:summarization, quality:corruption, structural:scholar_edition, information:filtering
Budgetary issues

The mayor and council set local taxes and a budget, which Congress must approve. The Government Accountability Office and other analysts have estimated that the city's high percentage of tax-exempt property and the Congressional prohibition of commuter taxes create a structural deficit in the district's local budget of anywhere between $470 million and over $1 billion per year. Congress typically provides additional grants for federal programs such as Medicaid and the operation of the local justice system; however, analysts claim that the payments do not fully resolve the imbalance.

The city's local government, particularly during the mayoralty of Marion Barry, has been criticized for mismanagement and waste. During his administration in 1989, Washington Monthly magazine labeled the district "the worst city government in America". In 1995, at the start of Barry's fourth term, Congress created the District of Columbia Financial Control Board to oversee all municipal spending. Mayor Anthony Williams won election in 1998 and oversaw a period of urban renewal and budget surpluses.

The district regained control over its finances in 2001 and the oversight board's operations were suspended.

The district has a federally funded "Emergency Planning and Security Fund" to cover security related to visits by foreign leaders and diplomats, presidential inaugurations, protests, and terrorism concerns. During the Trump administration, the fund has run with a deficit. Trump's January 2017 inauguration cost the city $27 million; of that, $7 million was never repaid to the fund. Trump's 2019 Independence Day event, "A Salute to America", cost six times more than Independence Day events in past years.