DC Mayor Muriel Bowser joined FOX 5 to discuss budget, tax increases

A slightly higher sales tax in the district could raise millions of dollars - some of it earmarked to address D.C.'s growing homelessness issue.

Mayor Muriel Bowser joined FOX 5 Friday to talk about that and other local issues.

Bowser said that the city has a pretty significant rainy day fund that can be used as funding for projects revenue could not be collected for. She said the fund could also be used to keep the government running for up to 45 days.

"We also have a gap this year, "she said. "The fiscal year starts October 1st, and what that gap means - our CFO who is independent from the mayor - estimated that the revenue we have coming in for next year is actually lower than our expected expenditures by about $190 million."

"So that's what we've been doing the last 90 days, closing that gap. Working with the council - working with the public - and working with my agency heads to make sure we can close that gap while, at the same time, making the key investments the district residents expect."

One of the big headlines regarding the city's financial situation is the possibility of raising the city's sales tax from 5.7 5% to a flat 6%.

Bowser said that she would like to continue to support a lower sales tax rate, however, a budget gap makes it necessary to explore all options.

"We have a gap and we have additional needs. I hear from people all over the city, members of the council - that they want to change direction with how we approach homelessness. They want to change direction with how we invest in our affordable housing. So in order to do that, we had to put all options to the table."

Bowser say the new sales tax rate will allow D.C. to expand their base and hopefully avoid adjusting income tax rates.

"Let's be clear, we're not talking about a big increase in sales tax," Bowser said. "Everybody in Maryland and northern Virginia pay it right now. When they come into the District of Columbia it wouldn't represent a big difference for when they're buying lunch or going out to dinner."

Bowser said parking taxes at parking garages will possibly allow the city to forgo raising fares on the Metro system.

Mayor Bowser also said changes are in store for the city's streetcar plan and on Monday, she will join the Nationals to throw out the first pitch on opening day!