The Senate stepped closer to cancelling the District of Columbia's attempt to decouple its tax policy from provisions in the One Big Beautiful Bill Act, which several states have already done.
"If Congress believes in democracy, it must trust the people of the District to manage their own affairs," said Del. Eleanor Holmes Norton, the city's non-voting member in Congress via a post on X.
"Interference in locally enacted laws only strengthens the case for D.C. statehood."
Congress's move would result in a $600 million hit to the city's budget.
The House of Representatives has already voted to deny the decouple. A final Senate vote scheduled for today would send the bill to the President's desk while sowing confusion for the city's taxpayers.
"This resolution would literally change the rules in the middle of the game," said Sen. Angela Alsobrooks, D- Md. "Taxpayers have already started filing returns, it would require revising tax forms and systems and could force taxpayers to refile."
Maryland has decoupled from three OBBBA provisions relating to expensing domestic research, modifying the limitation on business interest, and special depreciation allowance for qualified production property.
The legislation re-coupling D.C. is also inspiring opposition on the other side of the Potomac River.
"The District of Columbia elects a city government, a mayor and city council, and we should, in almost all instances, respect the wishes of those who live in D.C. and not impose our values on them," said Virginia's Democratic Senator Tim Kaine.
Virginia decoupled from OBBBA in May 2025 by amending its rules to not conform to any federal tax code amendments enacted on or after January 1, 2025, and before January 1, 2027, unless approved by the Virginia legislature.
Virginia elected Democrat Abigail Spanberger to the Governor's office in
States are allowed by law to ignore federal tax policy as the defections are causing
Washington D.C.'s finances are subject to Congressional oversight which played a major role
The city has lost nearly 25,000 federal jobs due to the Trump administration's efforts to downsize the federal workforce, which is also adding financial strain.
On Wednesday, Washington D.C. Mayor Muriel Bowser's public finance team added flame to the fiscal fire by addressing the City Council with an early warning about her $20 billion budget proposal that's expected in April.
"To be able to continue what we're doing this year next year would require us to be able to increase revenue by $1.1 billion," said City Administrator Kevin Donahue. "That is not the world in which we live in. This is a really hard budget."
Bowser, who has served as the city's mayor since 2015 announced that she is not seeking reelection in 2026.
Del. Norton, who has been the city's non-voting voice in Congress since 1991 will also be stepping down this year.
