D.C. may need to cut $500 million from the budget for the upcoming year if the economic downturn caused by the coronavirus pandemic doesn’t change course.

In a letter Wednesday to Mayor Muriel Bowser and Council Chairman Phil Mendelson, Chief Financial Officer Jeffrey DeWitt described a “worst-case scenario” in which the city sees a half-billion-dollar shortfall. That scenario involves another shutdown for quarantine, a reduction in federal aid, and a lack of any decline in unemployment numbers.

DeWitt previously announced that, based on projections, the city would need to shave some $773 million off its budget for fiscal year 2021, which begins in October. Relying on those projections, the D.C. Council recently approved an $8.5 billion budget for FY 2021. It was the first in a decade to not anticipate revenue increases.

But the projections were conducted at a time of “considerable uncertainty” about the length of the COVID-19 shutdown, the projected level of unemployment, the resilience of local businesses and the amount of federal aid that would arrive.

“An unprecedented level of uncertainty on future revenues still exists due to [these] factors,” DeWitt writes, warning of the need for potential cuts in the future. “The level of continued federal assistance has yet to be determined, concerns exist that reopening plans may be delayed or rolled back, and businesses, particularly in the hospitality sector, continue to struggle.”

In a press conference Wednesday, Bowser said she was briefed on the budget projections last week. She said the fact that estimates for the current fiscal year appear to be on track was “good news.” And she added that DeWitt would like to continue evaluating numbers for FY 2021.

“I don’t think that I’m entirely shocked by the news that we have to watch every bucket of taxes and how those taxes are coming in. And we might expect that every level from property tax, on the commercial side especially, could be affected,” Bowser said. “We will balance our budget … We went through a very intense process to balance ’20 and ’21 very recently, and I dare say that we’ve already cut the low-hanging fruit and into some programs and services that are very important and mean a lot to the prosperity of the District.”

If the worst-case scenario does come to pass, it could lead to tense debates within the Council over how to manage increasing revenue shortfalls. While lawmakers did raise $60 million in new revenue by increasing some taxes for the 2021 budget, the majority of the 2021 budget was balanced by using reserves and freezing salaries for city workers. But another hit to revenues could spark broader conversations about whether raising taxes more broadly — especially on high-income residents — is needed. While progressive activists pushed for that last month, a majority of the Council’s members said they wanted to hold any such increases as a last resort.

DeWitt’s office will provide an updated revenue estimate on September 30.