District feels economic impact of partial federal government shutdown

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Metro is losing $400,000 or more per day in ridership and parking. Photo credit: Matthew Henry

The country sees the effects of the partial government shutdown in so many ways: stories of individuals working without compensation or furloughed and unable to make mortgage and rent payments; in parks and museums unavailable to the public; or even in an inability to register services from the simplest of resources, like the Do Not Call list.   But the District of Columbia, specifically, is facing the effects of the federal government’s inoperation with serious consequences throughout the regional economy.

According to a recently released report by D.C.’s Chief Financial Officer, the Capital City faces roughly $40 million in revenue loss — $85 million if the shutdown continues until February 15th — as a result of reduced business activity, tourism, tax withholdings, and deferred lost wage income. 

The city originally saw less severe effects. Shutdown’s impact was lessened in the weeks immediately following December 22nd as many federal employees were already on vacation and tourism is generally slower, but now that the ordeal has reached historic length, analysis of economic activity and tax revenues related to it have D.C.’s leadership calling for action.

“The impact of the federal shutdown spreads far and wide within our community,” said Anthony Williams, CEO and Executive Director of the Federal City Council.

The Chief Financial Officer’s report states that of the approximately 102,000 furloughed employees of federal agencies in the D.C. area, about 37,750 are District residents.  15,750 are affected in non-profits or as government contractors.  This adds up to about 18% of the District’s population being directly harmed by the shutdown.

“Fortunately, we have managed our finances effectively and built up strong cash reserves… [but] if this shutdown continues, at some point, the projections will become more dire and it will impact the services we provide to our residents,” Mayor Muriel Bowser said.  But “it’s not just federal workers and their families who are impacted… It is restaurant workers, child care providers, hair salons, and so many others.”

Kathy Hollinger, President and CEO at the Restaurant Association Metropolitan Washington confirms that restaurants are taking a hit.  “Our local restaurants have reported a 20% average decrease in sales with some losing as much as 60% in sales,” she reports. 

“Small businesses that lease space in and around office buildings are already suffering,” said Margaret ‘Peggy’ Jeffers, Executive Vice President of the Apartment and Office Building Association of Metropolitan Washington.

Tourism — a $7.5 billion industry for D.C. — is obviously negatively affected; and Metro is losing $400,000 or more per day in ridership and parking, according to a letter the agency sent to the region’s U.S. Senators.

Even while the D.C. government is stepping up to assist impacted residents and families, city leadership, alongside Congresswoman Eleanor Holmes Norton, can do little more than vocally demand an end to the partial shutdown.

All proposals to end the conflict have resulted in Congressional stalemate.  Creative solutions to combat D.C.’s escalating shutdown impacts are being considered.  Congresswoman Eleanor Holmes Norton held an emergency town hall on the topic this week, and Council Chair Phil Mendelson has convened a working group to help identify areas for relief that have not yet been addressed.