News & Politics

Local Officials Detail Shutdown Impacts as Federal Fight Nears End

With Congress apparently closing in on deal to restart the government, local leaders say the shutdown has dealt a serious economic blow to the Washington area.

The so-called "Big Four" of local government: Montgomery County Executive Isiah Leggett, Fairfax County Board of Supervisors Chair Sharon Bulova, Prince George's County Executive Rushern Baker, and DC Mayor Vince Gray. Photograph by Benjamin Freed.
Economic activity has been down all over Washington during the shutdown (except, of course, at the bars). As the end of the shutdown seemed to come into view Wednesday afternoon, Mayor Vince Gray and his counterparts from Fairfax, Montgomery, and Prince George’s counties gathered at a joint press conference today to grouse about the hammering the area has taken in the past 16 days.
Altogether, the District, Maryland, and Virginia are missing out on $217 million a day in lost or deferred wages to federal employees and contractor. The District alone is losing $44 million a week in economic activity, and $6 million in tax revenue.
Hotel bookings in the first week of October dropped by about 13,000, or 8.3 percent, from the same period in 2012; restaurants recorded a similar drop. In total, losses sustained by the hospitality industry have cost the District about $2 million in revenue, Gray said.
Even if Congress settles its fight, the economic fallout may continue for some time. According to Sharon Bulova, the chairwoman of the Fairfax County Board of Supervisors, the roughly 25,000 federal employees in her county have been losing up to $150 million a day in income collectively. She also noted that funding for the Women, Infants, and Children nutriton service is running out, potentially affecting more than 12,000 low-income Fairfax County residents.
“People and businesess are uncertain about the economy,” Bulova said. “They’re uncertain if people will be able to go to work tomorrow.”
Prince George’s Executive Rushern Baker said that 16 percent of his county’s workforce is employed by the federal government, amounting to $270,000 in lost income tax revenues for each day of the shutdown.
Gray also used the summit to remind people of the shutdown’s unique effect on the District. With its budget subject to federal oversight, and thus jammed up by Congress, the DC government has been forced to operate off a contingency fund which is now down to about $30 million. That fund, though, has not covered payments the District owes to Metro, Medicaid providers, and nonprofit organizations that serve low-income residents.
City lawyers and budget officials are still determining if DC can tap some of its other reserve funds to keep going, though with the shutdown apparently nearing its end, that review might be unnecessary.
As Gray, Bulova, Baker, and Montgomery County Executive Isiah Leggett lamented the shutdown’s effects on their jurisdiction, Senate leaders announced a plan that will get the federal government running again and push the debt ceiling to February while making minimal changes to the Affordable Care Act. Even with a settlement to the impasse finally in sight, the press conference still provided the local officials to bash the dysfunctional Congress.
“The inaction is killing us,” Bulova said. “What is happening in Congress is just irresponsible.” But, she said, even if the shutdown ends tonight, local governments will not be able to recoup much of the lost economic activity.
As for the increased bar activity in DC, Gray said “I won’t try to speculate why.” A spokesman for the mayor says beverage sales increased by 3 percent—nearly all of it from liquor—during the first week of October over the first week of September.

Staff Writer

Benjamin Freed joined Washingtonian in August 2013 and covers politics, business, and media. He was previously the editor of DCist and has also written for Washington City Paper, the New York Times, the New Republic, Slate, and BuzzFeed. He lives in Adams Morgan.