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Record Washington Snow Costs U.S. Taxpayers, Local Businesses
Bloomberg


Catherine Dodge and Kate Andersen Brower Catherine Dodge And Kate Andersen Brower – Thu Feb 11, 12:00 am ET

Feb. 11 (Bloomberg) -- The blizzard and record snowfall that brought the U.S. capital to a standstill is costing taxpayers about $100 million each day the federal government is shut.

Near-whiteout conditions left federal offices closed for a third straight day yesterday, and last night the Office of Personnel Management announced the shutdown remains in effect for today. The office estimates that each day the government closes results in a loss of about $100 million in productivity and other costs.

Washington yesterday broke its annual snowfall record. The nation’s capital received at least 9.8 inches (24.9 centimeters), pushing the seasonal total to 54.9 inches, which breaks the old mark of 54.4 set in 1898-99, according to the National Weather Service in Sterling, Virginia.

The storm was the second for Washington in less than a week; 20 inches of snow fell over the weekend.

Many government employees are working, even as their offices have been officially closed.

“Employees either telecommute or bring work home,” said Steve Ellis, vice president of Taxpayers for Common Sense, a Washington-based watchdog group. “Not being in the office doesn’t necessarily mean not being productive.”

Essential employees report to their offices and critical work is completed, he said.

“The country can get by a few days without people manning the offices and the phones, but I imagine if it went much longer we would start to run into problems,” Ellis said.

‘Cost of Doing Business’

The government shutdown “is a cost of doing business,” Robert Bixby, head of the Washington-based Concord Coalition, a nonpartisan budget watchdog group, said. “What are they supposed to do, bring people in and get them killed on the roadways?”

Washington’s electric supplier, Pepco, a subsidiary of Pepco Holdings Inc., pulled its crews off the streets yesterday because of unsafe conditions, according to the company’s Web site. Washington’s Dulles International and Reagan National airports were closed yesterday.

Even the U.S. Postal Service suspended delivery during the blizzard, and city snow plows were pulled out of service during whiteout conditions, the local ABC station reported on its Web site.

Peter Morici, an economist at the University of Maryland in College Park, said the government closure won’t have a big effect.

“The checks will still be written, the money will be spent and tax revenue will be collected,” he said

Won’t Lose Customers

“The federal government isn’t going to lose customers to anybody,” he said. “It isn’t like the Japanese government is going to get the sales.” Any work that isn’t finished this week will just get made up later on, Morici said.

Although the shutdown is bad news for restaurants that cater to government workers, the local economy isn’t likely to take a big hit because the money is spent elsewhere, such as in hardware stores on salt, shovels and other tools, he said.

“This is a great inconvenience, but for the losers, there are winners,” Morici said. “It tends to even out.”

One of the losers yesterday was the Old Ebbitt Grill in downtown Washington, across from the U.S. Treasury Building. Just a handful of customers were trickling into the normally bustling restaurant, said manager Jenna Velella.

“We’re kind of known as the power-lunch place in the area,” she said. With all the government workers, attorneys and lobbyists snowed in, there was little action.

‘A Lot Quieter’

“When they aren’t here, it’s definitely a lot quieter,” Velella said. In the five years Velella has been at the restaurant, she said she’s never seen it as slow as it’s been the past couple of days.

Barbara Lang, president of the D.C. Chamber of Commerce, said the snow and the double whammy of the government closure is “disastrous” for small stores and restaurants downtown.

She estimates losses in the millions of dollars for these businesses. “You’re not going to make up five or six days of activity,” she said. “That money is just gone.”

Some businesses took advantage of the bleak weather.

The Dupont Hotel hosted an “ice bar,” serving beer, malts and Irish coffee outside on Feb. 6, a Saturday. The hotel made twice as much money at the bar than it would have on a normal weekend day, said Aaron Gillespie, director of sales and marketing.

‘A Wash’

Gillespie said the money he’s making on food sales -- and the fact that most hotel occupants can’t leave -- make the blizzard “a wash” for business. The people who were going to check out aren’t leaving and the people who were going to check in can’t get into town, he said.

Vida Fitness, a three-floor gym and spa in Washington’s Chinatown, stayed open from 9 a.m. to 5 p.m. yesterday seeking to capture business from cooped-up city dwellers.

David von Storch, president and founder of three Vida Fitness gyms in Washington, said while attendance is down 50 percent, he’s winning a lot of “positive PR points” with customers.

“You can only stay inside so long before you get cabin fever; the gym is an outlet to blow off some steam,” he said.

Von Storch also owns three Capital City Brewing Company restaurants, two in Washington D.C. and one in northern Virginia, where business isn’t doing so well.

“We are getting slammed,” he said. “We’ve lost $250,000 in sales since Saturday and there’s no way to make the money back from the meals we’ve lost, so we’re just going to have a bad quarter.”

Civil Rights Leaders

At the White House, even with most staff staying home, President Barack Obama’s schedule went on as planned yesterday. Obama met to discuss job creation for about an hour with civil rights leaders including Al Sharpton and Benjamin Jealous, the president of the National Association for the Advancement of Colored People.

“We were glad the president, even on this day of a blizzard, decided to have the meeting and be so open and free with his time,” Sharpton told reporters outside the West Wing after the meeting while holding an umbrella and standing in a driving snow.

“I would say good afternoon, but it’s cold out here,” Jealous said.

To contact the reporters on this story: Catherine Dodge in Washington at cdodge1@bloomberg.net ; Kate Andersen Brower in Washington at kandersen7@bloomberg.net .

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