Washington DC could lose $6 million a week in shutdown

WASHINGTON (Reuters) – A shutdown of the federal government would cost the U.S. capital city from $1 million to $6 million in lost tax revenue each week, according to Washington, D.C., Chief Financial Officer Natwar Gandhi.

In a letter on Wednesday to the city council, Gandhi wrote that the impact of the federal government suspending operations if Congress cannot reach a budget deal “depends in large measure on the conditions that would apply to such a shutdown.”

“District revenue losses would obviously be greater if employees were not reimbursed for lost wages (income taxes would go down) or if agency contracting expenditures were permanently lost,” Gandhi wrote.

“However, some losses cannot be made up — expenditures by federal workers commuting to work or by tourists who decline to visit D.C. if the museums are not open.”

Washington, D.C., is in the unique position of being a city without a state, and its budget is tied to the federal government. Like many states, it also faces the threat that a prolonged shutdown could damage its tenuous fiscal situation.

In past shutdowns more than 15 years ago, federal workers were ultimately reimbursed for days they could not work. Contractors were not. Meanwhile, major draws for tourists, such as the Smithsonian Institution’s museums, were shut and travelers and their spending money stayed away.

Already, the annual Cherry Blossom Festival, currently in full swing, is monitoring how a shutdown could impact many events. The parade for the festival, which attracts visitors from around the world, will likely take place this weekend as scheduled.

The Republican-led House of Representatives will vote on Thursday to postpone a possible shutdown of the U.S. government for at least a week by passing a short-term funding measure, House Speaker John Boehner said on Wednesday. The stopgap could face troubles in the Senate, where Democrats are demanding a bill to fund the government for the rest of the fiscal year.

(Reporting by Lisa Lambert, additional reporting by Andy Sullivan; Editing by Andrew Hay)

Washington DC could lose $6 million a week in shutdown