area elected officials repeatedly sounded the alarm in recent years that the dysfunction and austerity ruling Congress were hurting the local economy to the point where it lagged behind the nation’s.
Then details of a new $1.1 trillion omnibus spending package came down from Capitol Hill.
The legislation, approved by the House and Senate last week, provides $557 million for a Department of Homeland Security campus in the District, $390 million toward an FBI campus, $154 million for improvements at Fort Meade, $150 million for Metro and $60 million for the Gaithersburg campus of the National Institute of Standards and Technology.
The tax section of the agreement boosts the cap on the transit benefit for federal workers and makes it retroactive by a year. Federal employees also will keep a 1.3 percent raise that President Obama ordered in August.
Money for budget items largely spent in the Washington area is also up. Nearly $24 billion more has been included in the budget for defense, $2 billion more for the National Institutes of Health, $132 million more for the Office of Personnel Management (including $21 million devoted to cybersecurity), and $133 million more for the Food and Drug Administration.
That comes on the heels of a five-year transportation bill that included $6.2 billion for Virginia, $4.4 billion for Maryland and $268 million more for the District, an allocation that could advance infrastructure projects such as reconstruction of Arlington Memorial Bridge.
“It is light years away from the pay freeze and federal government assault that has characterized federal budget spending for the past three years,” said Rep. Gerald E. Connolly (D-Va.). “Regionally, there’s even more, frankly, to crow about.”
D.C. Del. Eleanor Holmes Norton (D) referred to Sen. Barbara A. Mikulski (D-Md.) as a “bipartisan wizard” Friday on WAMU after the retiring senator landed the $390 million for a new FBI headquarters although the General Services Administration has not decided where it will be built.
“I don’t know if I have ever seen anyone ever get money when the decision about the location hasn’t even been made,” Norton said.
Virginia may have suffered more from the across-the-board budget cuts known as sequestration, as well as the 2013 government shutdown, than any other state. From 2010 to 2014, the federal payroll there shrank by $1.16 billion, or 7.5 percent, according to the Virginia Employment Commission. In 2014, the commonwealth posted zero percent economic growth, 48th among states.
Maryland and the District have not been not immune, either, with government contractors cutting back and vacating large amounts of office space, hampering local tax collections.
“One of the most important things to a business is certainty,” Maryland’s business and development secretary, R. Michael Gill, said in a statement. “Having an approved budget package gives Maryland businesses connected to federal facilities greater stability as they look to expand and create jobs.”
During sequestration, the refrain from Virginia Gov. Terry McAuliffe (D) and other local elected leaders was dour: We can no longer count on Congress for economic growth.
But the number of government-related jobs is rising again, said Terry Clower, deputy director of George Mason University’s Center for Regional Analysis. Of the 67,000 jobs added in the area over the past year, he said, 25,000 were in the “professional services” industry, where most government contractors are.
November marked 20 straight months in Virginia of year-over-year employment growth. In the District, the unemployment rate dropped from 7.7 percent in January to 6.6 percent in November.
Clower also said Metro funding could have a “ripple effect”: If service and safety in the system improve, more people will ride. Outside of transit, he said, the spending is not likely to match huge increases seen between 2000 and 2010, and he said he did not know how much of the larger pools of money would be spent locally.
“It doesn’t represent that happy days are here again. The candy shop isn’t open yet, at least not all the way,” Clower said.
Indeed, some of the austerity practices adopted by the president and Congress appear to be here to stay. There is no sign that the GSA will depart from its efforts to put more employees in smaller spaces.
The DHS campus, for instance, will have 12,800 desks for 17,000 employees. The Justice Department occupies more than a million square feet in four locations downtown but will be consolidating into 840,000 square feet in two buildings in the District’s NoMa neighborhood.
An additional 20 million square feet of leases in the area are in holdover, meaning on short-term extensions, and their tenants also could opt for space consolidation, said Sandy Paul, managing director of research for Newmark Grubb Knight Frank.
“I think what may have happened is that some of the members of Congress who had been a thorn in GSA’s side [in relation to spending] realized that doing these short-term extensions was more expensive than long-term planning, which helps create efficiency,” Paul said.
