Tuesday, October 01, 2013

Impact of Federal Shutdown on Prince George's County

Statement from County Executive Rushern L. Baker, III
Federal Government Shutdown

Upper Marlboro, MD – Tonight, Prince George’s County Executive Rushern L. Baker, III released the following statement prior to the October 1, 2013, federal government shutdown:

“Once again, the citizens and economy of Prince George’s County are put at risk over political gamesmanship on Capitol Hill.  The Prince George’s County government, like all local and state governments and citizens around this nation, count on certainty and clarity from the federal government. By shutting down federal government operations, Republicans in the House of Representatives have made it clear that they would prefer to throw the livelihoods of millions of Americans, including many Prince Georgians, into turmoil in order to make a political point.

The support that the County receives to fund services for our children, elderly, veterans and those most in need will be impacted.  16% of Prince George’s County’s workforce is employed by the federal government and thousands more benefit either directly or indirectly from federal government employment and spending.   10% of the jobs located in the County are federal jobs. Ultimately, the County’s AAA bond rating may be at risk, which would affect the services the County provides and subsequently hampering our economic development, progress, and job creation efforts. 

On behalf of nearly 900,000 Prince Georgians, I urge an immediate solution to avoid this shutdown.  Congress cannot and should not create this unwanted and unneeded damage to our families, our economy, and our nation.”    

Impact of Federal Government Shutdown
Prince George’s County Facts

Income Tax Impact
  • Approximately $3 billion in Federal spending on salaries and wages in the County annually.
  • Assumptions:
    • 260 work days per year (52 weeks x 5 days per week)
    • $3 billion – federal salaries – County residents – annually
    • 70% of gross wages = Net Taxable Income
    • 3.2% = County income tax rate
  • Based upon the above assumptions, the Federal government spends $12 million each work day to County residents in salaries and wages ($3 billion / 260 work days).
  • Accordingly, each day that the Federal government shuts down without paying employees will cost the County approximately $270,000 in income tax revenues ($12 million x 70% x 3.2%).
  • The impact of Federal shutdown on County income taxes will be minimal.  For example:
    • 5 days without pay = $1.4 million in lost income tax revenues
  • As a point of reference, the County collects approximately $500 million annually in income tax revenues.
Other Federal Facts
  • Approximately $14 billion in Federal spending annually in the County
  • Approximately $5 billion annually in Federal procurement spending in the County
    • Each day that the Federal government shuts down without paying contractors/vendors will cost businesses $19 million
  • Approximately 10% of the County’s jobs are federal jobs
    • Approximately 27,400 out of 299,000 total jobs in the County
  • Approximately 16% of the County’s civilian employed population 16 years of age or older are Federal employees
    • Approximately 71,800 out of 447,800 total civilian employed population

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