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Gray: District Feels Chomp of Sequester Cuts

District leaders warned Tuesday that months worth of federal spending cuts implemented under the sequester have begun to outweigh the city’s private sector job growth, and that Washington, D.C., could be headed for revenue decline and further job losses in fiscal 2014.

“The alarm needs to be sounded,” D.C. Mayor Vincent Gray said at his weekly news conference at the Wilson Building, calling on Congress to end the sequester and balance the budget responsibly when members return to Capitol Hill next week. “We’re starting to see some what could be lasting impacts of this.”

Jobs in the District fell from a peak of 736,400 in October 2012 to 731,100 positions in July 2013. Unemployment ticked up slightly in July to 8.6 percent, after hitting a four-year low of 8.4 percent in December 2012, according to Bureau of Labor Statistics data that District officials released.

“We’re calling on the Congress to end sequestration and balance the budget responsibly, certainly not on the backs of the residents of the District of Columbia,” Gray said.

The mayor has no specific approach for lobbying lawmakers, but said he hopes to work with Del. Eleanor Holmes Norton, D-D.C., as lawmakers begin to piece together a federal spending package for fiscal 2014.

“It would be nice if she had a vote to be able to have more influence than she does now,” Gray said. “But no, we don’t have a specific lobbying plan other than continuing to make this type of information known.”

In terms of revenue, officials predicted the loss of $30 million in federal grants and payments in fiscal 2014. For the D.C. Housing Authority, the cuts mean that up to 250 families who would otherwise receive housing vouchers will not. Schools, health clinics and the Homeland Security and Emergency Management Agency will also feel the bite.

The city lost 7,000 government jobs during the first six months of 2013, but its private sector workforce increased by 3,400, growing from 493,200 to 496,600.

Deputy Chief Financial Officer Fitzroy Lee pointed out that “even the private sector job growth, while still positive, has slowed down,” as D.C. feels the multiplier effect of cuts to the federal workforce.

Officials attributed private sector growth to new jobs in retail, hospitality and construction to accommodate the city’s expanding population, as well as their five-year economic development strategy.

Gray declined to comment on how the city’s goal of creating a “retail-friendly environment” might be effected by his decision on a D.C. Council bill that would require some large retailers, including Wal-Mart, to pay their employees wages and benefits of $12.50 per hour. The mayor received the bill last week and is allowed 10 days to decide whether to sign or veto it.