The District could be looking at a net gain of millions of dollars for city coffers from President-elect Barack Obama’s weeklong inaugural celebration — even as Del. Eleanor Holmes Norton asks America’s taxpayers to pitch in more.
The latest inaugural cost estimate is $25.9 million, according to D.C. sources, citing numbers emerging from the office of City Administrator Dan Tangherlini. The District has $15 million to spend, courtesy of the federal government, for the inaugural and other upcoming events, such as World Bank protests and the Right to Life March.
Norton wants her congressional colleagues to have their constituents at least double that. D.C. leaders, meanwhile, are quietly optimistic that a multimillion-dollar windfall is coming from the estimated one million to five million visitors who will flock to the District next month.
“The federal government must bear 100 percent of the expense for a federal event — that has always been the rule,” Norton told The Examiner. “My only concern this time is that the expenses clearly are beyond any amount ever allocated for an inauguration.”
D.C. Chief Financial Officer Natwar Gandhi did not add an inaugural “bump” into his bleak fiscal 2009 revenue forecast released in September, said David Umansky, Gandhi’s spokesman. His projection resulted in a $131 million budget shortfall that the D.C. Council closed last month.
Past inaugurals have proven fruitful for the nation’s capital, but officials are reticent to predict what Obama’s massive celebration will bring and how it might affect the District’s struggling bottom line. And it would be “dangerous” for the District to tout what may be an economic windfall while simultaneously lobbying Congress for millions to pay for the inauguration, said one aide to Mayor Adrian Fenty.
“It’s going to be one hell of a weekend,” the aide said, “but I can’t blame them for being cautious.”
Statistics from past inaugurals indicate that D.C.’s bottom line is in line for a healthy boost.
In the first two quarters of the nine inaugural years since 1970, sales tax revenues jumped an average 16.9 percent, according to statistics from Gandhi’s office. And in those years, bars and restaurants weren’t operating 24 hours a day, as they may in 2009.
The 17 percent sales tax revenue jump in the first two quarters of 2005, the last inaugural year, meant an extra $50.3 million in tax revenues for the city. No one can predict a similar haul in 2009 given the weak economy, but for every 1 percent in bonus sales tax intake over last year, the city would reap $3.5 million.
Hotel tax collections soared to $60.6 million between November and March of fiscal 2005 — a period that included President Bush’s second inaugural — $12.6 million more than the same two quarters in fiscal 2004. Hotel occupancy, usually down in January, jumped to 95 percent the night before Bush’s 2005 inauguration, said Rebecca Pawlowski, spokeswoman for Destination D.C.
An even higher percentage of the city’s 29,000 hotel rooms is likely to be taken from Jan. 17-21, with each room averaging roughly $600 a night.
“I think there is some optimism but at the same time you have to recognize it’s one time revenue,” said Council Chairman Vincent Gray.
