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President Donald Trump’s administration is directing federal agencies to develop plans to move offices away from the D.C. area.
By April 14, agencies must submit proposals for “any proposed relocations of agency bureaus and offices from Washington, D.C., and the National Capital Region to less-costly parts of the country,” according to a memo from senior officials released Wednesday.
Trump also signed an executive order requiring agencies to compile a list of their real estate holdings and identify any leases eligible for termination.
“We’re cutting down the size of government. We have to,” Trump said during the first Cabinet meeting of his second term. “We’re bloated. We’re sloppy. We have a lot of people that aren’t doing their job.”
The civilian federal workforce — excluding military personnel and postal workers — consists of about 2.4 million people. Roughly 20% of those employees work in D.C. and the surrounding states of Maryland and Virginia.
“Federal workforce employment represents about 25% of the total employment of D.C.,” said Lucy Dadayan, principal research associate with the Urban-Brookings Tax Policy Center, a nonpartisan think tank in D.C. that analyzes current and longer-term tax issues.
It also represents about one quarter of D.C.’s gross domestic product, the total value of all goods and services produced by the city.
If agencies move away, “there could be a broad impact,” Dadayan said.
There would likely be an increase in office space vacancies and a decrease in overall consumer spending, sales tax revenue and income tax revenue.
According to Dadayan, that “could translate into property tax revenue declines, particularly for commercial property taxes, but also on residential property taxes, because if people who lose their jobs are unable to find employment in the DMV area, they could potentially migrate to other states for employment.”
All of that would potentially lead to budget shortfalls for local governments.
“Even a 10% reduction in workforce could lead to substantial hardships for the DMV area,” Dadayan said.
Wednesday’s memo from the Trump administration directs agencies to submit their plans for a reduction in force by March 13, which would not only lay off employees but eliminate their positions altogether.
Thousands of probationary employees have already been fired, and now the Republican-led administration is turning its attention to career officials with civil service protection.
Labor unions, Democratic state leaders and other organizations have tried, with some success, to slow Trump down with litigation, while Republicans are growing more concerned about how a slash-and-burn strategy could affect their constituents.
The Associated Press contributed to this report.
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