#2016 blizzard

By Katherine Shaver and Paul Duggan, Washington Post, January 30, 2016

As the Washington region continues to dig out from the Blizzard of 2016, the storm is revealing its economic force--on stores that closed for days, hotels stuck with empty rooms and government agencies left with steep snow bills.

State and local governments say they won’t know their full costs for several weeks, after they’ve cleared all the snow and tallied contractors’ bills along with overtime pay for police, firefighters and public works employees. Federal officials say they expect it will take several months to determine Snowzilla’s full national economic impact.

But some experts say a storm that paralyzed airports, transit systems, highways, businesses and school systems along the East Coast for an entire weekend and much of the business week will cause significant financial damage.

“The potential for this storm to be a billion-dollar weather disaster is pretty high,” said Paul Kocin, a National Oceanic and Atmospheric Administration meteorologist who has written about the economic impacts of major weather events. “Any storm that affects 30 million to 50 million people over several days has got to have a huge economic impact.”

An analysis by Moody’s estimates the economic cost of the blizzard in terms of lost productivity and spending at $2.5 billion to $3 billion.

Moody’s estimated that losses in the Washington region were roughly $570 million through Monday. That’s about a quarter of the total economic activity for the three-day stretch that began the first day of the storm. By contrast, losses in the New York metropolitan area were about 7 percent of the region’s economic activity, which translates to roughly $460 million.

Hans Bruland, general manager of the Hay-Adams in downtown Washington, said his hotel lost four days’ worth of business meetings, social events and hotel guests. He declined to share a dollar figure.

“Some of it gets rebooked, but some of it gets lost for good,” Bruland said. “When you have the city and the airports shut down, and the federal government shuts down and the transportation systems shut down on top of it--it impacts everyone.”

Metro General Manager Paul J. Wiedefeld said the transit agency, which shut down for two days and restored service only gradually after the storm, lost “close to about $7 million” in fare revenue and incurred “several million dollars” in other expenses.

Metro’s financial staff is still adding up costs in case the agency becomes eligible for federal disaster relief. Expenses included hiring contractors to remove snow, paying employees overtime and putting up scores of Metro workers in hotels during the storm.

“It’s going to be a substantial number,” Wiedefeld said. “I don’t know exactly what it’s going to be, but with these things, once the meter starts running, it runs pretty hard.”

Virginia Gov. Terry McAuliffe (D) said shortly after the cleanup began that the storm was costing the state $2 million to $3 million an hour, and that it could end up being one of the most expensive in the state’s history, topping $100 million. That’s about half the Virginia Department of Transportation’s annual snow-removal budget.

George Mason University economist Stephen Fuller said that even one of the biggest snowstorms in the Washington region’s history probably won’t cause a significant economic ripple in the long term. That is because so many workers in the region’s knowledge-based economy could work on a home computer, no matter how much snow fell.

Much of the big-ticket consumer spending that didn’t happen was simply deferred, he said. People who couldn’t visit snowy auto-dealer lots last weekend will resume their car hunt another weekend, he said.

“Most of the economy just got disrupted,” Fuller said. “People still got their work done, or a lot of it will get done by the end of the year.”

Even so, Fuller noted, there will be financial winners and losers. Plenty of stores and restaurants, particularly smaller businesses and those in car-dependent suburbs, have felt the hit of closing for several days.

On the other side, he said, grocery and liquor stores profited from people stocking up on bread and booze before the storm. Anyone with a truck bed and a plow blade had plenty of work, while restaurants and bars that could stay open in the city and walkable neighborhoods reported brisk business.

Out-of-town visitors who were trapped here spent money on hotels and restaurants that they otherwise would not have. Fuller noted that even an uptick in “happy activities” during snowstorms--think of the traditional baby boomlet nine months after people hunker down--will generate economic activity in the long term.