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Sequester Cuts Sting Local Agencies
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The first round of budget cuts known as sequester has tightened the coffers of many federal agencies, but may not be as devastating as first thought. As the new federal fiscal year approaches in October, some city officials work to maintain what they provide citizens; as businesses, universities and social service agencies brace for more changes.
Early on mandated 10% budget cuts known as sequestration were expected to produce dramatic changes in the way government operates with possible program cuts, job losses and furloughs.
“They will hurt our economy. They will add hundreds of thousands of Americans to the unemployment rolls. This is not an abstraction. People will lose their jobs,” according to President Obama.
But some organizations and government agencies appear to be absorbing some of the cuts, at least for now. They worry however about what might happen if cutbacks continue into the new federal government fiscal year that starts October 1st.
A machine seals the individual meal servings for the Meals on Wheels program. Lifecare Alliance runs the program. It’s CEO, Chuck Gehring says his agency has maintained the number of clients it serves with help from the city, but there won’t be enough money to pay for all of the needed meals this fall unless Congress acts.
Gehring explains Meals on Wheels gets $2.60 per meal. Sequester cuts of 5.8% would mean a loss of $138,000 or 55,000 meals. If all of the money is taken from the Meals on Wheels program during the last part of this year, up to 800 current clients may not get their dinner.
“A lot of us have kept these programs going because we don’t want to turn these people away. But folks at holiday time this year, there’s going to be people turned away throughout the United States and right here in Ohio,” says Gehring.
Gehring says that between 2008 and 2012 the number of clients LifeCare Alliance serves grew by 50% to 15,000. After the latest census the agency received a boost in funding.
“We deliver over 1.3 million meals a year total out of this agency. We have to be able to make those and get those out. And I can tell you we do that at a very reasonable cost,” says Gehring.
Headstart programs also face potential cuts.
Federal funding stayed the same for the new fiscal year that started this month at the Child Development Council of Franklin County. Spokeswoman Anita Davis says the agency will again receive $21 million dollars in federal money. Davis says that no one will be dropped however; nearly 200 children will not be added.
Davis says the sequester cuts could have been worse, but the administration planned ahead.
“There’s no increase in administrative costs. We have not received any pay increases. We’re not buying any extra supplies, materials that we would not have already been planning to order to operate for the new year,” says Davis.
In Whitehall, about 9,000 federal workers started one day a week furloughs at the Defense Supply Center last week. Mayor Kim Maggard says that will add up to a loss of more than $500,000 in income taxes this year or about 2% of its budget. Maggard says the city has cut capital improvements, water and sewer projects. Travel expenses are restricted, and no money is being spent on new vehicles. Next year she says will be harder.
“If you cut a half a million dollars or more every year then something has to give. And most of the time, unfortunately it’s going to be services or personnel and personnel definitely do give services, so it’s definitely going to hit,” says Maggard.
Sequester cuts are also felt on campus. Ohio State University received about $360 million in federal research grants this year. Vice President for Research, Caroline Whitacre says the first round of sequester cuts totaled $7 million, but she fears deeper cuts if congress keeps the sequester beyond this year.
“I was projecting a $13 million hit to our research bottom line. The fact that it’s 6 to 8 is better than I was expecting. But I’m worried that year 2 is going to be greater than year 1, and year 3 is going to be greater than year 2,” says Whitacre.
Federal stimulus money increased research funding at OSU during the past four years. But, figures provided by Ohio State shows a steady increase in federal funding even without the 180-million dollars in stimulus. Since 2008, OSU’s federal research budget has increased by 49 million dollars.