Unless Congress acts and the president signs a budget deal, local governments and their constituents could be impacted should the Sequestration Transparency Act of 2012 to go into effect Jan. 2.
A lack of action by the Joint Selection Committee on Deficit Reduction, known as the “Super Committee,” and Congress to enact a plan to reduce the federal deficit by $1.2 trillion, as required by the Budget Control Act of 2011, has triggered The Sequestration Transparency Act of 2012.
The automatic across-the-board budget cuts, known as sequestration, set to take effect Jan. 2, would be "deeply destructive" to national security and core civilian agency programs, according to a comprehensive report issued Sept. 14 by the Office of Management and Budget. See the full report at www.whitehouse.gov/sites/default/files/omb/assets/legislative_reports/stareport.pdf
The $109 billion in cuts coming next year — split evenly between Defense and civilian agency budgets — would slash Defense discretionary spending by 9.4 percent and civilian agency spending by 8.2 percent.
Every agency program not exempt from the cuts would be reduced by those amounts and the report warns this "blunt, indiscriminate" approach to deficit reduction would imperil key defense and civilian programs alike.
The National Association of Counties, known as NACo, is advising its members about how the cuts could impact county programs and services.
Koochiching County commissioners have been discussing how sequestration in preparing the 2013 budget. And International Falls officials point to three area of concern, should sequestration take effect.
Koochiching County
“If they don’t do something — balance the budget or pass legislation so this doesn’t happen, this is automatic cuts,” said Teresa Jaksa, county administration director.
Jaksa said many county services and programs would see funding cuts under sequestration.
“The reason we would be concerned is it cuts Headstart, the child care and development block grants — that’s a big one for Community Services,” she said.
Programs and services that would impact county residents include the children’s immunization program, maternal and child services, breast and cervical cancer screening, senior nutrition, and family violence and substance abuse programs.
While Jaksa said the programs would not be cut completely, they could see deep funding cuts through sequestration.
Earlier this month, the county board agreed to send a letter to the area’s federal delegation seeking support to fund a balanced approach to reducing the federal deficit apart from the act. The board said the act places the needs of the public at risk.
Jaksa said the pending nature of sequestration makes it difficult to plan for the future.
“We don’t know what will happen,” she said. “We put a budget together based on what we know on a given day and the next day that could all change, depending on what is happening in the state and federal governments. This is an example of that.”
But, she said, planning for these kinds of unknowns is not new to counties. She noted that former Gov. Tim Pawlenty’s use of unallotment in years past came in the midst of set budgets, forcing counties to react. “You never know what will happen until they adjourn and we get the paperwork,” she said of the Minnesota Legislature and Congress.
And while the cuts may not directly impact the county budget, the consequences of the cuts could be felt by a need for more county services. While Headstart, for example, is not a direct county service, it is a Community Action Program which helps identify issues that may need follow up. Without the program, more consumers may need county programs to fill in gaps.
Much of the federal funding in question through sequestration comes through the state and CAP agencies. “It will impact someone some way or another — they’re not complete cuts, but they are cuts,” Jaksa said.
International Falls
Cynthia Jaksa, Falls city councilor and chair of the city’s Finance and Legislation Committee, said the city’s concern lies in “three big items.”
A major concern to the city, she said, is grants provided to the Falls International Airport and Essential Air Service funding.
Over the last year, the local airport has received, on average, about $1 million each year since 2006, she said. “Those grants will be cut, and that will impact the airport negatively, along with the EAS funding cut,” she said.
In addition, Jaksa said grant money to the city through the Homeland Security Department that provides money to local law enforcement agencies to assist with border patrol activities would be cut. However, she said, that money has dwindled over time and is expected to end soon.
And while the city receives annual payments from the federal government to lease Voyageurs National Park’s headquarters, owned by the city’s Economic Development Authority, Jaksa said the lease cannot be broken.
“The only way to get out of the lease on their own initiative would be if the federal government actually defaulted on a contract that is in place,s and that is a remote possibility,” said Jaksa, “which is one of the reasons why the city had such a high rank on the bonds issued for the project.”
But Jaksa said she has other concerns outside the city’s governmental operations about sequestration. She said heating assistance and federal pass throughs to the state for education would also be impacted. “The city of International Falls has so much resting in education and social programs,” she said.
The other side of sequestration, Jaksa said, is that “cutting the military budget is way over due,” she said. “That part of sequestration, where they have cuts go to the military is just great.”
Jaksa said she’s optimistic that sequestration will not be put into place.
“The people behind funding the military contracts won’t let it happen, and on the other side it will be so painful to vulnerable people it would be too high a price to pay to get the cuts from the military.”
