Sequester effects could be wide-ranging locally

Officials still unclear on extent and harm of cuts
Mar. 06, 2013 @ 05:01 AM

Despite much hand-wringing across the nation about spending cuts put in place by the recent sequester, local officials still don't know what the exact repercussions will be.

"We're still trying to work it out. ... None of that's been communicated down to us," Lee County Manager John Crumpton said when asked how federal budget cuts, triggered March 1 after the U.S. Senate and House of Representatives were unable to reach a compromise to avoid the sequester, would hit the county's programs and personnel.

Crumpton said the county's health and social services departments would be hit the hardest, but that nothing would likely change until the next fiscal year begins in July. The county's departments have already begun submitting their budget proposals for next year, he said, so any funding changes that come down — whenever they do finally come — will probably only be applied to next year's budget.

Where the cuts could hit especially hard, according to other officials, is in education. Lee County Schools Superintendent Jeff Moss said teachers and teachers' assistants might have to be laid off, and Central Carolina Community College President Bud Marchant said many students could be at risk of losing financial aid.

Every elementary school in the county receives special federal funding known as Title I funding, which is sent to high-poverty schools to help hire teachers and assistants; Moss said the only education cuts from sequestration are to Title I and programs for students with disabilities. He said that while an unknown number teachers or assistants might have to be laid off, any cuts to disability programs would have to be picked up at the local level because of federal regulations requiring such programs.

Like Crumpton, Moss — who is negotiating a contract to become superintendent in Beaufort County, S.C. and likely will have resigned his Lee County position by the start of the next fiscal year — said any cuts won't be felt locally until next year's budget, and that there's still no telling how drastic they might be.

"When you read what they're saying in Washington (D.C.), they don't even know what it's going to be," Moss said.

At CCCC, Marchant said the main threat will be to the 40 percent of students receiving financial aid. Most of them, he said, receive federally funded Pell Grants that could be targeted for cuts.

Besides possibly having to pick up part of the tab for disabled student services, the county could be hit by school issues in at least one other way. Crumpton said that in addition to health and social services, the other major, direct effect from the sequester for the county government might be increased interest payments on bonds it took out to fund the recent construction at Lee County High School. He said those interest payments now receive a federal reimbursement that could be adjusted or done away with completely.

The City of Sanford could also be forced to pay more on bond interest payments, Mayor Cornelia Olive said.

"We got municipal bonds to do our waste water treatment plant, and we got these wonderful, low interest rates because we had such a good presentation that showed our economic stability," she said. "Well, all bets are off when it comes to something like (the sequester)."

Bob Bridwell, Sanford-Lee County planning director, said his department gets many federal grants to help with community development. However, all current projects with federal funding already have their funding set, he said, so local development would only be affected if the cuts continued for years into the future.

Broadway Town Manager Bob Stevens said the town doesn't have any federal bonds, grants or other funding sources that would be hurt by the sequester. But with indirect effects like possible cuts to law enforcement grants, he said, it's still possible that the town could be impacted in other ways.

Crumpton also said the county as a whole could be indirectly harmed through a loss of tax revenues and tax base. Especially with a second round of debt ceiling talks looming in the near future, he said, many business owners don't feel comfortable in the current economic environment — in which the federal government has relied entirely on temporary budgets known as continuing appropriations resolutions for years.

"It just creates uncertainty," he said, later adding: "You'd think that at some point, Congress and the president would figure out how to pass a budget."