Sequester means big hit for education, but other local impacts minimal -- for now
Kevin Osborne, WCPO Digital
6:06 PM, Feb 28, 2013
10:07 AM, Mar 1, 2013
CINCINNATI - Many Tri-State residents won't feel any immediate effects of the massive federal spending cuts known as the sequester begin taking effect Friday.
Mail still will be delivered, food stamps still will be available for the poor and roads still will be plowed if it snows.
But anyone with school age children likely will feel the pinch.
The across-the-board cuts will have a quicker impact on teachers who are employed using some federal funds, meaning layoffs could occur. And some special education and preschool programs would be stopped.
In fact, education is the biggest loser if the sequestration happens. Colleges and universities will face a significant loss of revenue as research grants are stopped.
The sequester is the name given to $1.2 trillion in automatic spending cuts that would occur over the next decade unless Congress and President Obama can agree on an alternate deficit reduction plan.
Of those cuts, about $85 billion would occur this year.
The sequester was conceived in August 2011 in a deal to raise the federal debt ceiling. It was designed as a failsafe option to nudge a bipartisan "super committee" into agreeing to a deficit reduction plan by January 2012.
After the super committee failed to reach a compromise, Congress had a year to come up with one on its own. That deadline also came and went without any consensus.
When it appeared a deal wouldn't be struck in time, Obama signed a resolution extending funding until March 2013 in a high-stakes game of chicken.
Now time has run out and, at least publicly, Obama and Congressional Republicans appear to be at an impasse.
"I don't have an exact number yet, but it would have a very negative impact on our staffing and programs," said Dawn Grady, a spokeswoman for Cincinnati Public Schools.
"We use federal funds to provide most of the programs for our disadvantaged students," she added. One of the programs provides free or reduced price lunches for low-income students.
Of the district's 33,700 students, 73 percent live under the poverty line and qualify for those programs.
Also, the White House has said 350 teachers would lose their jobs across Ohio. Nationally, 10,000 teachers would be affected, along with 7,500 support positions like teacher's aides.
Another sequester casualty will be Head Start early childhood education programs. It offers free preschool education for children ages 3-5.
Locally, the program is operated by the Community Action Agency. It serves more than 3,600 children countywide. Agency officials estimate they could lose about $1.9 million, which means 300 children would be dropped from the program.
"Early childhood education is really critical," said Verline Dotson, Head Start director. "We begin to lay the foundation for learning."
Higher education is also bracing for the impact.
The University of Cincinnati could lose between $10 million-$20 million in federal research grants during the next year.
"We don't have a lot of fat to cut, because we've been trimming for the past decade," said Dr. Steve Strakowski, UC Health's vice president of research.
The 8 percent across-the-board cuts mean it will be harder to get grants and the nation will lose an entire generation of researchers, he added.
Along with some decreases in revenue due to healthcare reform and a drop in philanthropic giving because of the bad economy, all of the revenue streams for UC's College of Medicine are strained.
"My hope is Washington will come to its senses and learn how to work with each other," Strakowski said.
Additionally, about 26,000 civilian employees of the U.S. Defense Department in Ohio would be furloughed indefinitely. Many of those workers are in the Dayton area, and work at Wright-Patterson Air Force Base.
Despite the cuts in defense spending, GE Aircraft Engines in Evendale thinks it can weather the fiscal storm, at least for a year. GE is the world's largest jet-engine manufacturer, and employs about 7,400 people locally.
"We don't expect an impact for the first year because military contracts for 2013 are already on the books," said GE spokesman Rick Kennedy. "After that, we have some concern. We don't know what the impact will be."
In recent years, GE has changed its business so about three-fourths of its customers are from the commercial sector, he added.
Further, GE has no connection to the military project most likely to be cut, the F-35 Joint Strike Fighter. But there are already about 25,000 military aircraft in use that have GE engines, which could be a safeguard for the company.
"We're in a pretty good position because we have a large fleet already in service," Kennedy said. "They're going to need maintenance for those aircraft."
Among the other programs most impacted would be domestic HIV/AIDS services. Nationally, the sequester could mean 424,000 fewer HIV tests will be conducted by the Centers for Disease Control, and about 10,000 people could lose access to reduced price HIV drugs.
Any impact wouldn't be felt until 2014, said David White, community investment coordinator for Caracole in Cincinnati.
Caracole provides services for 1,300 people with HIV or AIDS in an eight-county region across Southwest Ohio.
"For this year, it's already funded but we could be looking at cuts for next year," White said.
Other sectors, however, will have little or no short-term effect from the cuts. For example, county governments are largely unscathed.
"Most of the federal funding we receive is from entitlement programs, which are protected under the sequester," said David Gully, Warren County administrator.
Warren County is the home of House Speaker John Boehner (R-West Chester), who is leading the GOP standoff against Obama.
"Everyone is making a bunch of noise, but no one really knows what is going to happen (long-term)," Gully said.
The county administrator believes anxiety over the sequester is overstated. Gully noted that all Warren County departments were ordered to cut their budgets by 5 percent a few years ago.
"No one argued and they all did it," he said. "There was no noticeable difference in services. I'm not sure what all the fuss is about."
Similarly, Hamilton County Jobs and Family Services said programs like food stamps and Temporary Assistance to Needy Families are secure, at least for now.
"Our operations team has looked at it and they don't expect much of an effect on us," said spokeswoman Bridget Doherty. "All of the public services we provide are held harmless in this. We should be fine."
And, just as the old saying goes, the mail will continue to be delivered.
"The Postal Service receives no tax dollars for operating expenses, and relies on the sale of postage, products and services to fund its operations," said David Van Allen, A U.S. Postal Service spokesman.
"If automatic federal budget cuts go into effect March 1, Postal Service operations will continue as usual," he added. "Post Offices will remain open and employees and suppliers will continue to be paid on time."