From Washington to Whitehall
City leaders: Sequestration could devastate local economy
Few local budgets would be as devastated as Whitehall's if a caustic and partisan impasse in Washington regarding automatic spending cuts isn't resolved by March 1.
About 65 percent of Whitehall's annual income tax revenue is derived from the approximately 9,000 civilian and military employees at Defense Supply Center Columbus, 3990 E. Broad St.
The nearly 5,000 civilian employees are divided among four agencies: the Defense Information Systems Agency, Defense Logistics Agency, Defense Finance and Accounting Agency and the Defense Contract Management Agency. About 4,000 employees of the Department of Defense are housed at the base. Combined, DSCC is the largest single-site employer in central Ohio, according to Whitehall Mayor Kim Maggard.
"I'm very much worried about the impact this could have on our city," Maggard said.
If no agreement is reached before midnight March 1, automatic across-the-board spending cuts, known as "sequestration," are to begin, affecting every branch of the federal government in the result of furloughs for the ensuing six months.
Whitehall auditor Dan Miller said a six-month furlough of employees, at one day each week, would equate to a loss of $1.2 million in income tax revenue for the city. The city receives about $1 million of income tax revenue each month, Miller said. A four-day workweek would cut such funding by 20 percent, or a $200,000 loss each month.
Last year, the city's total income tax revenue was $21.1 million.
Whitehall officials said they expect a four-day workweek at DSCC in the event of a furlough.
John Forman, a public-information officer at DSCC, said Feb. 20 that employees were to be furloughed one day per two-week pay period.
"Sequestration would have a devastating effect not only on Whitehall but nationwide and (would) throw the country into a full recession," said Maggard, who also called attention to the domino effect of such a practice.
Whitehall businesses, particularly restaurants and retail stores, depend upon discretionary spending of the federal employees at DSCC.
Maggard alluded to the personal effect furloughs would have on the financial obligations of the DSCC employees, as well as reductions in public service and threats to the public safety stemming from the furlough of federal employees.
If furloughs are implemented, Maggard said, the city would make up the lost revenue through a combination of its own spending cuts and by borrowing against the city's cash reserve.
Among the earliest casualties would be abandonment of the city's project to build a community center on the site of a former U.S. Army Reserve Center.
"We would also cut training and travel," said Maggard, eliminating any plans for directors to attend conferences and seminars.
Capital improvement projects also would be reconsidered, as well as the purchase of new equipment, including vehicles.
"We would have to look at every little thing," Maggard said.
Patty Viers, president of the American Federation of Government Employees Local No. 1148, which represents the 4,000 Department of Defense employees at DSCC, addressed council members Feb. 19.
She recounted the dedication of the employees and appealed to the public to call their representatives in Congress and "demand and end to the gridlock (and) meaningless, petty and divisive misconduct."
The furloughs would go into effect unless President Barack Obama and Congress agree to rescind about $85 billion in automatic spending cuts to go into effect March 1. The impasse is rooted in the general reluctance of Republicans to raise taxes and the general reluctance of Democrats to reduce such entitlement programs as Social Security or Medicare.
U.S. Rep. Joyce Beatty (D-Jefferson Township) represents Whitehall residents. Via email Feb. 21, in response to a question about the status of discussions and possible local effects of federal spending cuts, told ThisWeek the House and Senate leaders "are having discussions and understand that looming cuts will impact the lives of Americans."
"I am hopeful sequestration will be reconsidered in order to avoid drastic cuts, loss of pay and reductions in services," Beatty said.
Alluding to not only cuts at DSCC but also to those at Ohio State University for research and development and to Franklin County agencies for such programs as Head Start, Beatty said, "Sequestration is not a responsible way to govern. It's time for a long-term fiscal fix that allows this county to move forward and stops temporary measures that hurt so many when the clock runs out on stop-gap measures."
Beatty said she is meeting with individuals and organizations on how sequestration could affect her constituents and has arranged for her staff to meet with DSCC employees. She also is preparing remarks to deliver in Washington concerning the local effect of sequestration, she said.
Maggard said she intends to reach out to Beatty and other politicians concerning the matter.
"If they can't strike a deal, people will have a worse opinion about our government than ever before," Maggard said.