Sequester's budget cuts spell uncertainty for Sacramento, Calif.

The Sacramento BeeMarch 8, 2013 

— In Washington, the across-the-board budget reduction triggered by the failure of Congress and the White House to reach a deal on federal spending is called the sequester.

In the Sacramento region, the rippling impact is called uncertainty.

Facing reductions in federal aid for health and human services, Sacramento County is preparing for cuts at centers providing family nutrition services, including vouchers for baby formula, for low-income residents.

Federal court trials may be delayed in the Eastern District of California as the U.S. Justice Department plots a 9 percent budget cut that could mean up to 14 days of furloughs for 184 Sacramento and Fresno office prosecutors and support staff.

Some 350 students at California State University, Sacramento, may lose out on federal work-study grants for next year, and UC Davis could lose millions of dollars in continued research funding.

And nearly 20,000 active- duty veterans, reservists and military retirees could see shortened hours at the popular commissary at the former McClellan Air Force Base.

But so far, virtually no one seems able to say for certain how government funding cuts and federal worker furloughs will affect the greater Sacramento region that is home to 15,000 federal workers and a recipient of hundreds of millions of dollars in federal funding.

The situation remains fluid because federal agencies are still determining exactly what to cut, while some Washington leaders want a budget deal that can avert the worst impacts.

"I think the tremors are going to start to grow over the next few months," said Chris McKenzie, executive director of the League of California Cities in Sacramento. "This is a very, very rapidly forming snowball that is going downhill. The cumulative impact on cities and communities is going to be very significant. But it hasn't been felt yet. So it's hard to know."

Federal agencies throughout the Sacramento region are already preparing for cutbacks from the sequester that will cut spending by $1 trillion nationally over the next decade, and about $85 billion this year.

So far, critical local infrastructure projects - such as the ongoing $900 million construction of a new dam spillway at Folsom Lake - have not been affected.

But agencies such as the U.S. Army Corps of Engineers, which is undertaking the dam project with the U.S. Bureau of Reclamation while continuing inspections and improvements on Sacramento-area river levees, are preparing to get by with less manpower and reduced funding.

"We are really busy right now trying to prepare for the worst-case scenario," said DeDe Cordell, the Corps spokeswoman in Sacramento. She said 882 employees in the Sacramento region are being scheduled for one-day-a-week furloughs but said the agency is trying to avoid delays in construction projects from a 5 percent cut in its civil work program.

"We're cutting all non-mission expenses, training and travel, trying to buy space for the future so we can minimize any impacts once we have clarity on the budget," Cordell said.

Federal agencies must notify employees 30 days before imposing furloughs. Cordell said her Sacramento District office is preparing to give Corps employees official notice next week.

Meanwhile, none of the 23 U.S. Department of Housing and Urban Development employees in Sacramento - offering foreclosure counseling and housing assistance and administering community development funds - will answer the phone May 10, their first of seven furlough days.

"Say your home is going through foreclosure and you need counseling or you have a Section 8 (federal rent assistance) voucher and there is a problem, we won't be there that day," said Elizabeth McDargh, president of local 1450 of the National Federation of Federal Employees, representing workers from dozens of government agencies in California, Arizona and Nevada.

While federal employees make up a small but stable portion of the Sacramento region's workforce, their number grew by about 1,000 workers during the past five years, as the regional workforce of state employees fell by about 4,000 and municipal workers dropped by 12,000.

Based on the cumulative earnings of local federal workers, the region could lose $18 million for each percentage- point decline in federal employee compensation, based on a review of U.S. Bureau of Economic Analysis data.

"We know that furloughs of a large number of employees hurts the economy," said Roger Niello, president and CEO of the Sacramento Metro Chamber. "We have a case study: the state of California. The furloughs (during the multiyear state budget crisis) definitely had an impact on the economy."

The region may also be affected as the long-term unemployed are affected by federal budget cuts March 31 when those receiving emergency unemployment benefits - after exhausting 26 weeks of state aid - will see about a 10 percent reduction in monthly payments.

Those cuts could take a few million dollars out of the economy in a region where the unemployed received $65 million in benefits in January, according to state Employment Development Department figures.

The Sacramento City Unified School District could lose as much as $2.6 million in federal funds for programs including special education, teacher training and support for low-income families and communities.

"Any time you're talking about further reductions in our resources after years and years of cuts to school districts, it's worrisome," said district spokesman Gabe Ross. "We don't know the full impact, but this will result in an impact for kids."

Ann Edwards, Sacramento County's health and services manager, said the county expects "significant reductions" in programs at four county offices for the federally funded Woman Infant and Children program, which offers family nutrition services.

Edwards said the county, which receives $600 million in annual federal funding, much of it for health and welfare programs, may also cut drug and alcohol programs.

UC Davis, the region's leading research university, took in $400 million in federal research grants last year. Dr. Lars Berglund, senior associate dean for research for the UC Davis School of Medicine, says he anticipates funding cuts as a result of the sequester but doesn't know the impact for university research, including major work in cancer and neuroscience.

"It is likely to be much more difficult to get new research funded," Berglund said. "And that's the most important thing - because investing in research is investing in the future. Research is not just something you can turn on and off like a spigot."

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