Some in Laurel facing sequestration with optimism, others brace for trickle-down effect

  • Laurel photographer Matthew Coates predicts some local businesses could feel losses when federal budget cuts become reality.
Laurel photographer Matthew Coates predicts some local businesses… (Photo by Phil Grout, Laurel…)
March 08, 2013|By Gwendolyn Glenn

When Congress and the White House failed to make a deal on budget cuts March 1, sequestration went into effect, requiring federal agencies to identify $85 billion in required cuts.

The looming reductions, which will be spread across agencies — with the exception of safety-net programs such as Medicaid — has federal employees and those who benefit from federal dollars concerned about how and if they will be affected.

Laurie Proietti, the acting director of Laurel Advocacy and Referral Services, said she's concerned about how the sequestration cuts will affect her agency and the residents it assists.

"I'm sure our funding for next year will be affected, so we are worried," Proietti said. "We received $66,000 from the Fannie Mae Help the Homeless Program (Fannie Mae backs a large percentage of the country's mortgages) and that may be affected. We're also worried about the grants we receive from the (Department of) Housing and Urban Development, that we use for transitional and permanent housing assistance."

If the White House and Congress fail to make a deal in coming days and weeks, Maryland would be particularly vulnerable because of the state's military installations and the large number of residents employed by the federal government full time or as contractors and suppliers.

"With Fort Meade, Andrews (Air Force Base), NASA, NIH (National Institutes of Health) and our universities, which are also dependent on federal contracts, the sequester would be very bad for the local defense and non-defense economies," said District 21 Sen. Jim Rosapepe. "This is a job killer and depresses the economy when it needs stimulation."

In Maryland, government officials predict 46,000 civilians who work for the Department of Defense could be furloughed under sequestration. In addition, according to the Prince George's County executive's office, federal jobs make up 10 percent of the county's work force. Officials estimate the sequestration cuts in federal dollars to the county would amount to $150 million this year at a time when the county is hurting for funds.

In the past few weeks, there have been dire predictions from both sides of the political aisle about pending layoffs, furloughs, closures and a halt of numerous government services, including diminished air travel. Yet furloughs require a 30-day notice to employees of most federal agencies, and there is the hope that a budget deal will be reached before the bulk of the cuts take effect.

Laurel City Council President Frederick Smalls is hoping for that best-case scenario.

"I don't think we'll see any immediate or long-term impact from this or that Congress will let it (sequestration) have a real negative impact," Smalls said. "In the environment we live in with 24-hour news, things sometimes get sensationalized. I think before this gets too serious, something will occur and be worked out."

Smalls, who is also the deputy secretary of state for Administration, Finance and Human Resources, added that he has not heard any alarm bells going off or talk of cutting jobs in Annapolis because of the failed budget deal.

"That's not to say it isn't being watched closely, but I have not heard any talk of furloughs," he said. "I deal directly with the (state) government's finance office in my role, and if that was looming or possible reductions were planned, I'd know about it."

In terms of Laurel, Smalls is also optimistic that the failed budget negotiations and the pending sequestration will not have a major effect on the city.

"I haven't heard the mayor express any concern," he said. "One thing we can be confident in as a city is that we have adequate reserves and we handle our money appropriately. If there is any concern, it would be at the state level and that can trickle down."

Businesses bracing locally

However, not everyone in Laurel is as optimistic as Smalls.

Although Laurel Board of Trade Chairman Matthew Coates believes a deal on budget cuts will be reached soon, he says many local businesses could be hurt in the meantime. He said that could include local cleaning companies, office suppliers, printers and others that do work for the federal government, including his Main Street photography shop.

"I have a federal government contract and they said they couldn't pay my invoice at this time because no funds were available," Coates said. "I will be paid but at a later date. Any business with a contract is still liable for the work, so I had to produce the work and the money came out of my funds. That will happen across the board and some business owners might not be able to afford to do that. If this (sequestration) is long term, businesses will go under."

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