National Business

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

 

The Sacramento Bee

"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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