Countdown to Sequestration

26 February 2013 Written by  

Photo 23 smallCongress has officially returned to business after a week-long recess, but there is no new sign of serious negotiations to avert sequestration on Friday. A report by the Pew Charitable Trusts places Utah in the top-third of states most impacted by sequestration relative to its size. Below are four different ways that sequestration would affect Utahns in coming months.

First, some reductions would hit Federal workers in Utah directly through furloughs and other reductions in salaries. This would include about 15,000 civilian employees of the Department of Defense as well as hundreds of other Utah workers. This would add up to over $80 million in lost wages.

Second, Utahns who use Federal services will see reductions in the level of these services. The impact of some of these reductions would be clear and immediate for beneficiaries: cuts to college aid, job search assistance, Headstart, childcare assistance, and meals for seniors. Federal aid to education for children with disabilities would be cut by almost $5.7 million. Other impacts will be more subtle but also far more widespread in the population, including cuts in Federal food safety, aviation security, and research funding.

Third, sequestration would have indirect impacts through reductions in Federal funding for different types of programs that are administered through Utah state government. State officials have estimated that this may reduce state expenditures by around $40 million. This would include almost $6.3 million in additional Federal funding for education, as well as cuts in public health programs, vaccines for children, air and water quality, fish and wildlife protection, law enforcement and public safety programs, and many others.

Finally, regardless of the type of cut in Federal funding, Utahns whose lives are touched directly by these programs, whether as employees or beneficiaries, would be forced to cut back their own spending to compensate for these losses. These cutbacks would reverberate across the state’s economy, further slowing recovery. To make matters worse, state revenue would be further reduced from lower income and sales taxes collected from these workers.

Much remains unknown about the impacts of sequestration at this point. The complexity of Federal government means that there is substantial room for maneuver by Congress and the White House in terms of the timing and structure of the cuts that would take place. In addition, the effects are likely to make their way only gradually through Utah’s and the nation’s economies.

This panorama complicates the work of Utah’s elected officials to budget for programs for the coming year, but given these unknowns there seems to be little choice but to forge ahead with the session. Legislative leaders have indicated that they may have to return later in the year to make adjustments.

Interested readers can find additional information at the following sites, which are the sources for much of the information here: Coalition on Human Needs ; Pew Charitable Trusts; The White House.

Sara Face Shot BetterSara Gunderson, Office Manager and Executive Assistant, joined the organization in 2007. She has extensive administrative experience, including more than eight years in development at the University of Utah Health Sciences Center. Sara received her BS in Psychology at the University of Utah with a coursework emphasis in infant and child development.