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Federal cuts may affect Whidbey Island economy and families

The myriad ways the federal government affects the Whidbey Island community are suddenly in a spotlight as the prospects of dramatic cuts loom.

The automatic federal spending reductions, known as sequestration, are set to occur March 1. A wide variety of officials on the island are worried about the effects it could have on the economy, education, public health, housing for the poor and local government coffers.

U.S. Rep. Rick Larsen sent out a staff report Monday detailing the specific impacts sequestration may have on his district, which includes Whidbey Island. The report states that approximately 1,200 civilian employees and contractors at Whidbey Island Naval Air Station will be subject to furloughs.

Doug Merriman, Oak Harbor finance director, said he’s been keeping a close eye on the potential defense cuts.

“The base is such an economic driver for our economy,” he said.

Navy officials say the direct financial impact to Island County is more than $590 million.

Likewise, Elaine Marlow, the Island County budget director, said she’s worried about the potential furloughs.

“There are a significant number of civilian employees at the base,” she said. “That will impact the amount of discretionary income they will have to spend throughout the county. We could see a dip in sales tax.”

A significant portion of county government revenues, she said, comes from sales tax.

Business leaders are also paying attention.

“Sequestration is bound to have an impact on local businesses,” Oak Harbor Chamber of Commerce director Kathy Reed said. “While active duty military personnel won’t be affected, there are as many as 1,200 civilian government employees who could be placed on furloughs that would, in essence, cut their pay by 20 percent beginning in April.”

“So whenever you mess with someone’s income,” she added, “it affects how people spend their money, which in turn impacts our business community. How big an impact is something I don’t think we’ll be able to tell immediately. I suspect the effects will be cumulative.”

Then there’s the potential cuts to a diverse number of federal grants, many of which fund programs that help low-income women and children, as well as victims of domestic and sexual violence.

Keith Higman, director of Island County Public Health, said his department would have reductions in vital federal funding, as well as indirect impacts from cuts in federal agencies.

“It would reduce our capacity to train and prepare for public health emergencies and to provide assistance to income-eligible mothers and children,” he said.

Higman said a range of grants will be reduced by 9 percent if sequestration occurs. They include a public health emergency preparedness grant; the Maternal and Child Health grant that funds public health assistance to income-eligible mothers and to the parents of special-needs children; and funding that provides income-eligible children with reduced-cost or free vaccines.

Higman said the Women Infant and Children program, commonly known as WIC, would likely face reduced funding. The program provides income-eligible families vouchers for groceries.

Another big loser in sequestration would be Citizens Against Domestic and Sexual Violence, known as CADA. Larsen’s office reported that the agency, which provides services to about 1,000 victims each year, could lose up to $90,000 in federal funds. The cut would reduce staff and impact training to law enforcement personnel and prosecutors, the report states.

“It would be devastating to our agency,” Margie Porter, director of CADA, said. “That’s almost a fifth of our budget. ... Ultimately it would be harmful to the victims.”

The Housing Authority of Island County would lose $342,000, eliminating support for 20 families to help them stay in their homes, the report says.

In addition, the report states that Medicare will face a 2 percent cut, which could translate to a decrease in reimbursement rates to doctors and hospitals.

“These automatic spending cuts are not just a Washington, D.C., budget gimmick. These indiscriminate cuts will have real and immediate impacts on families and workers in Northwest Washington‚“ Larsen said in a press release.

 

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