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Ryan Johnson, Published February 26 2013

Officials ‘waiting to see what might happen’ to local programs as sequestration deadline looms

FARGO – Barring a last-minute deal in Congress, the federal sequestration process that begins Friday could mean less research at North Dakota State University and the loss of a major star in the 2013 Fargo AirSho lineup.

But local officials said there’s an even bigger concern: It’s unknown how deep the automatic budget reductions would cut into local services, agencies and work the community takes for granted.

Valley Senior Services Executive Director Brian Arett said the sequestration, which would prompt automatic cuts of $1.2 trillion over the next decade to defense and domestic spending, could have a “pretty significant” impact on his agency because one-third of its funding is federal.

Arett said crucial details on what this would mean for the agency remain unknown, despite sequestration being part of a compromise to end the 2011 debt ceiling standoff.

“There has been discussion about sequestration going on for quite a while now, and this isn’t the first time that we’ve walked to the edge of the fiscal cliff and started to look over,” he said. “The frustrating part for me is there really is no way to prepare because we don’t ever know what’s going to happen.”

If the cuts happen, Arett said his agency will do everything possible to keep delivering meals through its Meals on Wheels program and providing transportation to the region’s seniors.

“Somehow as a program, we’re going to survive and we’re going to figure a way through it,” he said. “We just need to know what it is that we’re figuring our way through.”

The 2013 Fargo AirSho in August also could take a hit, spokesman Bryan Shinn said. The Blue Angels, a Navy flight demonstration squad, has been announced as the star attraction of this year’s show.

Navy officials recently stated Blue Angels flights would likely be canceled to deal with sequestration. The move would save an estimated $28 million this fiscal year.

Shinn said the Fargo AirSho will go on, but it could “kill” smaller airshows because of the loss of a top draw.

“They’re such a marquee act,” he said. “But we do have something else big in mind just in case the Blue Angels aren’t able to make an appearance.”

Phil Boudjouk, NDSU’s vice president for research, creative activities and technology transfer, said the university hasn’t yet received specific instructions on what sequestration will mean for its research.

“But my general feeling is, yes, we will be impacted,” he said.

NDSU’s research is heavily funded through federal defense, energy and agriculture contracts, Boudjouk said, and university officials are trying to remain optimistic while planning for reduced money – especially considering the U.S. government is the world’s largest funder of research.

“It’s sort of prepare for the worst and hope for the best,” he said.

Job Service North Dakota officials said in a statement the agency, which relies almost entirely on federal funds, expects across-the-board cuts just like other discretionary federally funded agencies. Under rules of the sequestration process, nearly all non-entitlement federal spending will face cuts over the next decade because the so-called congressional “super committee” failed to agree on budget cuts in November 2011.

“The impending cuts will ultimately translate into reduced staff support and services for job seekers, unemployment insurance claimants and employers,” Job Service leaders said in the statement, adding it could lead to reduced services and a 9 percent cut in weekly payments to recipients of unemployment insurance through the Emergency Extended Compensation program.

Fargo Cass Public Health Director Ruth Bachmeier said many questions remain, just days before the deadline passes for Congress to avoid sequestration. About 19.5 percent of the agency’s total budget –

$1.5 million – is pass-through federal funding, meaning the money is sent to a state agency that then disperses the money to local entities.

Bachmeier said that funding is spread among about a dozen programs, and not all will face the same level of cuts. Still, she said local officials are bracing for 5 to 7 percent cuts and reduced funding to areas such as public health emergency preparedness or even vaccination programs.

“It would be my goal that if we see some cuts that we would be able to look closely at our budgets and look at travel costs, conference costs and all of those costs that are in our budgets that we could remove without impacting services to our clients,” she said.

Southeastern North Dakota Head Start Director Barry Nelson said the program is solely funded with federal money, meaning it could see an “immediate and serious” impact.

“We’re kind of sitting with bated breath like everybody else until we find out what the details are,” he said.

Nelson said a preliminary report stated the cuts could reduce Head Start services to 200 North Dakota children. The exact impact, including how it would affect local services, remains to be seen, he said.

Capt. Dan Murphy said the North Dakota National Guard is waiting for guidance from the Department of Defense and national leaders.

Initial projections suggest drastic actions may be necessary to absorb the cuts, including the furlough of about 800,000 civilian workers across the country who are responsible for maintenance, military readiness and other important functions.

Those furloughs, targeted to begin April 21 and run through Oct. 1, could affect 607 federal technicians in the North Dakota National Guard, Murphy said.

The West Fargo Public School District is preparing for an estimated 5.3 percent cut in federal funding, Business Manager Mark Lemer said. That could include up to a loss of $75,000 to $80,000 for special education programming and as much as $75,000 for remedial services to students in low-income schools through the Title I program.

“Unfortunately, if the federal funds go away, the mandates don’t,” he said.

That means the district will have to look for cuts in other areas of its budget, leaving less money for the growing district in other important work, he said.

Moorhead schools face the same problems, Superintendent Lynne Kovash said. If sequestration begins, she said the district will have to find savings in the few budget areas that aren’t fixed costs – a short list that includes staffing levels, supportive programs for students and extracurricular programs.

“You have to look anywhere in your budget you can to make those reductions,” she said.

Moorhead Business Association Executive Director Chuck Chadwick said the impact of this uncertainty on the local business community is hard to measure, but the immediate effects of sequestration cuts would be felt by nonprofits and agencies that rely on federal funding.

“We know it’s probably not going to be good,” he said. “People are just kind of waiting to see what might happen. It could be very devastating, but my prediction is that they’re going to kick the can down the road a little bit. I don’t think that they’re going to allow that to occur at this point.”

Readers can reach Forum reporter Ryan Johnson at (701) 241-5587