Though official notification of possible furloughs for civilian defense workers has been delayed, the area is still expecting to take a hit economically as the effects of sequestration take hold.
The biggest impact could be the furloughs, in which civilian workers at Cherry Point would be forced to take one unpaid day off for each week for 22 weeks. Over the short term, the furloughs would represent a 20 percent cut in pay during the furlough period.
But area leaders see sequestration’s effects reaching far beyond the gates of Cherry Point.
“In addition to the furlough of civilian base employees, there are a lot of civilian contractors who will suffer as well,” said Marc Finlayson, consultant for the Allies for Cherry Point’s Tomorrow lobby group. “I believe all non-essential contracts are suspended after April 1.”
The 1,364 open contracts at the air station involve everything from work gloves to $100 million for engineering and logistics support, said Jamie Norment, of Ward and Smith, who is heading Craven County’s coordinated effort to lessen the impact of the massive federal defense cuts. Sequestration could impact things as basic as grounds and equipment maintenance.
Meanwhile, Coastal Carolina Regional Airport Director Tom Braaten got official word Friday that the FAA contract air traffic control tower will not be funded because of sequestration.
The FAA gave a reprieve to 24 of the 173 towers that were to have closed, citing negative effects on national interests, but will stick with its decision for others to clip $627 million from its $16 billion budget by Sept. 30.
Braaten said he would be meeting with Cherry Point air traffic controllers to make sure everything is on track to continue safe take-offs and landings at Coastal Carolina Regional.
Jacksonville and Greenville airports, in fact most of the roughly 5,000 U.S. public airports, do not have towers, and the New Bern airport has operated safely at times in the past without one.
Health benefits for military dependents and retirees also fall into the sequestration cuts, which would result “in delays in payments to service providers and, potentially, some denial of service,” according to Robert Hale, U.S. Department of Defense comptroller.
He said the Defense Health Program cuts “would leave us without enough money to pay TRICARE bills in the last month unless we could find a way to offset that, and it will be difficult. We’re going to be faced with delaying payments to providers, which could result in denials of service.”
In a letter to U.S. Rep. Walter B. Jones, R-N.C., 3rd Dist., ACT President Jimmy Sanders, Havelock mayor, said, “Although this has not received much publicity, these potential cuts have a chilling effect on morale, welfare, and our local economy.”
Meanwhile, the delay in the furlough announcement isn’t giving the 3,400 workers at the Fleet Readiness Center East repair and maintenance facility reason for hope.
“I’ve talked to the senior managers at Fleet Readiness Center East and they seem resigned to the furlough coming and are preparing very realistically,” Norment said.
He said workers are already cutting back on their personal spending, such as on clothes or dinners out, which is impacting the region’s economy.
“We are fighting to get that changed and have some support from our congressional delegation,” he said of furloughs, “but it is still set and the impact is not just on bureaucrats, the labor force and engineers at FRC East and the air station. It’s all the employees, the fire department, police force, the security guards.”
“If you apply that to 4,000 plus or minus a few, most of whom live in Craven and Carteret counties, it makes up a sizable portion of the workforce,” Norment said.
“It’s like all those people having a 20 percent pay cut and I’m very concerned about area business as they head into the holiday season. I expect employees will cover essential expenses but discretionary spending for them is more substantial than other portions of the population who don’t work on the air station.
“It will cause a significant hit on local business, anxiety in the community and have direct impact on chambers of commerce and business. This will not just cause a ripple effect. It will cause a direct effect.”
Exactly how it will affect the government tax receipts of Craven County and area cities remains unclear, even as they are involved in budget preparation for the next fiscal year.
“It’s hard to judge,” Craven County Manager Jack Veit said. “If it hits disposable income first and people get back to basics, we may be alright on sales tax.”
While a sizable portion of county residents depend on a federal check, only active non-military employees at Cherry Point will see the furlough and resulting pay cut. Only about half of them live in Craven County, although some of the contractors are in business here.