Business, community, city and even base leaders are trying to determine the exact impacts that sequestration would have on the Havelock area.
One thing is certain: If Congress fails to act by Friday, automatic cuts in defense will likely trigger civilian worker furloughs at Cherry Point, resulting in a 20 percent cut in pay for about 5,000 workers beginning in mid to late April.
"I don’t know what sequestration will bring," Col. Philip Zimmerman, commanding officer of Cherry Point, told members of the New Bern Chamber Military Alliance last week. "I have received no guidance on that."
Furlough plans would result in one unpaid day off for civilian workers per week for 22 weeks. That reduction in pay for such a long period has the business community concerned about the impact.
"As far as the impact on local businesses, I think it could make it somewhat difficult because the economy has made it tough to start with and having less money for civil servants to spend on base is only going to make it worse," said Marie Ortiz, owner of Make it Personally Yours in Havelock. "It’s going to impact the surrounding area for sure."
Ortiz, who retired from a civilian job on base after 31 years, said she could understand what civilian families would do if faced with furloughs.
"It would make a major recalculation of our lifestyle," she said. "We would have to take a step back and see what would have to really be eliminated. Most of the people who work on base count on every penny and a lot of them are going from payday to payday, even with as much money as they make. People tend to grow into their living and some of them overgrow from their living standards, and it would probably be a major devastation for a lot of people because they’re just barely making it."
The possibility of job cuts on top of the furloughs has her worried.
"My biggest concern would be that if we lost a lot of positions, not just with the pay cut," she said. "The next step of economic impact would be a number of people laid off or contracts would not be renewed or whatever, and the third would be that it would cause the whole base to shut down. That would be the ultimate economic impact."
Gene Bell, owner of Gene’s Audio in Havelock, said the civilian furloughs may not impact his business as much because he caters to the younger Marines. Still, he’s concerned.
"We’re more affected by cutbacks in the Marine Corps," he said. "Our business is car audio and is targeted towards younger people, not older people, per se. We’ll be affected, but nowhere near as much as we would be affected by a cutback in the Marines. They’re talking the base could be cut back by a third. That’s a huge number."
After hearing Zimmerman speak, Kevin Roberts, director of the New Bern Chamber of Commerce, said all businesses would feel the impacts of furloughs.
"It’s going to hurt all of us," he said. "Our elected officials are out on recess and this is going to hit home."
Bill Naumann, co-chairman of the Military Alliance, said base workers would make priorities that could hurt small businesses.
"Those employees are going to pay their mortgages and car payments," he said. "That 20 percent is money that won’t be spent at area restaurants and retail businesses."
That in turn could impact revenue of local cities and counties. As an example, bookings at the Havelock Tourist and Event Center could drop, as there is less money for big parties or conventions.
"We’ve held a date for them, but if they don’t come, how in the world do we expect full payment," said Lee Tillman, finance director of Havelock.
The sequestration comes at a time when city leaders are working on the 2013-14 budget.
"I’m just concerned if we see a lagging in the payments, if consumers go to Walmart less and go to McDonalds less and we see a decrease in sales tax and then if this goes on for 22 weeks and we go until Sept. 30 with the local economy taking a 20 percent hit, I hope I’m wrong." Tillman said.
Havelock Mayor Jimmy Sanders also serves as president of the Allied for Cherry Point’s Tomorrow lobby group, which sent a letter to legislators last week stressing the potential impact to civilian workers and the area economy.
"You know, I’d love to be the guy that believes the glass is half full, but I think we’re looking at a glass right now that’s half empty," he said.
Sanders said that failure of legislators to compromise had led to the situation. He said he did not believe a deal could be struck before Friday.
"I’m not optimistic, but I’m hopeful that before too many days or weeks that some agreement will be reached in Washington," he said. " … These civilian employees, for most of them, this 20 percent pay cut is going to be significant."
Mary Beth Fennell, production team director at Fleet Readiness Center East at Cherry Point, also met with the Military Alliance with Zimmerman. She said the facility was advised in January to conserve resources, put a freeze on hiring and "do not contract or purchase anything unless it is mission essential," she said. "Every purchase has to go to headquarters for approval."
She said budget cuts are not a reflection on FRC East employees or the workload.
"The house is full, there is lots of work and people wanting to do it," she said.
She did say unanticipated repair service inside or outside the facility has stopped.
"The Navy doesn’t have that money, so that work has stopped until April 1," she said.
Zimmerman said the base would have about $800,000 less in its baseline budget for next fiscal year. Still, he pointed out there was $52 million in other facility restorations and modernization projects in the current budget, with $22 million of the contracts to be awarded as soon as possible.
He also said that money was available for construction of the Slocum Road-U.S. 70 flyover as well as an aircraft support facility.