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Prince William Could Lose Millions if Sequestration Hits, Official Says

Prince William County stands to lose millions of dollars in direct federal funding, the deputy county executive said.

Prince William stands to lose millions of dollars in federal funding if sequestration proceeds as scheduled—and even if the United States doesn't fall off the "fiscal cliff," the county could still face challenges in the upcoming year, a county official said. 

The federal government is scheduled to cut $1.2 trillion in spending over a 10-year period beginning Jan. 1; half from the domestic budget and half from the defense budget. One hundred forty-nine programs, such as Social Security, are exempt from cuts. While Congress and the White House continue to bat competing proposals to resolve the issue back and forth, sequestration remains the law of the land. 

The federal government is poised to cut 8.2 percent ($38 billion) in the fiscal year 2013 domestic discretionary budget. Local officials across the country are continuing to prepare for the loss of funding, and Prince William County is no exception. 

The county stands to potentially lose millions of dollars in federal funding, Christopher Martino, the deputy county executive, told members of the Board of County Supervisors on Nov. 27. Martino's presentation detailed the areas where Prince William may experience cuts in fiscal year 2013. 

The county's Office of Housing and Community Development would probably experience large cuts. For instance, the Housing and Urban Development section 8 housing aid to the county totals $27.2 million a year. The cuts could translate to over $2.23 million in lost funding for the county. 

"What this translates into is as many as 160 families could lose their rent subsidy," Martino said. 

Prince William receives $573,000 for the home investment program, which helps first-time homeowners with downpayment assistance and counseling. That program would probably see a reduction of $46,986. 

Another program that could experience cuts is the HUD homeless assistance. The county receives $152,000; $12,464 could be cut. 

"This could impact a number of programs depending how it plays out," Martino said. "One being transitional housing...another could be the homeless shelter itself...or it could impact donations that we make with partners."

The county could also lose $97,334 in its HUD Community Development Block Grant. This money aids disabled people with housing that helps them rehabilitate and the money is repaid when housing changes hands. The county currently receives $1.887 million. 

Prince William isn't out of hot water even if Republicans and Democrats can come to an agreement.

"If some grand bargain is reached, we will still be impacted," Martino said. "Perhaps not to the extent that the sequester would, but perhaps even more so, because some of the proposals are to reduce spending by even larger percentages."

The county has a policy not to fill in the gaps if federal or state funding for programs disappear, unless the programs are mandatory, county executive Melissa Peacor told the supervisors.

Those figures do not include the indirect impact of lost tax dollars if government employees and contractors—who the local economy heavily relies on—lose their jobs.

"That certainly could have an impact on our underlying economy, and could have some of those folks coming to us for services," Martino said. 

And even if sequestration is resolved, or pushed further down the road, issues remain. The Bush-era tax cuts expire this year. Emergency unemployment benefits end. The payroll tax holiday and alternative minimum tax exemptions end. Congress still must find a way to deal with the nation's long-term debt. And Prince William County's credit rating will suffer if the nation's is downgraded. 

Related articles: 

Health Official: Proposed Budget Puts Community in Danger

Social Services on the Chopping Block?

Shadow of Sequestration Looms Over Prince William

County Hashes Out Priorities for Upcoming Year

Connie Moser December 04, 2012 at 05:16 PM
The most frustrating part of this story is not what's written here, it's what's NOT written here. I'm no budget wonk, but have been saying for as long as I can remember that PWC economy is built on retail and restaurant and services, leaving us in fragile condition for any type of down turn. I referred to our PWC claims of wealth as a stack of cards. When I addressed my concerns to officials, I was blown off with false assurances that not only was there nothing to worry about, my fears were baseless and a general air of "We do this for a living. Run along and mind your own business". Many other prominent bloggers like Al Alborn and Bill Golden tried do draw attention to the looming sequestration, only to meet the same type of dismissal. People like John Gray are discredited and labeled as troublemakers. Now, suddenly, PWC is concerned about the effects of sequestration? Little late to ride that horse, now.
Mary Stachyra Lopez December 04, 2012 at 05:28 PM
Interesting points, Connie; thanks for commenting. Did you see the presentation at the BOCS meeting last week on how Prince William is trying to attract life science companies? That would presumably help diversify the economy, but it could be years before the county sees any gains.
Connie Moser December 04, 2012 at 05:38 PM
Yes, Mary. Pretty good case for too little, too late. Plus, those life sciences companies typically depend on government grants and contracts.
Connie Moser December 04, 2012 at 05:44 PM
Pretty good conversation evolved from this story on my FB page. Friend me if you're on FB :-)
Mary Stachyra Lopez December 04, 2012 at 05:47 PM
I will, thanks! It's an interesting issue, and one that's not going away anytime soon.

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