Minneapolis Mayor R.T. Rybak was recently quoted in the Washington Post saying that automatic budget cuts — referred to these days as “the sequester” — would impact services for the poor, hurting the have-nots in his city more than the middle class. Nevertheless, even large Minnesota corporations such as Best Buy and Target could feel the indirect impact if consumers spend less money during a time of uncertainty, he said.
Otherwise, Rybak and Hennepin County Commissioner Mike Opat, chair of the county board, sound almost calm about it all, at least in the Washington Post. The article is available online at http://www.washingtonpost.com/politics/impact-of-budget-cuts-depends-on-where-you-live/2013/02/26/f117a3c4-802f-11e2-b99e-6baf4ebe42df_story_1.html.
St. Paul on Thursday, Feb. 28 issued its own news release, and the tone is much more dire. An analysis by the city of St. Paul’s Office of Financial Services predicts the effects of sequestration could impact everything from the city’s investment and debt portfolio to public safety programs.
The city’s 17 neighborhood district councils could lose a sizable chunk of city funding, though not right away, and housing development and emergency shelter grants would also be impacted through reductions of about 8.5 percent.
The city’s full news release is below:
FOR IMMEDIATE RELEASE
February 28, 2013
Effects of sequestration on the City of Saint Paul could be drasticSAINT PAUL — Today, an analysis by the City of Saint Paul’s Office of Financial Services shows that the effects of sequestration on the City of Saint Paul could include potential cuts in public safety, a reduction in neighborhood programs, and could negatively impact the city’s investment and debt portfolio.
“Only Congress has the power to pass legislation that prevents these severe cuts to public safety, economic development and the city’s investment and debt portfolio,” said Saint Paul Mayor Chris Coleman. “Communities across the country are just emerging from the worst recession in the history of the United States and are looking to Congress for a smart, thoughtful solution that doesn’t penalize local communities. Sequestration could have dire effects on communities across the country and I urge Congress to find a better way forward.”
Potential cuts to Saint Paul may include:
Approximately $1.5 million in funding for public safety, including:
· $250,000 to prevent human trafficking
· Up to $500,000 per year for equipment for Saint Paul firefighters
· More than $500,000 to help fund our Emergency Management and Police Department Information CentersAn 8.5 percent reduction in CDBG funds, HOME funds, and Emergency Shelter Grants that would:
· Limit the city’s ability to fund district councils
· Hinder economic development programs when they are needed most
· Prevent further investment into Saint Paul’s neighborhoods and communitiesThe City of Saint Paul is both an issuer and an investor in Build America Bonds. Sequestration could impact the cost of Saint Paul’s payments to its investors while potentially preventing Saint Paul from selling these bonds in the future.
With permanent sequestration, the city estimates that impacts to the investment and debt portfolio could potentially add up to hundreds of thousands of dollars cut from the city’s general fund over time.
Impacts on citizens from cuts to programs at the state and county level could also be devastating. $85 billion of sequester cuts are scheduled to take effect beginning March 1.
So what do you think about the sequester, dear Scoop reader? Should Congress allow these cuts to run their course? Is the president right in demanding fast action to avoid these budget cuts? And how much cause for alarm is there, really? Feel free to sound off, below….
