Daily Updates

April 21, 2013

Effects of automatic spending cuts surface

ATLANTA (AP) — A few weeks after automatic spending cuts took effect within the federal government, the trickle-down effect is beginning to surface in Georgia.

There are anticipated cuts to educational programs, as well as a likely freeze in rental assistance for the poor and reductions in community development grants.

Gov. Nathan Deal said this week that he had warned those who oversee state agencies receiving federal funds to prepare.

“We have made our state agencies aware of the fact that if they do lose federal dollars, their first priority should be to try to make sure that they economize and that they make the adjustments,” Deal said in an interview. “And that they should not expect the state, through its revenue, to backfill those revenue losses from the federal government.”

Deal noted that some state agencies may feel the effects more than others.

“Even though sequestration is an across-the-board type cut, with some exceptions, it does not play out that way on the state level,” Deal said, noting some state agencies are more dependent on federal grant money than others.

The Department of Community Affairs has been bracing for the across-the-board federal cuts for about two years as well as dealing with state budget cuts, according to spokeswoman Saralyn Stafford. In preparation of the federal cuts for the Housing Choice Voucher program, which provides rental assistance to the poor, the department closed program offices in Albany and Carrollton resulting in about 19 people losing their jobs.

Although a recent budget presented by President Barack Obama did not include major cuts to community development and housing programs for the next fiscal year, the department is still bracing for a possible 5 to 8 percent reduction in federal funding for the rental assistance program and a 5 percent reduction in funding for Community Development Block Grants.

“We haven’t had our head in the sand on this,” Stafford said. “We’ve been taking a lot of steps to consolidate offices where possible. And like a lot of other government employees, no raises.”

The state has some 15,700 participants in the rental assistance program benefiting an estimated 50,000 people, Stafford said. There’s a long waiting list of people who want assistance, but with the possible funding cuts the program would likely be frozen at its current level, she said.

“We probably won’t be able to serve new people but we don’t anticipate having to remove anyone,” Stafford said.

The Community Development Block Grants, which helps provide infrastructure needs, is a competitive program. The department expects it will not be able to award as many grants as previous years, Stafford said. The department anticipates funding could drop from $34.5 million to $32.7 million, following a $2 million cut the year before.

“We’ll have to see which (projects) rise to the top and how much that will cover,” Strafford said.

Another program that provides funding for low-income housing and down payment assistance for homebuyers may also see a reduction of a possible $700,000 to just over $14 million available.

All the possible cuts do not include federal funding for community development and housing programs that is sent directly to some of the state’s largest cities, which will likely face similar challenges.

Meanwhile, the U.S. Department of Education has released some preliminary estimates of cuts for fiscal year 2013. The biggest reduction would be an estimated $25.7 million in Title 1 grant money. The Title 1 program supports schools with high concentrations of low-income students. Georgia could also see a $17.4 million reduction in IDEA Part B funds, which provides assistance for children with disabilities.

Estimates are not yet available for individual school districts in the state. A handful of other educational programs are also projected to have cuts.

The Head Start program, which provides various services to low-income children and their families, is subject to a projected 5 percent reduction, although President Obama’s current budget proposal calls for an increase in funding that would mitigate the cuts. Most of the funds are administered on the federal level to providers in the state.

Meanwhile, the Georgia Department of Early Care and Learning is projecting the automatic spending cuts could affect a portion of funds it receives under the federal Child Care Development Fund. Estimates would see a reduction of approximately $7 million in fiscal year 2013 in the portion used to help fund the child care subsidy program and other related child care programs.

“However, due to the timing, nature of the funding streams, and current service levels, we currently expect to manage through this with minimal disruption to operations and no impact on service,” agency spokesman Reg Griffin said in an email.  

 

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