In Hampton Roads, defense cuts might hit like a storm
And just like a hurricane, the news isn't particularly welcome.
At a panel discussion Tuesday in downtown Norfolk, military leaders and civilians gathered to discuss how Defense Department cuts under sequestration would hit the region's economy, which depends heavily on military spending. The event was sponsored by LEAD Hampton Roads.
Panelist Carol McCormack, president of United Way of South Hampton Roads, brought up the results of a survey from two scientists at the Virginia Modeling and Simulation Center in Suffolk. Researchers Josh Behr and Rafael Diaz are modeling the effect of a superstorm like Sandy on Virginia.
Part of their work is to determine the financial vulnerability of regions, localities and neighborhoods in the event of a massive storm.
What caught McCormack's attention was an extensive household survey of military and non-military families. Spanning about 7,000 households in southeastern Virginia and beyond, it asked families if they would have trouble meeting a mortgage or rent payment if they lost a week's worth of pay. The results were roughly the same between military and non-military: about 34 percent said it would be problem.
The difference is more striking if these same families lost a month of income: about 60 percent of military families would have trouble making that payment, compared to about 53 percent of non-military families.
The numbers are telling because some 40,000 people in Hampton Roads are facing the equivalent of a 20-percent pay cut this summer if the Pentagon follows through with furloughs. Recent reports indicate furloughs would be one day a week for 14 weeks. That's close to losing one week of pay every month for three months.
"The reality is," she said, "most people budget month to month."
And while military leaders worry about the threat to military hardware and base operations, the defense cuts hit human services like a two-fisted punch, McCormack said. First, fewer families will be able to donate to organizations like the United Way, and secondly, the region will need more human services because more families will be in distress.
Behr, the co-author of the storm study, said he was struck by the data and how it could be applied in different circumstances.
"Catastrophic is a very relative term," he said. While a superstorm like Sandy would hit Virginia hard, the idea of one-third of the region's families not making rent or mortgage payments "puts some real stress on the family structure."
Demand still exists
Meanwhile, the military community continues to wrestle with the uncertainty posed by sequestration. The across-the-board budget cuts went into effect March 1, but many details remain unresolved.
For example, Navy leaders say they can avoid furloughs altogether, but the Army can't. It remains to be seen if the Pentagon insists on applying furloughs uniformly across the services, or if they will grant flexibility.
Mark Honecker, executive director of Fleet Forces Command, said demand for Navy assets has not decreased, and the world is certainly not a safer place. What makes the process so difficult is not knowing what Congress will do – or will not do.
"That's probably our biggest frustration," he said. "If we could project what that top line looks like in the future, we could plan differently."
But the ambiguity makes it difficult to predict even a few months in advance.
"I've got about an 11 billion dollar budget," he said. "I can't tell you within about 300 million dollars where we're going to end up at the end of the year."
Robert Matthias, the Virginia Beach assistant city manager, said the Virginia congressional delegation works well together on defense issues, and is showing solidarity in opposing another round of military base closings in 2015 as requested by the Obama administration.
One local success story has been the fight waged against canceling Navy ship maintenance work, which could have devastated shipyards in Hampton Roads. Earlier this year, the Navy said it might have to cancel maintenance work on 11 ships home-ported in Hampton Roads in order to save $287 million.
If that work is canceled, sailors aren't the only ones who suffer, said Bill Crow, president of the Virginia Ship Repair Association.
When ships go offline for maintenance, workers also install the most up-to-date equipment. It ensures that a Navy ship will be viable to the end of its life cycle.
"If we don't fix that ship and it doesn't get to the end of its life cycle, who's getting ripped off? You, the taxpayer," Crow said.
Non-defense hit, too
While much attention in Hampton Roads has focused on defense cuts, sequestration hits the non-defense side of the budget as well. That includes services for senior citizens.
John Skirven, CEO of Senior Services of Southeastern Virginia, said his agency took a $220,000 hit to senior services this year.
"We planned for it, so that we could minimize the impact in fiscal year 2013," he said.
But a $220,000 cut in 2014 could affect thousands of Meals on Wheels, rides to the doctor or in-home health care. The organization is holding two public hearings on May 13 to get comment on what services the public would like to see.
One will be at the Suffolk Department of Social Services, 135 Hall Ave., Suffolk, at 10 a.m.