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Sequestration Impacts

Sequestration Impacts. Nicola Sapp County Budget Officer November 13, 2012. Presentation Overview. History Sequestration I mpacts From the Top Down Non-Defense and Defense Federal Impacts State Impacts El Paso County Impacts. History.

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Sequestration Impacts

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  1. Sequestration Impacts Nicola Sapp County Budget Officer November 13, 2012

  2. Presentation Overview • History • Sequestration Impacts From the Top Down • Non-Defense and Defense • Federal Impacts • State Impacts • El Paso County Impacts Budget Administration

  3. History • The Budget Control Act of 2011 (BCA) allowed the United States to raise the Debt Limit in exchange for caps on Discretionary Program Funding designed to reduce the deficit by more than $1.2 Trillion over 10 years • The BCA further created “Sequestration” which is a procedure to automatically impose across the board cuts if there was no agreement on cutting the deficit • Sequestration is to begin January 1, 2013 Budget Administration

  4. Sequestration Effects • The Congressional Budget Office (CBO) estimates to be $109.3 Billion each year for ten years. • Actual cuts are $984 Billion + $216 Billion that is saved in interest costs • The cuts are to be divided between: • National Defense • National Parks • Education • Low Income Housing • Medical Research Budget Administration

  5. Who is Exempt • Exempt from cuts: • Medicaid • Social Security • The Child Health Insurance Program (CHIP) • The Supplemental Nutrition Assistance Program (SNAP) • Veteran Benefits • Temporary Assistance for Needy Families (TANF) • Refundable Tax Credits • Earned Income Tax Credit • Child Tax Credit • Certain Federal Highway Programs Budget Administration

  6. Impacts from the Top Down- Federal Impacts • $109.3 Billion in spending cuts annually • $54.7B in Defense spending annually • $54.7B in Non Defense spending annually • The President chose to exempt military personnel from sequestration, therefore defense had to be cut by an additional 10% in other places • Operations • Equipment • Capital Budget Administration

  7. Impacts from the Top Down- Colorado Impacts • Significant impact on Colorado budget • 25% of the State of Colorado is funded from the Federal Government • Colorado will have to cut services • Job losses are eminent Budget Administration

  8. Impacts from the Top Down- Colorado Non-Defense Impacts • $60 Million in Non-Defense Cuts • Education • No estimates on this impact yet • Job Development • No estimates on this impact • Health and Human Services • 7.5% Annual Reduction • $16.75M Federal & State annual reduction Budget Administration

  9. Impacts from the Top Down- Colorado Non-Defense Impacts • Colorado Center on Law & Policy estimates the state will lose • More than 1,600 jobs from the $60 Million in Non-Defense cuts • Loss of 1,215 direct jobs • Loss of 416 indirect jobs Budget Administration

  10. Impacts from the Top Down- Colorado Non-Defense Impacts Budget Administration

  11. Impacts from the Top Down- El Paso County Non-Defense Impacts • El Paso County Impacts – many undetermined • Education • No estimates on this impact yet • Job Development • No estimates on this impact • Health and Human Services • 7.5% Annual Reduction • $5.4M Federal & State annual reduction Budget Administration

  12. Impacts from the Top Down- Colorado Defense Impacts • Colorado is the home to a large number of Defense Contractors & Military Defense Facilities • Colorado Can expect a 10% across the board cut in Federal Defense funds • Up to $1.1 Billion in lost funding annually Budget Administration

  13. Impacts from the Top Down- El Paso County Defense Impacts • 5 Military Installations in Colorado • El Paso County is the home for Four of them • El Paso County Direct and Indirect Military Presence: • 80% Active Duty Personnel • 77% Civilian Personnel • 98% Total Family Members • Thus, El Paso County can anticipate a loss of $4.71 Billion Annually Budget Administration

  14. Impacts from the Top Down- El Paso County Defense Impacts • How Does the Military Impact El Paso County’s Economy? • In 2011, the Four Military bases provided an economic impact of $5.89 Billion • Generating 25%-30% of El Paso County’s Gross Metropolitan Product (GMP) (economic base) • Based on this, the impacts could be 18,000 jobs lost in El Paso County Budget Administration

  15. In Summary • Annual El Paso County Impacts: • Education $ ?,???,???,??? • Job Development $ ?,???,???,??? • Health & Human Services $ 5,400,000 • Military / Defense $ 4,710,000,000 Over 10 Years $47,154,000,000 Budget Administration

  16. Sources of Information • U.S. Department of Defense – Military Installation: www.militaryinstallations.dod.mil • The Greater Colorado Springs Chamber and EDC • Colorado Center on Law and Policy Budget Administration

  17. Questions? Budget Administration

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