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Sequestration Impact on Maine Nonprofits

by Brenda Peluso

Since the Supercommittee did not reach agreement on a plan to reduce the annual deficit, the 2011 Budget Control Act requires that Congress reduce mandatory, defense, and non-defense discretionary spending by $1.2 trillion over ten years. The first $110 billion of which will need to take place in the 2013 fiscal year. In Dec. 2012, the passage of H.R. 8 delayed these automatic spending reductions – also known as “sequesters” – until March 1, 2013. Congress failed to adopt a policy to replace sequestration with a different plan for budget reduction, and last week on March 1st, the implementation of these cuts began.

What will be the impact on Maine nonprofits and the people we serve? That depends on whether or not a new budget deal can be struck by Congress in the near future. The next deadline for Congress to act on a bill to fund the Federal Government is March 27th. In the meantime, several organizations have studied the potential impact should Congress not act in a timely manner.

In February 2013, The Washington Post developed a state by state website illustrating key cuts due to sequestration based on White House estimates. These estimates have been challenged by the Republicans in Congress.

According to the Maine-specific report, Maine could see, among other losses this year alone, job losses & furlough days among teachers & child care providers, public health workers, and military personnel. Other programs that could be affected include: National Institutes of Health, homeless assistance grants, Federal Student Aid, veterans employment and training, children and family services programs, disaster relief, low-income home energy assistance, senior nutrition programs, clean air and water funding, National Endowment for the Arts, and National Endowment for the Humanities grants.

The Coalition for Human Needs (CHN) has also done its own analysis of the impact on Maine. CHN notes that these “indiscriminate cuts come on top of a 15.9 percent cut in federal funds to Maine from 2010 to 2012.” Some of CHN’s Maine findings:

  • 1,800 Maine women and children will lose WIC nutrition benefits
  • 631 low-income families will lose rental housing vouchers
  • 356 Mainers with disabilities will not be able to enroll in vocational rehabilitation services
  • $620,000 for housing and emergency shelter will be denied
  • Low Income Home Energy Assistance Program (LIHEAP) is expected to average only $375 per household served in 2013, down from $405 in 2012
  • More than $2.7 million will be cut from Title I K-12 education funding for schools in low-income communities

In a report titled, “The Economic Impact of the Budget Control Act of 2011 on DOD & non-DOD Agencies” by Stephen S. Fuller, Ph.D., George Mason University finds that Maine could stand to lose 4,256 defense-related jobs and another 3,012 non-defense jobs totaling over 7,000 potential job losses at a time when Maine cannot afford more unemployment.

The Sequestration is evidence of our Congress’s inability to implement thoughtful fiscal policy. Sequestration cuts are indiscriminant and not based on sound policy analysis. Over the next few weeks, our representatives in Congress should be working to ensure smart budget decisions are enacted that best serve our residents. Phone, write or e-mail our representatives in Congress and let them know how these cuts are impacting your organization and those you serve. Let them know you want them to fight for a better way.

U.S. Senator Susan Collins
413 Dirksen Senate Office Building
Washington, DC 20510
Phone: (202) 224-2523
Fax: (202) 224-2693

U.S. Senator Angus King
188 Russell Senate Office Building
Washington, DC 20510
Phone: (202) 224-5344
Fax: (202) 224-1946

U.S. Representative Chellie Pingree
1318 Longworth House Office Building
Washington, DC 20515
Phone: (202) 225-6116
Fax; (202) 225-5590

U.S. Representative Mike Michaud
1724 Longworth House Office Building
Washington, DC 20515
Phone: (202) 225-6306
Fax: (202) 225-2943

Thanks to the following organizations for their contributions to the content of this blog post: Colorado Nonprofit AssociationMaine Center for Economic Policy, and National Council of Nonprofits.

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