Sequestration Reaches Deep Across Northland

Lake Superior Community Health Center

It would take a while for budget cuts to be felt at the community health center, which serves low-income residents with clinics in West Duluth and Superior, said Mavis Brehm, the center's CEO.

The health center's fiscal year begins March 1, and it has been informed that no federal money is authorized beyond the first three months, Brehm said. Federal money provides less than 20 percent of the health center's annual $7.5 million budget, she said.

Loss of all federal money would be a significant hit, but it wouldn't be enough to force the health centers to close their doors unless there are drastic cuts in Medicaid, which covers many of the center's patients, she said. Currently, though, Medicaid is protected from sequestration.

The two health centers serve 12,000 people annually.

Senior nutrition

Unless the budget impasse proves long-lasting, seniors in Northeastern Minnesota should face no imminent disruption in meal programs, said Marilyn Ocepek, director of Arrowhead Senior Nutrition Services, a division of Arrowhead Economic Opportunity Agency Inc.

Ocepek said she has received word that with the help of some hold-over funding from 2012, it looks like Meals on Wheels and senior dining programs throughout the seven-county region served by her agency should be able to continue unabated until the end of this calendar year. Beyond then, the funding outlook appears hazy.

Arrowhead Senior Nutrition Services provides meals to between 1,800 and 2,000 people daily in the region. The annual cost of feeding that many people is about $2.1 million, and 37 percent of the money comes from federal coffers, said Catherine Sampson, director of the Arrowhead Area Agency on Aging.

Sampson pointed out that if budget cuts continue, senior nutrition programs could face a very challenging 2014, especially with no financial cushion to fall back on from the previous year.

Community development

If the sequester remains in effect, the city of Duluth has been advised it could face about an 8 percent reduction in the amount of money it receives through the Community Development Block Grants it receives through the U.S. Department of Housing and Urban Development, said Keith Hamre, the city's director of planning and construction services. Those cuts could translate into about a $170,000 hit by later this summer.

That CDBG money can support an array of projects that provide affordable or low-cost housing or that reduce energy use.

Public safety

Duluth Police Chief Gordon Ramsay said the city receives about $107 million from the Department of Justice in a year to support task force operations, child advocacy centers, domestic violence programs, sexual assault prevention efforts and drug enforcement efforts.

It remains unclear how much of that money could be put at risk by the sequester.

Similar uncertainties face the Duluth Fire Department, which receives federal money to assist with training and emergency management preparations. The city also receives grants for pieces of equipment through the Federal Emergency Management Agency.

Transportation

Federal transportation trust funded programs are mostly exempt from Friday's sequester. The majority of Federal Highway Administration, Federal Transit Administration and Federal Aviation Administration programs are in this category, paid for by the federal gas tax, meaning there will be few short-term effects, according to an e-mail from Sergius Phillips, Minnesota Department of Transportation's federal relations manager.

But the feds used $18.8 billion of general fund money to pay for highway projects because the gas tax has fallen short, and the sequestration cuts could reduce that general fund portion by $330 million. That cut eventually would slow payments to states for transportation projects.

Jim Foldesi, St. Louis County public works director, said the state Department of Transportation would have to decide how to allocate those cuts across the state, but that it probably will mean delays, not elimination, of any planned road projects.