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February 28, 2013

State Officials: Defense cuts will hurt


Broad government-wide spending cuts set to take effect on Friday could slash an estimated $137 million in federal funding from education, health, environment and other programs in Oklahoma, but state finance officials are worried more about the potential impact of defense cuts.

With five major military installations in the state and an array of federal contractors who work with those bases, the impact of mandatory spending reductions on Oklahoma’s economy could be enormous particularly on sales and income tax revenue, State Finance Secretary Preston Doerflinger said Tuesday.

“I’m more concerned about the ripple effect and the potential decrease in consumer consumption because of furloughs and possible job losses, particularly in the defense industry in our state,” Doerflinger said.

If President Barack Obama and Republican congressional leaders don’t reach an agreement on an alternative deficit-reduction plan before Friday, $85 billion in automatic, across-the-board cuts will take effect.

Chris Spiwak, owner of Chequers Restaurant and Pub outside Tinker Air Force Base in Midwest City, said he’s afraid he might have to lay off an employee or two if the federal workers who fill up his restaurant at lunchtime are required to stay home from work some days.

“We have customers telling us that if they’re furloughed, they won’t be coming in as much,” Spiwak said. “That’s their expendable income. They’ll be eating at home or bringing their lunches. I’ve already had customers telling me that.”

Tinker officials estimate 16,000 of the base’s 26,000 total workers will be forced to take furlough days if the cuts go into effect, with a total of $124 million in lost pay.

In a letter to base employees, Lt. Gen. Bruce Litchfield wrote that the most likely option for unpaid civilian furloughs would be one day per week for the last 22 weeks of the federal fiscal year, late April through September, for a total of 22 work days. That would equate to a 20 percent reduction in pay for each civilian worker at the base.

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