LCSN: Sequestration looms: Cuts in federal spending would touch broad spectrum

February 16, 2013. Retrieved online February 19, 2013 from Brook Stockberger, Las Cruces Sun-News

LAS CRUCES — The collective feeling of many of those who work for or receive funding from the federal government can be summed up in one word: Ouch.

Whether it’s the military, Las Cruces Public Schools, New Mexico State University or even small business owners who count on government-backed loans, a lot of people are keeping their eyes on what the White House and Congress do or don’t do by March 1. That’s when steep federal budget cuts — known as sequestration — are set to take place if no deal is reached to delay or amend them.

NMSU could see a cut of as much as $13 million; LCPS could see a step back in federal funding of about $2 million; the city of Las Cruces could potentially lose $1 million or more.

Those are estimates based on federal funding levels and the proposed cuts. Still, no one knows for sure what the hit would be, or if the cuts even take place.

“It is not possible to know until the various federal agencies decide exactly how they are going to implement the cuts,” said Jim Peach, economist at NMSU.

Non-defense discretionary spending is scheduled to be cut 8.2 percent, Peach’s colleague at NMSU, Chris Erickson. But exactly how that impacts specific institutions is difficult to predict.

“It is very hard to put a dollar figure on the impact of sequestration,” Erickson said. “We are already seeing the effects to some extent as federal agencies have been husbanding their funds in anticipation of sequestration.”


“We do know that non-defense discretionary spending is scheduled to be cut 8.2 percent, which includes research funding as well as funding for financial aid,” Erickson said. “But you just can’t say that this means that NMSU’s federal funding will be cut 8.2 percent. Research funding, for example, is allocated through a competitive process, and NMSU researchers may do better or worse than average.

“Financial aid funding follows the student, and NMSU students tend to be lower income so qualify for more,” he said.

As of the last fiscal year, NMSU’s expenditure budget for the entire system was $677 million. Minerva Baumann, director of media relations, said the school received about $163 million from the federal government. That means, if NMSU does experience an 8.2 percent cut, there would be about $13 million less coming into the university, which, by comparison, is a little bit less than the school’s athletics budget of about $16 million.


“A tighter federal budget is likely to reduce growth rates of employment and income in Las Cruces and throughout New Mexico,” Peach said. “In turn, sectors such as the local housing market and retail trade could be in for some trouble as well.”

Read the Las Cruces Sun-News article

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