Waiting It Out
Sequestration Keeps Businesses Guessing
Posted: March 8, 2013
HARRISONBURG — Valley businesses that have the federal government as a client don’t know how, if at all, the spending cuts known as sequestration will affect them.
As part of an agreement to end the debt-ceiling crisis in 2011, Congress and President Barack Obama set in place $85 billion in reductions over 10 years. The measure was intended to force lawmakers to reach a large budget deal because sequestration includes cuts neither Democrats nor Republicans want.
It officially kicked in March 1 after the parties failed to reach a deal, but the reductions will be implemented in various stages over time.
Local business leaders say it’s not yet clear what programs may face cuts, and the doomsday predictions may just be political posturing.
“We’ll all just keep our fingers crossed and see what happens over the next month or two,” said Frank Tamberrino, president of the Harrisonburg-Rockingham Chamber of Commerce.
The most immediate apparent effect of sequestration was seen at major airports, with security lines swelling as cuts affected the Transportation Security Administration.
But nothing’s changed for now at Shenandoah Valley Regional Airport in Weyers Cave, Executive Director Greg Campbell said.
“I don’t think we’re going to see some of the impacts the larger airports see … but we’ll just kind of have to wait and see, probably a month or so,” he said.
The Federal Aviation Administration plans to close 173 air traffic control towers and cut back operations at others, including airports in Roanoke and Lynchburg. SVRA has no air traffic control tower.
Half of sequestration cuts will affect the defense budget.
It remains to be seen whether those will trickle down to Harrisonburg-based Tactical and Survival Specialties, Chief Financial Officer Craig Boyers said.
TSSi is a tactical equipment supplier to federal agencies, primarily the Department of Defense, but it also supplies other agencies. It employs about 65 people, most of whom work at TSSi’s Early Road facility.
Boyers said federal agencies still must decide how to implement budget cuts under sequestration.
“It’s really difficult to say where the cuts are going to fall because there’s not any congressional guidance or presidential guidance,” he said.
But more problematic for TSSi, he said, is how Congress has been funding the government in recent years, not with an annual budget but with short-term, stopgap measures called continuing resolutions.
It’s been nearly four years since Congress last passed a budget.
“It’s just a big, soupy mess and sequestration is just part of a bigger problem,” Boyers said.
Michael Stoltzfus, president and chief executive officer of Dynamic Aviation, said he’s seen information claiming sequestration would have major effects, while other sources say there’d be none.
Based in Bridgewater, Dynamic Aviation has contracts with various federal agencies, including the departments of Defense, Interior, Agriculture and Commerce, Stoltzfus said.
Dynamic employs about 750 people, with the Airport Road complex employing between 300 and 350 workers at any given time.
More than half of Dynamic’s business is work for the federal government, Stoltzfus said.
With so many agencies as clients, he said, the company could see reductions in some areas while none in others.
“We’re just going to kind of wait and see how it unfolds,” he said. “If you look at the data, there’s not a concrete sense of how it unfolds.”
Arlington-based Rosetta Stone supplies its language-learning software to federal agencies, including the State Department.
The company was founded in Harrisonburg in 1992 and continues to employ about 400 people at its downtown offices.
A spokesman said Rosetta Stone officials don’t anticipate any changes to their operations due to sequestration.
“Certainly, we don’t like to hear that cuts are being considered anywhere in the markets we serve,” a statement from the company says. “But our business is generally based on need, and where there’s a need, organizations tend to work creatively to find budgets.”
Contact Jeremy Hunt at 574-6273 or jhunt@dnronline.com
As part of an agreement to end the debt-ceiling crisis in 2011, Congress and President Barack Obama set in place $85 billion in reductions over 10 years. The measure was intended to force lawmakers to reach a large budget deal because sequestration includes cuts neither Democrats nor Republicans want.
It officially kicked in March 1 after the parties failed to reach a deal, but the reductions will be implemented in various stages over time.
Local business leaders say it’s not yet clear what programs may face cuts, and the doomsday predictions may just be political posturing.
“We’ll all just keep our fingers crossed and see what happens over the next month or two,” said Frank Tamberrino, president of the Harrisonburg-Rockingham Chamber of Commerce.
The most immediate apparent effect of sequestration was seen at major airports, with security lines swelling as cuts affected the Transportation Security Administration.
But nothing’s changed for now at Shenandoah Valley Regional Airport in Weyers Cave, Executive Director Greg Campbell said.
“I don’t think we’re going to see some of the impacts the larger airports see … but we’ll just kind of have to wait and see, probably a month or so,” he said.
The Federal Aviation Administration plans to close 173 air traffic control towers and cut back operations at others, including airports in Roanoke and Lynchburg. SVRA has no air traffic control tower.
Half of sequestration cuts will affect the defense budget.
It remains to be seen whether those will trickle down to Harrisonburg-based Tactical and Survival Specialties, Chief Financial Officer Craig Boyers said.
TSSi is a tactical equipment supplier to federal agencies, primarily the Department of Defense, but it also supplies other agencies. It employs about 65 people, most of whom work at TSSi’s Early Road facility.
Boyers said federal agencies still must decide how to implement budget cuts under sequestration.
“It’s really difficult to say where the cuts are going to fall because there’s not any congressional guidance or presidential guidance,” he said.
But more problematic for TSSi, he said, is how Congress has been funding the government in recent years, not with an annual budget but with short-term, stopgap measures called continuing resolutions.
It’s been nearly four years since Congress last passed a budget.
“It’s just a big, soupy mess and sequestration is just part of a bigger problem,” Boyers said.
Michael Stoltzfus, president and chief executive officer of Dynamic Aviation, said he’s seen information claiming sequestration would have major effects, while other sources say there’d be none.
Based in Bridgewater, Dynamic Aviation has contracts with various federal agencies, including the departments of Defense, Interior, Agriculture and Commerce, Stoltzfus said.
Dynamic employs about 750 people, with the Airport Road complex employing between 300 and 350 workers at any given time.
More than half of Dynamic’s business is work for the federal government, Stoltzfus said.
With so many agencies as clients, he said, the company could see reductions in some areas while none in others.
“We’re just going to kind of wait and see how it unfolds,” he said. “If you look at the data, there’s not a concrete sense of how it unfolds.”
Arlington-based Rosetta Stone supplies its language-learning software to federal agencies, including the State Department.
The company was founded in Harrisonburg in 1992 and continues to employ about 400 people at its downtown offices.
A spokesman said Rosetta Stone officials don’t anticipate any changes to their operations due to sequestration.
“Certainly, we don’t like to hear that cuts are being considered anywhere in the markets we serve,” a statement from the company says. “But our business is generally based on need, and where there’s a need, organizations tend to work creatively to find budgets.”
Contact Jeremy Hunt at 574-6273 or jhunt@dnronline.com