MuskogeePhoenix.com, Muskogee, OK

Local News

October 6, 2013

SUNDAY EXTRA: 600 jobs hang on fate of VA office

Long shutdown could cut private payrolls $3.22M per week

Shuttering the Veterans Affairs Regional Office in Muskogee for an extended period of time would affect not only those who work there, it could jeopardize 600 private-sector jobs.

Economic modeling shows that the loss of those jobs would result in lost earnings of $3.22 million a week. Experts say a hit that hard would ripple through the local economy, hurting an array of industries and the coffers of local governments.

The regional office, the largest of 56 around the country, provides jobs for more than 1,300 people. As the city’s largest employer, it has an annual payroll of $105 million and serves nearly 342,200 veterans.

The office’s continued operations depend on congressional funding, which was held up when House Republicans didn’t pass a spending bill without tying it to the repeal or rollback of the Affordable Care Act. Senators accepted the sequester-level budget proposals but stripped tea party Republicans’ extraneous demands from the continuing budget resolution before sending it back to the House, where it never went to the floor for a vote.

Officials with the local regional office have since been shooting at a moving target, trying to determine when funding for its operations will dry up. Although they initially predicted closure would take place last Friday, Jacob Nichols, a spokesman for the regional office, said operations would continue through Monday.

“Should a federal budget resolution not be passed before we report to work on Tuesday, the regional office will initiate an orderly shutdown of non-essential operations on Tuesday,” Nichols said Friday afternoon. “In the event of a shutdown, the regional office will not be open to the public after 4 p.m. Monday.”

Nichols said he expected that claims processing and payments for compensation, pension, education and vocational rehabilitation programs would continue through late October regardless of a shutdown. A prolonged shutdown could force the suspension of those services after all available funds are exhausted, he said.

Marie Seabolt, the acting director of the Muskogee City-County Port Authority’s business development arm, said the impact of shuttering the VA Regional Office could be significant. But the degree to which that economic impact is realized would be gradual and dependent upon the duration of the budget battle in Washington.

A report compiled by Economic Modeling Specialists International shows that private-sector workers earn 28 cents for every dollar paid to an employee at the VA Regional Office. The report also shows that for every four regional office jobs that could be lost during the shutdown, three private-sector or support jobs would disappear.

Seabolt said the economic impact of the potential shutdown of the regional office will depend on several factors. The most obvious is the number of workers actually furloughed, the duration of those furloughs and whether furloughed workers will receive back pay.

 “I have been in conversations with VA officials, and they haven’t been able to tell me how many workers will be furloughed,” she said. “The impact will be much less — or at least delayed — given there may be some who are called back or receive back pay.”

Seabolt said the mere fact that a number of VA employees could lose their paychecks for a period of time means less money would be spent at local restaurants and stores. Interim City Manager Roy Tucker said that would cut into the city’s sales tax revenue, which has been stagnant or declining the past seven months.

“Any actual or threatened furloughs will most certainly have an impact on our local economy,” Tucker said. “While I’m unable to put an exact dollar value on the affect the closure will have, I am afraid it will be measurable from our revenue collections in the coming months.”

Sales tax disbursements to the city for the first months of the fiscal year that began July 1 are down about $105,000 from the same period a year ago, he said. Any impact the anticipated furloughs of workers at the VA Regional Office would have on sales tax collections won’t be clear until mid-November and December, when the Oklahoma Tax Commission releases data for October retail sales.

Both Tucker and Seabolt said they were hoping for a resolution to the shutdown standoff. But as federal lawmakers dig in their heels, that appears less than likely considering the coming debate to raise the federal debt ceiling.

U.S. Rep. Markwayne Mullin, who represents Oklahoma’s 2nd Congressional District, described the partial shutdown as an unfortunate circumstance. But in an email sent Wednesday night to his constituents, Mullin indicated he would not support continued government funding unless he and his colleagues win concessions regarding the Affordable Care Act.

U.S. Sen. Tom Coburn has denounced attempts to tie government funding to the repeal or defunding of federal health care reforms as intellectually dishonest. But he also objects to the continuing budget resolution approved by the Senate because it does nothing to address wasteful spending.

U.S. Sen. Jim Inhofe predicted the shutdown would have “real implications for Oklahomans, seniors, small business owners, veterans, and civilian employees that support our military installations.” But he supports efforts to tie government funding to the repeal or rollback of the Affordable Care Act and blames Democrats for the shutdown.

Reach D.E. Smoot at (918) 684-2901 or dsmoot@muskogeephoenix.com.

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