By Oren Fliegelman, Special to the Packet Media Group
Princeton’s finances are likely to escape the federal sequester mostly unscathed, say local officials.
The sequester, a set of severe federal cuts that will eliminate $85.4 billion from the 2013 national budget, was set into motion on March 1 as lawmakers failed to broker a deal to reduce the federal government’s deficit. Called “dumb” and “unnecessary” by President Obama, the White House predicts that the blunt across-the-board reductions will cut back social services in New Jersey, eliminating almost $12 million in aid to New Jersey schools and cutting almost $500,000 for programs that provide meals to seniors.
Although the federal cuts are extremely deep, local officials believe that it is unlikely that Princeton’s finances will be significantly damaged. This is because very little of the consolidated Princeton’s budget is made of assistance from the federal government.
Although the final budget is still being put together, Councilman Patrick Simon expects only 1 percent of the approximately $63 million budget will consist of aid from the national and state governments. Of the federal aid that the municipality does receive, most grants are for specific, one-time projects, like road maintenance and post-disaster relief.
”Not to say it’s going to be zero,” said Councilman Simon, referring to the sequester’s local impact. “But it doesn’t look like it’ll be particularly large for Princeton.”
Most money for the day-to-day operations of the municipality comes from taxes and fees paid by local residents, said Scott Sillars, chairman of the Citizens’ Finance Advisory Committee, a group of local residents who advise Princeton’s mayor and council members on financial issues.
”We are a self-sufficient community and not as reliant on government programs” as are some other municipalities, said Mr. Sillars. “If we get hit, then other communities are going to get really hammered.”
However, Princeton does receive a small amount of federal aid for its schools. These federal funds are used mainly for summer programs, special education programs, and supplementary activities for at-risk children, said Superintendent of Schools Judith Wilson via email. Although they are only a small portion of the recently proposed $84 million school budget, if eliminated the money will certainly be missed.
”Because overall we get very little federal aid, the amount at risk is only $87,000,” said Ms. Wilson. “But in this very tight budget, $87,000 is significant.”
While Princeton will most likely fareendure the federal cuts well, any loss of funds in this economy, no matter how small, may be painful, warned Liz Lempert, Princeton’s mayor.
”All around budges are really tight,” said Mayor Lempert. “So even losing some money means corresponding cuts or finding revenue to balance it out from somewhere else.” However, Mayor Lempert added that even if there weren’t a sequester, “We’d still be looking for ways to save money and looking for alternative revenue sources.”
When asked whether residents will notice any service reductions because of the sequester, Mayor Lempert said, “I’m not sure yet, but everybody’s concerned.”
The programs that will be most affected by the sequester will be those that are run directly by the federal government or with federal grants. Princeton residents who are federal employees could face furloughs, while federally funded social-service programs, such as meals for the elderly, could face losses in financial support. The university, whose professors receive large research grants from the federal government, may be hit the hardest.
”At this point, it is not clear how the [federal] agencies will implement these cuts and if or how research grants will be impacted,” said the university’s spokesperson Martin Mbugua via e-mail. “The university has advised its researchers that there are plausible scenarios under which grants could be scaled back, and that uncertainty and tight budgets may be the reality for the foreseeable future.”
While municipal officials remain optimistic, there is a great deal of uncertainty about what federal assistance might be eliminated or when it would be decided. This uncertainty stems from the fact that most of the federal assistance that Princeton receives is distributed by the state, so it could be months before the full effects of the federal budget cuts become clear.
The money must trickle down from the federal government to the state and then to Princeton, said Bernard Miller, Princeton Council president. “That puts the municipality at the end of a very long chain.”
It is too early to start making predictions, added Councilman Miller. “At this point, I don’t think any of us understand what the sequester’s effects will be on the Princeton municipal government budget.”
”I think that there are more questions right now than there are answers,” said Mayor Lempert, summarizing the general attitude of local officials.
