Effect of Sequestration on Saint Paul

Today, an analysis by the City of Saint Paul’s Office of Financial Services shows that the effects of sequestration on the City of Saint Paul could include potential cuts in public safety, a reduction in neighborhood programs, and could negatively impact the city’s investment and debt portfolio.

“Only Congress has the power to pass legislation that prevents these severe cuts to public safety, economic development and the city’s investment and debt portfolio,” said Saint Paul Mayor Chris Coleman.  “Communities across the country are just emerging from the worst recession in the history of the United States and are looking to Congress for a smart, thoughtful solution that doesn’t penalize local communities. Sequestration could have dire effects on communities across the country and I urge Congress to find a better way forward.”

Potential cuts to Saint Paul may include:

Approximately $1.5 million in funding for public safety, including:

• $250,000 to prevent human trafficking
• Up to $500,000 per year for equipment for Saint Paul firefighters
• More than $500,000 to help fund our Emergency Management and Police Department Information Centers

An 8.5 percent reduction in CDBG funds, HOME funds, and Emergency Shelter Grants that would:

• Limit the city’s ability to fund district councils
•  Hinder economic development programs when they are needed most
•  Prevent further investment into Saint Paul’s neighborhoods and communities

The City of Saint Paul is both an issuer and an investor in Build America Bonds. Sequestration could impact the cost of Saint Paul’s payments to its investors while potentially preventing Saint Paul from selling these bonds in the future.  With permanent sequestration, the city estimates that impacts to the investment and debt portfolio could potentially add up to hundreds of thousands of dollars cut from the city’s general fund over time.

Impacts on citizens from cuts to programs at the state and county level could also be devastating. $85 billion of sequester cuts are scheduled to take effect beginning March 1. 

Submitted by the Mayor's Office...