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Employees faced with planning for 20 percent pay cuts

Federal budget cuts due to begin today could lead to federal civilian employees being furloughed one day a week, with 20 percent reductions in their salaries. Military contractors may face similar pay cuts, and some are worried about losing their jobs as federal spending slows.

Patuxent River Naval Air Station is offering a seminar to assist employees facing salary reductions associated with looming federal budget cuts, known as sequestration. “Managing Your Finances and Stress During a Possible Furlough,” is scheduled for March 6 and March 21. Anyone — government, military or contractor — who works on the air station is welcome to attend, but must call the Fleet and Family Support Center to register.

“People are already feeling financially stressed,” said Linda Schmid, a life skills educator at Pax River. “If they’re going to be told, ‘now we’re going to cut your cash flow up to 20 percent,’ that’s a concern.”

According to St. Mary’s County’s economic development office, Pax River defense contractors earn an average of $81,224 a year and civilian government workers an average of $105,508. Those salaries are for more senior workers. Junior to mid-level federal employees typically earn $34,075 to $51,630, according to the Office of Personnel Management. But no matter the pay grade, a 20 percent pay reduction is significant, Schmid said.

As employees face mortgages, tuition fees, or just making ends meet, Pax River officials have said that everyone needs to have a personal financial plan.

Schmid will be one of the presenters at the seminar sessions. And, while she’s a federal worker also facing a furlough, Schmid said she’s trying to practice what she preaches and stay positive. “Attitude is a decision,” she said.

Schmid plans to discuss ways employees can build resiliency and keep things in perspective. “Focus on the parts of your life that feel good,” she said. Rest. Eat well. Exercise. Build self-esteem. Accept help from people who care.

Instead of thinking, “this is the worst thing that could happen,” Schmid said, replace that thought with “I’m going to make a plan to get through this.”

That’s where Jim Walsh comes in. The personal finance manager will help those facing furloughs search for ways to bridge the 20 percent gap in pay.

People often use debit or credit cards. Review the statements, he said. A family might think they spend about 10 percent of their income on dining, or shopping, but it could be much more. If an initial financial review doesn’t find enough extra cash, Walsh said he’ll offer tips to look for more savings. Above all else, he said, try to avoid taking on new debt and, he said, be sure to talk with creditors before falling behind.

It’s critical, Walsh said, that people remain active and level-headed as they plan. “You pretty much have to do that if you’re going to respond rationally to these challenges,” said Lee Bradshaw, president and CEO of Technology Security Associates, a small business supporting NAVAIR, with about 60 employees. He and a partner started the company about 10 years ago because they thought they had a good product and they could do the work themselves. “And, we still think so,” Bradshaw said.

The St. Mary’s County Department of Economic and Community Development lists TSA as a service-disabled, veteran-owned company, which specializes in several areas, including program support, engineering, foreign military sales, logistics and cyber security. Like many small businesses, Bradshaw said, all areas of his company could be affected by the pending federal budget cuts.

He thought Pax River’s idea to offer the planning seminars for employees was a good one. Bradshaw also had plans to meet with his team this week to keep them informed and “lessen the impact as much as we can,” he said.

He’s one of many Pax River defense workers attending meetings, making connections and trying to decipher this budget crisis. Bradshaw said he hasn’t had to lay off any of his workers during all the uncertainty. His instinct is to protect his workers but, Bradshaw said, “I think everybody understands if the government faces furloughs, it’s inevitable that the contractors will, too.”

As employees in and around Pax River prepare for the changes, Schmid advised them to develop confidence in their ability to get through it. “You can’t do it alone,” she said. But, people are trying to provide resources and information to help one another get through this challenge.

“We can’t change the furlough,” Schmid said. “But we can change how we respond to it.”

nclark@somdnews.com

Massive federal budget cuts, known as sequestration, are slated to go into effect today, and employees at Patuxent River Naval Air Station and nearby Webster Field are bracing for the impact.

So are those whose work supports activities at the Navy facilities in St. Mary’s County.

If you go

To register for “Managing Your Finances and Stress During a Possible Furlough,” call the Fleet and Family Support Center at 301-342-4911. The seminar is scheduled at the center, Building 2090, on March 6 and 21, both days from 5 to 6:30 p.m. Preregistration is required, and is open to all employees at the Patuxent River Naval Air Station.

Military contracting firms already are looking at ways to cut spending, Rep. Steny Hoyer (D-Md., 5th) said earlier this week. They “don’t have confidence” that they’ll have the money to pay their employees to do work that is needed for national security and defense, he said.

Legislators say sequestration was never supposed to happen. Congress set up the spending reductions believing that the threat of severe, across-the-board cuts would force them to responsibly craft a plan to reduce government spending. For months, Democrats and Republicans argued about whether a solution should be reached through increasing taxes and cutting spending, or cutting spending alone. Lately, legislators have been blaming one another for the fallout.

With hours to go Thursday before the March 1 sequestration deadline, Congress hadn’t reached an agreement, although legislators can at any time act to replace the sequester with another budget plan.

“I don’t think any of us are too surprised that tomorrow is the 1 March deadline to address Sequestration and nothing has happened to come up with a thoughtful and reasonable approach to address our national deficit and still maintain our national security readiness,” Glen Ives, president of the Southern Maryland Navy Alliance and past commanding officer at Pax River, said in an email.

“Most military commands and defense industry companies have been bracing for this worst-case scenario,” he said. “A great deal of planning has occurred but most of that planning has been based upon many uncertainties and unknowns. Those uncertainties and unknowns are still there but things will become much more clear in the next few weeks.”

It’s “very tough” for everyday citizens to have faith in government now, Hoyer acknowledged. “People expect it to work.”

Legislators and employers expect that if the budget cuts — totaling about $84 billion from the federal budget this year alone — go into effect, the impact may be minimal for the first two weeks, but intensify as salaries and spending are reduced. “It won’t be overnight, but it will be soon,” Hoyer said.

There’s also a nagging concern about a resolution that keeps the government operating at 2012 spending levels as Congress tries to pass a budget.

Members of the military do not face pay cuts. But amid all the uncertainty, federal employees are trying to meet the needs of the sailors and Marines they support, and soon may have less money to do their jobs, smaller paychecks and fewer hours in their work weeks.

To offer support, Patuxent River Naval Air Station is planning a seminar “Managing Your Finances and Stress During a Possible Furlough” March 6 and March 21.

“We are deeply concerned about the negative effects the furlough will have to our employees’ morale, as well as the effectiveness of our valued civilian workforce,” said Capt. Ted Mills, commanding officer at Pax River, said in a statement. He’s warning that support services could be reduced with a furlough. But, Mills said, “we are reviewing options such as alternating furlough days to minimize the impact.”

The Naval Air Systems Command, based at Pax River, issued a statement saying “the specific impacts on the NAVAIR mission and workforce are not yet known.” If sequestration occurs, according to the statement, NAVAIR will begin “detailed planning related to workload adjustments and personnel impacts,” in accordance with instructions from the Navy and the federal government’s Office of Personnel Management.

nclark@somdnews.com