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Hotels already feel effects


Staff writer

It’s a waiting game right now for Calvert County residents and businesses as $85 billion in budget cuts from federal spending loom.

“The feel of the county — that I’m sensing — is they’re waiting,” Carolyn Hart, president of the Calvert County Chamber of Commerce, said. “We’re all waiting. We’re waiting for information. We’re waiting to see what’s happening.”

The federal spending cuts split between military and civilian spending, known as sequestration, went into effect March 1; however, Congress is still working on a compromise to mitigate the cuts. What effect the cuts will ultimately have remains unclear.

“We are definitely concerned,” Tim Hayden, the director of county finance and budget, explained. He said that at the county level, the impact will be seen when residents’ income taxes are lower because of furloughs and other employment cutbacks.

Income taxes, Hayden said, account for 20 percent of the county’s budget, and that’s where the “real impact” will be seen for the county.

He said it’s “really hard” to predict how severe the decrease in income taxes will be.

In Maryland, roughly 46,000 civilian Department of Defense employees will be furloughed, constituting a loss of $353.7 million in pay, according to figures released by the White House earlier this month.

“We’re monitoring it,” Hayden said. “There’s nothing else really right now” that the county is doing to brace itself.

In an emailed statement from Linda Vassallo, the director of the Calvert County Department of Economic Development, she said, “Generally speaking, the potential impact to the local community will be to our residents facing lost income through furloughs and to the business community through loss of local spending due to a decrease in discretionary funds.”

Hart said she has seen an “immediate” effect on hotels in the county that rely on travelers to neighboring county military bases, due to the government’s travel freeze.

“There has been a difference. There’s a change,” she said.

Beverly Brown, the director of sales and marketing at the Hilton Garden Inn in Solomons, said the market has seen a 10 to 15 percent decrease in occupancy from this time last year.

“It has been an immediate effect,” Brown said, adding that “we can only predict” the numbers may go down further.

She explained that because of that decrease, the 5 percent local occupancy tax per every room night consumed that goes to the county will “hit” the county’s general fund.

Hart said other businesses, such as retail and restaurants, will be feeling the cuts when residents have less disposable income.

“It’s the places where you go when you have disposable income — those are going to be the first ones affected,” Hart said.

As of Monday, the Chamber of Commerce has not come out with any plans or programs to help its members brace for the cuts and their far-reaching impact, but, she said, “we are discussing and planning.”

According to facts released by the White House earlier this month, across the state, schools stand to lose $14.4 million in federal funding, putting 200 teaching jobs at risk. The White House said Head Start and Early Head Start services would also be eliminated for approximately 800 children in Maryland, reducing access to critical early education.

Phone calls to Calvert County Public Schools were not returned before deadline.

Funding also would be cut for financial aid programs, job placement and training services, law enforcement and domestic violence grants, children’s vaccines and HIV tests.

It is still unclear how the Naval Recreation Facility in Solomons will be impacted by the budget cuts.

According to a statement from Capt. Ted Mills, commanding officer at Patuxent River Naval Air Station, “Reduction decisions, though difficult, have been prudent and in most cases reversible. Our goal is to remain mission capable. There is not a uniform answer for all activities. Some effects will not be noticeable until later in the fiscal year. We will prioritize continued funding towards those activities that support life, safety and critical security, as well as those programs that support Wounded Warriors.”