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Area cities, businesses brace for impact from defense cuts

As Air Force spending cuts loom, business owners and city officials in the surrounding communities are bracing for any possible collateral damage.

Business owners near Wright-Patterson Air Force Base expect to take a hit, but city officials say it’s too early to tell how the cuts will impact their income tax revenue.

Massive defense budget cuts could lead to the furlough of 180,000 Air Force civilian employees around the world if the scheduled sequestration isn’t stopped before March 1. Furloughs would have a big impact on Wright-Patt because of its more than 16,500 civilian workers.

The possible furlough for 22 days through September would result in a 20 percent loss in pay.

“Any financial impact on the employees at Wright-Patt is going to have an impact on the whole region, not just us,” said Jim Borland, Huber Heights City Manager. “Those employees are making their living here and spending their money in all the communities that surround the base — buying clothes, going out to eat. Even if they don’t do layoffs but only furloughs, that’s less money to spend.”

The mandatory cuts, known as sequestration, would slice $12.4 billion from the Air Force budget by Sept. 30. In January, the base imposed a hiring freeze and expected to terminate the employment of many 344 temporary or term employees, among other cost-cutting measures.

WPAFB is the state’s largest single-site employer with more than 29,700 military and civilian employees and a $4.7 billion annual economic impact, according to a recent report.

“If furloughs and cuts take place, I don’t think it’s a, ‘Hey, the sky is falling’ impact on us, but it will have a negative impact on us in Fairborn,” said Paul Newman, executive director of the Fairborn Area Chamber of Commerce. “Most directly affected will be eateries and retail businesses.”

Newman referenced the restaurants just outside the Wright-Patt fence along Broad and Main streets, and even on Kauffman Avenue, where revitalization is happening due to the Ohio 444 reroute.

Mike Gharst, who owns Roush’s Restaurant at 305 W. Main St. in Fairborn, said that the budget cuts would be “terrible” for his business. Roush’s sees a spike in patrons during the lunch hour primarily due to the base. If there are cuts, more people will be inclined to pack their lunch, Gharst said.

“Pure and simple, without the base, downtown Fairborn would be hurting severely,” he said.

Peggy Henthorn manages the 250,000-square-foot Airway Shopping Center at the Airway/Woodman intersection in Riverside. Henthorn has the same fears as Gharst, and she said even the “big-ticket” stores, such as Furniture City and Big Bob’s Carpet that’s opening soon, could feel the effects.

<<< See how Representative Mike Turner answered our Facebook friends' furlough questions >>>

“People will be a little more conservative,” Henthorn said. “We saw that when the economy first started to go down. People weren’t buying the things they wanted. They were buying more of the things they needed.”

Mike Peterson, a manager at Joe’s Pizzeria, 4313 Airway Road, said the restaurant has benefited from base personnel who have been regular customers the last 15 to 20 years.

“It would hurt us as much as anybody else,” Peterson said. “We’re concerned for Riverside and the surrounding areas. Cuts don’t help anybody. Dayton doesn’t need any cuts. We need a boost.”

Finance directors in Fairborn, Huber Heights and Riverside said at this point they don’t know the financial impact the base cuts would have on income tax collection.

Jim Bell, Huber Heights’ finance director, said the city receives a monthly income tax check from the federal government for all federal government employees — including the base — who live in Huber Heights. Bell would not disclose what the city receives, citing privacy concerns.

“We’ve not determined what kind of impact it would have on us because there’s not enough information out there,” Bell said. “They could cut 50 employees and not one of them lives in Huber Heights.”

Randy Groves, Fairborn’s finance director, said in 2012 the city collected nearly $1.6 million in income tax from government civilian employees who live in Fairborn. He said he didn’t think the hit to the income tax would be “devastating, but we don’t know how deep the cuts are going to be.”

“It’s a concern, of course,” Groves said. “Once we start getting some more details, then we’ll have more information to determine what kind of impact it’d have on us.”

Riverside finance director Thomas Garrett said the city received $27,300 in December 2012 from base employees who live in Riverside. That figure is what the city receives on average per month, he said.

“We’re watching with interest, but we’re not waiting on pins and needles,” Garrett said. “We’ll have to react to it when more information becomes clear.”

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