• December 25, 2014

Experts: Economic impact of shutdown unknown

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Posted: Wednesday, October 2, 2013 4:30 am | Updated: 3:15 pm, Fri Oct 4, 2013.

The U.S. government shutdown will affect the local economy but how much is unknown, according to area economic experts.

“There is no question that the Bell County economy is very dependent on federal jobs,” said Lee Peterson, Temple Economic Development Corporation president. “People not working will have a negative effect on the community.”

According to information from Fort Hood, about 19 percent, or 1,140 people, of the 6,000-strong civilian workforce was placed on immediate furloughs Tuesday because of Congress’ inability to approve a continuing resolution.

Mission-essential employees will continue to work and will receive pay during the shutdown, in accordance with the “Pay Our Military Act,” a bill signed into law late Monday by President Barack Obama.

“(The shutdown) will have some effect and obviously if you are one of those people furloughed,” said John Crutchfield, Greater Killeen Chamber of Commerce president.

People who are not being paid are going to stop their discretionary spending, which will affect businesses as well as state and local governments that draw sales tax revenue from that spending, Peterson said.

“One day is too much. These people have families and they have responsibilities,” he said, voicing concerns for those government employees. “One day will hurt, and as it continues it will hurt more and more.”

Prepare for emergency

Copperas Cove Economic Development Corporation President Polo Enriquez said he hoped government employees prepared for furloughs knowing it was a possibility, but the longer they remain without pay, the more they will take from savings or part-time jobs and limit their spending.

“I know we don’t anticipate emergency planning as much as we should,” Enriquez said. “I think a lot of these people may be prepared for this since it was talked about for so long. Certainly, long term it will affect people in decisions to make on purchases.”

The shorter the term is, the harder it will be to gauge the effect on the families, businesses and local governments, said Bill Kozlik, Harker Heights Chamber of Commerce president.

If it is just one day, it may be considered an “inconvenience” for people and businesses; the longer it goes the more impact the community will see as family budget shrink, Crutchfield said.

Cructhfield said the Killeen area will probably withstand the shutdown better than other government-based economies.

“We are fortunate in the regard that many of our personnel are essential to the fighting of the war as are the folks that support them.”

Killeen-area businesses should be used to such instances of temporary shrinking household spending, because of deployments, especially the more seasoned and older businesses, said Kozlik.

Modify business strategy

“The business community tends to not react too quickly (to such situations),” Crutchfield said. “Even if business turns down, they may just modify their business strategy a little bit different. Those that manage businesses tend to avoid walking into the economic swinging door.”

While it was probably not the best way to look at it, a short shutdown could benefit the greater economy, Crutchfield said.

“One of the things they are doing is closing the commissaries down, which will be good for our grocery stores for awhile, but that may not seem like a good outcome to some,” he said.

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