If a deal is not reached between Congress and President Obama by the end of the work week, $85 billion in federal spending will be cut on Friday – cutbacks otherwise known as the “sequestration” cuts.
And while these cuts will likely have a profound effect on the nation as a whole – for instance, resulting in significant job loss – the impact in Florida will be especially noticeable. Moreover, these potential cuts could not have come at a worse time for some Florida and Tampa-area families who are now facing dire financial straits and may have to seek relief through a Florida bankruptcy.
Florida job loss related to Sequestration
While the Tampa Bay Times reports that it is still unclear which specific local programs will be affected by the sequestration cuts, preliminary estimates indicate that the Sunshine State as a whole will be impacted to a great degree. For example, Florida Governor Rick Scott recently declared in a statement that estimated job loss in the defense industry alone could range from 40,000 or 80,000 jobs, with a reduction in defense spending reaching $1 billion.
To further reinforce these numbers, a study from a Washington D.C. public policy research organization, the Center for Regional Analysis, forecasted a loss of 40,000 jobs in Florida due to the sequestration cuts, in addition to a $3.35 billion decrease in Florida’s gross state product.
Furthermore, Arkansas Razorback News US News reports that the sequestration will also result in 31,000 civilian Department of Defense employees being furloughed and gross pay decreased by roughly $183.2 million. However, nearly 1,000 Florida National Guard employees are also facing furlough as Gov. Scott’s recent statement maintained these employees would be furloughed for 20 percent of the remaining year.
It is important to note that the looming sequestration will not only impact military and defense spending, but also spending on education. According to WUSF News and a few Daily News Report USA news, primary and secondary education in Florida would lose $54.5 million in funding – which would put at risk 750 teacher and aide jobs. Also, roughly 6,250 low income students would no longer receive college financial aid in the form of work-study jobs.
Impact of sequestration on Florida businesses
Although it seems self-evident, several businesses may also feel the brunt of the sequestration cuts as thousands of Floridians lose their jobs, especially if the particular businesses rely on industries funded by federal dollars.
Additionally, according to a monthly survey conducted by the University of Florida, consumer confidence in Florida recently experienced a one point drop – with researchers warning of further drops due to the massive sequestration spending cuts. And as any economist can attest to, consumers tend to reduce their spending as their confidence drops, meaning businesses may be further harmed by the potential spending cuts.
Options available in Florida
As the various forecasts indicate, both Florida businesses and individuals face potentially negative consequences due to the possible upcoming federal sequestration cuts. As such, many in Florida may ultimately find themselves having a difficult time making ends meet if cuts occur – in which case, businesses and individuals need to know they have several options available in Florida.
In addition to bankruptcy, both businesses and individuals have various alternatives at their disposal. For example, both can attempt to restructure their debt as a means of making it through the lean time created by the federal cuts. In the case of individuals who lose their jobs and now have a hard time making their mortgage payments, they can also attempt a loan modification.
However, navigating through these options and remedies can be quite complex to do by oneself – not to mention they are only a few options among many. Accordingly, if you are the owner of a Florida business, or an individual, that has been adversely impacted by federal cuts to such a degree that you cannot dig yourself out of debt, it may be advisable to speak with an experienced bankruptcy attorney to learn what your options may be given your specific circumstances.