At the beginning of 2013, a double-whammy of budget cuts and tax increases will automatically kick in if Congress doesn’t cut a deal.
If the country goes over the so-called “fiscal cliff,” when would Philadelphia feel the pain?
The short answer is: No one really knows.
Terry Gillen, Philadelphia’s director of federal affairs, says she doesn’t know when cuts would be made to city programs. That’s partly because Philadelphia is reimbursed by the feds after it spends grant money.
Philadelphia’s Homeland Security grants, Head Start programs and foreclosure prevention services could face the chopping block. Federal workers stationed in the city, such as defense employees, could also take a hit.
“It could be very bad for cities,” says Gillen.
That stresses out Mary Graham, executive director of Children’s Village. The federal government provides funding for low-income kids at her preschool through the Head Start program.
If we careen off the fiscal cliff, Head Start programs in Philadelphia would lose more than $3 million.
At this point, Graham doesn’t even know when the money would stop flowing. That’s making it hard for her to budget.
“We have a monthly providers meeting with the school district,” she says. “They said to us, ‘You just operate as if everything’s the same. You should be getting your next check the last week of December. And if everything goes well, you should get another check in March.’ Well, ‘if everything runs the same,’ is a little scary to us.”
It’s also unclear when taxes would automatically go up. The IRS hasn’t told employers to change how much tax they withhold from workers’ paychecks.