Sequestration reaches deep across Northland

The 148th Fighter Wing's 241 federal technicians in Duluth face days or weeks of unpaid furlough. A Two Harbors outdoor gear company that supplies tactical gear to the military doesn't know whether its next order will come in.

148th Fighter Wing
Erin Ansell, who works as a jet engine mechanic at the 148th Fighter Wing, inspects and cleans one of the Block 50 F-16 jet engines at the base recently. About 240 military and civilian employees at the base face unpaid furlough if the sequester begins Friday. (File / News Tribune)

The 148th Fighter Wing's 241 federal technicians in Duluth face days or weeks of unpaid furlough. A Two Harbors outdoor gear company that supplies tactical gear to the military doesn't know whether its next order will come in.

At Duluth International Airport, the air traffic control tower might be closed for the arrival or departure of the day's first and last regularly scheduled flights. The commercial pilots would have to turn on the runway lights themselves.

The Fond du Lac Reservation's Head Start program would have to cut back by 35 children.

As the Friday deadline for the automatic federal budget cut of $85 billion approaches, the News Tribune asked local government officials and agencies to project the real effects they expect and are planning for.

148th Fighter Wing, Minnesota National Guard


The 148th Fighter Wing of the Air National Guard employs 241 federal technicians, of which 216 are federal military technicians and 25 are civilian technicians, said Capt. Gina Keppeler of the 148th Fighter Wing.

All of those employees, who represent about 60 percent of the 148th Fighter Wing's full-time work force, would be affected by a furlough, Keppeler said.

Those employees include pilots, maintenance personnel, mission support personnel, and finance and accounting personnel.

The Minnesota National Guard said that sequestration could result in the furlough of 1,169 employees of the National Guard in Minnesota, about 54 percent of the National Guard's work force. Sequestration "has the potential to influence the readiness of our service members, equipment, facilities and training," said Capt. John Hobot, spokesman for the Minnesota National Guard.

Defense contractors

The automatic cuts will hit the Defense Department hard, with government contracts among the first to feel the impact.

In St. Louis County, 17 contractors do about $18 million in business with the military, according to the pro-military spending group "For the Common Defense." Sequestration cuts could mean $1.6 million to $3.2 million in cuts this year in just St. Louis County.

Granite Gear, a Two Harbors outdoor gear company that supplies tactical gear to the military and employs 40 people, already is feeling an impact. It is one of four contractors in Lake County that supplies the military that could see cuts. The rescue, medical and tactical gear the company supplies the military makes up 40 percent to 50 percent of its business. It's used by special forces including SEALs, Rangers and Green Berets.


"We don't know when the next order will come, or if it will," said Jeff Knight, the company's CEO. "At the very least, we've lost months.

"We're kind of in a holding pattern," Knight said. "We got enough going on to keep people busy. But in another month, we won't."

National parks

The Interior Department has told Apostle Island National Lakeshore and other parks to plan for a 5 percent budget cut, said Julie Van Stappen, chief of planning for the National Park property. That could mean eliminating up to eight seasonal employees at Apostle Islands. If those cuts continue into the summer, it would mean reduced services for thousands of visitors, such as reductions in visitor center staff.

At Voyageurs National Park, the 5 percent cut would mean eliminating the entire seasonal staff, including six interpreters and four park rangers, said Tawnya Schoewe, spokeswoman for Voyageurs. "It would mean ... campsites aren't cleaned as often; no trail clearing; and reduced staff and hours at the visitors centers. It's going to mean some direct impacts (to park visitors) if this holds true," Schoewe said.

The 5 percent cut also would have a big effect on Isle Royale National Park. An analysis provided by Superintendent Phyllis Green shows the cuts would include closing ranger stations, reduction in campground maintenance, eliminating staff at campgrounds and fewer ranger-guided ferry boat trips. The cuts would require eliminating seasonal positions, a move that would cut law enforcement rangers, visitor interpretation programs and resource management in half.

Lake Superior Community Health Center

It would take a while for budget cuts to be felt at the community health center, which serves low-income residents with clinics in West Duluth and Superior, said Mavis Brehm, the center's CEO.


The health center's fiscal year begins March 1, and it has been informed that no federal money is authorized beyond the first three months, Brehm said. Federal money provides less than 20 percent of the health center's annual $7.5 million budget, she said.

Loss of all federal money would be a significant hit, but it wouldn't be enough to force the health centers to close their doors unless there are drastic cuts in Medicaid, which covers many of the center's patients, she said. Currently, though, Medicaid is protected from sequestration.

The two health centers serve 12,000 people annually.

Senior nutrition

Unless the budget impasse proves long-lasting, seniors in Northeastern Minnesota should face no imminent disruption in meal programs, said Marilyn Ocepek, director of Arrowhead Senior Nutrition Services, a division of Arrowhead Economic Opportunity Agency Inc.

Ocepek said she has received word that with the help of some hold-over funding from 2012, it looks like Meals on Wheels and senior dining programs throughout the seven-county region served by her agency should be able to continue unabated until the end of this calendar year. Beyond then, the funding outlook appears hazy.

Arrowhead Senior Nutrition Services provides meals to between 1,800 and 2,000 people daily in the region. The annual cost of feeding that many people is about $2.1 million, and 37 percent of the money comes from federal coffers, said Catherine Sampson, director of the Arrowhead Area Agency on Aging.

Sampson pointed out that if budget cuts continue, senior nutrition programs could face a very challenging 2014, especially with no financial cushion to fall back on from the previous year.

Community development

If the sequester remains in effect, the city of Duluth has been advised it could face about an 8 percent reduction in the amount of money it receives through the Community Development Block Grants it receives through the U.S. Department of Housing and Urban Development, said Keith Hamre, the city's director of planning and construction services. Those cuts could translate into about a $170,000 hit by later this summer.

That CDBG money can support an array of projects that provide affordable or low-cost housing or that reduce energy use.

Public safety

Duluth Police Chief Gordon Ramsay said the city receives about $107 million from the Department of Justice in a year to support task force operations, child advocacy centers, domestic violence programs, sexual assault prevention efforts and drug enforcement efforts.

It remains unclear how much of that money could be put at risk by the sequester.

Similar uncertainties face the Duluth Fire Department, which receives federal money to assist with training and emergency management preparations. The city also receives grants for pieces of equipment through the Federal Emergency Management Agency.


Federal transportation trust funded programs are mostly exempt from Friday's sequester. The majority of Federal Highway Administration, Federal Transit Administration and Federal Aviation Administration programs are in this category, paid for by the federal gas tax, meaning there will be few short-term effects, according to an e-mail from Sergius Phillips, Minnesota Department of Transportation's federal relations manager.

But the feds used $18.8 billion of general fund money to pay for highway projects because the gas tax has fallen short, and the sequestration cuts could reduce that general fund portion by $330 million. That cut eventually would slow payments to states for transportation projects.

Jim Foldesi, St. Louis County public works director, said the state Department of Transportation would have to decide how to allocate those cuts across the state, but that it probably will mean delays, not elimination, of any planned road projects.

Federal employee furloughs would affect airport security screenings, Phillips said.

Duluth International Airport

At the Duluth airport, officials are planning for the worst-case scenario if the automatic spending cuts occur: The air traffic control tower could close nightly from 10 p.m. to 6 a.m.

That's because the Duluth International Airport is on the list of 72 airports that could see the elimination of overnight shifts of air traffic controllers due to employee furloughs to deal with the cuts, according to the Federal Aviation Administration website. The FAA operates the towers.

For Duluth, that means two regularly scheduled flights -- the last one at night and the first one in the morning -- will be arriving or leaving when the tower is closed.

"The flights wouldn't be altered but continue as scheduled," said Thomas Werner, the Duluth Airport Authority's executive director. "It can be done safely. Airports all over the country already close during overnight hours."

Some continue to operate at night, with procedures that give pilots the ability to turn on the runway lights and use other navigational aids normally provided by air traffic controllers, Werner said.

"We're confident we can make it work," he said. "But we'd have to invest in the infrastructure to do it. It's not cheap."

Airports affected will have another month to establish alternate overnight systems, since tower closings wouldn't occur until April 1, according to the FAA.

The Duluth International Airport is the only Minnesota airport on the FAA list of airports that could be affected.

The Fond du Lac Band of Lake Superior Chippewa

The band's resource management department and Head Start program probably will be most affected by Friday's cuts, said Karen Diver, its chairwoman.

The number of available Head Start slots probably will be reduced from 200 to 165. And because of U.S. Environmental Protection Agency cuts, the band's resource management department will get less technical assistance, guidance and money. The department deals with air and water quality, particularly for mining, habitat restoration and animal research.

Less money could be dealt with in one of two ways, Diver said: across-the-board cuts or targeted cuts to programs, meaning entire grant programs could go away.

On the other end, much like the retail sector that relies on consumer confidence, the band relies on earned income at its casinos and supporting businesses. And financial crisis rhetoric encourages people to hold off on entertainment spending, Diver said.

"Those are the first dollars people start to not spend when they feel economically unsafe," she said.

Duluth school district

The Duluth school district will be forced to deal with nearly $500,000 in federal program cuts. Its Title I, special education and Head Start funds will bear the brunt, with Indian Education and other smaller federal programs also getting reductions. Business services director Bill Hanson said the Minnesota Department of Education probably will give school districts some direction as federal money is processed through that agency.

He anticipates 30 percent, or about $150,000, must come from Title 1; 40 percent, or $200,000, from special education; and 15 percent, or $75,000, from Head Start. Laura MacArthur Elementary's school improvement grant -- received to improve test scores and narrow the school's achievement gap -- also could be affected, Hanson said.

The district plans to meet with program managers and talk about what can be cut in ways that will affect students the least, and then meet with union leaders to come up with plans and a timeline. Jobs, supplies and contracts that supply services all could be affected, Hanson said.


St. Luke's hospital will lose about $2.5 million in Medicare funding over the course of a year, said John Strange, the hospital's CEO. Between 60 percent and 70 percent of the hospital's patients are covered either by Medicare or Medicaid, he added.

There also will be an indirect impact as social programs are cut, Strange said, because hospital emergency rooms serve as a safety net for people with mental and physical health issues who can't get help elsewhere.

St. Luke's already has prepared for reduced funds by tightening its hiring and being slow to start new programs, Strange said. The cuts will mean a reduced surplus, which will mean less money to spend on capital equipment, he said.

Essentia Health expects a $9.5 million loss in Medicare funding across its system, spokeswoman Kim Kaiser said.

2014 Duluth Air Show

Ryan Kern, promoter of the every-other-year air show in Duluth, said the military budget cuts are expected to hit non-essential flying like the Blue Angels and Thunderbirds first, as well as any other military flying at air shows. If those cuts occur this year and aren't restored for 2014, that could threaten the planned 2014 Duluth show, Kern said.

"It would be tough to do an air show without that military presence," he said. "That's a $9 million economic hit on our community if that goes away."

Duluth EPA lab

Some Environmental Protection Agency employees and contract workers could see temporary furloughs, but it's still unclear how many, if any, or for how long, director Carl Richards said. No major cuts are expected, and operations of the lab wouldn't be directly affected.

U.S. Coast Guard, Duluth station

Local effects of sequestration on the U.S. Coast Guard are unclear, although the Coast Guard does not plan to furlough any civilian employees, said Lt. Paul Rhynard, Coast Guard spokesman in Washington, D.C. The Coast Guard office in Duluth has five civilian employees. Rhynard said reductions due to sequestration will have effects across all Coast Guard activities. The Coast Guard plans to allocate money and resources to prevent disruptions and preserve the most essential operations, Rhynard said.

FDL Resource Management
Cristina Bunch, groundwater protection specialist, measures a water sample from a lake on the Fond du Lac Reservation to examine under the microscope Tuesday. Bunch, who works at the FDL Resource Management Building, was counting zooplankton to determine the lake's water quality. The building's resource department will be affected by the sequester. (Bob King /

What To Read Next
An assistance package should provide $200,000 to complete the renovation of the neighboring building in the Spirit Valley neighborhood.
Bankruptcy information gathered from cases filed in U.S. Bankruptcy Court in Duluth.
Recently sold properties from St. Louis County.
Bankruptcy information gathered from cases filed in U.S. Bankruptcy Court in Duluth.