Businesses in military towns brace for budget cutbacks
FAYETTEVILLE, N.C. — Like many who make their living in the commercial strip outside the gates of Fort Bragg, Mike Thomas is confident that the $85 billion in automatic military spending cuts will hurt sales at his used car lot and rim shop.
The vast majority of his customers work on the base, and smaller paychecks mean less money for the four-wheel-drive Jeeps, chrome wheels and window-rattling sound systems that are his specialty.
While it remains too soon to measure the exact impact for small businesses that thrive on the civilians employed at the nation’s largest military posts, owners already are bracing for the damage.
Pentagon officials say the automatic budget cuts that took effect March 1 will result in one-day-a-week furloughs for 800,000 civilian employees across the U.S. starting next month, resulting in a 20 percent cut to their paychecks. Soldiers’ salaries are exempt from the cuts.
About 14,500 of those are at Fort Bragg, the sprawling Army base outside Fayetteville, N.C., where the commanding general on Friday announced additional cuts that include the closure of a dining hall and selected recreation centers that serve soldiers and their families.
About 38 percent of all economic activity in the surrounding county is tied directly to military spending, a total impact of about $5.5 billion a year.
Hand-painted signs at Auto Express, the shop about a half-mile from the base’s main gates where Thomas is the general manager, offer special discounts and financing for U.S. Defense Department employees.
In addition to the budget cuts,gridlock in Congress could trigger a full federal shutdown this month. Thomas expects the cuts will have an impact on his business similar to the military buildup before the 2003 invasion in Iraq, when sales dropped by about half as Bragg’s 82nd Airborne deployed overseas.
“Our business is about 90 percent military,” he said. “This is a military town. It is going to affect us all. When there’s a cut, people are scared to spend. I’ve yet to speak to anybody who thinks this is a good idea.”
In Wichita Falls, Texas, beauty salon owner Angela Ward expects her customers from nearby Sheppard Air Force Base to start cutting back. The facility has about 1,200 civilian workers.
She already offers a 15 percent military discount and offers a $10 men’s haircut each Tuesday. But Ward said she can’t afford to lower prices further, although she knows folks will go without or cut back on luxury items and services first during tough economic times.
“They will stop coming in as much or won’t have as much done at the salon in one visit,” said Ward, the owner of Crazy Beautiful Salon. “And moms tell us, ‘Take it shorter’ for their boys because they can’t afford to have it cut as often.”
In addition to the employee furloughs, Pentagon officials are also weighing cuts to military contracts, training, construction and maintenance.
Alabama’s Fort Rucker is the Army’s primary base for training helicopter pilots. With 5,850 military personnel and another 6,328 contractors, the massive base is the economic hub for three cities outside its gates, Enterprise, Daleville and Ozark.
Susy Guzman said she already is seeing the effects of budget uncertainty reflected in fewer diners at Brasas Brazil, her family restaurant in Enterprise. The business is popular with military contractors who work as flight instructors, helicopter mechanics, maintenance workers and administrators.
“You can tell people are being cautious because there is uncertainty, they are wondering if their wallets are going to be affected,” Guzman said.