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Businesses in military towns brace for budget hit

By Michael Biesecker

Associated Press

Published: Saturday, March 9 2013 11:45 p.m. MST

Guzman also owns Wings Aviation Products in nearby Daleville, a store that sells flight supplies, sunglasses and clothes to aviators and their families. She fears any cutback in flight training time could result in a downturn in revenue because nearly all the store's sales are linked to Army aviation.

Compounding her family's worries is the fact that Guzman's husband is a contract flight instructor who is facing the loss of nearly one month's salary a year.

"It hits us both ways, both from our businesses and our family income," she said.

There are those looking on the bright side, however. Slimmer government paychecks could send more people looking for quick cash to pawn shops and payday loan businesses.

At the Advance Till Payday cash advance store in Oak Grove, Ky., manger Judy Backlund gets a lot of her business from nearby Fort Campbell. The Army prohibits soldiers from using the short-term, high-interest loans, but she deals with plenty of civilians and contractors who work at the post.

Backlund said she's already getting calls from people who are worried about stretching their salaries if they are furloughed. Cash advance stores have been criticized for their high fees and interest rates, though the industry has said it's a necessary option for people who can't get a personal loan from traditional banks.

"It's not an answer to all your problems, but it's better than nothing," she said. "Most people are living paycheck to paycheck, and not much is going into savings."

One of her employees, 33-year-old Vanessa Nohelty, is the wife of a Fort Campbell soldier. Although military salaries are exempt from the budget cuts, Nohelty said the cuts could threaten many of the family programs and services on which spouses rely.

Nohelty said she is waiting to hear from the leaders at Fort Campbell about the effect on childcare, sports programs and counselors that help soldiers after they return from deployment.

"Are we going to get to keep all those programs?" she questioned. "Are they going to have as many counselors?"

Link Melley is the co-owner of Norfolk, Va.-based Freedom Furniture and Electronics, which operates 15 stores in military markets, including outside Fort Campbell. In business for 30 years, Melley said military customers account for 90 percent of the company's business. Many of his 220 employees are military spouses and veterans.

He said the anticipation of these budget cuts has led to a downturn in sales for more than a year. He worries he may have to reduce his staff.

"Typically when there is a deployment, the stress and anxiety is just at one base," he said. "This has been across the board, every service, every base in the country. ... I have never ever seen the anxiety level this high."

Beyond the immediate cuts, Melley said the uncertainty surrounding the constant political wrangling in Washington makes it hard to plan for the future.

"Frankly, we didn't expect sequestration to take place," Melley said. "The service members and their families have become the pawn, and Congress and the president need to get this figured out."

Hall reported from Oak Grove, Ky. Associated Press writers Angela K. Brown in Wichita Falls, Texas, and Jay Reeves in Montgomery, Ala., contributed to this report. Follow Associated Press writer Michael Biesecker at twitter.com/mbieseck.

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