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Federal sequester take effect; local impact remains uncertain

Automatic budget cuts, known as the "sequester," went into effect on Friday, March 1, and local organizations are now scrambling to get answers about what it might mean for their bottom line.

It's still too early to tell what it all might mean; however, Morrie Veilleux, district administrator for New Richmond schools, said the district is expecting $15,000 to $20,000 to be cut from its Title 1 budget compared to the 2011-12 school year and another $20,000 to $30,000 to be cut from its federal special education budget compared to the previous year.

"I read somewhere that schools in Wisconsin can expect to see a 8 to 9 percent cut, so that's where those estimates are coming from," he said.

While the district is currently having budget conversations, the school board has not considered any wage increases, health insurance increases or new positions, Veilleux said.

"As we get the information, and as the pieces of the puzzle become more clear, we'll start putting that together," he said.

It's possible that that state will allow school districts to increase their revenue limit by 150 percent, he said.

"Two Republican senators have already said they favor that," he said. "That would really, really help us."

For other organizations like Head Start, the local impacts of the sequester are still unknown, said Mona Karau, director of Head Start in New Richmond.

The White House has said Wisconsin can expect the elimination of Head Start service to about 900 children, among several other cuts.

The St. Croix Wetland Management District is also in wait-and-see mode, said Chuck Traxler, assistant regional director for external affairs at U.S. Fish and Wildlife Service.

"We don't have that level of detail yet," he said referring to the effects the sequester will have on the New Richmond office.

At Westfields Hospital, President and CEO Steve Massey said he doesn't expect the sequester to have an immediate impact on the hospital's ability to provide care or the hospital's plans for current projects or jobs.

"Under the sequester process, Medicare payments will face a 2 percent across-the-board reduction, resulting in the loss of millions of dollars across the state. Wisconsin hospitals are recognized as being among the highest quality, highest value in the country. Continued Medicare payment cuts further disadvantage high performing hospitals like ours," Massey said.

For the long-term, Massey said Westfields and other hospitals are operating with financial uncertainty.

"While we have done an excellent job planning for the future, we cannot predict the magnitude of cuts that are ahead as Congress continues to offer only temporary fixes to a long-term budget crisis, and hospitals appear to be the target of more cuts to resolve the crisis. This is not acceptable and could impact our ability to fund re-investment into our campus and continue to expand the services we provide locally," he said.

Throughout the federal budget, the sequester would cut $1.2 trillion over the next 10 years, with $85 billion trimmed before Oct. 1.

Beyond sequestration, Congress and President Barack Obama need to deal with the federal budget later this month. Federal programs are operating on a budget extension that expires this month.

In the spring, they must consider whether to raise the debt limit the government is allowed to carry.

Sequestration was approved two years ago when Congress and Obama could not agree on how to control the federal debt. They agreed to the automatic budget cuts as a way to force political leaders to find ways to avoid them.