Bloomberg News

Colorado Springs Impatient as Federal Shutdown Idles Thousands

October 03, 2013

Alicia Taylor is offering free haircuts to furloughed civilian defense workers at her Colorado Springs hair salon, with its view of white-winged gliders soaring over the 17 spires of the U.S. Air Force Academy chapel.

“If you look at your savings account and throw 20 percent in the trash, how are you going to pay your rent and feed your family?” Taylor said when asked to explain the giveaway. “That’s where they are right now.”

About 40 percent of the Colorado city’s economy relies on its multiple military installations and defense contractors. Ten percent of the 55,000 people in the industry were sent home by the government shutdown. The furloughs came on top of mandatory unpaid days off under budget cuts known as sequestration that cost federal workers 20 percent of their pay over several weeks.

“When you have to send more than 1,000 workers home on a non-pay status, it’s very difficult, it impacts morale, it impacts future operations,” said Dee McNutt, a spokeswoman for Fort Carson, the U.S. Army post on the city’s south edge. “We won’t know the full impact for a while.”

This city of 432,000 in the shadow of Pikes Peak, marking the Front Range of the Rocky Mountains, is known for its Tea Party support and its evangelical community, home to such Christian groups as Focus on the Family. While some residents are reluctant to criticize leaders in Washington, they make clear that they want the shutdown to end.

‘Significant Hardship’

While essential missions continue with uniformed military and some exempted civilians, “the shutdown will place significant hardships on all of our people,” said Lieutenant Commander Bill Lewis, a spokesman for the U.S. Northern Command, or Northcom, which is responsible for defending U.S. territory. “We hope this will end soon.”

Northcom and the North American Aerospace Defense Command, or Norad, are headquartered at Peterson Air Force Base, which furloughed 2,200 civilians and closed its commissary this week. Nearby Schriever Air Force Base sent 400 civilians home, and Norad and Northcom furloughed about 700 of their 850 civilians.

The government shutdown is the latest in a string of challenges to Colorado’s second-largest city since June 2012. A pair of wildfires that proved to be the most destructive in state history burned about 850 homes in the city and its suburbs. Flooding over the Waldo Canyon Fire scar closed highways and caused tourists to shy away from attractions near Pikes Peak. And federal budget cuts led the military to lay off thousands of workers and contractors to put projects on hold.

“Five thousand people here lost their jobs,” said Tom Binnings, senior partner with Summit Economics LLC, a Colorado Springs-based economic research firm.

High Unemployment

The city’s unemployment rate was 8.4 percent in July, the latest month for which figures were available for metropolitan areas, compared with 6.8 percent in Denver and 7.7 percent nationwide, according to the U.S. Bureau of Labor Statistics.

Colorado Springs budget troubles took on a high profile in 2010 when the city turned off one-third of its streetlights, halted park maintenance and cut services to close a $28 million budget gap after sales-tax revenue plummeted and voters rejected a property-tax increase.

Political wrangling over the federal budget portends more economic uncertainty for the city, which ranks first nationwide in the percentage of total workers who receive paychecks from Washington. About 19 percent of the workforce depends on the military, ahead of the U.S. Navy ports of Virginia Beach, Virginia, and Honolulu, tied for second at about 17 percent each, according to an analysis of Moody’s Analytics data by the Washington-based nonprofit Brookings Institution.

Spare Civilians

Some lawmakers said yesterday that legislation passed by Congress on Sept. 30 and signed by President Obama intended to ensure active-duty military personnel continued to be paid during a shutdown should also apply to civilian defense workers.

“If they are supporting men and women in uniform, I think that means many, or most, if not all of them, need to stay on the job,” said U.S. Representative Doug Lamborn, a Republican who represents Colorado Springs. “Unfortunately, in the Pentagon, they’ve so far drawn too narrow of an interpretation of who fits into that category.”

U.S. Defense Secretary Chuck Hagel said yesterday that aides were working to identify whether some civilians might be called back from furlough based on the nature of their duties.

“Fiscal and budget uncertainty isn’t good for any of us in the industry, whether that stems from failure to pass a budget, or upcoming concerns over the debt ceiling,” Steve Eisenhart, senior vice president of the Colorado Springs-based Space Foundation, said by e-mail. Many space-related defense activities are centered in the city at Peterson Air Force Base and Cheyenne Mountain Air Force Station.

Academy Curbed

More than 1,000 civilians were furloughed at the Air Force Academy, where the government shutdown caused the cancellation of a fifth of scheduled courses, closed the library and tutor centers, and shut down the base fitness center. Travel for all intercollegiate athletics was scrubbed, including the Air Force-Navy game on Oct. 5.

The shutdown also led to the cancellation of tours of the Cadet Chapel that stands against the backdrop of the Rockies visible from stylist Taylor’s salon. Her home in the Black Forest community near Colorado Springs is being repaired after a wildfire destroyed more than 500 structures in June.

“I hope it doesn’t last long,” said Taylor. “It’s been a very stressful, very trying, three months down here.”

To contact the reporter on this story: Jennifer Oldham in Denver at joldham1@bloomberg.net.

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net


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