Sequestration spending cuts may put the brakes on some projects in Michigan
Local governments and businesses are waiting to see how they will be affected by automatic federal budget cuts that take effect today.
In Grand Rapids, the city’s plans for a new rapid bus service may end up being delayed by the sequester cuts.
Peter Varga is the CEO of The Rapid. He says 80 percent of the funding for the nearly $40 million project is slated to come from the federal government.
Varga says if the federal funding is held up, the project will be delayed beyond its 2014 completion date. He says a delay will add to the cost of the project.
“Delays always mean cost overruns….which is kind of stupid,” says Varga, “You end up doing a project but it’s costing you more, because the federal government couldn’t figure out how to pay for their commitments in a reasonable manner.”
Sequestration cuts are expected to affect schools, environmental cleanup and other programs in Michigan.
The state is expected to lose more than $140 million in federal funding through the sequestration.