October 2, 2013

Businesses, brewers, loan seekers among Maine’s affected

Thousands of workers are placed on furlough during the shutdown, and local businesses brace for the economic crunch.

By J. Craig Anderson canderson@pressherald.com
Staff Writer

and Kevin Miller kmiller@pressherald.com
Staff Writer

The effects of the federal government’s shutdown ranged widely in Maine on Tuesday, from furloughs for 1,500 workers at the Portsmouth Naval Shipyard in Kittery to a bottleneck that kept Portland’s Rising Tide Brewery Co. from selling its newest beers.

click image to enlarge

Nathan Sanborn, co-owner of Rising Tide Brewery in Portland, says the budget stalemate may slow federal approval of some of his new beer labels and delay sales.

John Ewing/Staff Photographer

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Statewide, the shutdown sent thousands of federal workers home without pay, closed a major national park and left business owners bracing for economic damage. Most said they could weather the shutdown – as long as it ends within a few days.

If those days turn into weeks and Congress reaches no budget compromise, consumers and businesses in Maine will feel much more pain, they said.

“If the government shutdown extends beyond two weeks, I’m going to start to get worried,” said Nathan Sanborn, who owns Rising Tide Brewery with his wife, Heather.

Sanborn said the company has some new varieties of beer that need label approval from the Alcohol and Tobacco Tax and Trade Bureau, a division of the U.S. Department of the Treasury that regulates beer labeling and breweries, among other things.

“Until the government is up and running, we can’t get those labels approved,” he said, and the same problem will affect other breweries in the state.

The shutdown could be devastating for hundreds of workers at the Portsmouth Naval Shipyard, who received furlough papers Tuesday along with instructions to leave the premises by noon, union officials said.

About 1,500 of the 4,608 civilian workers at the shipyard have been furloughed, said Lt. Cmdr. Rebecca Rebarich with the Navy’s Office of Information. Nationwide, 75,000 civilian Navy employees were sent home without pay.

Stephen Graves said the furloughs left him and his shipyard co-workers disheartened and angry at federal lawmakers for allowing the shutdown to happen.

“I feel like it’s an unfair, unneeded set of events,” Graves said. “I’ve got a 4-year-old that plays better than these people do together.”

Debbie Jennings, president of the International Federation of Professional and Technical Engineers at the shipyard, said all workers were required to show up Tuesday, not knowing whether they would be sent home or allowed to stay.

About half of the union’s 1,600 members were sent home, with no word on when to return or whether they would be paid, Jennings said.

“There wasn’t a lot of direction,” she said. “We were just told to listen to the news and check the (shipyard’s) website.”

Like other federal agencies, the Navy separates employees into groups depending on the work they do. The Kittery shipyard repairs and maintains nuclear-powered submarines. Maintenance work there and at the Navy’s three other public shipyards may continue for some deployable ships, or when a delay would “endanger national security or create risk to human life or property,” Rebarich said.

Employees who provide “support services” are more likely to be furloughed.

Maine has more than 10,000 federal employees. Those who are sitting at home this week will have a lot of time to think about who put them there, said Arvard Worster, chief of the American Federation of Government Employees Local 2024 at the Portsmouth Naval Shipyard.

“This whole thing is so unnecessary,” Worster said. “We just need Congress to stop playing their political games.”

Congress has the authority to pay furloughed workers retroactively, but it remained unclear Tuesday whether lawmakers would be willing or able to do that in the current partisan climate.

The furloughs follow unpaid leave already imposed on federal workers because of the “sequestration” budget cuts that began in March. While most Kittery shipyard workers were exempt from the sequester-related furloughs, some were ordered to stay at home without pay.

In the private sector, small businesses in several industries are likely to suffer if the shutdown extends beyond a week or two, said business leaders in Maine.

“It’s unfortunate that we can’t operate as usual,” said Marcia Hartt, vice president of the Portland Regional Chamber. “There are so many lives and businesses that this impacts.”

Hartt said the shutdown would prevent U.S. Small Business Administration loans from being processed and create economic uncertainty that could hurt all types of business.

“I think that’s the thing that worries everyone: How long is this going to last?” she said.

The residential real estate market is almost sure to suffer in a prolonged shutdown, said Anthony Armstrong, owner of Portland-based Maine Home Mortgage Corp.

Many prospective buyers will not be able to get their mortgage loans processed until the federal government resumes its normal functions, said Armstrong, who is also a director of the Maine Association of Mortgage Professionals.

Consumers seeking U.S. Department of Agriculture Rural Development mortgages are likely to have the most difficulty because their loan applications most likely won’t be processed until the shutdown ends, he said.

Conventional and Federal Housing Administration loans should be affected less, Armstrong said, but it depends largely on how long the shutdown lasts.

“If it’s a short shutdown, the impact will be minimal, but if it’s an extended shutdown, the impact could be substantial,” he said.

Bart Stevens, president of the Maine Association of Realtors, said it is far too soon for real estate professionals in Maine to panic.

Consumers who already are in the process of buying homes should not face any difficulties, said Stevens, broker and owner at Century 21 Nason Realty in Winslow.

“It’s the people who are just beginning the process, those are the ones that are going to get hurt the most,” he said.

Maine’s military personnel are exempt from the shutdown, thanks to an eleventh-hour bill to protect military pay that Congress passed unanimously Monday.

And not all civilian federal workers in Maine were sent home because of the shutdown. More than 500 federal employees in the Aroostook County town of Limestone got word Tuesday that they will not be furloughed.

The Defense Finance and Accounting Service handles paychecks, reimbursements and retirement benefits for all military personnel, as well as civilian defense workers and retirees. Steve Burghardt, spokesman for the service, said the facility in Limestone was open for business Tuesday and no furloughs were planned.

The service is funded through fees collected from the agencies that use its billing and accounting services, not through year-to-year budget bills passed by Congress. A long-term shutdown could affect its revenues, however, and affect the agency.

Gov. Paul LePage said Tuesday that a short-term shutdown will not directly affect state government or public assistance programs.

The Republican governor said in a prepared statement that while some state government positions and programs are federally funded, they will continue as normal this week, The Associated Press reported.

He said the shutdown won’t affect school funding or state-run public assistance programs, but an extended shutdown could hurt some agencies.

LePage called the shutdown a “failure of leadership in Washington, D.C.”

J. Craig Anderson can be contacted at 719-6390 or at:canderson@pressherald.com@JCraigAndersonKevin Miller can be contacted at 317 6256 or at:kmiller@mainetoday.com
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