November 18, 2012

Five things you need to know about the fiscal cliff

Unless it's averted, the manufactured Capitol Hill crisis will have real-world implications for you. Yes, you.

By Kevin Miller kmiller@mainetoday.com
Washington Bureau Chief

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Department spokesman David Connerty-Marin said much of that money is "flow-through," meaning it goes directly through the state to local school districts. As a result, it would be largely up to local schools to address the losses, even as they struggle with the expiration of federal stimulus funds.

"This would be an additional hit that would certainly hurt. There's no question about it," he said.

FALLOUT FOR HIGHER EDUCATION

Families sending children to college, meanwhile, would lose access to the American Opportunity Tax Credit of up to $2,500 a year to cover tuition and other educational expenses, including textbooks. That credit would be replaced by the Hope Tax Credit, which is capped at $1,800 and has tighter income restrictions.

Gianna Marrs, director of student aid at the University of Maine in Orono, said the Opportunity Tax Credit especially benefits middle-income families who may earn too much to qualify for financial aid.

Other work-study and need-based grant programs could also see reductions, Marrs said. And while the popular Pell Grants are shielded in 2013, the program would be cut in future years.

University researchers are bracing for the impact as well.

"We've already started to feel the results of the fiscal cliff," said Mike Hastings, director of research and sponsored programs at UMaine. "Some of the federal agencies are so concerned about it that they are withholding their solicitations" for grant applications.

The federal government provided roughly 93 percent of the $61.5 million in grants that flowed through Hastings' office last fiscal year, supporting several hundred faculty and many more graduate students. Those researchers and graduate students conduct work that not only can lead to scientific discoveries but also can spawn commercial enterprises -- and therefore jobs.

The National Science Foundation, which is one of the biggest sources of federal research funding, is already warning researchers that existing multi-year grants may have to be trimmed if the agency has to absorb an estimated $469 million cut next year.

Washington Bureau Chief Kevin Miller can be contacted at 317-6257 or at:

kmiller@mainetoday.com

Twitter: @KevinMillerDC

 

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