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Calhoun County’s Vulnerability to Federal Handouts

Saturday, February 4, 2012

Just when we began experiencing significant reductions in the area’s unemployment rate, we started to receive the bad news. Due the withdrawal of our military forces from Iraq and the downsizing of our efforts in Afghanistan, it was recently reported that the Depot is planning to trim its workforce. This should not be surprising as it happens every time that peace breaks out. However, when adding this to Darcy Corporation’s recent layoff announcements, this area’s vulnerability to any downward fluctuation of federal funds places us at a higher than acceptable economic risk.

Our previous dependence on the now closed Fort McClellan should have taught us a lesson. The negative impact on house prices and sales in the Saks, Weaver, and Jacksonville areas immediately after the fort’s closing illustrated the costs associated with a loss of federal dollars. Then a few pieces of good news such as the opening of the Honda plant in Lincoln and the positive impact of the post-911 military spending gave this area a much needed financial boost. This does not alleviate the risk that we face should there be a significant reduction of government dollars flowing into this area. While many of my fellow conservatives are for responsible government spending, unless we show the proper initiative, our political views may prove to be detrimental to our community’s financial well-being.

Another major concern is the extremely high percentage of what is known as federal transfer payments received by residents in Calhoun County. (Transfer payments are funds paid to citizens and which are not related to services currently being rendered. These include Social Security checks as well as other “safety net” payments.) A study, which I conducted last August concerning the level of transfer payments coming to our area, showed that over 50% of our citizens receive such funds. Additionally, since this Recession started in 2007, the number of people receiving transfer payment has increased by 36%. While this money does stimulate the economy temporarily, it has less of an impact than income earned by the production of new services and products. Lastly, its continuity and predictability is subject to the political whims of those in Washington. Just like reducing the workforce at the Depot, any moves to diminish transfer payments to our citizens will be devastating to the local economy.

Our county is blessed with many resources, which among others includes industrious workers and our unique location at the hub of several transportation routes. On the other hand, our weak K-12 educational institutions, the high percentage of adult residents who are not in the workforce, and our high adult illiteracy rate, present fixable problems, which work against us. Efforts to recruit industry into this area have traditionally been successful and will work again provided that further economic recovery results in increased desires for plant expansion or relocation. On the other hand, home-grown entrepreneurship should also be encouraged. In many cases, this will require that our state and municipal governments significantly change their attitudes and become more pro-business.

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Keywords: Calhoun County, Anniston, economic development

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