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Federal furloughs would sting Hudson Valley economy, experts say

The Veterans Affairs Hospital Montrose Campus is located

The Veterans Affairs Hospital Montrose Campus is located at 2094 Albany Post Rd. in Montrose. (Feb. 25, 2013) Photo Credit: Angela Gaul

The threat of about $85 billion in across-the-board federal budget cuts looming Friday and the possible furloughs of some of the thousands of government employees based in the Hudson Valley could slow the region's economic engine, local business leaders said.

"We would certainly see some impact if an agreement is not made and employees based in the Hudson Valley were affected," said Marsha Gordon, president and chief executive of the Business Council of Westchester, an advocacy group.

The federal spending cuts, known as a sequester, were postponed from last month to March in the hopes that the delay would allow Washington time to agree to a deficit reduction plan.

Without an agreement in the next few days, federal employees could be furloughed -- or laid off -- leaving a trickle-down effect on the local economy, local experts said.

Federal employees based at the Department of Veterans Affairs hospitals in Westchester County's Montrose and Dutchess County's Castle Point, for instance, have total base salaries of almost $117 million, according to data from the federal Office of Personnel Management.

All told, nearly 2,600 federal workers based in the Hudson Valley receive more than $187 million in base salary, according to data obtained by Newsday.

Those figures, however, don't include a portion of thousands more federal employees holding sensitive jobs whose location was not specified. Those federal workers, including FBI and Secret Service agents, Federal Aviation Administration investigators and National Park Service police, receive total base salaries of $1.4 billion in the New York City metropolitan area.

"Many people are not aware of the number of federal employees, the people who are going to be laid off," said Rep. Nita Lowey (D-Harrison) in a Monday conference call.

Workers at the Otisville Federal Correctional Institution reportedly have begun receiving notices that they will be furloughed one day per every two-week pay period beginning April 1.

Gordon said that the uncertainty surrounding the budget cuts would have the greatest impact on smaller companies.

"The lack of clarity makes their confidence in the economy less clear because they're not sure how to proceed," she said.

The occupations with the largest aggregate federal salaries in the Hudson Valley are nurses ($25.4 million); medical officers ($17.4 million) and social insurance administrations ($11.7 million), according to the data.

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