PARAGOULD, AR (KAIT) – Region 8 civic and business leaders are closely watching what's happening on Capitol Hill as lawmakers work toward a compromise on a series of tax increases and spending cuts, to begin January 1.
"Everybody will be impacted the same because there will be a reduction in income, and when there is a reduction in income, there's a reduction in discretionary money that you have to spend. And that impacts business and when it impacts business, it impacts communities as a whole," said Paragould Mayor Mike Gaskill, who also believes Washington will come up with a solution before year's end.
By now, most people have undoubtedly heard about the so-called "fiscal cliff." Democrats want the top income earners to pay more money in taxes, while Republicans want to cut spending more.
"It looks like we're trying to, for the first time, come out of this recession that's been going on since 2008, and part of this money that we got, these tax cuts we got, was to help the economy," said Gaskill.
Gaskill said it's not known what federal programs would be threatened if the country enters 2013 without a new deal; however, he said residents in Paragould wouldn't notice anything immediately inside city limits.
"If we go off this fiscal cliff, we're not going to let that impact our taxpayers here in Paragould," said Gaskill. "We'll continue to offer services that we do on the income that we have, but it will probably take away some of the overall revenue because they'll have less money to spend."
Gaskill also said he's concerned about higher income taxes.
"When people don't have money to spend, then services can't be provided, or products can be (manufactured), and it goes all the way back to this," he said. "It starts with the business and then it goes to the distributors and then it goes to the manufacturers and so everybody suffers on something like this."
Gaskill said city government isn't the only entity that is paying attention. Region 8 News talked to Vicki Shelby, Director of Early Childhood at the Paragould School District. She said programs that receive federal funding may eventually be cut; but, it's too early to tell.
Shelby said the worst case scenario would result in job cuts.
"The majority of our grants, of course, are salaries. So you're looking at both ends. You're looking at people with jobs, our staff, our teachers, and then you're looking at children and their families," Shelby said. "I guess my fear is the most vulnerable of us--our children, our youngest children--are going to be the ones that are hit the hardest, and their families."
Gaskill said the overall consensus is that the "fiscal cliff" will be averted, but he still wonders what could happen.
"The hope is that they won't let us fall off this fiscal cliff. They are up there and you've got one side and the other, and they're having a hard time finding the middle," said Gaskill.
"They need to re-evaluate how they spend their money, too. They've talked about we'll do some cuts and we'll do this. But, once again, it looks like they're trying to fund the issues through tax dollars," said Gaskill. "If you leave people's money alone, businesses will reinvest when they know what's coming and that's the problem. When you don't know what's coming, you don't know if it's going to be more taxes. Then that money that you have, you'd like to invest in your business, and then it doesn't get invested."
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