States scramble to fill void left by federal shutdown

States scramble to fill void left by federal shutdown
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States worried about the impact the partial government shutdown is having on tens of thousands of workers and contractors in their backyards are scrambling to make up for services and fill in gaps left by the impasse in Washington.

From coast to coast, in red and blue states, governors and state legislatures are assuring around 380,000 furloughed federal employees they will be covered by unemployment benefits during the shutdown. The 420,000 workers deemed “essential” are not eligible for jobless benefits.


Affected government workers missed their paychecks last week because of the funding standoff, and there’s no end in sight to the longest shutdown in U.S. history.

“The dysfunction at the federal level that has led to the shutdown has some real, significant impact for people at the state level,” said Scott Pattison, who heads the National Governors Association. “The states administer the unemployment insurance program. The states administer food stamps. You could just go on and on.”

Some states are working with public and private banks to make sure mortgages are paid on time so no federal workers lose their homes. Others are moving back deadlines to ensure students whose scholarships are paid by federal departments can continue attending state colleges and universities.

California Gov. Gavin Newsom (D), who was sworn in just last week, has promised that the state will pay unemployment benefits to furloughed workers. Wisconsin Gov. Tony Evers (D) and New Mexico Gov. Michelle Lujan GrishamMichelle Lynn Lujan GrishamNew Mexico says EPA abandoned state in fight against toxic 'forever chemicals' Walmart to stop selling guns in New Mexico New Mexico governor to Nike after Arizona snub: 'Let's talk' MORE (D) have given furloughed workers assurances that they too will receive benefits.

Connecticut Gov. Ned Lamont (D) and Oklahoma Gov. Kevin Stitt (R), both of whom just took office, have asked state banking officials to help federal workers who may not be able to make their mortgage payments during the shutdown, which began on Dec. 22 and is now on Day 27.

Lamont has proposed a public-private partnership with Webster Bank to provide interest-free loans guaranteed by the state to those federal workers. Stitt directed his state’s Banking Department to instruct state banks to restructure loans or delay payment deadlines for those waiting to be paid.

But state budgets are tight, even in strong economic times. Some state officials are wary that the federal government could remain closed long after their reserve funds dry up.

“There’s nothing significant looming in the next week,” Kristen Cox, director of Utah’s Office of Management and Budget, told reporters on Monday. “My biggest concern now is looking out six weeks to two months.”

In Minnesota, Gov. Tim WalzTimothy (Tim) James WalzGun debate back in focus for states after mass shootings Minnesota program will pay homeowners to transform lawns into bee gardens as species inches closer to extinction Minnesota governor signs law making marital rape illegal MORE (D) said the state will help fund federal programs like the Supplemental Nutritional Assistance Program (SNAP), better known as food stamps, and veterans services. Still, state officials said they may have to consider layoffs for some of the 3,000 state workers whose salaries come in part from the federal government.

Minnesota Attorney General Keith EllisonKeith Maurice EllisonFormer Sanders aides launch consulting firm Minnesota AG will defend state's abortion restrictions despite personal views Hillicon Valley: House panel advances election security bill | GOP senator targets YouTube with bill on child exploitation | Hicks told Congress Trump camp felt 'relief' after release of Clinton docs | Commerce blacklists five Chinese tech groups MORE (D) said he would explore the possibility of a multistate lawsuit to recover any funds states pay to fill the gaps left by the federal government.

Ahead of a Friday deadline for students to make tuition payments for the University of Nevada-Las Vegas and the University of Nevada-Reno, new Gov. Steve Sisolak (D) asked the Nevada System of Higher Education to either waive late fees or financially assist students who depend on federal money.

The breadth of the programs for which states are plugging holes underscores just how much states rely on the federal government for programs that assist the poor, students, homeowners, or even blue-collar workers who cannot afford to miss out on multiple paychecks.

About one in every three dollars a state government spends comes from the federal government. And states that depend most heavily on federal dollars to cover programs aimed at poor and working-class families are red states that voted for President TrumpDonald John TrumpThe Hill's Campaign Report: Democratic field begins to shrink ahead of critical stretch To ward off recession, Trump should keep his mouth and smartphone shut Trump: 'Who is our bigger enemy,' Fed chief or Chinese leader? MORE in 2016.

Among the 10 states that get the highest proportion of their budgets from the federal government, according to a study by the Tax Foundation, eight — Mississippi, Louisiana, Tennessee, Montana, Kentucky, Missouri, South Dakota and Georgia — gave Trump their electoral votes. Ninth-place Maine gave Trump one of its four electoral votes. Only 10th-place Oregon chose former Secretary of State Hillary ClintonHillary Diane Rodham ClintonThe road not taken: Another FBI failure involving the Clintons surfaces DHS cyber agency to prioritize election security, Chinese threats ABC chose a debate moderator who hates Trump MORE over Trump.

Several Western states are using state employees to keep national parks open.

In Utah, state officials are cleaning up Zion and Bryce Canyon national parks. In Arizona, Gov. Doug Ducey (R) has pledged to use state funds to keep the Grand Canyon open to tourists.

“If you have plans to visit the Grand Canyon over the weekend, keep ‘em,” Ducey said in a statement.

Some states have even taken it upon themselves to plow roads and clean toilets that fall under federal jurisdiction.

But it’s not clear how long states will be able to fill the gap, especially if the shutdown continues long enough that a new month of SNAP benefits or payments to cover other programs aimed at low-income families come due.

Some states have already begun to consider tapping their reserve funds, money set aside for an economic crisis, not a political crisis.

“If this goes on another few weeks, it will be very significant for some state budgets,” Pattison said. “There’s not extra money. So if they move funds into something the federal government isn’t covering, then something else is cut at the state level or they’re actually dipping into rainy day funds.”