State Agencies Size Up Impact of Federal Shutdown
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In anticipation of a prolonged government shutdown, Gov. Dannel P. Malloy’s Budget Director Ben Barnes asked state agencies last week to identify federally funded programs and positions that could be impacted.
By Wednesday, the plans were posted on the Office of Policy and Management’s website.
The responses Barnes received from state agencies that deliver social service programs were lengthy, while there were a handful of agencies like the Insurance Department that don’t receive any federal funds and won’t be impacted.
The Department of Social Services received $3.5 billion in federal reimbursements and more than $178 million in federal grant awards in 2013, according to state officials. The largest program the agency manages is Medicaid, the health insurance program for low-income individuals, which was funded at about $3.1 billion last year, but it’s exempt from the shutdown because it’s an entitlement.
Social Services officials warned Barnes that if programs like Temporary Assistance for Needy Families and the Child Care and Development Fund don’t receive federal funding — because they are not exempt — it would cost the state about $25 million a month to keep them going. Currently, the state gets reimbursed about half of that monthly amount on a quarterly basis.
Also, while the Supplemental Nutrition Assistance Program — formerly known as food stamps — will continue to be funded through the month of October, it’s still unknown what would happen to that program during a prolonged shutdown. The U.S. Agriculture Department handles the program and reported that about $2 billion in contingency funding will be available and could be used to support state administrative activities.
Connecticut’s Social Services Department also estimated that the Low-Income Home Energy Assistance Program carried over enough money, about $7.4 million from last year, to cover the first fuel delivery to low-income households before Nov. 15, but nothing more. The federal government gave the state about $76 million last year to run the program and this year’s amount was expected to be about the same.
The state Department of Aging reported that if they don’t receive federal Title III and Title VII funds, there’s a contingency plan to allow area aging agencies to provide services for a few weeks. If the shutdown lasts longer, there will be an impact on meals delivered to homes and “supportive services such as in-home, legal and transportation, health promotion and respite for caregivers.”
The Congregate Housing Services Program depends upon monthly federal payments that the Aging Department passes through to two contractors. “These payments are regularly in arrears, so this may affect the two present contractors and the housing services they provide through this program,” the letter reads.
But it’s not only programs for senior citizens that will be impacted. It’s programs for children.
Myra Jones Taylor, executive director of the Office of Early Childhood, told the administration that it expects a $3.92 million payment from the federal government on Oct. 18 for the Child Day Care Program. She also acknowledged a prolonged shutdown may make that payment impossible.
“This agency is prepared to temporarily finance this obligation with general fund appropriations already allotted for this program to satisfy this payment. Should the problem not be resolved by January, future scheduled payments to these providers could be in jeopardy,” Taylor wrote in her letter to Barnes.
In Bridgeport, the Head Start program was forced to shut its doors, leaving about 1,000 low-income children without early care and education services. Action for Bridgeport Community Development, which manages the center, did not receive its payment from the federal government on Oct. 1.
U.S. Rep. Jim Himes, who represents Bridgeport, called it “absolutely unconscionable that, because of petulant behavior by a small minority of irresponsible members of Congress, nearly a thousand Bridgeport children are denied an education, their parents must choose between work and leaving children home unattended, and hundreds of teachers sit at home temporarily unemployed.”
Taylor said the Office of Early Childhood is working with the Bridgeport agency to see if it can provide support to those students during the shutdown.
At the other end of the spectrum, the Department of Correction receives an estimated $130,000 per month for federal inmates it houses in Connecticut correctional facilities. Over the next nine months, it expects to receive $1.17 million to house federal inmates.
“The agency should also be able to cover the costs associated with the incarceration of the federal inmates DOC houses using existing other funds, however this can only be sustained over a short period of time and is contingent upon prompt receipt of federal funds as soon as the shutdown is concluded.”
There are 30 employees whose positions are funded through federal grants and, according to DOC officials, the loss of the funding “would negatively impact the quantity and quality of services provided by the agency to offenders, primarily in the areas of reentry and educational services.”
State Treasurer Denise Nappier, who is in charge of paying the state’s bills, said at the moment the state’s cash position is good.
There has been an average of $760 million in the state’s common cash pool and even though she has the governor’s permission to use a $300 million line of credit, there’s been no need to do that.
As for what the future holds, “Depending on the scope and length of the federal fiscal impasse, there could be an adverse impact on the state’s cash flow,” Nappier wrote. “We do not, however, currently foresee any immediate significant cash flow issues with a short-term delay in resolving the issue.”