A&F statement on impact of shutdown in Massachusetts
To: State Legislature
From: Secretary Glen Shor
Date: October 2, 2013
Re: Federal Government shutdown
The federal government shutdown harms the Massachusetts economy, state government and people across the Commonwealth. Thousands of employees may face furloughs or layoffs; dozens of programs for education, health care, job creation and veteransÂ’ services will soon run out of funding.
In the immediate term, the state will use whatever flexibility and resources we have to keep people employed and programs running. However, this is an unsustainable short-term fix and risks creating budget problems at the state level. The Congress needs to pass a budget that reimburses the state for any cost it incurs during the shutdown and also fully funds these programs. Failure to do so will jeopardize the state budget, slow down the economic recovery and stop thousands of residents from accessing critical programs and services.
We continue to monitor the balances of federally funded accounts and the impact of the federal shutdown on the people of Massachusetts. I will update you regularly during this time. Some impacts have already been identified:
- In Massachusetts there are almost 4,600 federally funded state employees. As existing federal funds run out, these employees may either be furloughed or laid off for the duration of the shutdown.
- The federal government will not continue quarterly formula grants for Temporary Assistance for Needy Families, Child Care, Social Services Block Grant, Refugee Programs, Child Welfare Services and the Community Service Block Grant programs. As these programs run out of cash on hand, they will not be able to provide services without state intervention.
- No federal money is available to pay the administrative costs of the Nutrition Program for Women, Infants, and Children program.
- The processing of new educational, pay, and pension benefits for the 394,000 Massachusetts veterans will be delayed.
- If the federal government shutdown lasts beyond November 1, 2013, approximately 200,000 families will no longer receive Low Income Heating and Energy Assistance Program (LIHEAP).
- Colleges may be unable to draw down and disburse to students any campus-based program awards such as work-study or the Federal Perkins Loan Program.
- Head Start Grant recipients will face various budget shortages depending on their "grant year." Recipient whose grant year starts early in the fall might have to reduce or cease operations during the non-funded period.
- At least 35 HOME Investment Partnerships projects will be significantly delayed. This has the potential to delay or stop the development of over 1,543 units of critically needed affordable housing for families, veterans, the homeless and the elderly.
- While the federal government will continue to pay unemployment benefits, UI administrative funding has stopped. The processing of UI benefits will not be able to continue after December unless the state provides funds to cover these administrative costs.
The impacts highlighted above only speak to some of the ways in which the shutdown will have an effect on state government. There are, of course, significant additional consequences for the Massachusetts economy as the shutdown will also harm the private sector