7/27/2019 Effects of Government Shutdown on Massachusetts

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To: State legislatureFrom: Secretary Glen ShorDate: October 2, 2013Re: Federal Government shutdown

The federal government shutdown harms the Massachusetts economy, state government and peopleacross the Commonwealth. Thousands of employees may face furloughs or layoffs; dozens ofprograms for education, health care, job creation and veterans services will soon run out of funding.

In the immediate term, the state will use whatever flexibility and resources we have to keep peopleemployed and programs running. However, this is an unsustainable short-term fix and risks creatingbudget problems at the state level. The Congress needs to pass a budget that reimburses the statefor 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 fromaccessing critical programs and services.

We continue to monitor the balances of federally funded accounts and the impact of the federalshutdown on the people of Massachusetts. I will update you regularly during this time. Someimpacts have already been identified:

In Massachusetts there are almost 4,600 federally funded state employees. As existing federalfunds run out, these employees may either be furloughed or laid off for the duration of theshutdown.

The federal government will not continue quarterly formula grants for Temporary Assistance forNeedy Families, Child Care, Social Services Block Grants, Refugee Programs, Child WelfareServices and the Community Service Block Grant programs. As these programs run out ofcash 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 theWomen, Infants, and Children program.

The processing of new educational, pay, and pension benefits for the 394,000 Massachusettsveterans will be delayed.

If the federal government shutdown lasts beyond November 1, 2013, approximately 200,000families will no longer receive the Low Income Heating and Energy Assistance Program(LIHEAP).

Colleges may be unable to draw down and disburse to students any campus-based programawards such as work-study or the Federal Perkins Loan Program.

Head Start Grant recipients will face various budget shortages depending on their "grant year."Recipients whose grant year starts early in the fall might have to reduce or cease operationsduring 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 affordablehousing for families, veterans, the homeless and the elderly.

While the federal government will continue to pay Emergency Unemployment Compensationbenefits (federal extensions), UI administrative funding has stopped. The processing of UIbenefits will not be able to continue after December unless the state provides funds to coverthese administrative costs.

The impacts highlighted above only speak to some of the ways in which the shutdown will have aneffect on state government. There are, of course, significant additional consequences for theMassachusetts economy as the shutdown will also harm the private sector.