Gov. Beshear: Needless, Painful Impact for Vulnerable Kentuckians if Federal Shutdown Stretches Past Nov. 1

Gov. Steve Beshear


State may be forced to lay off workers if Washington impasse isn’t fixed soon

FRANKFORT, Ky.– A frustrated Gov. Steve Beshear has laid out the impacts of a prolonged federal government shutdown on the Commonwealth – a possibility that he said will have immediate and painful effects on millions of Kentuckians, many of them poor, elderly or young children. Funds for many critical programs will evaporate Nov. 1, and the state has limited recourse to remedy those losses.

“I am both disgusted and heartsick about the continued antics in Washington, D.C. Our elected leaders seem to forget that their actions – or rather, inactions – have real effect on citizens,” said Gov. Beshear. “Here in Kentucky, we have pregnant mothers who will lose access to healthy groceries; families who will lose access to child care and elderly citizens who won’t be able to afford their heating bills as we approach cold weather.”

“These are not the actions of a government attuned to the needs of its people,” he continued. “These are the actions of a privileged few so divorced from the day-to-day lives of their constituents that the suffering is a political afterthought, something to be managed after the cameras leave. In Kentucky, we put people first, politics second. It apparently doesn’t work that way in Washington.”

Approximately $8 billion in federal funds flow through Kentucky’s state government every year, but more than 85 percent of those funds are not impacted by the shutdown. Some programs, such as Medicaid, already have funds appropriated to them. For other programs, such as highway construction, permanent appropriations are set in statute and are not subject to annual approvals. A full list of those federal programs not affected by the shutdown is attached.

That leaves about $900 million in annual spending for programs that are currently at risk of complete closure – an average of $75 million monthly for federal programs operating in Kentucky.

Gov. Beshear pledged that state government would do its best to keep those programs operational past Nov. 1 and would evaluate available cash flow closer to the end of the month.

“We have to weigh our options carefully,” said Gov. Beshear. “Even if we have available funds to spend on supporting these federal programs, we currently have no guarantee that the federal government will reimburse us for those costs. If we aren’t reimbursed, we will have to make cuts in those federal services, or allow them to lapse altogether, in order to balance our books by the end of the fiscal year on June 30, 2014. There are no good options here for the state or for our citizens.”

Thousands of Kentuckians Could Lose Access to Food Assistance in Two Weeks Most affected federal programs have enough funding to cover services through Oct. 31; however, those programs will run out of money by Nov. 1. Those programs include:

SNAP (Supplemental Nutrition Assistance Program – food stamps), serving 854,000 Kentuckians at $110 million per month. TANF (Temporary Assistance to Needy Families), serving 61,000 Kentuckians at $15 million per month. WIC (Women, Infants and Children – provides healthy food like milk, juice and oatmeal to pregnant mothers and young children), serving 130,000 Kentuckians at $10 million per month. LIHEAP (Low Income Home Energy Assistance Program – provides payment assistance for energy costs such as heating bills and heating oil), serving 304,000 Kentucky families at $8 million per month. CCAP (Child Care Assistance Program – provides day care payment assistance to families) serving 40,000 Kentucky children at $8 million per month. Other affected programs include grants for immunizations, Social Security Disability Insurance, and family caregiver support services. A full list of federal programs operating in Kentucky that will run out of money at the end of this month is attached.

While every effort will be made to keep these programs operating for a short period of time, the unique structure of the SNAP (food stamp) program makes it impossible for state government to use its own funds to keep the program operating, even on a temporary basis. Therefore, the SNAP program would cease as of Nov. 1 if the shutdown persists.

“Unfortunately, because of the direct funding nature of the SNAP program, we will not be able to intervene to provide a cash infusion to keep that service operational,” said State Budget Director Jane Driskell.

The State Budget Office will monitor daily developments from Washington. No decision can be made until late October as to which – if any – services can continue to be supported. At that time, if viable intervention options have been identified, available cash reserves can be assessed and their most effective use evaluated.

While the federal government has allowed some states to use state or private funds to reopen federal parks, there are no plans to do so at this point in Kentucky. While the state has the ability to recover state funds advanced to certain federal programs that pass funds through the state, such as WIC, all communications to date regarding federal parks is that states should have no expectation of reimbursement.

State May Be Forced to Layoff Federally-Funded Employees Multiple state agencies employ workers who are paid with federal funds, and when those funds disappear, the state may be forced to put those employees on leave without pay until the federal shutdown is resolved.

While no such actions are necessary through the end of October, Gov. Beshear has directed the preparation of emergency regulations to authorize sending affected employees home if the federal government doesn’t resume operation by the first of the month.

Kentucky isn’t alone. Arizona, Arkansas, Georgia, Idaho, Iowa, Maine, Minnesota, Nebraska, New Mexico, North Carolina, Oklahoma, Pennsylvania, and Wyoming have announced or are planning furloughs, layoffs, or leave without pay. Michigan has sent required notices to collective bargaining units warning of furlough possibilities.

Many other states have indicated they will be unable to support all federal government programs in case of prolonged shutdown.

Other Unforeseen Impacts of Federal Shutdown In Glasgow, the federal shutdown has blocked 74 residents from moving into the new Glasgow State Nursing Facility. The facility is complete, but the federal shutdown has delayed Medicaid certification, which is typically a 2 or 3 day process. The request for Medicaid certification was submitted on Sept. 27 to Centers for Medicare and Medicaid Services in Atlanta, but due to the federal government shutdown, no action has been taken on the request.

Because of the shutdown, almost all the benefits staff for the federal Veterans Administration (VA) in the Louisville regional office are furloughed. That means that Kentucky Department for Veterans Affairs (KDVA) cannot access some needed files for certain veterans.

Federal Grants "Excepted" from Shutdown

Federal Programs Subject to Shutdown


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