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Federal Shutdown Impact

Federal Shutdown Impact

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Published by davidrauf
The Legislative Budget Board surveyed state agencies to determine what the fiscal impact of a federal government shutdown
would have on federally funded
programs. This document outlines those responses.
The Legislative Budget Board surveyed state agencies to determine what the fiscal impact of a federal government shutdown
would have on federally funded
programs. This document outlines those responses.

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Published by: davidrauf on Oct 01, 2013
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10/02/2013

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Mailing Address: P.O. Box 12666
Austin, TX 78711-2666Robert E. Johnson Bldg.1501 N. Congress Ave. - 5th Floor  Austin, TX 78701
LEGISLATIVE BUDGET BOARD
512/463-1200Fax: 512/475-2902http://www.lbb.state.tx.us
M E M O R A N D U M
TO:
John OppermanJamie DudensingCaasi LambSarah HicksAndrew BliffordJennifer DeeganAndrea SheridanKeith Yawn
FROM:
Federal Funds Analysis Team
DATE:
September 26, 2013
SUBJECT:
Impact of Federal Government ShutdownThe U.S. Senate passed a FFY 2014 Continuing Resolution (CR) without the provision that prohibits the use of federal funds to carry out the Affordable Care Act. The U.S. House will needto pass the amended Senate CR by next Tuesday to prevent a federal shutdown. We contactedselect state agencies to determine what the fiscal impact of a federal government shutdownwould have on federally funded programs. The responses varied depending on the time period of the federal shutdown.
Health and Human Services Enterprise
Short-Term Impact 
 
The Health and Human Services Commission (HHSC) assumes federal agencies willdistinguish between essential and non-essential functions, and that essential functionswould likely continue. HHSC states that a federal furlough may have a significantnegative impact on the enterprise if it impacts their ability to draw down federal fundingor obtain federal guidance on program operations.
 
Agencies plan to use existing federal letters of credit or any available prior year grantfunding to minimize the impact of a temporary loss of federal funding.
 
Health and Human Services agencies would continue partially state supported functions.For completely federally funded functions agencies would make case-by-casedeterminations of the impact. Agencies may implement a hiring freeze for completelyfederally funded positions. Fully federally funded positions include:
o
 
Department of Assistive and Rehabilitative Services: 1,034 Full-Time Equivalents(FTEs) with Disability Determination Services;
o
 
Department of State Health Services: 358 FTEs (208 with the SpecialSupplemental Nutrition Program for Women, Infants, and Children, 125 with
 
 September 25, 2013
Page 2
Public Health Emergency Preparedness, and 25 with the National BioterrorismHospital Preparedness);
o
 
Department of Aging and Disability Services: 130 FTEs (113 with GuardianshipServices
and 17 with Foster Grandparent’s program in State Supported Living
Centers);
o
 
Department of Family and Protective Services: 49 FTEs (30 with Child AbusePrevention and Treatment Act Program, 16 in child care licensing, 2 in the Elder Care Project, and 1 in Refugee Assistance); and
o
 
HHSC: 22 FTEs (13 in Refugee Program; 4 in Home Visiting Program, 2 inHealth Information Exchange, 2 in Texas Workforce Investment Council, and 1 inthe Healthy Marriage Program).
 Long-Term Impact 
 
State HHS agencies would likely need to make additional determinations on whichfunctions are essential and would consider staff furloughs and reduction or elimination of certain client services.
Texas Education Agency (TEA)
Short-Term Impact 
 
TEA reports is not very concerned about programs being unfunded, due to the fact thatfederal education programs have already been appropriated for the 2013-14 school year.Programs that receive only one appropriation (July) should not be affected.
 Long-Term Impact 
 
 
For programs that receive two appropriations (July and October), TEA is not sure if USDE will be able to send award notices on Oct. 1. Programs affected include: Title I,Special Education, Improving Teacher Quality, and Vocational Education grants.
 
If TEA does not receive the notices, LEAs will be limited to the July appropriation (20 percent) for those programs.
 
If TEA does receive the notices but the government shuts down, LEAs will be able tospend the full appropriation. TEA, however, may be delayed or have difficulty drawingfunds down from USDE.
 
If there is a prolonged shutdown and TEA is not able to draw down funds, it may have toreevaluate administrative fund use in order to meet payroll and vendor payments.
Texas Department of Public Safety (DPS)
Short-Term Impact 
 
DPS would not furlough any federally funded employees, but would use authority givenin the General Appropriations Act to arrange other funding to keep them on the payroll.
 
DPS is authorized for 512
Federal FTE’s in the 2014
-2015 biennium (315 in HighwayPatrol, 144 in Texas Department of Emergency Management, 2 in Law Enforcement
 
 September 25, 2013
Page 3
Support, 10 in Finance, 6 in Intelligence and Counter Terrorism, and 35 inAdministration).
 Long-Term Impact 
 
Grants to communities and payments for certain operating costs would most likely ceaseuntil DPS can draw funds directly from the federal government for those payments. This
may cause DPS’s sub recipients and contractors to furlough their employee’s based on
the lack of funding for their payroll
Texas Department of Transportation (TxDOT)
Short-Term Impact 
 
TxDOT does not expect the traveling public will see a reduction in service.
 Long-Term Impact 
 
A shutdown of the federal government that delays federal reimbursements should havelittle or no impact. TxDOT was provided by the State Legislature the flexibility tomanage cash flow with the issuance of short-term debt.
 
Project planning and execution should remain on schedule. If there are any delays it maycome in the form of project reviews performed by federal agencies (e.g. environmentalreviews).
Texas Department of Housing and Community Affairs (TDHCA)
Short-Term Impact 
 
TDHCA may not be able to access or draw down federal funds. It is possible draws could be held without access to funds; federal data entry systems could shut down; or no federal personnel would be available to review financial matters.
 
Where permissible, the agency is attempting to draw down funds in advance of ashutdown. Not all programs allow this. For those that do, the agency would need torequest a draw September 25 to receive funds by end of week. This may not be feasible.
 
In the initial 30-45 day window, agency FTEs would not be affected.
 
TDHCA also reported that in the last shutdown (FFY 1996) the federal agency deemedsome personnel exempt and were allowed to process federal funds payments to states.
 Long-Term Impact 
 
After 45 days, the agency would have to evaluate its workload and explore fundingoptions for federally funded FTEs.
 
Federal funds for programs may not be available. This would not just affect the agency but sub-grantees, local providers, and other beneficiaries.The Federal Funds Team will continue to monitor Congress action on the CR for FFY 2014.

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