The Trickle-Down Impacts of the Federal Shutdown on States and Localities

A ferry full of passengers steams towards the Statue of Liberty on Dec. 22, 2018, in New York. The national landmark remained open despite a partial government shutdown after New York Governor Andrew Cuomo made funding available.

A ferry full of passengers steams towards the Statue of Liberty on Dec. 22, 2018, in New York. The national landmark remained open despite a partial government shutdown after New York Governor Andrew Cuomo made funding available. AP Photo/Craig Ruttle

Featured eBooks

The Financial Management Challenge
Cyber Threats: Preparing States and Localities
Issues in City and County Management
 

Connecting state and local government leaders

The disruption in Washington, D.C. “could have a significant impact,” if there is a protracted partial shutdown, according to Steve Benjamin, the president of the U.S. Conference of Mayors.

While some states are already ponying up to keep national parks open during the partial government shutdown, the trickle-down effect on local and state governments could be felt more intensely in the days to come if federal agencies remain closed for an extended period of time.

The first few days of the latest shutdown—prompted by President Trump’s insistence that a temporary budget deal passed by Congress contain funding for a wall on the Mexico border—occurred during the weekend and Christmas holiday. For some states where national parks are major tourist attractions, this closure during a family vacation time meant the need to cover for the absence of park employees, as the Department of the Interior is one of the agencies closed in the shutdown.

Arizona Gov. Doug Ducey last week announced that his office would put into action a plan—finalized after the last shutdown earlier this year—to keep the Grand Canyon open, ensuring trash pickup, bathroom access and shuttles, along with other services. New York Gov. Andrew Cuomo said the state would spend $65,000 a day to keep open the Statue of Liberty and Ellis Island, while Utah Gov. Gary Herbert also said that parks would be open, although staffing could be limited.

In Utah, almost $55,000 has been spent to keep open visitor centers and provide limited janitorial services at Arches, Bryce Canyon and Zion national parks from Dec. 22 through the end of the year, the office of tourism reported on Thursday.

In many other places, the National Parks Service told visitors that parks would be open, but there wouldn’t be any staff around. Some parks would be entirely closed.

Not all agencies are closed during this shutdown, as Congress had already passed bills funding them. But as Mike Wallace with the National League of Cities noted in a blog for the organization, a few of the closed agencies, such as the departments of Transportation and Housing and Urban Development, are those that work most intimately with local governments.

A short shutdown wouldn't have much impact on local and state operations, Wallace and others agreed.

Mayor Steve Benjamin of Columbia, South Carolina, told Route Fifty that a longer shutdown, however, could affect a variety of local government programs, from job training to transportation.

“There are roads projects happening all across the country right now, some of which depend on federal funding or federal approvals,” said Benjamin, president of the U.S. Conference of Mayors. “If leadership is MIA because of a shutdown, it could have a significant impact.”

About 350,000 federal employees received furlough notices on Wednesday, the first regular work day after the shutdown began this weekend, Government Executive reported. Another 500,000 employees are expected to work without pay until the government reopens.

On Tuesday, Trump said he couldn’t say when a deal would be worked out, while an aide to House Minority Leader Nancy Pelosi on Wednesday said there were “no updates” on negotiations, the Washington Post reported. While Trump has insisted on some kind of wall or fence funding, saying it is important to border security, Democrats have countered that the money he is seeking is a waste of federal dollars.

While HUD has sent home most employees, the agency’s shutdown plan says it will still disburse grants that prevent life threatening situations, such as homeless assistance grants, said Wallace, the program director for community and economic development for the National League of Cities.

But there are other programs that might not meet HUD’s threshold of posing a “threat to the safety of human life” that city governments could find themselves having to cover during a lingering shutdown, Wallace said.

“The thing about shutdowns...cities know how to hunker down and get through these based on past experience. But it comes with a cost,” he said. 

Along with HUD, Interior and DOTD, other agencies affected by the shutdown include the departments of Justice, Homeland Security and Agriculture, as well as the Environmental Protection Agency and Small Business Administration. The EPA, however, has indicated it will remain open with reserve funds through the end of the year. The Federal Emergency Management Agency, which is working in the aftermath of several natural disasters across the country, has also said its staffers will remain on the job during a shutdown, according to the Los Angeles Times.

Brian Namey, a spokesman for the National Association of Counties, said a shutdown that lasts more than a few weeks becomes increasingly difficult for local governments to handle, particularly when officials lack access to discretionary federal funds that they rely on.

“We play a major role in the administration of many federal programs on the ground,” he said. “We need a reliable federal partner in order to deliver services for our residents.”

During the 16-day federal shutdown in 2013, Govs. Mary Fallin and John Hickenlooper, of Oklahoma and Colorado, sent a letter to Congress on behalf of the National Governors Association saying that while states had weathered the government closure without program suspensions, the states were “not in a position to be the bank for the federal government.”

James Nash, a spokesman for the group, said that most states do have the resources to absorb a short interruption in federal funding. But he added that there are 20 new governors taking office soon who will start crafting their first budgets.

“New incoming governors deserve the ability to work in an environment of certainty from the federal side,” he said.

Benjamin, the mayor from South Carolina, emphasized that recent shutdowns stemmed from disagreements between Trump and members of Congress on immigration, saying his organization would like to see federal leaders focus on the issue separately from the budget fights.

“We will continue to advocate for comprehensive immigration reform. We hope this is something that the new Congress will successfully address so we don’t have to return to it again and again,” he said.

Editor's note: This story was updated after publication to add a dollar figure to Utah's efforts to keep parks open.

Laura Maggi is the Managing Editor of Route Fifty and is based in Washington, D.C.

NEXT STORY: Democrats in New York Are Ready to Deploy Their Newfound Power