Potential federal shutdown next month could hurt 2,500 state employees

About 2,500 state employees in Maine could be affected by a federal government shutdown because their positions are funded either entirely or partly with federal money, a state finance official told lawmakers Thursday.

However many details of how a federal government shutdown would affect Maine’s state government are unclear because much depends on guidance the federal government issues when a shutdown occurs.

Kirsten Figueroa, commissioner of the Department of Administrative and Financial Services Russ Dillingham/Sun Journal

“Usually … the federal government will tell us which programs will continue to receive funding, which will be reimbursed after the shutdown ends and other pertinent information states can use to figure out how to proceed,” Kirsten Figueroa, commissioner of the Maine Department of Administrative and Financial Affairs, told lawmakers on the Legislature’s Committee on Appropriations and Financial Affairs.

“Unfortunately, this means that no matter how thorough or detailed our planning might be (at the state level), we’re not going to find out until the very last minute what the actual decisions are on what will continue, what will be reimbursed, what will stop,” Figueroa said.

Hours before a shutdown would have taken effect last weekend, federal lawmakers approved a 45-day resolution to continue funding. But the threat of a federal shutdown in mid-November still looms, especially with Congress in disarray following the ouster of former House Speaker Kevin McCarthy from his leadership post.

Officials in Maine have previously warned of the impacts a federal shutdown could have on federal programs and employees in the state, including furloughs or disruptions in pay for workers and a likely closure of Acadia National Park.

A federal shutdown also could jeopardize food assistance for mothers and young children and access to some federal programs, such as applications for small business loans, federally backed home mortgages, and passports. Social Security benefits would continue, as would mail service since the U.S. Postal Service does not depend on Congress for funding.

Officials have a framework to identify state government programs, positions, contracts, and grants that might be impacted by a federal shutdown and each agency evaluates those programs to assess the federal funding source and the impact of any lapse in funding.

But Figueroa said much also depends on shutdown-specific guidance.

“Once we know for certain, we work through personnel actions for affected positions, we discuss contract interruptions that might happen with vendors, and realign our work efforts,” she said. “It is a program-by-program, position-by-position … evaluation once we know what the ‘quote unquote’ rules are of the shutdown.”

Figueroa said Maine is “in a very strong cash position right now,” so if programs were unable to draw money from authorized federal funding due to a shutdown, it’s possible the state could cover a gap in funding.

That wouldn’t change state budget allocations or appropriations, Figueroa said, but rather the state would seek assurances upfront from the federal government that any state funds would be reimbursed after the shutdown.

Figueroa also said there could be differences in the impacts for federal employees, who work for and are paid by the federal government, versus state employees who are funded with federal dollars.

While federal employees are guaranteed back pay even if they are furloughed during a shutdown, Figueroa said “there isn’t always that same assumption the feds will automatically reimburse” for federally funded state employees.

Officials have previously said that there are more than 11,000 federal employees in Maine.

There are 13,010 positions total in state government. The 2,500 number Figueroa cited Thursday as being partially or fully funded by the federal government constitutes just over 19% of state employees.

As the state evaluates the potential impact of a shutdown, it could look at things such as whether there are federal funds that carried over from previous years that could fund those state employees or opportunities for them to work on programs with different funding sources, though some may be asked not to come to work, Figueroa said.

“We still won’t know the final details until the last minute, but we are continuing our review and analysis over the next 40 days,” she said. “Each day that passes brings changes we need to evaluate and consider, so we will use this time to review and analyze our options.”