State Managers Are Asked To Prepare For Partial Federal Government Shutdown

Hours before a deadline that could lead to a partial federal government shutdown, Gov. Charlie Baker suggested Massachusetts would continue running smoothly if the feds do close down operations, although state officials are internally cautioning about "potential challenges."

"If this is a short shutdown, I don't believe there will be much disruption of any kind," Baker told reporters after an event Friday. "Programs are going to continue, stuff will go on, there might be a day or two with respect to the distribution of certain reimbursements and that kind of thing."

Congress faces a midnight Friday deadline to reach a budget deal so that the government does not run out of money, including funds that flow to states. A short-term funding bill passed the U.S. House Thursday, and Senate Democrats are calling for a long-term bill that addresses issues including immigration.

In a memo Thursday to chief state fiscal officers, budget directors and general counsels, First Deputy Comptroller Jeffrey Shapiro and Executive Office of Administration and Finance Budget Director Catharine Hornby offered guidance in the event of a shutdown, which they said could "create potential challenges."

"While there is a chance that a CR (Continuing Resolution) will be adopted by the deadline tomorrow we must be prepared for the possibility that federal government operations and/or federal funding for states will not be authorized," Shapiro and Hornby wrote.

The fiscal officials asked state managers to confirm by Thursday, Jan. 25 the steps agencies can take "to protect Commonwealth residents and resources in the event of a federal shutdown, including the use of other funding sources currently available to them.

"Please describe the impact of utilizing such funds on other state-operated programs and services," the officials wrote. "Agencies should not assume that additional state funding will be available. Therefore, please identify any state funding that would be required for the state to take on responsibility for critical federal programs, and indicate whether and when legislative authorization would be required."

Officials also want to know by Thursday about any payroll concerns for roughly 3,600 employees paid from federal funding sources across state government.

Baker said people have been anticipating a potential shutdown "for a while now," and he's been working with state agencies to plan.

In the memo, Shapiro and Hornby said state agencies developed federal government shutdown contingency plans in 2013 and in 2015 and were again asked in December about actions they expect to take in the event of the shutdown that may now be imminent.

"The big question is whether or not it drags on into becoming weeks or months, and obviously if it were to drag on beyond a short period of time, we'll have to make some adjustments as we go," Baker said. "But in the short term, it's our view that this shouldn't feel any different day to day."