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Agencies Watching the Feds

September 06, 1995
State Capital Bureau

JEFFERSON CITY - State agencies that rely on federal funding are watching closely as the battle over budget cuts rages on in Washington.

With major gaps between the Republican Congress and the Clinton Administration plans, state agencies in Missouri that rely on federal funds are preparing plans for a federal budget shutdown that could occur in just a few weeks.

The deadline is Oct. 1. That's when the new federal budget year begins. If Congress and the White House cannot reach agreement by that date, spending by federal agencies and distribution of federal funds to state government will come to a halt.

"Nothing is cut and dry," said Tammy Berg, an official at the Missouri Labor Department. "We are simply trying to be forward thinking, to anticipate how Congress might act."

The Labor Department receives 100 percent of its funding for unemployment compensation coverage from federal sources.

Berg said the department is looking for ways to voluntarily streamline operations, while still providing quality service to state residents.

Marilynn Knipp, the Associate Director of the state's Social Services Department, is looking at various angles to ensure the department has the funding in place to provide essential services through the next fiscal quarter. Welfare programs in Missouri rely on the federal government for 60 percent of their budgets.

"We are tracking the situation in Washington closely," Knipp said. "But Aid to Families with Dependent Children, Medicaid and energy assistance should be secure at current levels at least through December."

That's because the state is assured of federal funding continuing for the entire calendar year. Although the new federal budget year begins in October, federal funds the state receives in the last three months of the year actually are appropriated in the current federal budget.

So, any budget deadlock in Washington would have to continue for three months before there would be a funding impact on the state.

Federal workers in Missouri also face large-scale furloughs if Congress and the White House cannot agree on a new budget by Oct. 1.

There are more than 64,000 federal workers in Missouri who would be affected. The federal government is one of the largest employers in the state.

"Stopping payroll would have a detrimental economic impact on the entire state," said Reginald Huey, Executive Vice President of the American Federation of Government Employees, Local 1136. "Most federal workers live paycheck to paycheck and they are legitimately concerned about having money for mortgage, utilities and groceries."

Susan Smith, a worker with the Social Security Administration in Kansas City, said the threat of a shutdown seems particularly daunting.

"I've worked for the federal government for 22 years, and there have been numerous rumors of shutdowns," Smith said. "But, for the first time I am really scared. There is a real fear in my department of furloughs."

The budget battle and shutdown speculation were raised after the Clinton Administration threatened to veto provisions in all 13 House appropriations bills and several Senate bills.

The last time the federal government shut down because of a budget deadlock was in 1990, but the shutdown lasted just three days.