Federal shutdown starting to ripple through states

JEFFERSON CITY, Mo. -- The federal government shutdown that has idled hundreds of thousands of workers is starting to ripple through states, which are now laying off employees and warning of thousands of additional furloughs if the budget stalemate is not resolved soon.

The trickle-down effects highlight the extent to which states are dependent on the federal government. In many states, federal money comprises about a third of all revenue. As federal dollars dry up, so do state programs.

Across the nation, about a dozen states already have furloughed hundreds of employees whose paychecks depend on federal money. The layoffs have hit civilians at state National Guard bureaus, workplace safety inspectors and state workers who determine eligibility for Social Security disability benefits, among others.

More state employees could be furloughed this coming week.

"For me, it couldn't have come at a worse time," said Tammy Turner-Lee, a 54-year-old supervisor in Oklahoma's disability determination office who is targeted to be furloughed Friday. "My husband is going through chemotherapy right now. ... If we are in furlough status, that means I am going to have to go into credit card debt."

Medicaid, the biggest federally funded state program, has remained exempt from the cutbacks. But federal officials have said other big state-administered programs -- like food aid for low-income families -- may have only enough money to make it through October.

As Congress and President Barack Obama remain at odds over the federal budget, some states have started to prepare for widespread furloughs.

Arkansas already has laid off 673 employees and could furlough an additional 4,000 if the federal shutdown continues for another week.

"The state of Arkansas simply does not have the resources to continue to cover the costs of federal programs," Arkansas Gov. Mike Beebe wrote in a recent memo to agency directors.

Some states have avoided furloughs by tapping into accumulated federal funds while others are dipping into state coffers.

Maryland has continued to pay 11,000 employees because the Legislature set aside $100 million to plug holes created by federal budget battles. Kansas Gov. Sam Brownback dipped into cash reserves to avoid 119 furloughs and reinstate dozens of others in an office that handles unemployment benefits.

But Florida Gov. Rick Scott took the opposite approach, ordering agencies not to use state money to cover typical federal expenses.

Furloughs of state workers are slowly mounting. There have been 56 so far Maine, more than 100 in Illinois, 244 in Arizona, more than 300 in Virginia and over 400 in Washington.

The disability office in Oklahoma's Department of Rehabilitation Services, where Turner-Lee works, halted its outgoing mail to stretch its dwindling federal dollars. But furloughs could kick in by week's end for 289 full-time and 39 temporary state employees.

The Oklahoma shutdown would affect nearly 18,000 people waiting for word on whether they can get disability benefits.

The entire staff of the Maine disability determination office already has been furloughed, meaning people with disabilities "are going to incur additional financial hardship," said Sara Squires, the public affairs director at the not-for-profit Disability Rights Center in Augusta, Maine.

Other states such as Pennsylvania, Missouri and Michigan still are bracing for a big hit from the federal shutdown.

About 200 maintenance employees of the Missouri National Guard already are furloughed, but the state has several thousand additional federally funded employees.

The key date in Michigan is Oct. 20. If nothing is resolved by then, state officials will begin reviewing which 15,000 to 20,000 employees to furlough.

"If we are still in the same position a week from now, we've got some very real problems and concerns," said Kurt Weiss, a spokesman for the Michigan budget office.

Furloughed federal workers could eventually get paid if Congress later approves retroactive wages. But state workers dependent on federal funds could face complications because of quirks in local laws or collective bargaining contracts.

In Minnesota, some 100 Department of Health workers have received notices warning they may be laid off. So have 67 employees of the Minnesota Department of Military Affairs.

Having been through a state government shutdown two summers ago, Chad Olson, lead electrician at an Air National Guard base in St. Paul, said he'd be inclined to look for a new job if he winds up on indefinite furlough again. "I can survive, but I don't want to put myself in a position where I can't survive," Olson said.

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Associated Press writers Brian Bakst in St. Paul, Minn.; Andrew DeMillo in Little Rock, Ark.; David Eggert in Lansing, Mich.; Gary Fineout in Tallahassee, Fla.; John Hanna in Topeka, Kan.; and Brian Witte in Annapolis, Md., contributed to this report.

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