What Counties Need to Know When a Government Shutdown Happens

Counties are calling on our federal partners to work in a bipartisan way to keep the federal government fully operational. As intergovernmental partners, any budget uncertainty at the federal level creates uncertainty at the local level as counties administer federal programs on the ground.

Without a fully functioning federal government, counties are unable to fulfill our critical responsibilities in providing nutrition assistance, airport security, infrastructure development, public housing, homelessness assistance, disaster aid, rural development, emergency training and response grants. Beyond those responsibilities, the safety of the food system, the federal court system, the implementation of 5G technology, the safety of national parks, Native American communities, coastal security and more are all at risk.

While counties are skilled at doing more with less, a shutdown can have significant impacts our ability to deliver key services.

COUNTY GOVERNMENT SHUTDOWN FAQS

What happens to mandatory programs that bypass the regular appropriations process when the federal government shuts down?

Funding for programs that bypass the regular appropriations process will remain available. Examples of programs outside the appropriations process that would receive automatic funding include:

• Children’s Health Insurance Program (CHIP)
• The mandatory/matching portion of the Child Care Development Fund (CCDF)

However, many mandatory programs require an active authorization to receive funding in the new fiscal year. The following programs are set to expire on September 30, 2023, and will not receive new funding absent congressional action. These include:

• Some Farm Bill programs, including the Senior Farmers Market Nutrition Program
• Airport Improvement Program (AIP)
• Temporary Assistance for Needy Families (TANF)
• The mandatory portion of Community Health Centers
• National Flood Insurance Program (NFIP)
• The mandatory portion of Title IV-B Child Welfare Services

What happens to mandatory programs that are funded in appropriations acts when the federal government shuts down?

Most of these programs would not have access to new funding during a shutdown, but states will be entitled to reimbursement once funding is enacted and made available. Counties that are responsible for administering these programs should work with their state to receive reimbursements. Examples include:

• Social Services Block Grant (SSBG)
• Child Nutrition
• Vocational Rehab – Basic State Grants
• Supplemental Nutrition Assistance Program (SNAP)
• Emergency Food Assistance Program (TEFAP) Commodities

These programs would continue to have access to any carryover funding from previous years. For example, funding for Child Nutrition programs is available for two years, so unspent funds from Fiscal Year (FY)2023 will remain available.

Beyond the programs listed above, Medicaid, Title IV-E Foster Care and Adoption Assistance, and Child Support Enforcement all received funding for the first quarter of FY 2024 as part of the FY 2023 omnibus package, meaning that states and localities have access to this funding. Health care, benefits and other services provided by the U.S. Department of Veterans Affairs will also largely go undisrupted thanks to advance appropriations.

SNAP's funding is set to expire on September 30, 2023, in conjunction with the expiration of the 2018 Farm Bill. Currently, USDA has provided states with advance funding to issue benefits through the month of October, 2023. Should a shutdown extend into November, states will not have access to new SNAP funding apart from multi-year carryover funds and some contingency reserves.

Which programs already have funds available for FY 2024?

A handful of discretionary (not mandatory) programs would not be immediately affected by a shutdown because they received FY 2024 funding in the FY 2023 omnibus package or have unspent funds available. Examples of these programs include:

• Title I Grants to Local Educational Agencies
• Special Education Grants to States
• Career and Technical Education state grants
• The Child Care and Development Block Grant (CCDBG) -- states have two years to obligate appropriated CCDBG funds and many have unobligated emergency funds provided during the COVID-19 pandemic
• Workforce Investment Opportunity Act (WIOA) formula grants – WIOA adult and dislocated worker programs have funds for their program year (July 1, 2023-June 30, 2024). WIOA youth does not receive advance funding, but the enacted FY 2023 budget provided funding through June 30, 2024. 

FEDERAL GOVERNMENT SHUTDOWN’S EFFECTS ON COUNTIES

Health and Human Services

Supplemental Nutrition Assistance Program (SNAP)

• SNAP offers nutrition support to eligible low-income individuals and families. The program serves 40 million residents and accounts for 80 percent of spending in the farm bill. Although SNAP is primarily a partnership between the federal government and states, 10 states delegate SNAP administration directly to county agencies, which covers services for 32 percent of all program recipients.
• Under recent guidance from USDA, SNAP funding is available to support state administrative expenses and benefits delivery through the month of October, 2023. However, states may experience challenges issuing benefits should a shutdown extend into November due to limited availability of funds to meet program need.

Special Supplemental Nutrition Program for Women, Infants and Children (WIC)

• The Special Supplemental Nutrition Program for Women, Infants and Children (WIC) provides nutrition support to low-income pregnant, postpartum and breastfeeding women, infants and young children who are deemed nutritionally at risk. State agencies administer WIC through 1,900 local agencies in 10,000 clinic sites. Nearly 50 percent of local WIC agencies are part of local government, including counties, while clinic sites include county health departments and other county agencies.
• WIC would experience significant, immediate impacts in the event of a government shutdown. Without action by Congress, recent increases within the WIC package for the purchase of fresh fruit and vegetables will expire, translating to a steep benefit reduction for all program participants.
• Because WIC is a discretionary program, it would receive no new funding during a shutdown. The U.S. Department of Agriculture has indicated that federal contingency funds will only sustain benefit delivery for a few days. After that, states will need to rely on their own funding streams to keep the program running in the short-term, which they will be able to do to varying degrees.

Temporary Assistance for Needy Families (TANF) Program

• TANF is a federal entitlement program providing federal funding to states, tribes and territories for a wide range of benefits, services and activities to address both the effects of and the root causes of poverty. Nine states delegate TANF administration to county agencies, which contribute significant local funds to administrative and supplemental costs of running the program.
• The Temporary Assistance for Needy Families (TANF) program is set to expire on September 30, 2023. Given that TANF’s reauthorization is tied to the funding extension, the program cannot issue first-quarter payments.
• To ensure residents continue to receive TANF benefits, states may use unspent funds or Maintenance of Effort (MOE) dollars to continue the program. However, the ability of states to sustain TANF funding may vary based on their financial situations.

Title IV-B (Child Welfare Services)

• Title IV-B includes mandatory and discretionary funding to support child welfare programs with the goal of keeping families together. These dollars can support state programs that protect and promote the welfare of all children, prevent the neglect, abuse or exploitation of children, support at-risk families, promote the safety, permanence and well-being of children in foster care and adoptive families and provide training, professional development and support to ensure a well-qualified child welfare workforce.
• Title IV-B was funded at $710 million total in FY 2023.
• Authority for Title IV-B is set to expire on September 30, 2023. Given that Title IV-B reauthorization is tied to the funding extension, the program cannot issue first-quarter payments. While states may be able to bridge the gap using their own dollars, the financial circumstances around their ability to do so may vary.

Head Start

• Head Start targets children under age five from low-income families with comprehensive programming to meet their emotional, social, health, nutritional, and psychological needs and bolster school readiness. Head Start services are delivered nationwide through 1,600 agencies that tailor the federal program to the local needs of families in their service area. County governments often play an important role in the operation of Head Start and Early Head Start programs, whether by directly serving local grantees and/or by contributing supplemental funding to support the program.
• According to federal officials, there are ten Head Start grantees serving an estimated 10,000 children whose grants begin on October 1, 2023, meaning they will be impacted by a shutdown. The ability of these programs to stay open will vary by grantee.

Transportation

• Counties directly support over one-third of the nation’s public airports. If the shutdown lingers, TSA agents who must work without pay are expected to increase the number of “call outs” as they face the looming reality of not receiving their next paycheck, creating not only congestion at airports across the country but also serious safety concerns. 
• Further impacting air travel, roughly 17,000 Federal Aviation Administration (FAA) employees who are not air traffic controllers or safety inspectors will be out of work. This includes personnel who conduct facility security inspections, evaluations and audits; capital planning for facilities and equipment; financial operations; law enforcement assistance support; and most administrative support functions — among many others. Like TSA agents, air traffic controllers are also deemed essential and must work without pay throughout the shutdown.

Justice and Public Safety

• Most of the U.S. Department of Justice is operating as many of its functions relate to the protection of life and property and are exempt from the shutdown.
• During the federal government shutdown, counties will continue justice and public safety operations, however, the grants that fund these programs are impacted.
• As part of the shutdown impacting the Departments of Homeland Security and Justice, federal agency grants staff are unavailable to provide technical assistance counties need to comply with grant requirements.
• Grant applications from the U.S. Department of Homeland Security are not being processed due to the shutdown. This presents fiscal uncertainty for counties as they work to continue critical public safety services.

Housing and Urban Development

• Fair Housing Authority (FHA) loans, including Multifamily Housing, processing is impacted. Much of HUD’s activities supporting FHA’s portfolio of insured mortgages, which are vital to the stability and liquidity of the national economy will continue during a lapse.
• Monthly subsidy programs such as public housing operating subsidies, housing choice voucher subsidies, and multifamily assistance contracts will continue to operate for as long as the funding remains available.

Federal Land Agencies

• Training has been halted for thousands of western firefighters. The U.S. Forest Service can’t pay for contracts for needed equipment. No federal employees are working to reduce dry “fuel” that feeds catastrophic blazes.
• Full closure or partial staffing presence at federal lands sites can lead to canceled trips/reduced tourism and public safety issues (illegal camp fires, for example) on federal lands. Search and rescue or law enforcement operations may be curtailed, forcing the county to take on a greater share of the burden.
• Permits for projects on public lands (i.e.: applications for permits to drill for oil/gas) will be backlogged even further.

Agriculture and Food

• At the U.S. Food and Drug Administration (FDA), overall food safety is taking a hit in routine inspections, guidance development and staff training and technical assistance programs that are available to to local health inspectors.
• While most direct funding programs continue, the non-excepted staff - particularly Rural Development State Directors - are unable to provide support and advice to constituents relying on indirect assistance from U.S. Department of Agriculture (USDA) Rural Development like guaranteed home loans that are no longer supported by the agency during the partial shutdown. 
• Pauses in the critical services of the Farm Service Agency, Natural Resources Conservation Service, Rural Development and Agricultural Research Service would impact county governments and their residents.

Environmental Protection Agency

• Cleanups and inspections at Superfund sites are stopped.
• Most inspections for drinking water systems, hazardous waste management sites and chemical facilities are stopped.
• Administration of and funding for of Clean Water/Drinking Water State Revolving Fund (SRF) programs, brownfields grants are stopped.
• Signoff on Clean Water Act and Clean Air Act permits and plans are not being issued.