Gov. Nathan Deal’s administration is making it clear it has no intention of backfilling federal funding if Washington’s government shutdown grinds on in coming weeks.
If the shutdown persists, state agencies will have to start making decisions this week about whether they have the money to continue paying state workers whose positions are at least partially funded through federal contracts or grants.
Deal’s budget director, Teresa MacCartney, sent state agencies a memo Friday detailing how state government would deal with the shutdown, letting officials know they would not get additional federal funds to operate their programs. It could mean furloughs of state employees who are paid at least in part with federal funding.
“For federal funds approved under a previous continuing resolution or fiscal year, reimbursements may be slowed as the federal government may be unable to process requests,” she wrote, “As a result, your agency must be prepared to curtail federal activities to meet available funds.
“The state will not be able to advance allotments to offset reduced federal cash flow. Additionally, your agency should not assume that funds expended for federal activities conducted during the shutdown will be reimbursed by the state or the federal government once the budget is enacted.”
The state this year is expecting about $14 billion in federal funding for various state programs, mostly to provide health care and school nutrition efforts. Roughly a third of state government spending comes from the federal government.
The federal government foots the bill for roughly two-thirds of the cost of Medicaid, the health care program for more than 1.5 million of Georgia’s poor, disabled and nursing home residents. Many other state agencies rely on at least some federal funding as well.
Officials in the governor's office have also raised concerns over funding for PeachCare, a politically popular health insurance program for children. They are concerned about delays in reauthorizing the program.
The program, which covers 9 million children nationally, has been one of the issues at the center of the government shutdown debate in Congress.
Chris Riley, the governor’s chief of staff, made it clear to reporters earlier this month that the state doesn’t have the money to fund programs like PeachCare without federal help.
Georgia lawmakers are currently considering a state budget that counts on federal funding for PeachCare.
“A lot of you like to ask, ‘will we backfill if the federal goverment fails to authorize (spending)?’ ” Riley said. “We fully expect the congressional delegation to fulfill the federal government’s obligation.”
Riley, a former longtime congressional aide, said the state should be wary of replacing federal funding with state money.
“You have to be very careful here,” Riley said. “If the state ever steps up and backfills, then the federal government says, ‘Uh-huh, we don’t need to pay for Georgia, we can pay New York twice as much because Georgia’s got the money to pay.’ “
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