The initial word is that states will get reimbursed the federal funding withheld during the government shutdown, state budget director Jeff Mohlenkamp said Wednesday.
“Preliminary guidance we’re getting from the NGA (National Governors Association) and our federal contacts is the federal government is going to make states whole,” he said.
Mohlenkamp said that’s important to Nevada because “we took the approach of keeping all the programs open.” To do so, he said, the state has been using other available money, including general fund cash, to support those programs and prevent layoffs over the past 16 days.
“There are numerous programs throughout the state where we’ve been using federal dollars carried over and we’ve been using some general fund,” he said.
Mohlenkamp said, however, he can’t be certain until he sees the final version of the bills reopening the government and raising the debt limit.
He said it would take a complete review of programs throughout state government to calculate how much state cash has been used in place of the missing federal money, but that there are several very large costs the state has had to absorb. The largest are funding for welfare and the food stamp program. Not only are those benefits 100 percent federally funded, the U.S. government picks up half the administrative costs.
Those costs, Mohlenkamp said, are significant. He pointed out that welfare has about 1,800 workers and that in the food stamp program, the state was looking at up to 500 layoffs or furloughs.
Unemployment benefits are guaranteed and funded. However, he said, the administrative costs therein are federal, and if they hadn’t been covered, there would have been no staff to process claims and get the money out the door.
He said the state could have supported its programs through the end of October but that after that, there would have been serious reductions in some — including shutting down the food stamp program.
“I feel really good about the way we managed this,” Mohlenkamp said.
He said that includes not only his office and the executive branch but the legislative leadership. Legislative leaders were key in making sure Nevada’s congressional delegation understood the potential impacts on Nevada if the situation was not resolved, Mohlenkamp said.
“If they reimburse the state, we can look at this as a very frustrating exercise,” he said.
But Mohlenkamp said the deal only extends the shutdown and debt ceiling temporarily.
“We may well be facing something like this again in a couple of months,” he said, adding that in that case, “all this planning might not be for nothing.”