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Will The Federal Shutdown Count As A Rainy Day?

Will The Federal Shutdown Count As A Rainy Day?

With parts of the federal government still shuttered since Dec. 22, will Michigan's now-$1.1 billion Rainy Day Fund come into play at some point?

 

Maybe, but the state would likely look at using "common cash" or cash flow from Treasury to "get us by at first," said Kurt Weiss, spokesperson for the state Budget Office, but "obviously, we hope it doesn't come to having to use either common cash or the Rainy Day Fund."

The Budget Office did an initial assessment of potential shutdown impacts and found no major ones on state government operations at least through Feb. 5. The state can get by for about 45 days after a shutdown begins, and the halfway point was hit last week.

But if the shutdown persists, the Budget Office is going to ask state agencies to again assess potential impacts beyond Feb. 5, with data due back by Friday, the 25th, Weiss said.

Any use of Michigan's Rainy Day Fund would take an appropriation of the Legislature and a two-thirds majority vote from each chamber, Weiss said.

There isn't anything barring the fund's use to cover federally funded programs, which comprises roughly 40 percent of the state's overall budget. Weiss also said the state could reimburse the fund "once the feds reimburse us."

A bill signed into law from last session would limit the annual withdrawal from the Rainy Day Fund to 25 percent of the fund, but that doesn't take effect until March 29.

One program that's been impacted is federally funded food assistance. Michigan, along with other states, has made the decision to issue February food stamp benefits this month instead, which was announced earlier this week by the Michigan Department of Health and Human Services (DHHS).

But what happens beyond that is uncertain, as DHHS spokesperson Bob Wheaton said, "at this point all we know from the federal government is that food assistance will continue through February."

Wheaton said Michigan "cannot afford to replace all lost federal revenues with general fund state dollars because the federal programs are simply too big for the state to assume the cost."

He said the food assistance program alone serves 1.2 million Michigan people, and in October 2018 the state paid out more than $145 million in benefits for food assistance, according to the most recentl available data.

President Donald Trump and Congress have not reached an agreement on passing a spending bill or resolving the debate over funding a wall along the southern U.S. border. The partial shutdown is now considered the longest federal government shutdown in history.

One of the latest flare-ups involves Trump and U.S. House Speaker Nancy Pelosi (D-Calif.) trading letters. Pelosi last Wednesday requested Trump reschedule his State of the Union address to Congress planned for Jan. 29 -- or submit it in writing -- and Trump wrote Thursday to inform Pelosi that her upcoming foreign trip would be postponed until after the shutdown.

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