Washington State Agencies Prepare for Potential Federal Government Shutdown

OLYMPIA — Amid a looming impasse in the nation's capital, which could lead to a federal government shutdown, various Washington state agencies have been instructed to identify vulnerable programs in case federal funding comes to a halt.

If Congress fails to pass a continuing resolution or spending bills by midnight on Saturday, the federal government could initiate a partial shutdown starting on Sunday, October 1, marking the beginning of the federal fiscal year.

At present, the specific state initiatives and programs that might be impacted remain uncertain. On Friday, Nona Snell, the budget director for the state's Office of Financial Management, sent a communication to state agencies that receive federal funding, requesting them to complete an Excel form by October 2. This form is intended to outline programs that could be affected should a shutdown occur.

Federal appropriations currently account for slightly over 25% of Washington's operating and transportation budgets within the state's current biennial budget, according to the Office of Financial Management.

In the 2021 fiscal year, Washington received 32.6% of its revenue from the federal government, as per data from the Pew Charitable Trusts. Nationally, U.S. states collectively received 36.7% of their revenues from federal sources during that year. The figures, however, are noted to have been influenced by substantial COVID-19 pandemic relief aid.

Agencies have been asked to provide information regarding potential reductions or terminations of essential programs serving Washington residents, the number of employees facing potential layoffs due to a lack of federal funds, and details on any "major contracts, grants, or loans that would need to be terminated or suspended," as outlined by Snell.

"Our primary focus at this time is on agencies with the largest federal funding at risk and/or those agencies that have indicated they are likely to face impacts immediately in the event of a shutdown," Snell emphasized.

A spokesperson from the Office of Financial Management highlighted that specific attention is being directed towards key agencies that receive federal funding, including the Department of Health, the Department of Social and Health Services, the Health Care Authority, the Department of Services for the Blind, and the Employment Security Department.

While certain government functions will remain operational — Social Security payments, for instance, will continue as usual — other nonessential federal activities will be significantly curtailed. Federal agencies will suspend all nonessential operations, and numerous federal employees, including military personnel, may not receive their paychecks. Approximately 54,000 federal employees are located in the state of Washington, according to the Congressional Research Service.

In response to inquiries, Mike Faulk, a spokesperson for Governor Jay Inslee, criticized the "gamesmanship" taking place in Congress, characterizing it as a situation where "everybody loses." Faulk expressed concerns about the incoherence and ego-driven nature of the political maneuvers in Congress and questioned the effectiveness of the proposed actions in addressing the deficit.

The duration of any potential shutdown remains uncertain, with the political landscape in Congress divided between a Democratic-controlled Senate and a Republican-led House. Additionally, Speaker Kevin McCarthy's hard-right conservative faction is seeking to leverage the shutdown as a means to achieve spending cuts, leading many to brace for the possibility of a shutdown that could extend for weeks.