State will be reimbursed for money withheld during government shutdown

It’s official: The federal government will reimburse all the money withheld from Nevada and other states during the government shutdown.

The national Association of State Budget Officers and Federal Funds Information for States have confirmed that, state budget director Jeff Mohlenkamp said. FFIS is the research organization that monitors federal funding decisions for member budget and legislative offices nationwide.

According to an FFIS report, the government will reimburse states “for costs incurred for operating federal programs during the shutdown, including reimbursement for furloughed employees.”

Mohlenkamp said that includes the money Nevada had to pay to keep federally funded employees working given that Nevada didn’t shut down any programs, instead using reserves, the general fund and other available cash to keep things running.

That prevented up to 500 layoffs or furloughs in the food stamp program alone.

Restoration also guarantees that funding for those who handle unemployment benefits isn’t shorted. The funding for those benefits themselves wasn’t cut off by the shutdown, but funding for the staffers who make sure recipients get their checks was.

“I have asked them (state agencies) to look at the funding levels and make sure the state was made whole,” Mohlenkamp said.

The legislation also provides short-term extensions for several programs that were to expire Sept. 30, including food stamps and other nutrition programs operated through the Department of Agriculture.

A week ago, Mohlenkamp said the initial word was all the money would be restored to states. But he expressed concern that the same gridlock would shut government down again in January, when the resolution continuing the government expires.

He said Wednesday that the resolution contains language that relieves that fear, adding that states will be made whole if there are more shutdowns in this fiscal year.

“If they shut down again, they say in advance they’re going to make states whole,” he said. “That was a very pleasant surprise.”

Another element in the federal legislation that he said was good news, particularly for Western states, is the addition of $636 million to the Interior and USDA fire-suppression budgets. The budgeted federal funds were pretty much exhausted, raising questions about if and when states would be reimbursed for firefighting efforts.

Nevada didn’t have as bad a fire year as other states such as Colorado and California, but there were two large and expensive fires this summer — the Bison fire south of Carson City and the fire on Mount Charleston near Las Vegas.

“That eliminates any concerns we might have over the federal government’s ability to reimburse us,” Mohlenkamp said.

He said, however, funding was restored only to sequestration levels, not to the levels before sequestration cut into a long list of federally funded programs and services.

“But we had always planned for that, so there’s no impact on our budgets,” he said.

With the funds restored and the state assured it will be reimbursed if there is another shutdown, the larger issue becomes the impact on the economy, Mohlenkamp said.

“They haven’t resolved this,” he said. “They just moved it down the path.”

If Congress gridlocks again, he said, it can’t be good for the economy.

“If it comes as we move into the holidays, that’s not a good time to have economic uncertainty,” he said.