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A representative of Governor Tomblin reported to legislators no programs had to be cut and no employees had to be laid off as a result of the federal government shutdown, but with an agreement from Congress that only funds the government through the first of the year, the administration is still worried the state could run into the same issues again.
The governor and his staff are now asking state lawmakers to consider taking legislative action to prevent future problems when there’s a lack of federal funding.
“I think it’s safe to say we’re relying on an unreliable partner,” said Governor Tomblin’s Deputy Chief of Staff Jason Pizatella as he stood before a joint Finance Committee meeting in the House Chamber to describe the impact the federal shutdown had on the state.
While Pizatella said West Virginians who rely on federal and state funded services saw almost no changes in their benefits, if the shutdown had continued through the end of the month it would have been a different story.
“What we’ve tried to do in the governor’s office is try to figure out exactly how state government can insulate itself from the instability that is currently present in Congress and throughout the federal government,” he said.
As the governor and his staff prepared for the shutdown, two issues arose- continuing to fund federal services and paying employees whose salaries are reimbursed by the federal government.
As far as programs and services go, legislators were told the Departments of Health and Human Resources and Education would have been most affected because they rely so heavily on federal aide. In fact, that federal aide is larger than the state’s annual budget.
According to the state Department of Revenue, West Virginia’s general revenue budget is about $4.2 billion annually. The federal government gives the state nearly $4.8 billion in funding for programs. While some are funded through legislation, like the Affordable Care Act, others are funded through federal appropriations which don’t go through during a shut down.
Director of the state Budget Office Mike McKown said Medicaid is one of those programs and in order for it to continue in a long term shutdown, the state would have had to cover the federal portion.
“Medicaid alone would take about $200 million a month. Today, we had $50 million cash. I mean, it would last one week,” McKown said after the meeting Monday.
McKown said Medicaid is just one of the hundreds of state programs paid for in some part by the federal government.
He said there’s no way the state could keep up the payments and there’s no guarantee West Virginia would be repaid for the money spent.
Secretary of Revenue Bob Kiss said the governor asked agencies to begin prioritizing federally funded programs in case the money would run out, but that money not only pays for the programs, it also pays for the employees who operate them, either by reimbursing the state for all or part of their salaries.
“Because if we’re going to all of a sudden be faced with a situation where we simply don’t have the resources to fund positions that are in part or entirely funded with federal dollars, there’s going to be some serious ramifications and somebody is going to have to make some decisions,” Kiss said.
“You can make the argument right now that without statutory authority right now it’s unclear who or if anybody has the authority to make those decisions.”
Kiss said that’s where state lawmakers come into play.
“We don’t have a furlough statute,” he said. “You can lay them off so to speak. That authority is there, but to furlough them with the concept that they’re being let go without pay, but they’re basically retaining their status as an employee when you have the cash available to pay them as opposed to terminating their employment.”
Kiss said to just layoff workers would create issues with vacation time, sick leave and even retirement benefits when they’re brought back to work so the governor is asking lawmakers to consider enacting furlough legislation to avoid those problems in the future.
“I think having gone through this exercise hopefully will be beneficial. I think the legislature is taking the time to deliberately think about these issues,” Kiss said. “I don’t think it would be that complicated to come up with a statute. The federal government has a statute and I don’t think it would be that complicated to come up with a similar one.”
Kiss added, however, the state will hopefully be able to avoid any major issues should a federal shutdown occur in January because the legislature will be in session and available to take necessary actions.