Federal shutdown could force tough choices on CT

Washington – As the budget crisis in Washington shows no sign of a quick resolution, a slew of health and social programs have either lost all federal money or are running out funds.

The administration of Gov. Dannel P. Malloy has kept these programs running by using leftover federal funds or paying for them out of state money in the hopes of a future reimbursement from Washington.

But the federal government’s shutdown, which turned off the spigot of federal funds to the state, is a new challenge for the Malloy administration.

“Obviously, the situation is unpredictable at this point, because the outlook from Washington is uncertain,” said David Dearborn, spokesman for the Connecticut Department of Social Services.

Each state agency prepared a contingency plan when the federal government was shuttered Oct. 1, a result of the inability of a sharply divided Congress to agree on a budget.

Most agencies said they had money on hand to continue operations for a few days or weeks.

But as it becomes more likely that the shutdown will continue for a while, the Malloy administration will have to choose whether to continue dozens of programs with state funds or discontinue those services.

Administration officials declined to say how the state planned to weather a long-term shutdown.

“We’ll be pulling together plans when we get to that point,” said Gian-Carl Casa, undersecretary for legislative affairs at Connecticut’s Office of Policy and Management. “We don’t yet know the magnitude of the problem, which largely depends on the duration of the shutdown.”

On Wednesday, the state decided to rescue Bridgeport’s Head Start centers, which ran out of money more than a week ago, forcing them to shut their doors and stop serving more than 1,000 pre-schoolers. Gov. Dannel Malloy offered the Bridgeport centers $800,000 to resume operations. But dozens of other Head Start centers are in danger of closing soon.

For now federal funding has stopped for two huge social programs that are paid for by the federal government, Temporary Assistance for Needy Families, more commonly known as welfare, and food stamps, officially known as the Supplemental Nutrition Assistance Program (SNAP). Connecticut received about $500 million for welfare and $2.2 billion for food stamps in the 2013 fiscal year that ended Sept. 30.

Yet Medicaid, a joint federal-state health program for the poor, is the social net program that receives the most federal funds. The federal share of the state program is about $2.5 billion.

“SNAP benefits are expected to be intact through October; TANF services are continuing at this point, although federal reimbursements jeopardized; and Medicaid claims/coverage continuing through October at this point,” Dearborn said in an email.

There are also much smaller programs in Connecticut funded with federal dollars whose immediate future is up in the air.

For example, more than a dozen mental health and substance abuse programs in Connecticut are funded by about $47 million in grants from the U.S. Department of Health and Human Services. Many of those grants are through the federal agency’s Substance Abuse and Mental Health Services Administration (SAMHSA), which has only 10 percent of its staff on the job.

Officials at the Connecticut Department of Mental Health and Addiction Services declined to discuss how the shutdown would impact mental health programs in the state, preferring instead to release a statement:

“DMHAS anticipates we will be able to draw down funds associated with awards prior to the appropriations lapse,” the statement said. “As the shutdown continues DMHAS will closely monitor the federal payment system and take appropriate steps as needed.”

Several HHS grants, aimed at providing mental health services for adults, children and the homeless, were not awarded “prior to the appropriation lapse” and were to begin funding Oct. 1, the day the federal government shut down.

Lucy Nolan, executive director of “End Hunger Connecticut!”, said the federal budget crisis caught Connecticut officials off guard.

“I don’t think anybody expected this to go beyond a week,” she said.

The Conneticut Department of Education declined to say what will happen to 130 employees paid with federal funds. These federally funded employees work in the  Technical High School System, Bureau of Special Education; Bureau of Health/Nutrition, Family Services, and other offices. The state has had to pay the $700,000 payroll of these teachers,  without reimbursement, since last week.

On Oct. 20, the state Department of Education will spend $10 million on school nutrition programs. If the shutdown is still ongoing, the federal government won’t reimburse the state for this money, and “the (state) Treasurer will need to find other available resources,” the department’s contingency plan said. Five days later, the Department of Education would have to spend $35 million on a number of other education-related federal programs that won’t be reimbursed if the shutdown continues. These expenses will reoccur every month.

Rep. Rosa DeLauro, D-3rd District, said the state will eventually have to decide how long it can run certain programs without money from the U.S. government.

“They are going to have to make hard choices,” she said. “The longer this goes on the harder it is for the states.”

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