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The state could pull some funds from a program designed to buffer budget cuts.
Sunday, September 29, 2013
With just hours left for Congress to reach a deal, Virginia is bracing for the possibility of a partial shutdown of the federal government on Tuesday.
The commonwealth currently holds $22.5 million in its Federal Action Contingency Trust, a fund designed to prepare the state for federal spending cuts. About $8.9 million in this fund has already been allocated for other expenditures, leaving $13.6 million to help delay some of the harmful effects of a shutdown.
Any balances remaining in the Governor’s Economic Contingency Account could also be used for this purpose.
In a memo sent last week to executive branch agency leaders, presidents of colleges and universities and others, Martin Kent, McDonnell’s chief of staff, outlined the state’s general policy for contingency funding.
He wrote that agencies should not incur expenses against federal programs or grants after Oct. 4 unless the programs are not affected by Tuesday’s deadline.
Kent says agencies may keep federally funded state employees who may be affected on the payroll until Oct. 4 “in order to prevent unnecessary furloughs so long as the agency can absorb the costs.”
If the shutdown threat to the American government were external because of an act perpetrated by an enemy, “the American people would rally with every ounce of their energy to battle against it,” Democratic Sen. Tim Kaine said last week.
House Majority Leader Eric Cantor said Thursday that he is aware that the American people do not want another government shutdown, but that “they are tired of the debt.”
In neighboring Maryland, Democratic Gov. Martin O’Malley estimates that furloughs of federal workers could cost the state $5 million per shutdown day in income and sales-tax collections and hinder the state’s economic recovery, according to a memo.
Tucker Martin, spokesman for Gov. Bob McDonnell, said it is hard to estimate the fiscal impact of a federal government shutdown on Virginia until all information based on Kent’s memo has been compiled.
“Once we have that information, we will be evaluating it to determine what steps may need to be taken,” Martin said.
In defense-heavy Virginia, the losses could be potentially devastating .
Fairfax County, for example, is home to about 4,100 federal contractors, who in 2012 took in $26.4 billion in federal contracts, the county’s economic development authority said.
Many civilian military contractors would be affected, including the Newport News shipyard, Kaine said during a hearing Wednesday, warning of “severe consequences.”
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