Federal Shutdown Ends, but Damage to Cities Remains

No comments

Update: On Friday, January 25, President Trump and Congressional leaders announced a short-term agreement to reopen the federal government, ending the longest government shutdown in American history. Local leaders are encouraged that our federal partners are ready to put forward a bipartisan bill to end the government shutdown, but the damage has been done — to the economy, to the federal workforce and to the lives of millions of people who rely on federal programs and services. NLC urges Congress and the White House to find a sustainable solution to end the shutdown permanently and prevent any more damage to America’s cities, towns and villages.


Our nation’s cities are being directly and severely impacted by ongoing partial federal government shutdown. While much of the focus has been on the partisan bickering in our nation’s capital, American cities, towns and villages are facing increasingly challenging financial and economic situations. What’s at stake: reduced federal funding to cities, diminished worker capacity due to furlough and depleted consumer spending due to reduced public assistance food stamps.

Federal Funding

The federal government is now on day 33 of a partial shutdown that began at midnight on December 22. Nine federal departments and several smaller agencies have seen their funding lapse, including the Department of Housing and Urban Development (HUD) Department of Transportation (DOT) and the Environmental Protection Agency (EPA).

1


Notes:

  • Federal award amounts include loans, grants, and direct payments.
  • This data pertains to federal grants, loans, and other financial assistance awards that exceed $25,000, as well as certain federal contracts that exceed $3,000.
  • All 2019 DOC awards were awarded through the EDA, a sub-agency of the DOC.

While aid to cities amounts to less than one percent of the federal government’s budget, according to USAspending.gov, approximately $66.3 million in grants, loans and direct payments to our nation’s cities are at stake due to the partial government shutdown. These are payments that were expected to begin on or after January 1, 2019. Based on data reported to the Office of Management and Budget (OMB) by federal agencies, cities are expected to be affected most by obligated federal dollars for grants associated with the U.S. Economic Development Administration (EDA), coming in at approximately $19.5 million.

Furlough

More than 800,000 federal employees are furloughed and there appears to be no end in sight to this manufactured crisis for our nation’s residents and workforce. This is what the furlough looks like across the largest agencies affecting cities:

Picture1

On January 16, President Trump signed a bill approving retroactive compensation for federal workers currently on furlough, which will be distributed once the shutdown is over. This comes less than a week after furloughed employees received $0 pay stubs, and many of them are worried about how to make ends meet until a budget is passed and the shutdown ends. While much of the focus of the shutdown has been on Washington, D.C., cities all over the country are feeling the effects.

In order to gauge how cities are being impacted, NLC analyzed 36 cities with the highest number of federal employees. Based on publicly available data from the Office of Personnel Management, more than 30,000 federal employees are furloughed from the above agencies across the 36 cities.

Some cities are particularly hard hit. For example, New York, New York, Atlanta, Georgia, Arlington, Virginia, Philadelphia, Pennsylvania, Houston, Texas, and Chicago, Illinois, each have over 15,000 federal employees, many of whom have been furloughed. Cities also make up a large percentage of the federal workforce in their respective states, further intensifying the shutdown burden. Portland, Oregon, Albuquerque, New Mexico, New York, New York, New Orleans, Louisiana, Boston, Massachusetts, and Chicago, Illinois, all house more than 35 percent of their state’s federal workforce.

The economic impact at the city level is significant. In Atlanta (which has the third largest number of federal employees), every missed paycheck amounts to a loss of $5.5 million that could be otherwise spent in the local economy. In Philadelphia, every missed paycheck amounts to a loss of $4.2 million.

Public Assistance Supplemental Nutrition Assistance Program

Nearly 39 million Americans depend on the Department of Agriculture’s supplemental Nutrition Assistance Program (SNAP) each month. Here’s what that looks like across some of the nation’s largest cities:

image002


Notes:

  • The above graphic is based on data from the United States Department of Agriculture that lists the number of SNAP recipients by county.
  • To determine the number of recipients in each city, the city and county populations were obtained from the Census Bureau’s 2017 estimates. The city population was divided by the total county population to determine the percent of all county residents that reside in the city. The number of SNAP recipients in the county was then multiplied by that percentage.
  • To determine the monthly benefits received, the estimated number of city recipients were multiplied by the average monthly SNAP benefit amount for each respective state.

Beginning next month, there may not be enough money to cover all benefits, making it harder for millions of American to get the nutrition they need. Here’s what that means for households, children and seniors:

  • Based on the average monthly allowance per SNAP recipient in the above three cities, a persistent shutdown could mean the loss of $1.9 million per month in SNAP benefits.
  • Children are particularly vulnerable to this loss, as 68% of all SNAP recipients are families with children.
  • The elderly population is also likely to feel the effects, as 33% of all SNAP recipients are families with elderly or disabled members.

While the shutdown remains in the hands of the executive and congressional branches in Washington, American cities are faced with the everyday reality of residents not receiving public assistance. With no end in sight, cities must cope with their federal workers being denied the ability to work, earn, and spend money that fuels the economy. These residents and federal workers are being hit earlier than the city governments themselves, and cities must continue to band together in getting Washington to shut down the shutdown.

Stay Updated

NLC continues to push Congress and the administration to reopen the federal government. For updates on the status of the shutdown, along with resources for local governments and information about individual agency budgets, visit NLC’s shutdown resource for city leaders. We want to hear from local leaders impacted by the shutdown. Share your #shutdownstories on Twitter by tagging @leagueofcities and tell us how your community and residents are being impacted.

Anita-Yadavalli-small-2About the authorsAnita Yadavalli is the Program Director of City Fiscal Policy in NLC’s Center for City Solutions. Anita leads NLC’s Public Sector Retirement initiative, with a focus on research and education for city leaders on pensions, retiree healthcare benefits and general fiscal policy issues.


Version 2Brenna Rivett is a Principal Research Associate in NLC’s Center for City Solutions. Brenna’s areas of expertise include data analytics, quantitative research, housing policy, and urban sustainability.