Uncertain times: Effects of government shutdown felt throughout lakes area

Republicans' and Democrats' concerns about the partial federal government shutdown were shared by local officials as the political standoff enters its third week with no end in sight.

"We intentionally spare our constituents from the effects of a federal government shutdown in order to continue to serve our customers," Tim Houle, Crow Wing County administrator, said Friday, Jan. 4.

President Donald Trump has demanded any budget deal include more than $5 billion to fund construction of a wall between the United States and Mexico. Democrats have resisted the idea.

Whether the federal government shutdown that began Dec. 22 will affect area agencies and the services they provide locally-and to what extent and in what ways-is yet to be known.

Crow Wing County

"We can continue to do this for awhile, but we will not be able to fund it forever. In my mind, if this goes longer than the end of January, we would have to seriously re-evaluate," Houle said.

The largest portion of the county's expected revenue in 2019 is property taxes at $36.75 million. The next largest is federal, state and local grants and aid worth an expected $28.6 million.

Out-of-home placements of children by social services or by corrections is generally on the rise in the county and draining county coffers, according to county community services officials.

"We haven't seen any impact on community services yet," Community Services Director Kara Terry said Thursday.

"Our director's group has not heard anything further from the state on this. We may hear more if the shutdown continues after January."

Minnesota was ranked least affected by a federal government shutdown according to a report released Thursday by WalletHub, a personal finance website.

"For context, the longest shutdown ever was 21 days under President Bill Clinton, and only seven shutdowns have ever lasted 10 days or longer. This is the third shutdown under the Trump administration," according to the report.

WalletHub compared the 50 states and the District of Columbia in terms of five key metrics, ranging from each state's share of federal jobs to federal contract dollars per capita to the share of families receiving food stamps to gauge the impact of the partial federal shutdown.

"There are potential impacts for us in that we are reimbursed portions of health and human services staff costs that we are currently incurring that we do not have any assurance that we will be reimbursed for," Houle said of county community services.

"Unfortunately, having been through too many of these, I can tell you that in every past circumstance like this, we have been retroactively reimbursed, so there is a reasonable basis on which to conclude that we will be again."

Certain federal employees work without pay or are placed on furlough when the government shuts down. Non-essential government services also remain inactive and certain benefits are liable to run out of funding.

When it comes to rankings of shutdown impact, Minnesota came in at No. 49 for share of federal jobs, 46 for federal contract dollars per capita, 41 for access to national parks and 47 for its percentage of families receiving benefits from the Supplemental Nutrition Assistance Program. For more information about the WalletHub study, visit https://wallethub.com/edu/government-shutdown-report/1111 .

Social Security

As for Social Security-with administration locally based at its offices on College Road in Brainerd-the impact on the lakes area looks to be relatively small, per administration spokesman Doug Nguyen.

"Partial federal government shutdowns will not affect Social Security because we received our full (fiscal year) 2019 appropriation on Sept. 28, 2018," Nguyen wrote to the Dispatch in a statement. "Social Security services and offices will remain fully operational, and Social Security benefits will be paid on time."

The same cannot be said for the U.S. Department of Agriculture offices for rural development in Baxter. Until the shutdown is over, callers will be greeted by a voicemail stating staffers are out of the office and on furlough until funding is restored.

Small business lending programs

It's much of the same story for the North Central Region Small Business Development Center at Central Lakes College-a primary area outlet for federal small business loans. Program coordinator Katrina Wheeler said the program is chugging along at a little less than 50 percent of its funding-which, aside from federal funds, is financed through state monies and grants.

Wheeler said the program has enough funds on hand to weather a government shutdown for a couple more months-though, she noted, federal small business loans can be filed and packaged at the center, but not processed or approved in the meantime.

Central Lakes College

At Central Lakes College, some students are experiencing small hiccups in the financial aid department because of the shutdown.

First and foremost though, the Free Application for Federal Student Aid, or FAFSA, program is still up and running, meaning students can still apply for and be granted financial aid. And students who were granted financial aid for the fall semester will not have any issues getting their spring semester finances in order, CLC financial aid director Mike Barnaby said.

Some students newly applying for financial aid, however, might have some slight issues.

"Once a student applies for financial aid, sometimes they're flagged for a process called verification," Barnaby said, explaining during this process, students could be asked for additional forms, including tax transcripts.

The problem?

The transcript request portion of the IRS's website is down because of the government shutdown.

"So depending upon (a student's) situation or how they answer some of the questions on the FAFSA, they may have trouble getting us the additional documents that we are required," Barnaby said, noting the verification process typically affects roughly 30 percent of students applying for FAFSA.

With the school between terms right now, Barnaby said he hasn't been able to see the full potential effects of the shutdown yet, but he has worked through issues with a couple students.

One student, for example, was stalled with the need for a tax transcript, but Barnaby said there are legal ways to work with the student's FAFSA data to get the information needed.

And should the shutdown end before CLC's spring term does, the financial aid department can still process student files, as long as it is done prior to last day of the semester.

Barnaby is also working with the school's business office and administration to see if payment deferrals could be an option right now, given the circumstances.

"So we're not tremendously in a panic mode," Barnaby said.

On the national level, the National Association of Student Financial Aid Administrators, Barnaby said, is a board lobbying for looser restrictions on the verification process for FAFSA in times like this.

"They're in negotiations right now to see if that's something that the feds will take a peek at and/or maybe loosen it for whatever time frame that they're down," he said. "So that's one positive that we're hearing."

Should the shutdown be prolonged, Barnaby said he hopes the national association will ramp up negotiations with government officials even more.

CLC's TRIO program, a student support services program, is federally funded, but because its funds were allocated at the beginning of the school year, the program does not feel any effects from the shutdown right now.

But a prolonged shutdown, TRIO Director Charles Black Lance said, could prove problematic for future funding.

Other than some hitches with financial aid, CLC President Hara Charlier said the campus is fortunate not to suffer any negative effects from the shutdown.

"We expect no impact at all on our operations and certainly no impact on our ability to serve students," Charlier said. "Serving students is the most important thing we do, and we are confident we're going to be able to do that."