Blog Posts > Shutdown Costs Keep Adding Up
October 16, 2013

Shutdown Costs Keep Adding Up

As stories of the cost of the federal government’s shutdown and its impact on citizens come to light, here’s what it means for individuals, businesses, and the state of West Virginia.

Toll on Citizens

We have all heard the shutdown affects “non-essential” programs, but what does that mean? Programs that provide nutritional assistance for pregnant and post-partum women, infants, and children, and funding for Head Start and home energy assistance, for example, no longer receive federal funding. Instead, they must have that portion of their budget offset by the state or suffer immediate cuts which would harm West Virginians already living in poverty.

But individuals receiving services are not the only ones at risk. Many federal employees working in West Virginia,  such as correctional workers, must take unpaid leave or work without pay due to the shutdown. These lost wages mean workers struggle to afford gas, groceries, and other essentials, pinching pennies to make ends meet.

Impact on Business

The shutdown’s impact on individuals is just part of the story. With wages frozen, workers are spending less, leaving small businesses across the nation reeling. Secondary businesses that serve or contract with the government have already begun feeling the aftermath of the shutdown.

Cost to West Virginia

West Virginia has made up for the federal funding loss for “non-essential” programs with state funds. The good news here is West Virginians are still able to receive assistance from vital programs. However, this impact is likely to worsen as West Virginia and other states become less able to fill the funding gap caused by the shutdown. Similarly, when small businesses take a hit from the shutdown, so too does the state. Just as the loss of wages impacts businesses through decreased spending, when small business revenues fall, state revenue falls leaving the state is expected to do more with less.

The Bottom Line

The government shutdown is not turning off the lights on government; it is the equivalent of a financial earthquake leaving states to pick up the rubble.

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