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October 13, 2013

States starting to feel effects of government shutdown

Jefferson City, Mo. — The federal government shutdown that has idled hundreds of thousands of workers is starting to ripple through states, which are now laying off employees and warning of thousands of additional furloughs if the budget stalemate is not resolved soon.

The trickle-down effects highlight the extent to which states are dependent on the federal government. In many states, federal money comprises about a third of all revenues. As federal dollars dry up, so do state programs.

Across the nation, about a dozen states already have furloughed hundreds of employees whose paychecks depend on federal money. The layoffs have hit civilians at state National Guard bureaus, workplace safety inspectors and state workers who determine eligibility for Social Security disability benefits, among others.

More state employees could be furloughed this coming week.

"For me, it couldn't have come at a worse time," said Tammy Turner-Lee, a 54-year-old supervisor in Oklahoma's disability determination office who is targeted to be furloughed on Friday. "My husband is going through chemotherapy right now. ... If we are in furlough status, that means I am going to have to go into credit card debt."

Medicaid, the biggest federally funded state program, has remained exempt from the cutbacks. But federal officials have said other big state-administered programs — like food aid for low-income families — may have only enough money to make it through October.

As Congress and President Barack Obama remain at odds over the federal budget, some states have started to prepare for widespread furloughs.

Arkansas already has laid off 673 employees and could furlough an additional 4,000 if the federal shutdown continues for another week.

"The state of Arkansas simply does not have the resources to continue to cover the costs of federal programs," Arkansas Gov. Mike Beebe wrote in a recent memo to agency directors.

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