Raleigh, N.C. — State government is bracing for the impact of the partial federal government shutdown, Gov. Pat McCrory told the Council of State Tuesday morning.
"In the departments that I'm responsible for, probably the two biggest impacts will be in the Department of Health and Human Services, where we have approximately 4,500 employees that are funded fully or partially with federal funds, ... and the Department of Commerce," McCrory said.
The state Department of Environment and Natural Resources and the Department of Public Safety would be affected as well, he said.
Although the state government operates independently of the federal government, North Carolina does administer dozens of federal programs. The federal government reimburses the state for those operations, but without a new federal budget, the dollars to pay for those workers don't exist.
State officials were on the phone with their federal counterparts as early as 7 a.m. Tuesday to sift through which positions and functions were considered "critical" by the federal government and would therefore keep working and which were "non-essential."
State Budget Director Art Pope sent a memo to state agencies outlining how the delay in federal funding would be handled, although he said the state was still trying to get a handle on specifics.
"The state is required to follow federal guidelines on the use of federal funds during the shutdown," Pope said.
In particular, the state administers environmental, health and safety programs required by federal law but reimbursed with federal tax dollars. It is up to the federal government, he said, to determine whether state workers funded with that money stay on the job.
Social services programs such as unemployment insurance and Social Security will be largely unaffected, he said.
State employees who are funded only partially by federal funds will have their time and pay reduced by the proportion of their salary paid for by the federal government. In some cases, the federal government may waive some furlough requirements.
"One example of this is the administration of the federal Social Security Disability program," Pope said. "The disability payments are already funded, but you still need to administer the claims for payment."
The Social Security Administration has already notified the state that those claims processors will stay on the job.
"The gray area is whether a state-administered federal program is considered critical or noncritical by the federal government," Pope said. "One example are the numerous inspection programs and whether they are considered critical public safety and health or if inspectors should be furloughed."
McCrory offered his help to the heads of independently-elected state departments in managing the cash crunch. Of those, the most affected might be the state Department of Labor, where a quarter of the workforce is federally funded, according to Commissioner Cherie Berry.
"We have two major goals," McCrory said. "We've got to make sure that functions that are critical remain open and yet, at the same time, we have to make sure we aren't spending money the state doesn't have."
One bright note: the North Carolina State Fair will not be affected if the shutdown runs on for days and weeks. The Labor Department inspectors who make sure rides are safe are funded by locally collected fees.