Howard officials, business leaders weigh impact of government shutdown

With a federal shutdown in effect after Congress failed to reach a spending-bill compromise by midnight on Oct. 1, local officials and business leaders are trying to determine what the impact of a potential federal shutdown will be for Howard County.

The Republican-controlled House and Democrat-controlled Senate have been at odds over the future of the Affordable Care Act. Leading up to the impasse Monday night, both chambers lobbed bills back and forth – some proposing to defund or delay the law, and others funding it in full.

The shutdown is the first in 17 years. 

Howard County budget administrator Ray Wacks said the scale of the shutdown’s impact on the county’s economy will be hard to predict.

“No one knows how long the shutdown will occur, or how many of our federal employees will be affected,” he said.

According to Wacks, about 12 percent of Howard County’s workforce is made up of government employees. Approximately 50 percent of those federal employees – about 9,000 people – work at Fort Meade, a national security-centric U.S. Army base in Anne Arundel County.

The next largest group of federal employees residing in Howard, Wacks said, are the approximately 2,000 Social Security Administration workers.

Overall, about 18,000 Howard Countians work for the federal government.

Wacks said the effects of a shutdown on these employees would vary based on which jobs were deemed “essential” to the functioning of the nation. “Essential” employees will continue to work and be paid during the shutdown.

He also said the length of the shutdown, and whether employees would be reimbursed for the salary they lost over that time, would play a role. The last time there was a government shutdown, from mid-December 1995 to early January 1996, federal employees were eventually reimbursed.

Wacks said there were likely to be secondary impacts on local business.

“If people are losing money from their paychecks, they’re going to stop going to restaurants, going shopping,” he said.  

Duane Carey, the immediate past chair of the board of the Howard County Chamber of Commerce and President of Impact Marketing & Relations in Ellicott City, said he didn’t think the shutdown would have a notable impact on local businesses unless it lasted more than a few weeks.

“If people are living so paycheck to paycheck that they are concerned about spending, that would surprise me for Howard County,” Carey said. “I think it’s going to be a blip.”

But, he said, the shutdown underscores the county work force’s dependency on the federal government.

“If we are able to even things out a little bit because we've got a good, strong, thriving private sector, that puts us in a better position,” he said.

There’s also the matter of the impact a halt in federal procurement – the process by which the government buys or leases goods and services – will have on Howard County businesses.

“What we’ve been hearing is because they were anticipating something like this occurring, federal agencies have been dialing back,” Wacks said.

As for essential services, he said, the government would have to be shut down a long time for them to see an impact.

Howard County has a rainy-day fund of about $60 million that can keep schools and public safety institutions like police and fire stations running in the meantime.

Whatever the outcome, Wacks said county officials likely wouldn’t know the full impact until a few months from now.  

“The results will be delayed,” he said. “We’re not going to know until January or February what the impact [will be]."

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