Governor McDonnell Holds Conference on Potential Govt Shutdown
In light of what he calls an "unconscionable" federal shutdown, Governor Bob McDonnell is asking state agencies to evaluate how a loss of federal funds would impact their operations.
Federal funds make up about 20 percent of the state budget, and Virginia boasts 172,000 federal civilian workers. But McDonnell says Virginia will not take any action to buffer against the effects of a shutdown until the end of the week.
McDonnell hammered President Obama Monday for "failing to lead," and Senate Democrats for not working with Republicans on entitlement reform. McDonnell also hit members of his own party for threatening a shutdown over healthcare spending in the Affordable Care Act, as healthcare exchanges go into effect Tuesday.
"Ultimately Obamacare will fail under its own weight," McDonnell said, "but it is absolutely wrong to shut down the government, and to threaten to shut down the government over this issue."
The governor says the state has resources in place to help supplant federal funding cuts. Virginia has $13 million dollars available in the recently created Federal Action Contingency Trust (F.A.C.T.) Fund, as well as an additional $2 million in the state's Economic Contingency Fund. On top of that, McDonnell highlighted a rarely used option allowing him to authorize the borrowing from the general fund to protect public safety. The state's rainy day fund, which contains more than a billion dollars for other purposes, would not be used.
Should a government shutdown persist, the biggest impacts on Virginia will come in the form of decreasing revenues. McDonnell expects as many as one-third of federal workers in Virginia could experience furloughs, which would mean fewer income and sales tax dollars flowing into state coffers.
This all comes as McDonnell and cabinet officials prepare to travel to New York City Thursday to defend the state's longstanding AAA bond rating before credit agencies. In the past, agencies have expressed concern over the commonwealth's transportation infrastructure, pension system, and dependence on federal spending. With pension reform in place and transportation reform under his belt, McDonnell says he is optimistic Virginia will keep its positive rating.
"We're going to tell them everything that we can to explain to them why our AAA bond rating should continue unabated as it has now for nearly 80 years," McDonnell said.
The governor will issue another update by Friday at the latest detailing the state's federal shutdown plans.
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Ed joined the NBC29 news team in May, 2011. A Charlotte, NC, native, he graduated from the University of North Carolina at Chapel Hill with degrees in journalism and political science.Full Story
Ed joined the NBC29 news team in May, 2011. A Charlotte, NC, native, he graduated from the University of North Carolina at Chapel Hill with degrees in journalism and political science. Email/Follow on Twitter/ Full Story
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