Federal agencies and programs rely on annual funding appropriations passed by Congress and signed into law by the President. If Congress fails to pass or a president fails to sign the budget bills, a government shutdown occurs and non-essential discretionary functions cease. Essential services – such as law enforcement, fire departments and emergency medical services – remain operational. In a shutdown, federal employees are typically furloughed and may not work until appropriations are restored. Some judicial and congressional employees deemed “excepted” by the courts and Congress can continue to perform their essential duties in a shutdown, while others are required to stay home without pay.
Shutdowns have a number of negative impacts for communities, including revenue losses (e.g., from visitor fees and gift shop sales at national parks), economic disruptions and the loss of wages for federal workers who are either furloughed or required to work without pay. Additionally, federal agency shutdown plans take significant staff time to develop and implement.
Local leaders are encouraged to identify federal workers who may be affected in their communities and work to minimize their economic hardship. Shutdowns largely impact people who depend on government programs and services, such as those living in affordable housing, those receiving food stamps or who have children in school. Cities that receive federal grants for programs are also impacted and should plan accordingly, identifying supplemental funding sources in the event of a funding lapse. In addition, a longer shutdown will put more pressure on state and local governments that are forced to offset lost federal revenue through reduced tax revenue and the cost of providing services to residents.
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