By Todd Haggerty and Erica Michel
At all levels of government, federal, state and local, the budget provides the legal basis for spending and the failure to enact a budget can have wide ranging consequences. With Congress' failure to pass a budget resulting in a partial federal government shutdown, it's worth noting that many state governments have also faced shutdowns over the years.
In the absence of a budget or a temporary appropriations bill, 22 states require the government to partially shut down. This most often involves furloughing state employees not deemed critical to the maintenance of public safety and health, closing state parks, and shuttering some non-essential state offices such as those that issue driver’s licenses.
Since 2002, at least 20 states have started one or more fiscal years without a finalized budget. In several of these states, incomplete budgets resulted in partial government shut downs. Here are some of the more recent state government shutdowns:
• Minnesota is the most recent state to have a partial government shutdown. The 2011 shutdown lasted for 20 days, resulting in the temporary layoff of 22,000 state workers. The shut-down also closed state parks during the busy July tourism season, as well as two state-owned race tracks. Driving exams were also suspended. State officials estimate the state lost $1.25 million from unsold lottery tickets alone and an additional $1 million per week from closed state parks. However, other state officials estimated the state saved approximately $65 million from unpaid salaries to laid-off employees.
• Michigan faced two partial shutdowns in 2007 and 2009. The state’s shutdown in 2007 lasted only four hours—from midnight of the last day of the fiscal year until 4 a.m. on Oct. 1, 2007, when the governor and legislature reached a deal for temporary funding. In anticipation of the shutdown campers had been asked to leave state parks the night before. The short disruption also resulted in decreased state police on the highways. Plus, highway rest stops were barricaded, drawbridges closed and traffic cameras turned off. The partial shutdown involved temporary layoffs of 35,000 of the state's 53,000 employees. In 2009, Michigan experienced a technical two-hour government shutdown as lawmakers worked on a temporary spending plan. However, there was no interruption in the delivery of state services.
• New Jersey's state government partially shut down in 2006. This occurred despite the state having missed its budget deadline in three of the previous five years without shutting down. Before the governor signed the budget eight days into the fiscal year, 45,000 non-essential employees were placed on unpaid leave. One of the more dramatic results of the furloughs was the three-day shutdown of Atlantic City's casinos for the first time since their launch. This occurred because state casino inspectors, who are required by law to be present in the casinos, were among the state workers included in the furlough order. State officials reported that closing Atlantic City casinos alone resulted in daily losses of $1.3 million in gambling tax revenue for the state.
A partial federal government shut-down would likely have similar effects to a state shut-down, but with broader effects. National parks across the country will likely close, Americans could face delays applying for passports, and many federal government workers could face furloughs. The Wall Street Journal examined many more potential effects on its “Washington Wire” blog.
Todd Haggerty is a Policy Specialist in the Fiscal Affairs Program at NCSL and Erica Michel is a Research Analyst II in the Fiscal Affairs Program at NCSL.