Minnesota workers, businesses start to feel sting from federal government shutdown

Sandy Parr was so exhausted after working 18 straight hours at the federal prison in Rochester that she turned the radio up and rolled the windows down in her Ford Expedition late Monday night in an attempt to stay awake on her drive home.

It was the 16th day of the federal government shutdown and Parr, a food service supervisor and nurse at the medical prison, was already feeling the effects of filling in for dozens of absent colleagues. To make matters worse, Parr is not getting paid for working 60-hour weeks during the shutdown.

"The shutdown is a huge source of stress," said Parr, who lives in Byron, Minn., and soon may be forced to choose between groceries and medications for her 14-year-old son, who has autism. "We all have to decide what we can pay now and what we can't pay, so that we can have enough money left over to support our families."

Across Minnesota, the indefinite government shutdown is tightening its grip on federal workers, their families and local economies. With no end in sight, thousands of workers who perform vital jobs — such as screening passengers at airports, guarding prisoners or inspecting food or drug manufacturers — face missed paychecks Friday. More than 750 federal workers in Minnesota have already applied for unemployment benefits, and farmers across the state are growing anxious over delays in federal subsidy payments and loans. Meanwhile, low-income Minnesotans who rely on federal aid for food and rent could have their benefits cut off.

The federal government is a large employer in Minnesota, with approximately 32,000 employees in more than 30 agencies. While only about 5,500 work for agencies affected by the shutdown, their work affects a broad swath of the economy and everyday life. The wages and salaries of the 32,000 in Minnesota top $200 million a month, according to the state workforce agency.

"You take that level of income earned by individuals out of this state, and it will have definite downstream impacts" on the economy, said Steve Hine, a labor economist at the Minnesota Department of Employment and Economic Development. "People can't go out and spend money they're not receiving."

From northern Minnesota's Voyageurs National Park to southern Minnesota farmers, there's no corner of the state that is unaffected.

With the U.S. Department of Agriculture (USDA) shut down, farmers are unable to apply for federal loans or get farm program analysis. Farmers who didn't apply immediately for federal payouts designed to offset losses from President Donald Trump's tariff battle with China will now get delayed payments since the federal office has closed.

"It just adds insult to injury," Minnesota Farm Bureau President Kevin Paap said. "It's not knowing when things will get better."

The stalemate is also placing a squeeze on farmers with loans from the federal Farm Service Agency (FSA). Erin deKoning and her husband own a cattle and pig operation in the southwestern Minnesota town of Ellsworth. At the end of 2018, they sold their calf crop for the year. Because the FSA has a lien on their acreage, the couple needs someone from the agency to endorse the check before the bank will cash it. But FSA offices are closed.

"It's the one day a year we get a paycheck," deKoning said, calling it a sizable payment. "It's very irritating."

At the University of Minnesota, two research buildings — a cereal disease lab and a major regional research center — have closed on the St. Paul campus because they operate on funding from the USDA. Some employees have relocated to other facilities, but the shutdown has nonetheless caused "substantial disruption" to the U's agricultural research, said spokesman Devin Henry. Some 1,300 federal research awards have been affected.

In addition, U researchers have accrued $10 million in unreimbursed research expenses since the shutdown began — a number that climbs by half a million dollars a day.

If the deadlock continues a few more weeks, it could also hit landlords who own 28,000 Section 8 housing units in Minnesota, who receive tens of millions of dollars in federal subsidies for affordable housing for low-income tenants. The U.S. Department of Housing and Urban Development (HUD) is contractually obliged to make Section 8 payments to these landlords throughout 2019 and in some cases beyond, said Jessica Deegan, director of federal affairs at Minnesota Housing, which helps distribute federal funds throughout the state. But HUD is working off of last year's appropriations, she said. If those funds run out before the shutdown ends, there will be no money to make future payments.

"There is a lot of anxiety," said Minnesota Housing spokeswoman Megan Ryan.

A HUD spokesman said that in previous shutdowns, the agency never left Section 8 subsidies unpaid, nor were any low-income tenants evicted for lack of government payments. The spokesman said that HUD has money to pay for Section 8 vouchers until the end of February and enough funds to make certain landlord payments through March.

The shutdown could also imperil access to food assistance. Approximately 450,000 Minnesotans, or 8 percent of the state's population, are enrolled in the federal food stamp program, known officially as SNAP or the Supplemental Nutrition Assistance Program. The Trump administration announced Tuesday that benefits will be available through February, though many still fear that any cut in benefits will force them to go hungry.

Vicki Parchman, 60, of Brooklyn Park, who is unable to work because of a physical disability, said she relies on food stamps for all of her meals. She expects to be visiting soup kitchens, relatives and food pantries if her SNAP benefits are cut.

"It's going to have a profound effect on my diet and my health," said Parchman, who estimates that her SNAP benefits are $170 a month. "I realize that it doesn't help to be worried, but I'm really worried."

Celia Hahn, a transportation security officer at the Minneapolis-St. Paul International Airport and president of the union that represents some 800 federal airport workers in the region, said many of her co-workers are already facing difficult decisions. She said some are starting to call their mortgage companies and send resumes to other employers, as a precaution.

Like thousands of other federal workers, Hahn expected to work without pay during the shutdown because her job is considered essential. She's already had to cancel plans to sign up her twin 9-year-old boys for a soccer clinic this winter. In another couple weeks, Hahn said, she likely will have to call her mortgage lender to negotiate payments.

"Everyone is anxious and upset," Hahn said. "It feels like they can withhold our pay and just use us as bargaining chips in their political games."

Several major banks operating in Minnesota, including Wells Fargo and U.S. Bank, said they will take steps to accommodate federal employees who face a period without paychecks.

Staff writers Jim Spencer and Shannon Prather and Washington bureau chief Patrick Condon contributed to this report.