Maine businesses brace for impact of government shutdown

Photo / Adobe Stock The U.S. federal government shut down at midnight Wednesday over a budget stalemate.

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A U.S. government shutdown that started at midnight could spell trouble for Maine businesses and the state’s broader economy that goes beyond federal workforce and funding stoppages.

While there are still many unknowns about what services and programs may be disrupted, initial concerns revolve around what happens in the case of a protracted shutdown.

The budget stalemate in Washington comes on top of ever-changing policies on tariffs and trade for the past several months.

“Clearly, we do not need additional unpredictability,” Patrick Woodcock, president and CEO of the Maine State Chamber of Commerce, said in a phone interview Wednesday en route to a factory visit in Guilford.

“From tariffs to Canadian tourism, it seems as though we continue to have a self-inflicted erosion of business confidence,” he said.

To some extent, he said that businesses should have some level of expectation given the number of shutdowns over the past 10 years. The most recent one stretched more than a month, from Dec. 22, 2018, to Jan. 25, 2019.

If the shutdown is still in place on Friday, it's unlikely that the U.S. Department of Labor will be able to release its scheduled September jobs report.

Woodcock said that creates another level of uncertainty for businesses trying to get a sense of where the economy and interest rates may be headed, calling on national political leaders to “limit the damage” and end the stalemate.

“I really hope there’s a resolution before the end of this week where this data can be released,” he said. “We need transparency in our economy.”

Financial services

In the financial services sector, government shutdowns can lead to a disruption in services provided by furloughed federal employees, tax processing delays and a decline in consumer confidence, said David Libby, president and CEO of Town & Country Federal Credit Union.

Regarding Maine's broader economy, he warns that the shutdown could disrupt travel plans and potentially impact household finances.

"However, a shutdown lasting less than two weeks is unlikely to have a material impact on the economy or household finances," he said.

Earlier this week, the Scarborough-based credit union announced various relief options to help ease the burden of a shutdown. They include Crisis Assistance Relief Loans of up to $10,000 at an annual percentage rate of 3.99%.

Jim Roche, president of the Maine Bankers Association, offered reassurances about the state’s banking sector.

“Banks across Maine will be operating normally today, and customer deposits and accounts are safe and will continue to be safe and accessible, he told Mainebiz. “The lifeblood of Maine’s economy is consumer access to banking services. Banks take this role very seriously and will not let customers down."

Portland Jetport

Paul Bradbury, director of the Portland International Jetport, said the jetport does not expect any direct impact on immediate operations since the Transportation Security Administration and Federal Aviation Administration air traffic controllers are exempt from the shutdown.

"Although these operations are exempt, it remains challenging for the federal staff performing these duties since they are required to report to work but will not be paid during the shutdown," Bradbury noted.

Health insurance premiums

Garrett Martin, president and CEO of the Maine Center for Economic Policy, said he is mainly worried about the shutdown's impact on health insurance premiums.

"There's no question that what the fight is ultimately about is making sure that people aren't going to lose access to their health coverage," he said.

The nonpartisan think tank is based in Augusta.

Without action, Martin warned that millions will see premiums spike or lose coverage altogether.

On the broader economy, Martin told Mainebiz that the situation "creates another layer of uncertainty ... that has begun to take a toll on some Maine businesses."

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