November 14, 2019
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Why the shutdown hits Maine harder than Maryland

Kevin Bennett | BDN
Kevin Bennett | BDN
A sign at the Side Street Cafe in Bar Harbor offers a discount to Acadia National Park employees who have been furloughed because of the federal government shutdown.

As the nation enters the second week with its federal government largely shut down and no immediate resolution in sight, the Washington, D.C., area is feeling the impact.

But Maine isn’t far behind the nation’s capital and its environs when it comes to bearing the brunt of a government funding lapse. Maine, in fact, ranks fifth in a new study that ranks the states (and Washington, D.C.) most and least affected by the shutdown and the potential for a default on the nation’s debt obligations.

The study, put out by the website WalletHub, says Virginia is the state most affected by the shutdown. Makes sense. Washington, D.C., ranks fourth on the list. Makes sense, too. But that’s just one spot ahead of Maine. Maryland — home to numerous federal offices and federal workers — is sixth, one slot behind Maine.

So why does a shutdown hit Maine harder than it hits Maryland? It’s not because Maine is home to a disproportionately high number of furloughed federal employees — though the state has its share. Rather, it’s the state’s high concentration of seniors and veterans, its businesses’ dependence on loans from the U.S. Small Business Administration, and the role real estate plays in the state economy.

The study also takes into account each state’s dependence on federal contract dollars and the number of student financial aid applications per capita. But it doesn’t even consider the range of other federal funding streams — from education funds to food stamp benefits to low-income heating assistance — on which Maine residents depend to a higher degree than residents in other states. Some of those funds haven’t been affected by the impasse yet, but they could be if the shutdown drags on long enough.

As for the WalletHub study, the analysis ranked Maine second on the list of states that could be most affected by a Social Security funding shortage, a possibility if the country defaults. Maine, after all, has the highest median age in the country. A greater share of its population is 65 and older than the rest of the nation’s — 16 percent in 2010 compared with 13.1 percent nationwide — and, therefore, dependent on Social Security checks.

WalletHub ranks Maine No. 5 for its population of veterans per capita — though other analyses have ranked Maine second or third — meaning more residents would feel the brunt of delayed pension and disability payments if the shutdown extends past the end of October.

Maine placed seventh on the list of states that could be most affected by a disruption in loans from the federal Small Business Administration, and the state was 10th on the list of states whose economies rely most heavily on real estate.

With lenders unable to readily verify loan applicants’ income tax returns, and with more than 90 percent of Federal Housing Administration staff on furlough, home buyers face the possibility that approval of their mortgage applications will be delayed. That doesn’t bode well for a real estate sector still struggling to bounce back from the recession.

What other states are bearing the brunt of a shutdown? Alaska took the No. 2 spot on WalletHub’s list, and Alabama landed at No. 3. New Mexico, Colorado, Idaho and Hawaii round out the top 10.

Only one of Maine’s New England neighbors even made it into the top half of the most affected states: Vermont, at No. 21. Massachusetts ranked 30th, Connecticut 34th, Rhode Island 35th and New Hampshire 37th.

It’s just another reason why, for Maine’s sake, the sooner the shutdown stalemate ends — with the Affordable Care Act intact — the better.

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