Governor Taps Emergency Reserve to Treat Shutdown

As reported in the Baltimore Sun, Maryland received 16,078 claims filed by furloughed federal workers during the first six days of the U.S. government shutdown, according to the state Department of Labor, Licensing and Regulation.

And according to the Washington Post, Governor O’Malley has considered tapping an emergency reserve set up with money held back from State pension funding to lessen the impact of a lengthy federal government shutdown.

“We have flexibility on how to use these funds, and we’re actively assessing all of our options so that we can minimize the harmful effects of prolonged congressional recklessness on Maryland families and businesses,” O’Malley said in a statement.

In fact, some of the funds have already been used,

During this year’s 90-day legislative session, the General Assembly set up a special reserve account to help weather the fallout in Maryland from federal budget cuts due to the sequester. Last month, O’Malley announced he was taking $9 million from the account to bolster funding for initiatives including Head Start, Meals on Wheels and drug treatment programs.

The decision to hold back $100 million from the $300 million that had been dedicated to the pension fund was debated during the last session.  The funds from additional salary contributions from state employees and teachers were intended to pay down the pension’s unfunded liabilities, but were held in case they were needed for revenue shortfalls due to sequestration.

For more information, see the full story from the Post and out previous coverage on Conduit Street, State Budget Provides $100m Hedge Via Pension FundingAdvisor Disappointed in Potential Pension Funding Cut.