Study: Red states most impacted by shutdown

October 11, 2013

States with high concentrations of federal workers, military installations, veterans and students who rely on federal funding are being hit hardest by the government shutdown. And most of those states, according to a new report, are red states.

Virginia will be worst hit by the shutdown, according to WalletHub, an online personal finance company, thanks to the Commonwealth’s reliance on federal contracting dollars and the number of federal workers concentrated around Washington, D.C. and the Newport News area. Alaska and Alabama, both of which rely heavily on federal workers and government contracts, are second and third most vulnerable, the study found.

Four of the top five most vulnerable states — including Maine — are run by Republican governors. Only Maryland, which also depends on federal dollars and workers, is a blue state.

Meanwhile, Midwestern states, both red and blue, are some of the least vulnerable to a shutdown. Iowa, Indiana, Minnesota and Wisconsin are all among the five least affected states, along with New York.

Republican-led states are also the most dependent on loans from the Small Business Administration. Seven of the top 10 states most affected by the disruption of SBA loans — North Dakota, South Dakota, Alaska, Michigan, Maine, Idaho and Wyoming — are governed by Republicans. Democrats hold the governor’s mansions in Colorado, Montana and Oregon.

And students in red states are most dependent on federal loans. Georgia, Mississippi, Arkansas, South Carolina and Louisiana are expected to send in the most FAFSA forms this quarter; those forms won’t be processed while the government is shut down. Only Arkansas has a Democratic governor.

If the shutdown continues through the end of the month, the Department of Veterans Affairs would run out of money to cover disability and pension claims. Alaska, Virginia, Montana, Wyoming and Maine have the highest concentrations of veterans per capita, meaning those states would feel the crunch hardest.

Reid Wilson covers state politics and policy for the Washington Post's GovBeat blog. He's a former editor in chief of The Hotline, the premier tip sheet on campaigns and elections, and he's a complete political junkie.
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Reid Wilson · October 11, 2013