There's no shortage of painful examples of how the federal government shutdown threatens Minnesota, beginning with the estimated 19,000 federal employees in the state, many of whom aren't getting paid.
But when personal finance website WalletÂHub.com cast a cold eye on the debacle, it concluded that Minnesota will be among the states least affected. In a report out Tuesday, WalletHub ranked Minnesota No. 48 in terms of potential impact because the state doesn't rely as heavily on federal purse strings as other states.
Topping the hurt list at No. 1 is Virginia, with Alaska, Alabama and the District of Columbia following it. Iowa ranked last.
John Kiernan, a senior analyst at WalletHub.com, said the results weren't too surprising.
"It's just helpful to see how dependent each state is on the federal government, whether it's directly in terms of wages or just the impact that we all feel in terms of logistical concerns because government agencies are understaffed or underfunded now," he said. "We're all losers in this situation."
Kiernan noted the irony that Republican-leaning states stand to be hit hardest.
WalletHub based the study on seven key measures: federal employees per capita, federal contracts per capita, disruption of loans from the Small Business Administration, Social Security funding shortages, real estate as a percent of the state's economic output, student aid applications per capita, and veterans per capita. Federal employees and federal contracts were weighted most heavily.
Minnesota was in the top 10 in just one of those seven measures: student aid applications per capita, where it ranked No. 7.
That ranking reflects the relatively high share of young people in Minnesota who go to college, said Andi Egbert, a senior researcher at the Minnesota State Demographic Center.
Pell grants and student loans from the federal government for the current school year aren't affected, and students don't have to worry about those funds. However, WalletHub noted that skeleton staffs and the potential problems related to the debt ceiling "stand to cause long waits for FAFSA application processing as well as funding issues in the future."
FAFSA is the acronym for Free Application for Federal Student Aid, the standard way that students seek government help to pay for college.
Mike Dougherty, vice chancellor-advancement at Minnesota State Colleges and Universities, said the shutdown won't immediately affect financial aid and research grants already awarded, but the future is a question.
"We are closely monitoring changes in the federal situation and will adjust in the days ahead as needed," Dougherty said.
Jennifer Bjorhus • 612-673-4683
