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Shutdown Effect on Indiana Muted -- So Far

Most federal workers in Indiana are at fully funded agencies, but state might have to cover Medicaid costs if impasse drags on

(INDIANAPOLIS) - The five-week federal shutdown isn't affecting Indiana's state budget yet, but budget analysts are keeping an eye on it.

States receive federal money to help administer Medicaid. State budget director Jason Dudich says if the shutdown drags on, Indiana might have to dip into state funds to cover those costs until the federal money is released.

Dudich says his office is also watching for a possible drop in sales and income taxes due to federal workers going unpaid, but hasn't seen one so far. Indiana has more than 23,000 federal workers, but three-quarters of them work for agencies which are fully funded and haven't shut down.

Governing magazine estimates Indiana has about 5,000 workers, from the TSA to the IRS, who are about to miss their second paycheck. The exact number is difficult to pin down, because some agencies have reserve funds they can dip into until the shutdown is resolved, and some workers are classified as "essential" and continue getting paid.

By Governing's estimate, Indiana has the 17th-lowest number of unpaid workers, and the 18th-lowest percentage of the total federal workforce. In the District of Columbia and three western states, a majority of federal workers aren't getting paychecks. At the other end is Rhode Island, which has only a small number of federal workers to begin with. More than 90% of them are in agencies unaffected by the shutdown.

Protesters outside a NASA research center in Mountain View, Calif. (Photo: Anda Chu/MediaNews Group/The Mercury News via Getty Images)

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