Big local projects unaffected by shutdown for now.

Byline: Brian Johnson

The partial federal government shutdown hasn't yet thrown a wrench into plans for big construction projects like the $2 billion Southwest Light Rail transit project, but the head of Minnesota's Management and Budget Office is still nervous.

As the budget impasse extends to nearly three weeks, Minnesota is grappling with impacts that could chill economic activity in the state, said Myron Frans, commissioner of the Minnesota Management and Budget Office.

Impacts vary from agency to agency depending on their federal appropriations and when the appropriations dry up. But even if the shutdown ended today, Frans said, damage has been done because of the backlog of unfinished work it has created.

Some impacts are more subtle than others. For example, the now-shuttered U.S. Department of Commerce hasn't been able to provide updated economic reports, which businesses rely on for making decisions, Frans said.

Other repercussions range from delays in getting loans from the U.S. Small Business Administration to inaction on a request to the Federal Emergency Management Agency for disaster relief in Duluth.

That request, submitted by then-Gov. Mark Dayton in November, was in response to an October 2018 windstorm that caused more than $11.5 million worth of public infrastructure damage. The request is "sitting on someone's desk" at FEMA, Frans said.

The Minnesota Management and Budget Office has been "actively involved" in analyzing the shutdown, and Gov. Tim Walz has "directed us to examine what effects this might have in Minnesota," Frans said.

"At what point do [those impacts] start to affect big projects? We are trying to answer that now," Frans said. "One thing you can't do is call [shuttered federal departments] and ask questions. That makes it more difficult. We are frustrated to say the least."

One concern is that a protracted shutdown would disturb the bond market, which could have a ripple effect on a wide range of building projects.

When it comes to construction, no Minnesota project is bigger than Southwest, and the federal government is expected to cover nearly half of the cost of the planned 14.5-mile line between downtown Minneapolis and Eden Prairie.

"In the short-term, I don't think the shutdown will have an impact on us or Southwest," said Kate Brickman, communications director for the Metropolitan Council, which is overseeing plans for Southwest. "Right now, we have what we need to move forward and the project is...

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