The effects of a federal government shutdown could have a “profound and far-reaching” impact on the Houston and Bay areas due to the importance of the Johnson Space Center, according to a letter from the Bay Area Houston Economic Partnership.

The gist

With the federal government possibly shutting down Oct. 1 due to budgetary issues, BAHEP President Brian Freedman sent a letter Sept. 27 to the Texas congressional delegation, making the case that the decision could “shape the lives of thousands and the future of our community.”

Specifically, Freedman pointed to the Johnson Space Center, which would shut down along with the government. According to the letter, the space center’s impact on the area includes:
  • Employment of more than 3,000 civil servants and more than 8,000 contractor employees in addition to indirect effects on 28,000 total jobs
  • Contributions of $4.6 billion annually to the local economy and $8.5 billion when considering other effects
Beyond the space center, the Houston region has 29,000 federal workers across multiple departments, the letter states. Throughout Texas, there are nearly 150,000 federal employees.

It could also affect the economy overall in terms of credit ratings and loans on families and small businesses, which could lead to layoffs, Freedman said in the letter.


Diving in deeper

A shutdown of the government could take place if the U.S. Congress doesn’t fund the government to the level needed to run at the start of the new fiscal year, according to a Sept. 27 news release from the Department of Defense.

If left unfunded, operations will begin to shut down Oct. 1, which marks the start of the fiscal year for the federal government.

The last government shutdown took place in 2018, according to Freedman’s letter.
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Quote of note

“The Bay Area Houston region, like the rest of the nation, isn’t just a series of numbers on a spreadsheet,” Freedman wrote in the letter. “It’s a thriving ecosystem of businesses, families and federal entities that play a vital role in our nation’s endeavors. A government shutdown doesn’t just mean a few closed offices; it implies a cascading effect on thousands of lives, both directly and indirectly.”