DETROIT — With the government shutdown in full swing this week, local residents have questioned just how that may affect the State of Michigan, along with the City of Detroit, which now enters its third month in a bankruptcy crisis. 

However, state officials don’t seem to be in any panic. Earlier this week, it was announced that both the State and City are in well enough shape to handle a government shutdown, as long as it doesn’t last for more than a couple of weeks.  

However, if it does drag on longer than that, there will, no doubt, be ramifications, as more than 40 percent of the State’s roughly $50 billion budget, is made up of federal funding.

All State employees, even those whose positions are federally funded, have been reporting to work since the government shutdown. Some of the departments with the most federally funded employees include the Department of Transportation, the Department of Human Services and the Department of Education.

What isn’t certain, however, is what would happen to the scheduled hearings later this month in the Detroit bankruptcy case, should the government shutdown still be in effect then. The U.S. District Court, which announced that it has enough funding for at least 10-12 days from the start of the shutdown, said it will be making a decision on what steps to take, closer to the date of the hearing, currently scheduled for October 23.

But one of the first state-administered programs that could be impacted by a prolonged shutdown is the Temporary Assistance for Needy Families program, which provides access to financial assistance to people through their Bridge cards; which is federally funded.

The Women, Infants and Children Program (WIC) also announced that it only has enough funds to operate for ten days, without government assistance in Michigan. Should the government shutdown exceed that, thousands of low-income mothers, pregnant women, babies and young children, who rely on government assistance to purchase food and get healthcare referrals and nutrition education, could see that help cut off

While State officials have remained calm, the auto companies seem to have already begun pushing their panic buttons. With the shutdown affecting some 800,000 federal workers, it’s unclear just how many of those might now defer plans to buy a new car.  Auto industry officials warn that the federal shutdown could have a major impact on the City of Detroit.

“We’re all concerned,” Ken Czubay, head of U.S. marketing, sales and service at Ford, said during a conference this week. “We’re going to have to evaluate how long it’s going to last, and we’ll take the appropriate measures, depending on the length of the activity in Washington.”

Czubay’s counterpart at General Motors said he had “faith that the right things will be done and done quickly” to resolve the budget dispute, but Kurt McNeil, GM’s vice president of U.S. sales operations warned, “If the thing drags out a couple weeks, then…It starts to have a bigger factor on business.”

In times of economic and government crisis, the auto industry has always proven to be the most fickle. Fearful consumers steered clear of both vehicle and home purchases during the Great Recession from December 2007 to June 2009, sending the auto and housing industries to some of the lowest lows they had seen in decades.

College students may also have reasons to worry. A long term government shutdown could cause a backup in federal loan applications, which in turn, could mean thousands of students might have to drop out of college, if payments aren’t made before their university’s required deadlines.