The Pew Charitable Trusts

If John Kerry is elected president, Democrats predict a new partnership between the federal government and states.

The U.S. senator from Massachusetts, who formally accepted the presidential nomination at the Democratic National Convention Thursday, promises a more activist approach in dealing with issues important to states.

Kerry supporters are banking on him to invoke new strategies to stop the exporting of manufacturing and computer work overseas, lessen the burden of health care costs on states' budgets and help pay for Bush-era rules on education and anti-terrorism.

Kerry, 60, accepted the nomination in a nationwide televised speech that largely dealt with national security issues and the war in Iraq. To relieve Iraq war-related commitments straining National Guard units throughout the country. Kerry said he would add 40,000 active duty troops and "end the back-door draft" of National Guard and reservists.

Democrats expect Kerry to pay more attention to the plight of states than President Bush, a former Texas governor.

"Most governors ... know we have to do our share, but we have felt over the last few years that Congress and the president have won the political points of cutting taxes, but then simply passed the burden on to the next level of government," said Virginia Gov. Mark Warner.

Kerry will have to do more than win the White House. Many of his proposals would not go very far unless Congress, now firmly in Republican control, can be convinced to increase taxes on wealthy Americans to free up money for his initiatives.

Jobs are clearly a top priority for state officials. "There's no sense of urgency coming from (this) White House (about job losses). We just keep relying on the same-old, same-old," said Gov. Kathleen Blanco of Louisiana.

Kerry promises to abolish current tax rules that reward U.S. companies which move jobs overseas. "If there are two companies in Baltimore and one wants to expand in Baltimore and one wants to expand in Hong Kong, John Kerry would say you can't stop the company from expanding in Hong Kong, but it's crazy to have our tax code reward the person who goes to Hong Kong and put the company that decided to create more jobs in Baltimore at a competitive disadvantage." Gene Sperling, a Kerry economic advisor, told Stateline.org.

Kerry also vows to create jobs for the new economy by wiring "every corner of America" with broadband technology, especially in underserved rural America. He wants to pump more federal dollars into higher education and research, into such areas as renewable energy and stem cell technology.

"This needs to be a shared response by states and the federal government. Now states are carrying all the burden," Gov. James McGreevey of New Jersey said at a news conference.

Health care is another Kerry priority. He promises to "strike a new compact" with the states on Medicaid, the state-federal health insurance program for the poor and disabled. Under his plan, the federal government would pick up the full cost including the states' share -- of more than 20 million poor children currently on Medicaid. In return, states would expand their health care coverage for low-income working families that earn too much to qualify for the Medicaid program.

Oregon Gov. Ted Kulongoski said he hopes Kerry will address the impending retirement of thousands of Baby Boomers, many of whom will need expensive long-term health care that states will have to cover. "The federal government has to step up. ... The states cannot carry this burden by themselves."

Kerry also wants to give a health care tax credit to small businesses that would cover up to 50 percent of the cost of employees' premiums and allow small businesses to be able to buy the same health plan available to members of Congress.

In addition, Kerry Thursday night talked about the importance of allowing Americans to buy prescription drugs that are reimported into the United States from foreign countries.

Another of states' bugaboos that Kerry promises to remedy are federal laws that impose requirements on states but don't cover all the costs, from education to homeland security costs imposed on states after Sept. 11, 2001.

Kerry pledges to fully fund the No Child Left Behind (NCLB) law that requires more testing and reporting of student achievement plus the costs of another federal law to help special education students. States estimate they've been shortchanged $27 billion promised since NCLB was signed in 2002 and $10 billion for special education for 2004 alone.

"We have seen so many mandates coming down from the federal government on education. The states are strapped. ... We all want quality education, but it isn't free," said Gail Rasmussen, a delegate from Oregon and a vice president of the Oregon Education Association.

The most direct aid to states is Kerry's proposal to dole out $25 billion over two years to help "stop painful budget cuts" states had to make in the past four years because of Bush's economic policies, according to Kerry's online campaign site.

"It's shocking to think how little [the Bush administration] did for states," Sperling, Kerry's economic adviser, told Stateline.org. The $25 billion is to help states avoid raising tuition and local and state property taxes.

Surprisingly, many state leaders and governors are not aware of the $25 billion "state tax relief" proposal and don't count on a Kerry White House for a federal bailout.

"Anytime the federal government is willing to send me some money, I will happily get out there with my wheelbarrow ... but that's not what I'm looking for," said Tennessee Gov. Phil Bredesen.

Kerry's campaign also proposes that the federal government issue $24.8 billion in bonds to repair and build new schools.

The issue of gay marriage, which roared onto states' legislative agendas this year, took a low profile at the convention even though the event took place in the only state that now allows same-sex marriage. While Bush favors a federal constitutional amendment forbidding same-sex marriages, Kerry says he opposes gay marriage but also opposes a federal constitutional ban, preferring to leave marriage laws to each state to decide.

Other changes that states likely would see under a Kerry administration are in the energy and environment areas. Kerry, who spearheaded a multi-state attack on acid rain as lieutenant governor of Massachusetts from 1982 to 1984, pledges to step up efforts to cleanse the air of acid-rain precursors, mercury emissions and other pollutants, including gases that contribute to global warming. His campaign site vows to reverse Bush officials' relaxation of clean-air rules.

On the energy front, Kerry pledges to increase America's independence from foreign oil, in part through development of renewable fuels and through tax incentives to encourage automakers to make cars more fuel efficient.

"We as a nation are overly dependent on foreign oil," New Mexico Gov. Bill Richardson, who served as Clinton's energy secretary, said at a news conference here. "The Bush administration has failed to develop an energy policy that lessens that dependence."