States Stuck with Federal $29 Billion Tab, NCSL Says
By Pamela M. Prah, Staff Writer
The nation's top legislative leaders kicked off a campaign to stop the federal government from stiffing states for an array of programs that Washington dictates but doesn't adequately fund, complaining that the bill to states is $29 billion this year alone.
The National Conference of State Legislatures, in a report and news conference, accused Congress and the White House of falling back into a bad habit of giving states new responsibilities without the money to see them through.
NCSL said the federal government is shortchanging states $9.6 billion in enforcing the No Child Left Behind education law and another $10 billion in providing education for disabled students. The figures are based on congressional estimates, rather than actual tallies of state spending.
"Even during strong economic times, states can ill-afford to shoulder this burden. During a time of fiscal crisis, the burden is intolerable," Utah House Speaker Marty Stephens (R), NCSL president, said at a news conference on Capitol Hill. "States' own budget choices and priorities are being supplanted by federal spending priorities."
The report by NCSL, a bi-partisan organization that represents state legislators, details the federal programs that foist extra costs on states and is its first to spotlight unfunded mandates since Congress passed a law in 1995 aimed at curbing Washington's tendency to shift costs to the states.
While the 1995 Unfunded Mandates Relief Act has stemmed the tide, Congress and the White House continue to enact measures that leave states holding the bag, said NCSL Executive Director William T. Pound. "A significant part of the problem in state budgeting today is caused by dealing with federal mandates and cost-sharing programs," Pound said.
Pound pointed to the Medicare prescription drug plan that Congress passed last year as another example of Washington sticking it to the states. That law could force states to pay as much as $6 billion more to cover the costs of prescription drugs for poor seniors with the extra burden of having to figure out who is eligible for the new prescription drug plan.
Stephens said states will have to spend nearly 6 percent of their general fund revenues in fiscal 2004 on federally mandated programs. In fiscal 2005, the price tag goes to 7 percent.
NCSL also singled out the following programs for shortchanging states by millions of dollars:
- Election reform. States haven't yet received $2.4 billion needed to develop computerized databases of registered votes and meet other requirements of the federal Help America Vote Act.
- Environment. States are short $1 billion to comply with federal clean water, drinking water and clean air requirements.
- Food stamps. Congress reduced payments to states for administering the program by $227 million.
"We are asking Congress to fully fund all the programs that they mandate the states to enact," said Pennsylvania Rep. David Steil (R), who chairs NCSL's Budgets and Revenue Committee. In both No Child Left Behind and the special education laws, he said, NCSL wants Congress "to live up to the funding promised."
The sharpest controversy over unfunded mandates centers on President Bush's signature education law. Both Democrats and Republicans in statehouses have attacked the No Child Left Behind law for leaving states to pick up the tab. The law requires states to test all students in math and English and to pay for students to transfer if schools persistently fail to meet state standards.
Stephens said the federal government is playing a "shell game" with No Child Left Behind. Although states can refuse to enforce the federal education law, they risk losing millions in other general federal education dollars, he said. The reason, he said, is that for decades, states received millions of federal dollars to help educate poor children under a program commonly known as Title I. When Congress passed No Child Left Behind, it lumped the programs together.
"You certainly have the right whether you want to do No Child Left Behind or not. But if you don't do it, then you don't get the full Title I funding ... That makes it much more difficult to determine whether they want to accept these grants," Stephens said.
In Utah's case, before No Child Left Behind was enacted, the state received about $75 million a year to educate poor children under Title I. After NCLB, the state would receive $100 million, Stephens said. If the state, however, decided not to enforce NCLB, the state would lose the entire amount.
Key Republicans on Capitol Hill take exception to states' claims. "The No Child Left Behind Act is neither unfunded nor mandated," said Josh Holly, spokesman for the House Committee on Education and the Workforce. He said that since No Child Left Behind was signed into law more than two years ago, federal elementary and secondary education funding has increased 40 percent to $24.3 billion in fiscal 2004, from $17.4 billion the previous year. Holly said it appears many states are lumping in costs for complying with President Clinton's 1994 education reforms.
But others agree that Washington is sending too many orders to the states without sufficient funds. "States clearly have a legitimate concern," said Nicholas Johnson, director of the state fiscal project at the Center on Budget and Policy Priorities, a Washington, D.C, group that focuses on policies that affect the poor. He said the federal government has a track record of giving states more responsibility, but often not more money. The recent state fiscal crunch hasn't helped either, Johnson said, forcing states to figure out how to pay for new federal programs on top of state obligations.
Neither the Bush administration nor the GOP-controlled Congress is showing much sensitivity to states, said Richard Nathan, director of the Nelson A. Rockefeller Institute, the public policy research arm of the State University of New York. "The federal government has been pushing for things that it wants to achieve but without spending money. That lays costs off to the states," he said. "There doesn't seem to be the good spirit of cooperation" of previous administrations and congresses, according to Nathan, who has written a paper about Bush federalism.
Paul Prososki, state government affairs manager at the anti-tax group Americans for Tax Reform, said he agreed that the federal government should stop passing laws that push the costs to the states. However, he said states can overcome this burden without resorting to higher taxes.
Top NCSL officials released the figures in a newly revived publication called the "Mandate Monitor," which the organization used to issue in the early 1990s. NCSL describes the monitor as a "watchdog" publication to help state lawmakers track federal legislation and regulations affecting the states.