Posted on 01/13/2004 8:08:44 PM PST by calcowgirl
WASHINGTON – Almost $1 billion of the savings that Gov. Arnold Schwarzenegger unveiled in his state budget on Friday rests on the assumption that Congress and the White House will make profound – and some say politically improbable – changes in the way they do business.
Some of these changes would require other states to sacrifice money so California could have more. Some presume the Bush administration will lift penalties on California for failing to follow rules that come with federal money.
While Schwarzenegger on Friday criticized former Gov. Gray Davis for "using tricks and gimmicks to put off the hard decisions" of budgeting, his own 2004-2005 budget may rely on overly optimistic scenarios when it comes to getting more money from Washington, experts said. "I think it's going to be a tough sell across the board," said Jean Ross, executive director of the California Budget Project, a research group that focuses on policies affecting low- and middle-income people. "The budget is certainly optimistic in some respects."
H.D. Palmer, spokesman for the state Department of Finance, said Schwarzenegger's election introduced a climate of change and cooperation that will help the new governor achieve his federal goals. "The governor strongly believes that by working together – the state, the congressional delegation and the Bush administration – we have a very good opportunity to make some serious progress on these issues," Palmer said.
Schwarzenegger's budget assumes a $560 million savings if Washington lifts sanctions imposed on California for failing to meet federal goals for health and social services programs. For example, the state owes Washington $220 million this coming year for failing to get a computerized child-support system up and running.
Bush, however, may find it politically problematic to let California off the hook without doing the same for other states. "Most likely, they (the White House) will do ... just enough to be helpful, but not so much as to cause political problems," said Bruce Cain, a political science professor at the University of California Berkeley.
The governor also assumes Washington will send California an extra $350 million, largely by changing how it calculates federal grants that go to states for services such as health care, roads and homeland security. Palmer could not yet say how much of the $350 million would come from each area.
By far the largest of these grants is Medicaid, the health care program for the poor that matches state spending with federal dollars. Assuming that states with high incomes will have low poverty, Washington uses per-capita income to decide how much Medicaid goes to each state. California has high incomes, but also high numbers of people in poverty. As a result, several states get more than 70 cents from Washington for every state dollar they put into health care for the poor. California gets only 50 cents. "Even though (the program) is meant to deal with poverty, it doesn't use poverty data, which stinks," said Tim Ransdell, executive director of the California Institute for Federal Policy Research.
Schwarzenegger's budget assumes California will get more Medicaid money by changing this formula, though efforts to do so have faltered for decades. California Sen. Dianne Feinstein, a Democrat, will soon introduce a plan to base Medicaid spending only on poverty data, but even Bush administration experts said it could be hopeless. "The political problem that she will face is that there are some states that would lose money as a result," said a senior adviser at the Centers for Medicare and Medicaid Services, a branch of the U.S. Department of Health and Human Services.
The governor's budget says California should get more than 9.6 percent of federal transportation dollars, as it now does, in part because state roads are congested by the movement of international goods through California's ports and southern border.
Ransdell said plans being discussed include changes to the federal "Congestion Mitigation and Air Quality" program, which distributes transportation money based on the number of people living in areas with bad air pollution.
California gets a good chunk of this money, but it would get more if the program did not require that every state get a guaranteed amount, regardless of air quality. Powerful lawmakers from small states wrote this requirement, because their regions were losing money as the populations in California and other Western states grew.
Such "small-state" guarantees are required in many grants, and they make it difficult for California – despite its 35 million people and 53-member House delegation – to change grant formulas. And in a Senate where every state has just two votes, California has the same voice as Wyoming, which has fewer than 500,000 residents and one House representative. For that reason, Schwarzenegger's hope of getting more homeland security dollars for California will be "an uphill battle," Ransdell said.
Schwarzenegger is counting on a plan by Rep. Chris Cox, R-Newport Beach, that would base homeland security spending on the terrorist threat faced by each state, doing away with "small state" guarantees that give Wyoming $35.67 per capita of homeland security money while California gets only $4.85. Cox's position as chair of the Select Homeland Security Committee would otherwise give his plan momentum, were it not for obstacles in the Senate.
"I think the problem with both the transportation and the homeland security (ideas) are that California has two senators, but so does North Dakota," said Ross of the Budget Project. "Any gain for California would come at the expense of another state."
Some requests represent long-standing battles between the Bush administration and California. Schwarzenegger presumes Washington will send extra money for jailing undocumented immigrants who commit crimes. But Bush, facing his own $374 billion deficit, has made it clear he considers this a state burden. Though Congress has struggled to salvage a small amount – $250 million this year – the reimbursement has declined steadily.
After the amnesty/open borders proposal from last week, anything is possible.
Smaller, more conservative states will realize that their own prospects are greatly improved by reducing federal programs and forcing states to provide for themselves. It will either be that or bankruptcy for the entire nation.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.