March 10, 2004
States Get Stuck With $29 Billion Bill
Federal unfunded mandate gap to reach $34 billion in FY 2005
WASHINGTON, D.C. – The cost of implementing federally-mandated programs to state governments will reach more than $29 billion in fiscal year 2004, according to a new report from the National Conference of State Legislatures.
As state legislative leaders gather here this week for NCSL’s Leader to Leader meeting, NCSL is launching a renewed campaign against unfunded federal mandates, the first such campaign since the enactment of the Unfunded Mandates Reform Act of 1995 (UMRA).
“Although the Unfunded Mandates Reform Act has been effective in curtailing some forms of unfunded mandates, Congress and the administration have continued to shift the cost of many major policy initiatives to the states,” said Utah House Speaker Marty Stephens, president of NCSL. “In so doing, states’ own budget choices and priorities are being supplanted by federal spending priorities.”
A key component of the state lawmakers’ campaign is the revival of NCSL’s Mandate Monitor. The Mandate Monitor was a publication used extensively and effectively in the early 1990s as a means to track proposed federal legislation that would have a negative financial impact on state governments.
The first installment of the new Mandate Monitor shows states will be forced to spend nearly six percent of their general fund revenues during fiscal year 2004 on federally-mandated programs. In fiscal year 2005, the cost climbs to seven percent.
|
Federally-Mandated Program |
FY2004 |
FY2005 |
|
Food Stamps |
$197 million |
$197 million |
|
Help America Vote Act |
$2.4 billion |
$2.94 billion |
|
Environment |
$1 billion |
$1.45 billion |
|
No Child Left Behind |
$9.6 billion |
$10 billion |
|
Individuals with Disabilities Education Act |
$10 billion |
$9 billion |
|
State Criminal Alien Assistance Program |
--- |
$297 million |
|
Transportation Sanctions |
$19 million |
$38 million |
|
State Drug Costs for Dual-Eligibles |
$6 billion |
$6.6 billion |
|
Medicaid |
--- |
$1.88 billion |
|
Homeland Security |
--- |
$1.145 billion |
|
Bioterrorism |
--- |
$105.5 million |
|
Workers’ Grants |
--- |
$161 million |
|
TOTALS |
$29.3 billion |
$33.8 billion |
The report shows that although the enactment of UMRA has slowed the tide of unfunded mandates, states still must foot the bill for several categories of cost-shifts that are not defined as unfunded mandates under UMRA including:
-
Conditions of grant aid (No Child Left Behind);
-
Changes in entitlement programs (elimination of welfare benefits to legal immigrants);
-
Failure to release appropriated funds (Help America Vote Act);
-
Reduction in payments for administering federal programs (Food Stamps);
-
Sanctions (Reductions in transportation funding for non-compliance with drunk driving standards); and
-
Under-appropriation (Individuals with Disabilities Education Act).
Speaker Stephens believes that the growing trend towards shifting costs to the states, if gone unchecked, will lead to trouble.
“Even during strong economic times, states can ill afford to shoulder the burden that Washington has passed to us. During a time of fiscal crisis, the burden is intolerable,” he said. “We are hopeful that members of Congress, especially the 51 percent of members who have served in state legislatures, will join us to craft workable safeguards against unfunded mandates.”
NCSL is the bipartisan organization that serves the legislators and staffs of the states, commonwealth's and territories. It provides research, technical assistance and opportunities for policymakers to exchange ideas on the most pressing state issues and is an effective and respected advocate for the interests of the states in the American federal system.
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