March 4, 2008
Federal Budget Critical for States, Economy
Partnership, economic stability, cost-shift protection top list of concerns
WASHINGTON - The federal budget resolution is a blueprint. It sets fiscal priorities and protects state-federal partnerships. Yet this year the blueprint comes with added importance – ensuring economic stability and bolstering economic growth.
States have always played a role in preserving the nation’s economic strength. And in a letter this week, states, again, are outlining ways in which Congress can preserve state-federal partnerships, protect against cost shifts and stimulate economic growth. As House and Senate leaders consider the FY 2009 budget resolution, states urge Congress to temporarily increase federal match money for Medicaid, delay implementing the costly new Medicaid regulations and allocate at least $1 billion for REAL ID. These requests, along with a host of other recommendations, will help alleviate state revenue shortfalls and spur much-needed economic growth.
“States stand ready to be partners with the federal government in leading the way to economic recovery,” said Rep. Donna Stone, NCSL president. “America’s state legislatures will strongly advocate changes in the federal budget to create jobs, fully fund federal mandates and meet the challenges of the changing economy. Together, we can help those who need it the most during this uncertain time.”
Among the recommended suggestions:
Medicaid Program Funding: A freeze or temporary increase in federal matching Medicaid payments to states for people who lose health care coverage during the economic downturn along with any support Congress may provide through unemployment benefits.
Medicaid Regulations: Congress can delay implementing new Medicaid regulations that would shift up to $50 billion in federal costs to states, according to a recent report from the House Energy and Commerce Committee.
REAL ID: Congress can allocate $1 billion this year for the initial implementation and avoid yet another unfunded federal mandate. Costs to comply for states are at least $4 billion, according to a Department of Homeland Security Estimate.
Infrastructure: Additional investments in transportation, waste water and drinking water projects would quickly boost economic growth.
Food stamps, unemployment benefits and low-income home energy assistance: Temporary increases in Food Stamp benefits; temporary extension of unemployment benefits; and supplemental heating assistance for low-income families.
Child Support Enforcement: Child-support payments made by non-custodial parents go directly to meet the basic needs of families and children, so they are quickly circulated into the economy. Federal funding is critical to help states to collect these payments quickly and consistently.
Discretionary Grants: Congress should consider providing states with one-time discretionary grant assistance and the flexibility to address their fiscal concerns. Discretionary grants help reduce shortfalls in state-federal partnerships.
Sales Tax Deductibility: An extension of taxpayer authority to deduct their state and local sales taxes when completing their federal tax forms is an important option for taxpayers residing in states that do not impose personal income taxes and are reliant on sales tax revenue to carry out their responsibilities.
Justice Assistance Grants: Congress can restore funding for the Byrne Justice Assistance Grants to their 2007 level to continue law enforcement functions that have been compromised.
While many states anticipated a slowdown in revenue from the housing sector slump, the drop has been higher than expected in many instances, according to recent reports. In November, NCSL released a report detailing the budgetary challenges facing states. Twenty-four states reported state revenues have been hurt by the housing sector slump. At least a dozen states are seeing declines in their real estate transfer or recording taxes and many have reduced their economic forecasts. Now, Congress can provide relief to states on under-funded federal mandates and regulatory cost shifts to ward off a further economic downturn.
“We understand the challenges of crafting a budget resolution and carrying out an appropriations process that is fiscally sound. State legislators confront the same challenges each year,” Stone said. “At the same time, our membership is prepared to work with you on each of these recommendations and to strengthen the intergovernmental partnership of many programs for which both levels of government are responsible.”
The National Conference of State Legislatures is the bipartisan organization that serves the legislators and staff of the states, commonwealths 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.
###
|
