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With the increasing size of the federal government, the states are seeing their burdens grow.

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States Stuck With $29-Billion Bill

With the increasing size of the federal government, the states are seeing their burdens grow.

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 gathered recently 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 per cent of their general fund revenues during fiscal year 2004 on federally mandated programs. In fiscal year 2005, the cost climbs to seven per cent. 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% of members who have served in state legislatures, will join us to craft workable safeguards against unfunded mandates.” * Although in a recent public appearance, Education Secretary Rod Paige said, “there’s nothing about the law that is unfunded.”

Federally-Mandated Program
FY2004
FY2005
Food Stamps
$227 million
$227 million
Help America Vote Act
$2.4 billion
$2.4 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
$350 million
$650 million
Transportation Sanctions
$27.4 million
$54.8 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
$126 million
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