Bush, Congress enacts laws but don't give states a way to pay for the financial load

NO MONEY:

March 24, 1992|By New York Times News Service

Against the background of a stubborn recession and mounting fiscal distress in the country, the federal government continues to create or expand domestic spending programs with little or no review of the financial burdens they will place on state and local governments, public policy(analysts say.

In 1990 alone, the year the recession began, President Bush signed 20 bills into law, ordering programs that the National Conference of State Legislatures says will cost state and local governments billions of extra dollars, primarily for health care, the environment and Social Security payments for public employees.

Some mandates, like the Americans With Disabilities Act, were enacted without any reliable estimates of the cost to state and local governments.

The legislation, which requires businesses and state and locil governments to provide the disabled with equal access to services, employment, buildings and transportation systems, i( now expected to cost them millions of dollars annually to comply.

The most expensive regulations for any state involve Medicaid, the federally subsidized health-care program for low-income people that will cost $38.3 billion for the states to finance this year.

Federally required health-care programs consumed 14 percent of all state judgets in 1990 anl, with the cost of expansions in mandated progzams and inflation in medical expenses, the federal programs will devour 28 percent of the states' budgets by 1995, the National Governors Association estimates.

The next most expensive mandates involve environmental laws, primarily water purification, which will cost state and local governments $32 billion a year by 1995.

Three new studies show that despite the publicized efforts of President Ronald Reagan and President Bush to decentralize government, both contributed to a proliferation of regulations that meant enormous costs to states and cities in the 1980s.

No one can reliably estimate the cost of complying with many such programs, and Congress is required to make only preliminary estimates on some of the bills it considers.

But analysts say no federal law provides for complete reimbursement of any mandated program, and some legislative analysts estimate the burden to local governments of such spending at scores of billions of dollars a year.

Pessimism is widespread. Three-quarters of the states and more than a third of the nation's cities report worsening fiscal problems this year, and many governors and mayors are saying the problems will linger or worsen even if the economy recovers quickly.

"I think we're headed for a showdown," Gov. John Engler, R-Mich., said in a recent interview in which he blamed Congress for "wrecking" state budgets.

But analysts and other governors blame Mr. Bush.

In an effort to give the states more flexibility in administering federal mandatory programs, Mr. Bush last year proposed to consolidate $15 billion in financing for block grants and to leave the decision on how to spend the money up to the states.

But many cities opposed the legislation and it died in Congress. Mr. Bush said last week that he planned to revive the proposal.

Nevertheless, analysts say Mr. Bush has done little to curb the flow of federal mandates. Nor, they assert, has he acted to provide more financing for those bills he has signed .

"President Bush has provided zero leadership in this area of nation-state relationships," said Joseph F. Zimmerman, professor of political science at the State University of New York in Albany and the author of two new studies on the relationship between the states and the federal government.

Of the 125 mandate-laden bills that have been introduced in Congress this session, more than half deal with health care and criminal justice, which are the two fastest growing segments of state budgets, said Martha A. Fabricius, a policy analyst with the National Association of State Budget Officers who has been monitoring this legislation.

If enacted, the bills would force most states to raise taxes or reduce existing services, analysts said.

Under some of the bills, the states would be directed to pay all or some of the cost of new programs such as insuring savings and loan associations, planting trees on state-owned land, operating mobile units to assist the mentally ill among the homeless and increasing prison terms for several categories of violent crimes.

The states would also be ordered to eliminate at least one revenue-producing program, a tax on certain retirement income, forcing them to find other ways to finance government.

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