Wednesday, February 18, 2009

Developing Republican Strategy II: Some governors might reject funds

Some governors might reject funds

By Matt Kelley, USA TODAY
WASHINGTON — Although President Obama's stimulus package provides about $144 billion directly to state and local governments, a few Republican governors are suggesting they might reject some of the money.
No state has yet refused any of the funding from the $787 billion stimulus package, which Obama signed into law on Tuesday. But Republican governors, including those in South Carolina, Texas, Louisiana and Alaska, have said they are looking closely at the strings attached to the federal funding before they decide what to do with it.

Two of their concerns: The restrictions on some of the money could further crimp state budgets, and programs created or expanded with stimulus funds may have to be cut once the stimulus funds are depleted.

"You get this huge slug of money. It funds programs for a couple of years, and then what?" says South Carolina Gov. Mark Sanford, who heads the Republican Governors Association. "You get it started, you get a constituency established, and then we're supposed to yank the rug out from under people when the federal money runs out?"

Alaska Gov. Sarah Palin, the former GOP vice presidential candidate, said in a statement Monday that state lawmakers should be careful about budgeting stimulus money because "it's not fair to Alaskans to create expectations about programs that wouldn't be sustainable." Texas Gov. Rick Perry told the Houston Chronicle he feared federal money would have "mile-long" strings attached.

Sanford said he and his staff were going "line by line" through the stimulus legislation to determine whether to reject any of the funding. He said it wouldn't be hypocritical to criticize the stimulus but accept the money.

"It's legitimate to say, absolutely, 'I don't like it. I do think it's bad policy. But I'm not going to further encumber the people I represent' " by rejecting the federal money, Sanford said.

White House spokesman Tommy Vietor dismissed criticism of the stimulus, noting that Republican governors in Florida, California, Vermont and Connecticut have said they support the package. Vietor said that's because the stimulus "provides relief to families in their states who are struggling during a difficult time."

State lawmakers across the country have questioned the stimulus' effect on future state budgets, said Carl Tubbesing, deputy executive director of the bipartisan National Conference of State Legislatures (NCSL). "A lot of legislators are worried that they will create these commitments and new expectations, and the money will go away," Tubbesing said.

For the $70.6 billion in education funding provided to states, the stimulus law doesn't require states to continue those new or enhanced programs after the federal money dries up, said the NCSL's David Shreve. Sanford said an example of a possibly costly new program is a provision requiring the state to provide unemployment benefits to part-time workers, which he said South Carolina never has done.

In Massachusetts, Democratic Gov. Deval Patrick told business leaders Wednesday that he is pleased his state will get up to $9 billion from the stimulus plan, but he warned of budget challenges once the extra money runs out.

"These funds will certainly help, but this stimulus package will not be a panacea," Patrick said in prepared remarks for the Greater Boston Chamber of Commerce. The stimulus funding for states includes money added to programs such as Medicaid, unemployment benefits, food stamps, and welfare payments and aid to schools.

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