Governors Stress State Fiscal Gaps at White House Meeting

The nation’s governors assembled here Saturday with an agenda that underscored the gap between what they say their fiscally strapped states need and what they can expect to get from the Bush administration and Congress, even in an election year.

The governors asked for an ambitious, six-year highway bill at a time when some in Congress are eyeing a stripped-down measure, and President Bush is threatening to veto the bill if it gets too pricey.

State leaders also complained about soaring healthcare costs, even as Bush is seeking to curb federal Medicaid spending.

And they urged more flexibility and funding to carry out Bush’s cornerstone education initiative, the No Child Left Behind Act, at a time when federal funding is being squeezed all around and the White House is increasingly sensitive to the growing budget deficit.

Facing common fiscal pressures, the governors -- in Washington for a four-day meeting of the National Governors Assn. -- hoped to find common ground Saturday on some issues as they prepared for meetings with Bush and congressional leaders.

But bipartisan consensus bumped up against election-year partisanship when the subject turned to Bush’s economic policies.

Democratic governors denounced Bush for overseeing steep job losses in the manufacturing sector. “This president has offered no vision of where he intends to go with this economy,” said Wisconsin Gov. Jim Doyle.

GOP governors rallied behind Bush. “I truly believe the economy is turning around,” said Gov. Bob Taft of Ohio, a state hit hard by manufacturing job losses.

With Republicans concerned about Bush’s political strength, GOP pollster Bill McInturff told the party’s governors not to be so anxious about reports of the president’s falling poll numbers. “Stop the heavy breathing,” McInturff said. “We’ve had a difficult few weeks, but it doesn’t change the basics of the election.”

Election-year partisanship aside, the governors’ meeting came at a time of continued financial pressure on states, which unlike the federal government have to balance their budgets each year. Although the economy has begun to recover, states still are struggling to eliminate shortfalls.

That has forced even some Republican state legislatures to consider tax hikes. Virginia’s GOP-controlled Senate last week approved a bill that would increase taxes by $3.6 billion over two years. In West Virginia, Democratic Gov. Bob Wise is struggling to pass the second increase in cigarette taxes in two years to help cover the state’s healthcare costs.

Governors of both parties share concerns on a number of important issues, including the fight over highway funding. And they urged Congress to pass a six-year authorization for road construction and mass transit programs -- a big enough bill to allow long-term planning.

But the governors are worried about reports that Congress may resort to passing a one- or two-year highway bill and postpone long-term questions until after the November election.

That option has surfaced if Congress cannot break an impasse over funding levels. The Senate has passed a six-year bill authorizing $318 billion. A companion bill in the House authorizes $375 billion. Both far exceed the $256 billion requested by Bush, who has threatened to veto any bill he considers a budget buster.

Governors of both parties have been chafing under the requirements of Bush’s education reform. It mandates that states demonstrate their students are making steady progress toward reading and math proficiency -- or be required to take costly remedial action. The administration last week responded to some complaints that the rules were too rigid by easing requirements for assessing students who are disabled or whose first language is not English.

But even some Republicans say that was not enough to make the law workable in many places. “There is concern because it is one-size-fits-all and it doesn’t fit everyone,” said Alaska Gov. Frank Murkowski. “We’re asking for flexibility and haven’t received the degree of satisfaction we want.”

Democrats argue that more flexibility is not enough, because states also need more money to comply. “Without the money to run those programs, they will not work,” said Delaware Gov. Ruth Ann Minner.

Another area of bipartisan -- and perennial -- concern is the cost of healthcare and of Medicaid, the federal-state program for the poor. States got some relief under last year’s Medicare prescription drug bill, which calls for the federal government to pay more of the drug costs of the elderly poor who qualify for both Medicare and Medicaid.

But Raymond Scheppach, executive director of the governors association, said state leaders would continue to push the federal government to do more for those people and to oppose efforts to cut payments and impose tighter regulations.

In general, Scheppach said, the underlying problem in current federal-state relations is that neither level of government is swimming in money.

“You get pushing and shoving in terms of how do I push my costs off to another level of government,” Scheppach said. “It’s clear that things are going to be tight, and they are going to be tight for the next five years.”