State Agencies Ordered to Curb Grant Requests

Republican Gov. George Deukmejian, in keeping with his public support for President Reagan’s proposed budget cuts, has ordered state agencies to curb applications for federal grant dollars, it was learned Thursday.

The new policy was outlined in a memo to state agency heads and department directors by Deukmejian’s chief of staff, Steven A. Merksamer, who said that a review procedure was being set up to justify all grant applications because of the more than $200-billion federal budget deficit.

“As you know, the governor has indicated his full support for the President’s efforts to control federal spending and reduce the deficit,” Merksamer wrote.

“You should submit only those requests which do not negatively impact state budget policies and the federal deficit, or for which a compelling need is demonstrated on behalf of the health or safety of the citizens of California.”

Surprised by Connection

Democrats familiar with the memo, which has not been widely distributed, expressed surprise at the connection Merksamer made between the grant projects and the deficit.

They said that dollars made available to states for grants represent federal appropriations that will be spent even if California drops out of the competition for the money.

“It is just plain wrong to say that this will affect the deficit. The money will be spent either by California or by one of the other 49 states competing for these funds,” said Senate President Pro Tem David A. Roberti (D-Los Angeles).

Traditionally, states jealously watch the amount of dollars distributed by the federal government and vigorously compete with each other for every cent made available.

Said one legislative budget source Thursday, reflecting that view: “We ought to go after every nickel that our taxpayers send back to Washington.”

The Deukmejian Administration did not make official estimates of the dollars involved. The grants involve individual allotments for special projects but do not include major ongoing health and welfare programs funded by the federal government.

$130 Million Last Year

A legislative budget source said the state last year received about $130 million in special projects grants for such things as job-training programs. Among the state agencies receiving the money were the Department of Education, the Department of Social Services, the California Highway Patrol and the Employment Development Department.

Grants in the past have been used for water projects and development of waste treatment plants, as well as job-training programs, sources said.

For Deukmejian, the policy outlined in the Merksamer memo represents yet another public demonstration of his support for Reagan’s budget policies. In February, he was one of a handful of governors who voted to support the President’s position on the budget at a session of the National Governors Assn. in Washington.

The majority of governors, however, voted in favor of cuts in defense spending or, as a last resort, a tax increase as a means of reducing the deficit.

Merksamer’s memo was issued March 27. As in the past, grant applications will originate with individual departments or agencies, then undergo review by the Department of Finance. Under the new procedure, grant applications will be submitted to the federal government only after being approved by the governor’s office.

Health, Safety Need

One of the questions on the new request form is: “Will this activity increase federal spending and thereby increase the federal deficit?”

Kevin Brett, a spokesman for the governor, said that “just because federal grant money is potentially available does not mean that California should apply for every grant. Absent a compelling health and safety need, and if the federal dollars exacerbate the federal deficit, then California will not apply.”