Washington Blamed for Fiscal Woes

Frustrated by their inability to solve California’s financial woes -- and perhaps tiring of pointing a finger at one another -- state lawmakers are increasingly laying the blame thousands of miles away, in Washington, D.C.

Gov. Arnold Schwarzenegger and legislative leaders will head there this week in a lobbying blitz to demand more money. And they will go armed with a long list of grievances:

Such as California contributing more federal tax dollars than it gets back. Or California getting less homeland security money per person than Wyoming. Or California footing the bill to jail thousands of illegal immigrants. The list goes on.

Democrats suggest that if Washington would just pay the state its “fair share,” California’s huge budget gap could be reduced by billions.

Not quite, several budget experts say. The state may get shortchanged on some federal programs, they say, but not nearly enough to make any sizable dent in its projected $8.6-billion shortfall.

The biggest role the feds may play in the effort to eliminate the state budget gap is that of a convenient scapegoat.

“There is a fair-share amount California is entitled to, but I don’t think we ought to kid anybody,” said Leon Panetta, a former White House budget director and onetime chairman of the House Committee on the Budget. “Federal money is not going to balance the state budget.”

The problem for California is being a rich state, full of millionaires. Federal money is generally doled out based on per-capita income. Poorer states get more. That leaves California getting 79 cents back for every dollar its residents pay in federal taxes. New Mexico, on the other hand, gets $2.

The feds haven’t rushed to give the state more Medicaid and welfare money for the same reasons that California isn’t moving aggressively to provide more state resources to a place like Newport Beach, where taxpayers send more to Sacramento than the city gets back. Blighted areas of Los Angeles take priority.

“The money is driven by formulas,” said John Ellwood, a professor of public policy at UC Berkeley. “You can’t really make the case that those formulas were created to give one part of the country more than the other. It is true the red states get more. But that is because they are poorer.”

Not only are Californians richer, but they are also younger on average than residents of other states, meaning less money for Social Security and healthcare programs comes this way.

Then there is transportation, where Californians get less than 91 cents back on every dollar they pay in gasoline taxes. The reason: The federal government puts gas tax money into a pool to pay for the entire interstate highway system. The cost of maintaining the interstates in low-population states is more than those states will ever be able to generate in gasoline taxes.

Blaming Washington for the state’s fiscal problems is not a new phenomenon in Sacramento. Governors have been complaining of California being shortchanged for decades. Gov. Pete Wilson said the Democratic Clinton administration was sticking it to the state by not covering the costs associated with illegal immigrants. Gov. Gray Davis and fellow Democrats accused the Bush administration of blatantly neglecting the needs of left-leaning California.

Some of the gripes are legitimate. California, for example, is losing significantly more in revenue than any other state as a result of federal tax law changes.

And there is general agreement that California has done a poor job of collecting its share of so-called pork-barrel projects. Those are the billions of dollars in federal spending that is not driven by formulas.

It’s a source of endless frustration in Sacramento that the state can’t get more of that money -- which could take the shape of hundreds of millions of dollars to help pay for incarcerating illegal immigrants, more for homeland security or increased assistance for water projects.

Adding to the frustration is that California’s congressional delegation is as powerful as it’s ever been. The state’s 53 representatives in the House control the chairmanships of six committees -- more than any other state. Among them are two panels with broad authority over federal spending: Appropriations and Ways and Means.

“We will not be able to use our strength to help California unless the whole delegation works together,” said Rep. Jerry Lewis (R-Redlands), chairman of the Appropriations Committee. “We have been a donor state for a long, long time, and all of us ought to be committed to doing what we can to repair that.”

But working together has not been a strength of California’s delegation. When the group meets with Schwarzenegger on Thursday, it will be the first time they have sat face to face in a year.

Lawmakers from other states -- especially Southern ones -- spend a lot more time working in tandem across partisan lines to steer money back home. The Texas delegation, for example, meets every month. And it has paid off for those states.

The California delegation’s disunity occurs because “the gulf is so wide” between their political viewpoints, said one member who asked not to be named for fear of alienating colleagues. “If you look at the Texas delegation on any ideological scorecards, everybody is between 40 and 60. We’re zero to 100.”

Panetta, a former congressman, says that one of the few issues on which the delegation has been able to stand united is related to the wine industry.

His advice to the delegation: Talk to Sen. Ted Stevens of Alaska, a former chairman of the Senate Appropriations Committee who gained notoriety for his ability to bring federal projects to his sparsely populated state.

In 2004, while Stevens was still heading the committee, Alaska landed $808 per person for pork projects, according to Citizens Against Government Waste, a taxpayer watchdog group. It was more than any other state. California ranked 43rd among the states in the same study -- with just $18 per person for such projects.

Stevens “always managed to get Alaska more than its share of federal dollars,” Panetta said. “They don’t all have to be Ted Stevens. But when you are the chair of a committee, there is no question you can prioritize California. People need to understand you are going to fight to protect your state’s share of the money.”

Before the representatives talk to Stevens, however, they might do well to begin talking to each other.

An example of how polarized the delegation is can be seen in Rep. Duncan Hunter’s (R-El Cajon) push to have the federal government build a fence along the Mexican border. The fence would go right through the district of Rep. Bob Filner (D-San Diego), but Filner complains that the proposal has yet to be discussed with him.

“Does he talk to me? No,” Filner said.

Even if the House delegation began working together better, there are limits to how much its members could do in a time of soaring federal deficits.

“The traditional ‘pork’ programs that go through Appropriations are the very programs the president is aiming to squeeze,” said Robert Bixby, executive director of the nonpartisan Concord Coalition, a federal budget watchdog group.

Beyond that, any proposal to shift federal money toward California has to go through the U.S. Senate, where each state has two senators. And even in the House, Bixby says, the delegation needs to be cautious about how it wields its clout.

“Non-California lawmakers are already a little uncomfortable with one state having so many key committee chairs,” Bixby said. “A high-profile visit by a high-profile governor that results in a high-profile flood of dollars to California might create resentment and an inevitable backlash.”

Democrats in Sacramento and Washington, meanwhile, have been much more vocal than Republicans in demanding more federal money for California.

Whatever the outcome of Schwarzenegger’s push, Democrats stand to gain. Should the governor succeed, they can say, “I told you so.” Should the governor fail, they can accuse him of not making good on his promise to secure more money -- and not getting anything in return from President Bush after helping elect him to another term in the White House, contrary to the wishes of most voters in the heavily Democratic state.

“Is the governor tough enough to make the [congressional] Republicans perform for their state?” asked Rep. Zoe Lofgren (D-San Jose). “He’s the one who said he would be the ‘Collectinator.’ ”

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Federal returns

Eighteen states, including California, sent more tax money to Washington in fiscal 2003 than they received back in federal spending. California gets 79 cents back for every dollar paid.

The District of Columbia gets the best return on federal taxes paid; New Jersey gets the worst.

Ratio of federal spending to taxes:

*--* State Amount Rank Alabama $1.68 7 Alaska $1.90 3 Arizona $1.23 22 Arkansas* $1.47 12 California* $0.79 44 Colorado $0.81 42 Connecticut $0.67 49 Delaware $0.82 41 District of Columbia $6.59 1 Florida $0.98 35 Georgia* $0.96 36 Hawaii* $1.57 9 Idaho $1.31 19 Illinois $0.72 46 Indiana* $0.96 36 Iowa $1.04 30 Kansas* $1.11 25 Kentucky $1.51 11 Louisiana* $1.47 12 Maine $1.35 17 Maryland $1.34 18 Massachusetts* $0.79 44 Michigan $0.86 39 Minnesota $0.69 48 Mississippi $1.83 4 Missouri* $1.30 20 Montana* $1.57 9 Nebraska $1.03 31 Nevada $0.70 47 New Hampshire $0.65 50 New Jersey $0.58 51 New Mexico $2.00 2 New York $0.80 43 North Carolina $1.08 27 North Dakota $1.73 6 Ohio $1.01 32 Oklahoma* $1.47 12 Oregon $0.99 34 Pennsylvania $1.07 28 Rhode Island $1.06 29 South Carolina $1.36 16 South Dakota $1.46 15 Tennessee* $1.30 20 Texas $1.00 33 Utah $1.20 23 Vermont $1.13 24 Virginia $1.59 8 Washington $0.91 38 West Virginia $1.82 5 Wisconsin $0.83 40 Wyoming* $1.11 25

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* More than one state with the same rank

Sources: Census Bureau, California Institute for Federal Policy Research

Halper reported from Sacramento; Simon reported from Washington.