States prepare to combat stimulus strings

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Worried the federal government is increasing its dominance over their affairs, several states are pursuing legislative action to assert their sovereignty under the 10th Amendment of the Constitution in hopes of warding off demands from Washington on how to spend money or enact policy. The growing concerns even have a handful of governors questioning whether to accept federal stimulus money that comes with strings attached.

The sentiments to declare themselves legally independent from Washington have swept across as many as a dozen states, renewing a debate over so-called unfunded mandates that last raged in the 1990s. The states question whether the U.S. government can force states to take actions without paying for them or impose conditions on states if they accept certain federal funding.

“We are telling the federal government that we are a sovereign state and want to be treated as such. We are not a branch of the federal government,” said Arizona state Rep. Judy Burges, who is leading an effort in her state to pass a resolution called “Sovereignty: the 10th Amendment.” Ms. Burges was inspired to action by a pair of Bush administration initiatives: The No Child Left Behind education law of 2002 and the Real ID Act, a 2005 law that established national standards for state-issued driver’s licenses and identification cards.

In other states, lawmakers say they are bracing to repeal federal mandates to spend their money that they expect will emanate from Washington once President Obama begins delivering some of the big-ticket programs promised during his presidential campaign.

Oklahoma state Sen. Randy Brogdon introduced a resolution that he said would enable his state to “reclaim its 10th Amendment right to reject any and all acts of Congress that go beyond its enumerated powers in violation of the 10th Amendment.”

Other states pursuing sovereignty resolutions are Hawaii, Michigan, Missouri, Montana, New Hampshire and Washington. Similar measures are likely to be introduced in more than a dozen other states, analysts said.

“The states are sending a message,” said Robert Alt, a legal scholar at the Heritage Foundation.

The nearly $800 billion stimulus bill also has raised worries.

Republican governors Mark Sanford of South Carolina, Bobby Jindal of Louisiana and Rick Perry of Texas expressed reservations this week about accepting their states’ shares of the stimulus package because they are worried that the federal government will impose conditions on how it can be spent.

As a self-styled staunch conservative, Mr. Sanford, the new head of the Republican Governors Association, aggressively opposed the stimulus plan. However, in a Thursday morning interview on CBS’ “The Early Show,” Mr. Sanford said his state would accept money from the stimulus bill. Opposing the plan “doesn’t preclude taking the money,” said Mr. Sanford. South Carolina’s 9.5 percent unemployment rate is the nation’s third-highest.

Mr. Perry sent Mr. Obama a letter Wednesday certifying that Texas also would accept stimulus money.

“I remain opposed to using these funds to expand existing government programs, burdening the state with ongoing expenditures long after the funding has dried up,” Mr. Perry wrote, clearly expressing his opposition to unfunded mandates.

Mr. Obama has promised that his administration will use federal funds to support his administration’s initiatives.

“[Mr. Obama does] not support imposing unfunded mandates on states and localities. They strongly support providing necessary funding for programs such as No Child Left Behind,” his campaign literature said.

The states are resting their efforts on the 10th Amendment to the U.S. Constitution, which states: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

Mr. Brogdon said prospects for passage of his resolution are “grand,” noting that a similar bill passed the Oklahoma House by a 97-3 vote last year and that Republicans captured a majority of the Oklahoma Senate in the 2008 elections. He predicted that the Legislature would easily override a veto from Gov. Brad Henry, a Democrat.

Mr. Obama proposed a slew of expensive programs during his presidential campaign, ranging from health insurance to policies addressing alternative energy and climate change. “The states are worried that these programs would increase the overall regulatory burden without providing the funding,” Mr. Alt said.

Some analysts dispute the financial impact of recent unfunded mandates on state budgets.

Tad DeHaven, a budget analyst at the Cato Institute who recently completed a two-year stint in Indiana’s budget office, said he hasn’t “heard states clamoring about unfunded mandates the way they were during the 1990s. What you hear more today are states begging for federal money.”

The reality is that states are being “hypocritical,” he said, noting that about a third of average total state spending comes from the federal government.

The biggest federal grants involve Medicaid, the federal-state program that provides health care for the poor.

“States were adding Medicaid benefits when times were good. Now the federal government must bail the states out through the so-called stimulus bill because the states’ revenues have taken a hit and they must operate under a balanced-budget mandate,” Mr. DeHaven said.

In 2007, according to the Congressional Budget Office, states collectively spent $1 billion for unfunded federal mandates from programs enacted since the Unfunded Mandates Reform Act of 1995, said Brian Riedl, a budget analyst at the Heritage Foundation.

“To a large degree, states are scapegoating their budget problems on Washington,” Mr. Riedl said. “It’s tough to be sympathetic for states and local governments when they got $467 billion in federal grants last year,” he said.

Mr. Riedl also rejected the notion that the No Child Left Behind Act constitutes an unfunded mandate. States are free to opt out of this and many other federal programs by not accepting federal money in exchange for federal regulations. States have effectively decided that the federal dollars are worth the strings attached to them, Mr. Riedl concluded.

Mr. Riedl acknowledged that Medicaid, which was created in 1965, does represent a major unfunded mandate. But he said that “a majority of state Medicaid spending is on populations and benefits that states have voluntarily added and could reduce at any time.”

The other major unfunded federal mandate that predates the 1995 law is the Individuals with Disabilities Education Act (IDEA). However, federal funding for IDEA has grown 71 percent faster than inflation since 2001, Mr. Riedl said.

Many of the sovereignty resolutions under consideration in the states will not have the force of law. Even if they did, said Mr. Alt, “through the supremacy clause in the U.S. Constitution, so long as a federal statute is constitutional, it would trump state law.”

Mr. Brogdon of Oklahoma did not take issue with that. “Federal law does not trump the Constitution,” he said.

He suggested that if he becomes governor, the federal courts likely will get a case involving the 10th Amendment and congressional powers.

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