How Are States Squeezed by Federal Policies?

By Matt Hurley for the TIB Network:

I've discovered another curious press release...this one claims that Missouri's budget has been "squeezed" by federal policies (let me translate the liberalese, "Bush's tax cuts")

The Center on Budget and Policy Priorities has released a new case study, which describes the effect on Missouri residents of recent federal tax and budget policies that have harmed state finances by reducing state revenues and raising state costs; the effects include reduced health coverage, declines in education funding, higher tuition costs, and higher local taxes and fees.

Ladies and Gentlemen, our federal government was never supposed to get involved in health care or education and has no control whatsoever over state and/or local taxes and fees.

Nowhere in the Constitution of the United States will you find the words "health care" or "education." The Tenth Amendment to the Constitution 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.

By not mentioning health care or education in the Constitution, the founding fathers did not delegate those powers to the federal government; nor did they prohibit such governance by the States. Therefore, it is up to the individual States or the people to be responsible for health care and education.

Federal policies that impose new costs on Missouri and restrict state revenues have been a major contributor to the state's recent fiscal crisis and are likely to cost Missouri more than $1 billion per year over the next several years, according to a report issued today by the Center on Budget and Policy Priorities and the St. Louis-based Missouri Budget Project.

"These harmful federal policies have forced Missouri to impose bigger budget cuts over the past few years than would otherwise have been needed to deal with the fiscal fallout of the economic downturn," said Nicholas Johnson, director of the Center's State Fiscal Project and a co-author of the report. "And because those federal policies are ongoing, they will continue to make it harder for the state to provide residents with the services they need."

- Center on Budget and Policy Priorities

What "new" costs are we talking about here?

As a result of the budget cuts Missouri has been forced to make, for example, some 37,000 parents with low-paying jobs have lost eligibility for state-subsidized health insurance. Many are likely to wind up uninsured, since few of these jobs provide health coverage and private coverage can be prohibitively expensive for these families.

- Center on Budget and Policy Priorities

Had Missouri been responsible with their health care budget? Did they adequately plan for providing a service to their citizens?

It doesn't sound like it to me if the state had to make cuts in state-subsidized health insurance. And since when do states treat federal dollars like an entitlement?

Also, some 88,000 Missouri families with children attending state colleges and universities are paying higher tuition -- up to $630 more per year at two-year colleges and up to $1,743 more per year at four-year colleges -- and property owners and renters in roughly one-fifth of the state are facing higher property taxes, as school districts seek to offset substantial losses of state aid.

- Center on Budget and Policy Priorities

College costs are out of control. Let me ask a question, is the President of the United States on the Board of Regents for every school in the country? According to the Cincinnati Enquirer, the problem can be traced back to the states, at least in Ohio: "Ohio Board of Regents officials said they expected poor grades, in part because state appropriations for higher education dropped by more than $1,000 per student over the last five years." Read that again. That's right, "state" appropriations dropped.

More importantly, people need to start holding their college administrations accountable for their expenditures. As a student government veteran myself, I could spend an entire day relating tales of waste at my beloved Northern Kentucky University.

Instead of pursuing more equitable policies toward Missouri and other states, which could have ameliorated those painful budget cuts, the federal government has enacted large tax cuts aimed primarily at high-income households. (In 2004, households making $1 million or more will receive tax breaks averaging about $124,000, or 191 times as much as the average household in the middle of the income spectrum will receive.) As a result, many lower- and middle-income Missourians likely have lost more from the cuts in services the state has imposed to balance its budget than they have gained in federal tax cuts.

- Center on Budget and Policy Priorities

Ah, it's Bush's tax cuts that has caused states to shirk their responsibilities. Sure...

We haven't really seen anything on the added "costs" yet, let's get to that:

Federal policies are imposing two broad types of costs on states:

-- Added spending obligations. Most of the added costs result from "unfunded mandates" in areas such as educating disabled children and the No Child Left Behind education law, where the federal government has imposed new requirements on states without providing the needed funding. Also, in recent years the cost of prescription drug coverage for low-income elderly and disabled people has increasingly shifted from Medicare (which is fully federally funded) to Medicaid (where states pay nearly half of all costs).

-- Lost revenue. Two Supreme Court rulings bar states from taxing purchases made over the Internet, even though states can collect sales taxes if the same items are bought in a store. Similarly, federal law bars most states from taxing the fees charged for Internet access, even though states can tax the fees charged for telephone service.

For the love of all things sacred and holy, the No Child Left Behind Act WAS and IS FULLY FUNDED. In fact, a number of states have not used all of their allocated funds and may soon have to return that money to the federal government.

As for prescription drug coverage, Congress and the President just gave away millions in a package for that in the last year. You might have heard of it, it's called the Medicare Prescription Drug, Improvement and Modernization Act of 2003. Additionally, the President supports a discount drug card for senior citizens. Where do you all think that money comes from? The Tooth Fairy?

Lost revenue from the internet? You're joking, right? This is your big defense? What did the states do before the internet for revenue? If Missouri has been relying on internet cash to pay for their health care and education programs, they have been the victims of bad governance.

Government, whether it be federal, state or local, has to assume certain responsibilities and stop passing the buch back and forth. One of those responsibilities is making sure that the bills get paid. The states have been treating the federal government like a cash cow for decades and there is too much at stake (you know, that whole War on Terror Militant Islam thing) to be playing games over this kind of stuff. Missouri, and every other state, has only itself to blame for its troubles.

John Kerry Delenda Est!