As the federal government and the incoming Obama administration consider an economic-stimulus package, governors are making the case that education and health care are in danger of significant cuts without a cash infusion to states.
In a meeting with President-elect Barack Obama last week, the governors made clear that they have about $136 billion in infrastructure projects—mostly transportation, but also some on school construction—ready to go if Congress decides to help kick-start the economy with an investment in the nation’s infrastructure.
States are in dire financial straits. Collectively this year, they have made $53 billion in cuts, and an additional $90 billion in shortfalls face governors and legislatures, Joe Hackney, the Democratic speaker of the House in North Carolina, said at a Dec. 1 press conference urging Congress and the president-elect to take action to help the states. In all, at least 41 states have budget deficits.
Medicaid, Infrastructure
The governors are making a two-pronged plea for federal aid. They need cash to help with entitlement programs, particularly the Medicaid health-care program for the poor and people with disabilities. Second, states want federal grants for capital projects, such as bridge, road, sewer, and school projects, that will create jobs.
The amount of money available for school infrastructure would likely be small, however. About 70 percent of the “ready to go” projects identified by states is for transportation, said Pennsylvania Gov. Edward G. Rendell, a Democrat and the chairman of the National Governors Association. Officials with the NGA were unable to pinpoint what percentage of the remaining projects were for school construction.
The biggest beneficiaries of federal school infrastructure aid would be districts that have secured voter approval for their projects but are having trouble selling bonds to start construction because of the freeze in the credit markets, said John Musso, the executive director of the Association of School Business Officials International, in Reston, Va.
