Governors See Slow Recovery, Even With Stimulus Funds
While state aid provided by the $787 billion stimulate bill might help avert draconian budget cuts, governors of both parties said, they did not expect to see signs of an economic recovery until late this year or early 2010. And for some Republican governors, out in force on the Sunday talk shows, debate continued to rage over just how much of the stimulus money to accept, NewYorkTimes reported.
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The governors, here for the winter meeting of the National Governors Association, are poring over the new stimulus law, which cuts taxes and provides billions of dollars to the states for education, transportation, Medicaid and energy and environmental projects.
With state budgets teetering, Gov. Arnold Schwarzenegger of California, who supported the stimulus bill, stressed the need for Republicans in state houses and in Congress to be "team players" in facing the economic crisis and not to hold fast to their party orthodoxies. "You've got to go beyond just the principles," he told George Stephanapolous on ABC's "This Week."
Florida Governor Charlie Crist, also a Republican, voiced a similar sentiment on NBC's "Meet the Press," where he urged Republican to give President Obama "a shot."
"I think he's on the right track," Mr. Crist said.
On Saturday, Governor Crist said that while Florida would receive $12.2 billion over three years as a result of the stimulus law, "We still have declining revenues and have to cut the budget."
Another group of Republican governors, including possible contenders for the 2012 presidential nomination, have denounced the stimulus as a bloated behemoth. A handful of them caused a stir by saying they would turn down some of the federal money.
Governor Bobby Jindal of Louisiana said he opposed spending federal money because it would require permanent changes in state law. "It would be like spending a dollar to make a dime," Governor Jindal said on "Meet the Press." "I just have a fundamental disagreement with this package."
Mr. Jindal, a rising star in the party since being elected governor in 2007, said he would take advantage of one stimulus provision to increase unemployment benefits by $25 a week, financed entirely with federal money. But he said he would not accept money to expand eligibility for unemployment because it would increase in employer taxes.
Mississippi Governor Haley Barbour, like Mr. Jindal, said that he would reject the money for expanding unemployment insurance.
"There is some we will not take in Mississippi," Governor Barbour told CNN's "State of the Union" on Sunday. "We want more jobs. You don't get more jobs by putting an extra tax on creating jobs."
In an interview on Saturday, Mr. Barbour criticized the stimulus law, saying: "It's filled with social policy and costs too much. You could create just as many jobs for about half as much money."
Mr. Jindal and Mr. Barbour both said that they would accept funding for transportation projects.
State and local Democratic leaders were quick to pounce on those governors opposing stimulus money, seeing their resistance as a political liability for Republicans in cash- strapped states.
"We'll take it," said Gov. Jennifer Granholm of Michigan on "Fox News Sunday." "We'll take your money."
Nathan Daschle, executive director of the Democratic Governors Association, said over the weekend: "If Republican governors do not want this money, Democratic governors will put it to good use."
At least one Republican agreed with the Democrats.
"I'm more than happy to take his money or any other governor in this country that doesn't want to take this money," Mr. Schwarzenegger said in response to South Carolina Gov. Mark Sanford, who also said he would reject a portion of the stimulus money: "I take it, because we in California can need it."
Mr. Douglas, the vice chairman of the National Governors Association, played down the split among Republicans. On Saturday, he predicted that most Republican governors would, in the end, accept most of the federal money.
"You can philosophize in D.C. all you want, but we in the states have to get things done," Gov. Brian Schweitzer of Montana, the chairman of the Democratic Governors Association, said on Saturday. "A governor's job is to deliver for people: to create good jobs, to keep criminals in prison, to educate children, to make sure we have decent roads. This recovery package does that."
Moreover, Mr. Schweitzer said: "It's a little late for Republican governors to get high-minded about accepting federal dollars. This recovery legislation represents only a small share of all the federal money states receive."
Governors in both parties said that state revenues were coming in far below their projections and that the stimulus money, while helpful, would not be a panacea.
Gov. Jon Huntsman Jr. of Utah, where the economy is better than in most states, said the revenue figures were "still dismal."
Asked when the recovery would start, Mr. Huntsman, a Republican, said: "We were hoping in the fourth quarter of this year. But I think many are pushing it now into 2010."
Gov. Steven L. Beshear of Kentucky, a Democrat, said: "If the experts are correct, next year may be even worse than this year. I think very probably they are correct."
Gov. Christine Gregoire of Washington, a Democrat, said: "The recovery will be very, very slow. We are the most trade-dependent state in the nation. Since November, I've lost $4.2 billion of projected revenues in a $32 billion budget. We fell off a cliff."
The chairman of the governors association, Edward G. Rendell of Pennsylvania, a Democrat, said he had not seen any hint of a recovery, "not yet."
Based on revenue estimates in the middle of last year, Mr. Rendell said, he had expected a $1.6 billion deficit. But because of plunging state revenues, he said, he increased his deficit forecast to $2 billion and then last month to $2.3 billion. Likewise, Gov. Jay Nixon of Missouri, a Democrat, said, "We've seen a huge dip in revenues."
But the economic crisis had created an opportunity, Mr. Nixon added.
"We will use the new federal money to transform the economy," he said, "to build not just roads and bridges, but also human capital, investing in education and job retraining."