Stimulus plan would give states $200 billion
States and local governments would be the big winners in an $825 billion economic stimulus program set for a House vote Wednesday.
More than $200 billion would go to states, enough to offset $100 billion in projected budget shortfalls they now face in the next two years, plus fund big spending increases. The money could spare states from politically painful program cuts, tax increases or both. Two-thirds of the federal money is aimed directly at states' biggest spending items: education, health care and roads.
California would get $22 billion over two years, estimates the Federal Funds Information for States (FFIS), a state-financed research group. Texas and New York would get $16 billion each. The smallest take: $578 million for Wyoming, which has a surplus and is considering a property tax cut.
"This will let us balance our budgets in a way that avoids making draconian cuts," says North Carolina House Speaker Joe Hackney, a Democrat and president of the National Conference of State Legislatures (NCSL).
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His state, which would get $5.5 billion over two years, faces a $2 billion shortfall through June 30.
Nationally, states confront $32 billion in projected budget shortfalls this year and $64 billion in 2010, according to a December estimate by NCSL. NCSL spokeswoman Michelle Blackston says states still will watch their budgets tightly. "This will supplement, not supplant, state spending," she says.
President Obama supports a large stimulus plan, including aid to state and local governments, and is scheduled to meet today with Republican congressional leaders.
The federal government gave states $20 billion in 2003 to help them overcome budget problems. The current plan, supported by House Speaker Nancy Pelosi and other Democrats, would dwarf that amount. Included in the aid state and local governments would get over two years:
• $198 billion for all states, FFIS estimates. This money would include about $80 billion for education, $50 billion for infrastructure and $30 billion left to the discretion of governors.
• An extra $45 billion for health care in high unemployment states, the final amount depending on future jobless rates.
• $160 billion for cities, the National League of Cities says. Included: $10 billion for mass transit.
