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December 1, 2008

State Leaders Ask Congress for Another Stimulus Package

Washington — The national associations of governors and state legislators called on Congress and the White House today to shore up their states’ sagging economies with an infusion of at least $126-billion.

The states are facing estimated budget shortfalls totaling at least $140-billion for the current and forthcoming fiscal years because of declining revenues from sales, income, and property taxes, said the National Governors Association and the National Conference of State Legislatures. At the same time, the states are likely to face increased demand for services like Medicaid, which provides health care for low-income residents.

State leaders are calling for a two-year increase in the percentage of federal matching funds for Medicaid to offset the increased numbers of people expected to be living in poverty by the end of the economic downturn.

The associations have also identified more than $57-billion worth of infrastructure repairs that could be started in short order, an effort that would provide new jobs for residents and an increase in income-tax and sales-tax dollars.

“These investments should include a broad array of infrastructure projects, including airports, bridges, highways, transit systems, ports, rails, clean water, sewers, and broadband,” said Gov. Edward G. Rendell of Pennsylvania, a Democrat, at a news conference near Capitol Hill. “We should target high-priority projects so funds can be obligated and invested so that we will see the effects quickly.”

State lawmakers are also calling for $3.5-billion increase in Pell Grant money. While only a small percentage of the proposed infusion of money would go directly to higher education, an improvement in state revenues could forestall some budget cuts that would fall on colleges and universities by the end of this fiscal year and the following year. —Eric Kelderman

Posted on Monday December 1, 2008 | Permalink |