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State, federal budget deficits hot topic at governors' conference

By Hannah Bergman
Star Washington Correspondent
02-25-2004

WASHINGTON – During a final day of meetings at the National Governors Association conference Tuesday, Congressional leaders urged state governors to work closely with their Congressional delegations so their concerns are heard in Washington.

About 50 governors, including Alabama Gov. Bob Riley, attended the annual meeting.

At a meeting to discuss the Congressional agenda as it relates to the states, Senate Majority Leader Bill Frist, R-Tenn., told the governors they face the same challenges as the federal government when it comes to the budget.

In 2002, state revenues fell for the first time since the 1930s, Frist said. The federal government also has also seen a reduction in its income over the past three years. Both are concerned about healthcare costs and pensions, he said.

For Alabama, those budget concerns led Riley’s office to cut more than $400 million from the state’s budget in the past year.

While Frist advocated controlling spending, House Minority Leader Nancy Pelosi, D-Calif., challenged governors to help Democrats add money to Bush’s budget, calling his proposal a disappointment.

“We need your help to change what is in that budget to what is needed in the states,” Pelosi said.

But Frist cautioned against excessive spending.

“The percentage of federal budget in terms of grants that go to states, and that includes Medicaid, is about 18 percent. That’s higher than it’s ever been at any time in history. The sum of that is $420 billion of the federal budget,” Frist said.

Just less than a third of Alabama’s budget in the 2003 fiscal year, or about $5 billion, came from the federal government.

Frist and Pelosi also talked about health care, jobs and education and the need for governors’ input in Congress.

“We hear your challenges, but it’s always helpful to hear your challenges directly spelled out to us, and I know you’re aware of our challenges,” Frist said.

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