updated 3/10/2004 11:14:27 AM ET 2004-03-10T16:14:27

States will wind up paying at least $29 billion this year to cover the costs of programs and initiatives handed down by the federal government — from education to homeland security — as Washington leaves an increasingly large burden for states, according to a new report.

A bipartisan group of state legislators documented the costs in a report released Wednesday, with the biggest burdens coming from special education requirements, President Bush’s new No Child Left Behind education law, and prescription drugs.

“It is a fairly significant problem,” said Pennsylvania state Rep. David Steil, a Republican who helped craft the National Conference of State Legislatures’ report. “It’s quite easy to define a need, and then push it down to local governments to pay for it.”

Others questioned whether states overhype allegations of so-called unfunded mandates, especially since many programs are voluntary.

Biggest chunk: Special Ed
The report said the $29.7 billion estimate was conservative and the total could be much higher. It accounted for 6 percent of states’ total general fund spending. Costs include:

  • $10 billion for special education programs.
  • $9.6 billion for No Child Left Behind.
  • $6 billion for prescription drugs for Medicare-eligible patients.
  • $1 billion for environmental regulations.

The costs are expected to rise to $34.2 billion next year, causing onerous burdens at a time when state finances are still weak, the report found.

The fiscal weight of unfunded mandates has “changed dramatically, especially in the last three or four years,” said Michael Bird, NCSL’s federal affairs counsel. A 1995 federal law, enacted after state complaints a decade ago, sought to put an end to such laws.

But the report found that the measure has been undermined by exemptions to it, conditions on federal grants to states, and the failure of Congress to fully fund the laws its passes.

Congressional report counters
Not everyone agrees on the report’s conclusions, however.

The Congressional Budget Office, charged by Congress under the same 1995 Unfunded Mandate Reform Act to assess the impact of federal policy on the states, reported in July that only two laws have passed in the last seven years that imposed costs of more than $50 million on states. They are a 1996 increase in the minimum wage and a 1997 decrease in spending on food stamps.

The report specifically found that Bush’s No Child Left Behind law and an older special education law are voluntary programs, and aren’t technically mandates.

“There’s a difference between an unfunded mandate and a program that the states just want more federal money for,” said Brian Riedl, a budget expert at the conservative Heritage Foundation. “Washington can’t be blamed for that.”

While the CBO found virtually no evidence of unfunded mandates, its latest report echoed, in part, some of the states’ complaints of loopholes in the federal law, and found that more than 600 federal proposals between 1996 and 2002 would impose additional costs on state and local governments while not falling under the definition of a “mandate.”

'Way off the mark'
Bird said that homeland security programs and Bush’s education law may be voluntary, but the reality is that states can’t simply walk away from them.

“While on paper that might make some sense, in reality that’s way off the mark,” he said. “When the federal government is missing the boat on its part of its share of the responsibility, then we’ve got to stand up. And they’re missing the boat more often than they used to.”

The full conference report is online at www.ncsl.org.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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