When West Virginia Gov. Joe Manchin, Idaho Gov. C.L. “Butch” Otter and Montana Gov. Brian Schweitzer joined together for a lively roundtable discussion Monday at The Council of State Governments Spring Conference in Coeur d’Alene, Idaho, audience members got a clearer picture of how the stimulus is really affecting the states.
“We couldn’t have had a better group of political leaders to talk about some of the challenges,” said author Matt Miller, who served as the moderator of the discussion.
The first challenge up was the Recovery Act and how states are dealing with it.
Although all three governors were appreciative of the extra funds flowing from the feds to their states, all three cautioned against building up a state government on money that would run out in a few years, when Recovery Act dollars are set to expire.
“We made sure we didn’t put ourselves in a position that we couldn’t sustain,” said Manchin. “This downturn in economics of what we’re all dealing with is not going to be over anytime soon.”
Idaho did the same, focusing on one-time projects and making sure residents are aware that some programs sustained this year with federal money might not be around in two or three years, according to Otter. “We see the end of it without doing any violence to our tax structure in Idaho,” Otter said.
Schweitzer echoed Otter’s call to use the stimulus money for one-time projects and also agreed with Manchin’s words of caution. He said state governments need to be cautious and consider what the state will do when the money runs out. After all, he said, effects of the recession will probably hit the states late. Not only that, but the states will probably recover a little later as well, he said.
“As you know in government, when people get used to a little candy, they figure that candy ought to be there every time,” Schweitzer said. “Let’s hope the economy does turn around.”
The Recovery Act represented an unprecedented investment in transportation and infrastructure projects to the tune of $27 billion. Manchin believes the Recovery Act transportation and infrastructure are the most important. “I think it’s the only part of the stimulus that’s going to have any type of jobs created,” Manchin said.
The rest of the stimulus funding to the states almost seemed like backfill—where states basically plugged budget holes to avoid even more desperate budget cuts. The budget stabilization funds under the stimulus package, came to the governors in the silos of education and health care. And, with most of governors in “meltdown mode,” Schweitzer said, the dollars were meant to help the states avoid major funding cuts to education and health care.
That’s why Schweitzer believes Recovery Act funding hasn’t really created much reform, particularly when it comes to education. “You can’t say we need reform and here’s the money,” Schweitzer said. “You need to say you can’t get the money if there’s no reform.”
Still, America’s education system is not competing with the rest of the world, Manchin said. “We had a great opportunity to use the carrot to get better results, but at this point in time I don’t know that that’s going to happen,” he said.
A rural state like Idaho is using technology to link schools, sharing qualified teachers and educational services from one end of the state to the other. “We’re spending quite a bit of money connecting every school in the state,” Otter said. “We’ve got a responsibility to reform ourselves. Washington, D.C., is the last place I’m going to look for reform, especially in education.”
Schweitzer echoed that sentiment: “Reform has got to come from the ground up—it’s not going to come from Washington.”
Otter stressed that the states are still the laboratories for invention—and when it comes to education, all three governors stressed the importance for the states to improve America’s education system, making sure it’s competitive with the rest of the world.
“We’re in a recession, we’ll come out of the recession and grow again,” Schweitzer said. “That economy with the best ideas that still creates products with good ideas will always win. The best dollar you can invest is still in education.”
For more on the governors’ panel and what the team of governors thought about health care and energy, check out the upcoming June/July issue of State News magazine, available in print or online June 1 at statenews.csg.org.