State leaders will need flexibility if sequester hits

February 25, 2013

In three days from now, $85 billion in cuts to federal spending – known as the sequester – will go into effect. Democrats and Republicans voted on the sequester in July of 2011, and they have done very little until the past few weeks to change the composition or timing of the cuts, if they take effect. Now, after taking a week off from legislating, Obama and leaders of Congress are back to dueling on how all this will play out. As they are currently planned, cuts are across the board and don’t allow adjustments for priorities.

Some “flexibility” legislation is exactly what this process needs. The best approach for the portion of the money that flows to the states would be to block grant the spending. I wrote after President Obama was re-elected:

Under increasing federal budget pressures, funding to the states will likely be sharply decreased for many programs. Chris Whatley, director of the Washington, D.C. office for The Council of State Governments, laid out the implications of the current form of sequestration:

28 of the 42 streams of federal funding to the states would face cuts. The programs facing cuts are found across a range of departments and services, from special education and low-income heating assistance to veterans’ employment and training.

States should be given their reduced funding as block grants as well, and then be allowed to shift the dollars between programs according to their local needs. For example if Maine faced a particularly cold winter, its leaders could shift more funds to home heating assistance. As federal funding to states shrinks and as governors and legislatures face shifting priorities, they need more flexibility to spend. President Obama should loosen Washington’s reins on the states.

The Huffington Post agrees:

Some governors bracing for the effects of the sequester are emphasizing the need for flexibility in making those cuts in their states.

“We are budget balancers. There is an art to it,” said North Dakota Gov. Jack Dalrymple (R), talking to HuffPost at the National Governors Association meeting in Washington, D.C. this weekend. “The worst thing is to have no flexibility.”

Dalrymple said governors were briefed at the meeting that the cuts would come from individual federal line items that would flow down to the states, a plan he said he feared wouldn’t give state officials enough control over how their states were impacted.

Overall, state and local governments have already made substantial employee reductions. 680,000 employees have been removed from an overall employment scale of 16 million (about 4.2 percent). The Pew Charitable Trusts has a great chart that shows how some states shrunk their work forces, while others increased theirs (for example, Colorado increased its workforce by 10 percent between 2008 and 2012). The economic conditions and social needs of every state vary, and the sequester is a great time to give states the flexibility they need to make adjustments with their federal grants. In times of shrinking resources, flexibility is a governor’s best friend.

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