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Campaign rhetoric obscures facts about federal money
January 10, 2010

Texas officials called it blackmail and coercion and resented "the federal government pointing a loaded gun at the Legislature."

Written by Kate Alexander, The Austin American-Statesman

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Texas officials called it blackmail and coercion and resented "the federal government pointing a loaded gun at the Legislature."

Those words could have been uttered recently by Gov. Rick Perry , who has repeatedly charged over the past year that the federal government has shortchanged, hamstrung or tread upon Texas.

But it was a young Democratic state senator named Chet Edwards, now a U.S. congressman, who decried the federal gun-pointing — back in 1985.

That day, the Texas Legislature begrudgingly raised the minimum drinking age from 19 to 21 to avoid losing about $100 million in federal highway construction money.

Today, legislators probably would have done the same. Railing against the federal government might be easy — and smart — politics, but turning away the federal dollars is tough.

Federal money has consistently made up about a third of the state's budget for the past decade. The only major deviation from that trend is this year, and it stems from the $12 billion injection of stimulus money.

In the current budget, the $66 billion in federal aid includes money to provide health care to very low-income Texans, offer additional education services for children with disabilities, feed poor children during the school day, and build and maintain highways.

Without that federal contribution, Texas would have to use state tax dollars to pay for those services or not provide them.

Accepting the money comes at a cost, however. Texas must chip in about $20 billion in state matching money and sacrifice some independence.

To get education money, states must abide by school accountability standards; highway money is dependent on compliance with clean air rules; and getting additional unemployment aid last year required states to expand who was eligible for benefits. Texas balked at that last requirement.

State officials across the country have long resented both the costs and the conditions of federal money.

But as Perry faces his toughest re-election challenge yet, from a Washington player, U.S. Sen. Kay Bailey Hutchison, he has taken that resentment to a new extreme, as shown by his suggestion that Washington intrusion might force Texas to secede, said Richard Cole, a professor at the University of Texas at Arlington who has studied the relationship between states and the federal government.

Perry sees the federal government's big feet trampling all over Texas lately.

"I believe the federal government has become oppressive in its size, its intrusion into the lives of our citizens, and its interference with the affairs of our state," Perry said last April in a speech supporting states' rights.

"Texans need to ask themselves a question: Do they side with those in Washington who are pursuing this unprecedented expansion of power? Or do they believe in the individual rights and responsibilities laid out in our foundational documents?"

It is premature to say whether President Barack Obama is indeed presiding over an unprecedented power grab, experts say.

In some cases, the Obama administration is backing away from federal involvement in state issues.

Cole points to the administration's decision to no longer pursue certain marijuana possession cases in states that have legalized medical marijuana. The federal government also has allowed states to implement automobile emission standards that are tougher than the federal regulations, a departure from the previous administration's stance.

And it was President George W. Bush who engineered a prime example of federal intrusion into a state responsibility with the No Child Left Behind Act, said Shama Gamkhar, a professor at the LBJ School of Public Affairs at UT-Austin.

That legislation attached stringent conditions on states to get federal education money but provided limited federal assistance to cover the additional costs. And states deeply resented it, Gamkhar said.

"Perry's rhetoric is simply that — a campaign strategy to paint Hutchison as a shady Washington Goliath attacking a virtuous state David who cares about the home folks," said John Kincaid, a professor at Lafayette College in Pennsylvania who has conducted research with Cole on public attitudes toward different levels of government.

Their research shows a long-standing and growing distrust of the federal government in contrast to the public's increasing trust and confidence in state and local government. That trust gap, which has been widening over the past 35 years, has rarely been as big as it is today.

Perry is wisely mining that vein of distrust, Cole said.

Hutchison is part of that federal institution, and Perry has turned one of her greatest strengths — bringing home federal money — into a liability, said Sean Theriault, a UT government professor.

He repeatedly criticizes her for seeking federal dollars, not mentioning that much of that money goes to popular projects back home. Texas, for instance, got more federal money for defense and veterans in 2008 than any other state, and direct federal spending made up 18 percent of the state's economy that year.

"It is a really clever strategy on Rick Perry's part," Theriault said. "I don't know how she wins this battle."

It is not hypocritical for Perry to jab at the federal government with one fist while taking the federal dollars with the other, Kincaid said.

He has a legitimate beef about onerous federal mandates and cost-shifting, Kincaid said, and states today are essentially locked into taking the federal money.

For every dollar Texans paid in federal taxes, 89 cents came back to the state through direct federal spending or money to state and local governments or residents, according to an analysis of 2008 data by the Center for Public Policy Priorities, a policy group that is an advocate for low- and moderate-income families.

That return ranks Texas 37th among the states and is affected by both the demographics of the state and policy decisions on the state and federal levels.

Texas gets back $1.66 for every tax dollar — 22nd among the states — when additional federal commitments, such as flood insurance and guarantees of loans for students, farmers and small businesses, are added to the mix.

Perry's adversarial approach toward the federal government is curious because those dollars have been essential to balancing the state budget, Theriault said.

The $12 billion in economic stimulus money this year allowed Texas to avoid major program cuts, provide some additional resources to schools and other programs and leave untouched its $8 billion rainy day fund. That reserve fund will be key to closing a looming budget hole when the Legislature meets again next January.

Edwards, who once railed against federal intrusion, is now a leader of the supposed intruders as a high-ranking member of the House Appropriations Committee.

He said there is a natural friction between the state and federal governments that provides a good check on power in our democracy.

"At the end of the day, it's about putting politics aside and working together to serve the best interests of the folks we all represent," Edwards said. "The level of partisanship and lack of civility we see playing out in our politics today on both sides of the aisle is a real concern. To solve big problems — whether it's on the state or federal level — leaders find a way to rise above their differences and put the people's needs first."

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