Federal aid bill ties state’s hands

August 21, 2010 05:00 am

They say you shouldn’t look a gift horse in the mouth. But when the “gift” is from Uncle Sam, you’d be crazy not to.

Take the $26 billion state aid bill signed by President Barack Obama earlier this month. It’s a boon to Oregon’s schools, no doubt, but it comes at a price.

To receive Oregon’s share of the bill – some $272 million, of which $117 million will go to education – state lawmakers must restore about $14 million in cuts they made to the higher education budget last year. Then they’ll have to keep it there for the coming fiscal year. Moreover, they’ll be prevented from cutting what they spend on all education through the 2011 fiscal year, no matter what state revenues and needs might be.

That goes too far. It requires a yet-unelected Legislature to live by the priorities of the 2009 Legislature, no matter who is there and no matter what the state’s needs are a year from now.

Still, at least we’re not in the same boat as Texas. Federal lawmakers were annoyed, to put it mildly, when Texas used some $3.2 billion in stimulus dollars to balance the state budget, which now includes a nicely padded rainy-day fund, according to Bloomberg Business Week. This bill let Congress get even.

If Texas agrees to take the money ­– and some Texans argue that doing so would require the state to violate its own constitution – the state will be forbidden to make cuts in education through 2013. Moreover, the money will go directly to school districts without ever passing through state government hands.

Notwithstanding the strings attached, the money that comes to Oregon will be put to good use. More than half, some $155 million, will extend by six months payments that have let the state cover more people under the Medicaid program for the poor. The remainder will go to schools, where it must be spent to keep teachers on the job or rehire those laid off.

If the $26 billion bailout were motivated only by a desire to help states in dire straits, then Congress wouldn’t have attached any strings at all. Presumably, state leaders know what their most pressing problems are. And given a sudden windfall, they’d distribute the money in accordance with their constituents’ priorities.

Apparently, however, Congress would rather use public funds to curry favor with powerful teachers unions.

It may well be that state lawmakers, given a choice, would have done exactly what the legislation requires. We’ll never know, however, for Congress made the spending decisions for them. That’s unfortunate, and it’s a lesson that should be kept in mind the next time a gift-wrapped present arrives from Washington.

– Wescom Wire (Bend Bulletin)