The Federal Budget

The Governors believe that the federal government must uphold its current funding commitments to states.

Key Health and Human Services Programs

The Governors urge Congress and the Administration to meet their commitments in the most critical programs affecting human investments and needs including the following: Temporary Assistance for Needy Families (TANF), Medicaid, the Social Services Block Grant (SSBG), the State Children's Health Insurance Program (S-CHIP), child care, the Byrne Grant Program, and other U.S. Department of Justice state grant programs. Congress must meet its commitment to fully fund the federal portion of the Individuals with Disabilities Education Act (IDEA).

Homeland Security

In the aftermath of September 11, states have borne unprecedented costs to ensure that the nation's critical infrastructure and the public are protected.  The federal government must work with states in providing adequate resources for emergency communications, for responding to and preventing bioterrorism, and for securing critical infrastructure, including borders, ports of entry, dams, communication equipment, nuclear power plants, water supplies, etc.  In addition, any homeland security strategy that is developed should be based on the following principles:

• Governors bear the ultimate responsibility and accountability for the development, implementation, and coordination of any plan to respond or protect the citizens and businesses of any state;
• Adequate resources must be provided to support any proposed security need that would require state and local participation;
• Funding for all infrastructure protection and public health systems should be coordinated through the appropriate state agencies; and
• Federal departments and agencies must coordinate with and through the states when delivering federal programs and assistance to first responders.

Transportation Trust and Natural Resources Funds

Congress and the Administration must act swiftly to maintain the same funding level as for FY2002 and to ensure funding guarantees made to states in TEA-21 and AIR-21 by continuing to dedicate all revenues coming into the Highway and Airport and Airway Trust Fund for their intended purpose: to repair, maintain, and improve the nation's highway, rail, transit and aviation systems.  The Governors support full funding of the new Land Conservation, Preservation and Infrastructure Improvement Program and continued support for a meaningful share of outer continental shelf (OCS) revenues to be shared with all states and territories; and restoring the integrity of the abandoned mine land (AML) program.

Senior Prescription Drugs

If Congress decides to expand prescription drug coverage to seniors, it should not shift that responsibility or its costs to the states. Furthermore, in the process of developing a senior prescription drug policy, the federal government should acknowledge and accommodate state programs and avoid disincentives to state innovation, such as unreasonable maintenance-of-effort requirements, reduced federal matching funds, or other penalties.

Protecting State Sovereignty

State Authority Over State Revenues

States will continue to work toward enacting legislation to simplify and streamline their own state sales tax systems. The Governors oppose efforts by the federal government to restrict or interfere with states' ability to collect existing tax liabilities. Additionally, Governors oppose federal actions which would preempt or erode state revenues. The Governors support changes in the Unfunded Mandates Reform Act to require consultation with states and reports to the appropriate committees of Congress on any proposed federal tax or revenue changes which would preempt or reduce state revenues.

The Uninsured: Association Health Plans (AHPs) and "HealthMarts"

The federal government must not preempt state laws and regulatory authority regarding the regulation of health insurance pooling groups such as AHPs or "HealthMarts." States must continue to have the authority to protect consumers purchasing health insurance through these arrangements.

Key Legislative Priorities

Welfare Reform Reauthorization

As Congress considers the reauthorization of welfare reform, the Governors believe that the critical funding and flexibility of the Temporary Assistance for Needy Families block grant must be preserved (without any set-asides).  The program should be reauthorized to ensure that states are able to continue their current innovative efforts to assist low-income individuals and families move toward self-sufficiency.

IDEA

The Governors, in conjunction with the Chief State School Officers, are currently discussing policy changes that should be considered during the Reauthorization of the Individuals with Disabilities Education Act (IDEA). Foremost, Congress must meet its commitment to fully fund the 40 percent federal share of IDEA.

Medicaid

The Governors agree that added flexibility with respect to cost-sharing, optional benefits, and optional populations is crucial to maintaining the viability of  Medicaid in the 21st Century. In addition to programmatic flexibility, fundamental changes to the financing structure of Medicaid are necessary to ensure the program's long-term viability.  Because Medicaid prescription drug expenditures are growing at 189 percent annually, the Governors endorse the President's proposal to increase the rebates that Medicaid receives from pharmaceutical manufacturers. The Governors urge that if Congress enacts any economic stimulus package, the one proposal that would help all states would be a temporary increase in the Medicaid assistance percentage (FMAP). The Governors call for the appointment of a Medicaid Commission to recommend fundamental, long-term reform of the program.

Food Stamp Reform

The Food Stamp program should be reformed to allow state innovation, reduce administrative burdens for recipients, the states, and the federal government, and improve access to benefits for individuals and families in need. The Governors support greater coordination between food stamps and other human service programs, such as TANF.

Environment and Energy

The federal government must work with the states more effectively in designing and implementing environmental and energy programs.  High priorities for the states include: promoting legislation that supports a diverse and reliable portfolio of energy sources in a safe and environmentally sound manner and recognizes the authority of states in decision-making, giving more authority for states to implement Clean Air Act regulations in a flexible and cost-effective way; and enacting legislation granting states flexibility to use alternative approaches to the Concentrated Animal Feeding Operations (CAFO) regulations. The Governors also believe that there needs to be sufficient flexibility in EPA's total maximum daily load (TMDL) regulations to recognize alternative programs that can achieve water quality standards, as well as significant new funding for states to address TMDLs.

International Trade

The United States Trade Representative should negotiate new trade agreements and expand existing trade agreements in an effort to achieve greater economic prosperity through global free trade. In support of this objective, the Governors support passage of "fast track" negotiating authority.

Farm Bill Reauthorization

The reauthorization of the Farm Bill in 2002 presents opportunities for enhancing the economy of the farming sector and rural communities. The Governors will work toward improved rural development and farm credit programs, commodity programs, market promotion programs, and conservation and stewardship of natural resources.

Privacy

The federal government should work with states to ensure the security of individuals' medical, financial, and other personal information. Federal action must not weaken states' authority to protect the privacy of their citizens and should enhance state enforcement authority where appropriate.

Synar

The Synar statute requires all states to reduce tobacco sales to minors according to limits established by the U.S. Department of Health and Human Services (HHS) or suffer a 40 percent cut in their Substance Abuse Prevention and Treatment block grant. The Governors are strongly committed to reducing youth smoking and to restricting underage access to tobacco products; however, Congress must establish a Synar enforcement structure that does not threaten, interrupt, or eliminate critical substance abuse treatment and prevention programs. Furthermore, the Governors call upon HHS to work with states to formalize fair administrative procedures that build an effective state-federal partnership to reduce tobacco sales to minors.