By Rob Hotakainen
Published: Thursday, Dec. 17, 2009 – 12:00 am | Page 20A
Last Modified: Thursday, Dec. 17, 2009 – 8:36 am
WASHINGTON – Washington is moving to assist California and other cash-strapped states that face the prospect of raising taxes or cutting spending again in 2010 to balance their books.
The House took the first step Wednesday evening, passing a $75 billion jobs bill that would help states pay for infrastructure projects and prevent more public employees from being laid off.
Some are calling it Stimulus II, and the sequel would come as good news for 35 states that face budget gaps totaling $31.5 billion by the middle of next year. California is projecting the largest shortfall, at $6.3 billion, followed by Illinois and New York, according to the Center on Budget and Policy Priorities.
Earlier this year, the White House disappointed California officials when the Obama administration made clear that it had no interest in backing the state’s emergency loans as a short-term measure.
But now the White House is signaling that it wants to send more money to the states. Without offering any specifics, President Barack Obama mentioned the idea in an economic speech last week, and state officials are eager to hear exactly what he has in mind.
On Capitol Hill, House Speaker Nancy Pelosi, D-San Francisco, is urging Congress to finalize a bill quickly, before state legislatures begin their work in 2010.
“It is very important. It would prevent the firing of schoolteachers, police officers, firefighters and health care workers who are meeting the needs of the American people,” Pelosi said.
Many Republicans are scoffing at the notion of another stimulus, calling the majority party spendthrifts.
Noting that the United States just completed a year in which it racked up the largest deficit in history, Gold River Republican Rep. Dan Lungren said the federal government is in worse shape than the states.
“While it might seem that it would make sense for us to bail out the states, I have to ask, who’s going to bail out the United States?” Lungren said.
California cashed in on the first round of stimulus funds, with the White House and California officials estimating the funds created or saved 110,000 jobs in the state. That number has been criticized as exaggerating the impact of federal dollars, and officials say a more accurate accounting may not be available for months.
The state wanted more help, asking the federal government to backstop its loans, but state officials quickly abandoned the idea when White House officials said it would not be fair to help just one state in such a manner.
Under the latest House package, called the Jobs For Main Street Act of 2010, all states could compete for a chunk of the $48 billion targeted for more infrastructure projects and the $27 billion to keep more public sector employees on the payroll.
Pelosi said state and local governments begin their budgeting in January and February, “and it’s important for them to have some idea of if and when we would be doing something.”
But it appears as though she’ll have to wait, at least until early next year. No action is planned this year in the Senate, which remains intensely focused on its health care overhaul, leaving no time for other issues.
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