Stateline Story

NGA Meeting to Focus on Budget Woes, Corp. Ethics, Healthcare

A short summer visit to Idaho won't be much fun this year for the nation's governors, some of whom are still waging fierce budget battles with their legislatures.

The National Governors Association Meeting in Boise July 13-16 will unfold just days after most states began their new fiscal year on July 1. Most of the states' chief executives plan to be there. But a few may be tied up back home trying to wrap up last-minute budget details or dealing with special sessions called to address new problems, such as the Supreme Court's recent death penalty decisions striking down a number of state laws.

The capital punishment rulings are likely to be addressed in some of the NGA discussions, along with electric utility issues, global trade, the future of Amtrak, anti-terrorism efforts and the U.S. Senate action designating Yucca Mountain in Nevada as the storage site for most of the nation's high-level nuclear waste. Energy Secretary Spencer Abraham is expected to get a grilling over the latter when he appears before the governors at a session on energy and the environment.

But the issues that will dominate the NGA's 94th annual meeting are likely to be the states' worsening financial situations, ever-rising healthcare costs, and the newest hot-button issue of the moment corporate ethics.

"We're not sure how this corporate responsibility issue is going to play out," says NGA Public Affairs Director Christine LaPaille. She said the Enron, WorldCom and other Wall Street scandals would likely be discussed among the governors in a private session.

At the moment, the NGA doesn't have a policy that addresses corporate corruption. But some governors are pushing for new regulatory policies aimed at protecting pension funds and other state investments. It's unlikely any final policy decision addressing corporate fraud will be made at the meeting, but the governors could end up issuing new calls for state-level pension and accounting reforms to help protect retirees and state investments.

The debate over corporate fraud comes at a crucial time for the states, whose pension fund and investment losses due to the recent scandals have only exacerbated increasing deficit problems. Though the governors don't like to use words like bankrupt to describe their budget situations, a few states, such as Illinois, have been forced to borrow a billion dollars or more just to honor tax refund and other commitments.

"This is the worst fiscal situation in 20 years for states. They're in terrible, terrible straits, and that's going to be the underlying issue with everything we discuss," says LaPaille.

Despite such pressing issues, some governors are worried that the meeting may end up being long on rhetoric and short on action. Vermont Gov. Howard Dean said in a recent interview that he expects little of any significance to emerge from the meeting because of election year politics. The Republican governors, Dean said, will be under "enormous pressure...to stay in line" with Bush administration policies.

"You're not going to hear a lot of public discussion," says Dean, a Democrat who hopes to win his party's nomination for president in 2004.

Thirty-six states will hold gubernatorial elections this year. Twenty of them are open seats, meaning that 20 state chief executives will be attending their last NGA meeting this year.

The most well known among them is Michigan Gov. John Engler. Engler is the current chairman of the NGA and the longest-serving governor in the country. He will give up his office in January after 12 years.

Engler, a Republican, will turn over the NGA chairmanship on the last day of the meeting to Kentucky Gov. Paul Patton, a Democrat.