The fiscal squeeze on the states was in the spotlight at this year's summer meeting of the National Governors' Association, which was winding up in Boise, Idaho Tuesday.
In an interview with STATELINE.ORG, Kentucky Gov. Paul Patton, a Democrat who's the new chair of the NGA, discussed state budget problems and other issues. Patton, an ex-coal industry executive, is in his second term as Kentucky's governor and is considered a rising star in national politics.
STATELINE.ORG: The National Governors Association estimates that forty some odd states are suffering from between $40 and $50 billion of revenue shortfalls. As you look out across this situation, what one word would you say sums this up? And why would you choose this word?
Patton: I would say crisis. This is a crisis. [An aide interjects: "I was afraid you were going to use a four letter word." Laughter follows] Tennessee is the state closest to (Kentucky) that's had the most visible problems. Their problems started a couple or three years ago. And they've just passed [budgets] to make do. And finally they ran out of the ability to do that. They could no longer keep their state running.
Kentucky could be there and some other states could be there in a year or so, if the economy doesn't turn around and have a strong rebound. Now we had hoped we were starting that rebound in January and February, and I think we did. We had hoped for a robust recovery, as you normally do coming out of a recession.
The purpose, of course, of basic reserves is to allow you to go through these troughs without cutting back services. You go through a trough but you come back and you just maintain a bridge. And then, when you get a peak, you build that reserve back up. That's the theory of it.
This is a bigger trough and a longer time than we had anticipated. This is much worse than 1992, for instance. And in Kentucky, it's much worse than '82. . . .
STATELINE.ORG: The theme of this meeting is "State Leadership in a Global Economy." Do you consider Kentucky a leader? And if so, what is the state doing?
Patton: Kentucky is a leader in education. It's a leader in state technology, business technology. I think we're a leader in transportation. We have a very professional transportation cabinet that has won many awards. . . .
I think we're leading in areas of childhood protection, spouse abuse. My wife's particularly active in that area.. You wouldn't expect Kentucky to have the most progressive program of protection for women and children for abuse. And I think you can make a case that we have one of the best atmospheres in the nation, and I think we certainly have made the most progress over the last six or seven years. You couldn't have said that six years ago. But in four legislative sessions, Judy has had a very aggressive agenda of making our laws progressive in the view of people that are advocates for women and children. And I could probably name several more.
In elementary and secondary education, post-secondary education, Kentucky is just simply a leader in improving. We were the leader in basic fundamental K-12 reform in 1990. Last week I just came back from Los Angeles, a meeting of the Education Commission of the States. . . .They [meeting participants] come up to me and say, "We just appreciate so much what you have done. It's been so much help to us. It's allowed us to get some major change and debate." Then in post-secondary education, I think that we are viewed as the leader in making a commitment to improve post-secondary education when many states are backing off and continuing to solve their [budget] problems by cutting colleges and universities and forcing them to raise tuition. So I think in many ways Kentucky is surprisingly a leader. And I think my selection as the leader of this organization [the National Governors Association] is some reflection of the fact that my colleagues respect the work Kentucky has done.
STATELINE.ORG: How do you view NGA's role in the governance of states and this nation?
Patton: This is a very valuable organization. It allows the states to present a relatively united front on issues that they have in common. We're all very political, and it's a challenge, but this organization operates on a nonpartisan or a bipartisan basis. And we have a lot more in common than we have differences. We don't operate on ideology as much as, say, the Congress would. The Congress can afford to be ideological on a lot of these programs, like social programs and school programs, and then push them down to the states and tell them to implement it. Well, the governors are the ones that have to implement it. They're much more prone to look at it from a practical standpoint than an ideological standpoint.
We will naturally come into conflict with the White House. Invariably, we're wanting the federal government to spend money. Democrat, Republican, it doesn't matter. When it comes to them [governors] wanting money out of the federal government, party doesn't really make any difference. During the Clinton Administration, we pushed for the expenditure of all of the transportation money on transportation. They had been skimming off for years. They had been skimming off a couple or three billion dollars a year to help solve the budget problem. The Clinton Administration opposed that. But I and other Democrats and Republicans went to the Congress and we prevailed over the White House. Clinton seemed to understand that much more than this administration does. This administration seems to be expecting this organization [NGA] to support them because it's dominated by Republicans, when it's not in the best interest of the states. . . .
STATELINE.ORG: For some time now, almost a year, governors have been seeking some sort of fiscal relief from the federal government and it seems like they [the federal government] has been less than forthcoming on that front. What is your reaction to that?
Patton: It's understandable that the administration has their priorities. Helping us with our problems is not one of them. But the Congress has the same constituents we do, and that's the reason we were able to prevail on the surface transportation issue. So even where the White House would rather spend the money on something else, or rather not spend the money at all and maintain the deficit as low as they can, we can go to the Congress and prevail upon them. For the same reasons that we don't want to cut Medicaid, the Congress doesn't want us to cut Medicaid. So we can have a lot more in common sometimes than we do with the White House.
STATELINE.ORG: There were some protesters outside yesterday. They were from a few different constituencies, but their basic complaint was that the NGA is too beholden to corporate interests. What's your response to that?
Patton: That's not a valid complaint. They're basing that upon the fact that we have corporate sponsors that help us do research projects and that help with some of the social functions relative to what we do. But then you can see all kinds of places where we go against corporate interests. Right now, the biggest area is with the pharmaceutical companies. And we've received support from pharmaceutical companies. But we're openly in opposition to the pharmaceutical companies on several different issues. We appreciate corporate support, but you won't find corporate interests having any kind of unfair influence in this organization.
STATELINE.ORG: What you hope to accomplish as chair of NGA?
Patton: Welfare reform. Hopefully we can bring that to a conclusion this year. We're going to lay the foundation for the Surface Transportation Act. We're working on the sales tax issue on remote sales and trying to get a system whereby we can tax all remote sales just as we do domestic sales, that's catalogues and electronic ordering and all that stuff. Medicaid, with both the flexibility to make the system work more effectively and more funding. That's going to continue to be a big issue. These are things that you have to keep on bringing up. You can't just say, "Well, we brought that up last year and got no relief so we're going to drop it." These are things we have to continue to bring up and hopefully, most of the time, hopefully we'll eventually achieve justice. Very seldom do you just bring something up and have everybody embrace it, and say, "Oh yeah, that's exactly the thing to do. Let's just do that and move on to something else." You have to let the pressure build. And we've been working on Medicaid relief for years. And I somehow believe that in the course of the next year we'll some kind of relief. There's another half dozen things we're working on. .