Poll Finds Significant Public Split Over Federal Aid to States, Even Before Congress Crafted $30 Billion Bailout

4/30/2003

From: Pete Sepp or Maureen Tell, 703-683-5700; both of the National Taxpayers Union

ALEXANDRIA, Va., April 30 -- As lawmakers return to Washington to wrestle with fiscal issues, one provision of their budget blueprint is already likely to be met with public skepticism. A poll conducted by Fabrizio, McLaughlin and Associates for the National Taxpayers Union (NTU) revealed that although states have been demanding full assistance by the federal government, most people are only willing to give them some assistance and only when it applies to fighting terrorism.

"The economic downturn combined with the War on Terrorism provided many free-spending states with the excuse they needed to request federal assistance, however these poll results reveal that the general public isn't ready to write a blank check," said NTU President John Berthoud. "In assigning the blame of state budget woes, taxpayers haven't overlooked the decisions of many Governors and State Legislatures to enact huge spending increases over the past decade."

Participants were asked to answer the following question: "Some states now find themselves in financial difficulty due to the sluggish economy, new homeland security measures, and rapid growth in spending programs over the last decade. Which of the following statements is closer to your opinion?" In response, 37 percent thought that Washington should "only provide federal tax dollars to assist all states in fighting terrorism together." The remaining responses were almost evenly divided: 27 percent said Congress should "not provide federal tax dollars to bail out the states, because they made their own budget problems," while 28 percent believed the federal government should "provide federal tax dollars to assist any state that claims it is in need." Ten percent chose not to give an answer. The survey of 1,000 adults was conducted March 22-23, with a (plus)/-3.1 percent error margin in 95 out of 100 cases.

Although Members of Congress were not asked this question, many apparently gave their answer in the FY 2004 Budget Resolution that was passed on April 11, 2003. The "Sense of the Senate Concerning State Fiscal Relief" stated that, "any legislation enacted to provide economic growth for the United Sates should include not less than $30 Billion for State fiscal relief over the next 18 months."

"Based on the NTU poll results, Congress ought to re-visit this huge $30 Billion giveaway as the budget process moves forward," Berthoud recommended.

Berthoud also noted that any public concern over such a grant is validated by statistics. According to a study he prepared earlier this year for NTU's research affiliate, states saw inflation-adjusted revenues rise by an average of 4.2 percent each year during the 1990s. Despite the claims of many Governors that they are in a revenue crisis, state and local governments actually took a higher share of Gross Domestic Product in calendar year 2002 (10.2 percent) than they did in 2001 (10.1 percent).

"Until states learn to control spending, this year's federal Budget Resolution will continue to be seen as a convenient solution for states' fiscal woes," Berthoud concluded. "And, regardless of which level of government is handing out the money, it all comes from the same place: the overburdened taxpayer's pocket."

The 335,000-member National Taxpayers Union is a non-partisan grassroots citizen organization founded in 1969 to work for lower taxes, less wasteful spending, and accountable government at all levels. Note: Full poll results are available online at http://www.ntu.org.