Gov. George Ryan wants one thing from the federal government: more. More money, that is, for transportation, education, Medicaid and a host of other programs. Noting that Illinois consistently ranks near the bottom among states in per capita federal spending, the new Republican governor has made wringing more greenbacks out of Washington his No. 1 goal in federal-state relations.
Congressional budget negotiations for the fiscal year beginning October 1 are underway. And with an Illinoisan, Yorkville Republican U.S. Rep. J. Dennis Hastert, wielding the speaker's gavel in the House and several other Prairie Staters in key congressional posts, Ryan believes now is the time to strike. The governor amply demonstrated that in March, when he and Chicago Mayor Richard Daley presented a $1.8 billion wish list to members of the state's congressional delegation.
"Illinois has a golden opportunity this year," Ryan said. "The stars are aligned in the correct position for all of us — together — to get a lot accomplished for our state."
But it won't be easy.
Budget experts point out that Illinois' poor return on the federal tax dollars its citizens send to Washington is a product of long-term economic and demographic trends. And with Congress struggling to maintain self-imposed spending caps — and vowing to reserve most of the projected budget surplus for Social Security — any substantial boost in federal spending for Illinois is a long shot, at best.
"The amount of change you can effect in any one Congress is probably minis-
cule," says Paula Duggan, a senior policy analyst at the Northeast-Midwest Institute, a group that monitors federal spending trends in the states.
But it is not impossible.
Annual figures compiled by the institute and the U.S. Census Bureau consistently show Illinois among the bottom tier of states when it comes to grabbing federal funds. Census Bureau figures for the 1998 federal fiscal year, the most recent available, ranked Illinois 43rd among the 50 states in per capita federal spending. The figure was $4,605, well below the national average of $5,491. (The fiscal year covered October 1,1997,to September 30,1998.)
However, that was a slight increase from the $4,440 the feds spent per Illinoisan in fiscal 1997, enough to boost the state's ranking from 45. That broke a recent downward trend.
Traditionally, Illinois' low ratings have been attributed to the reality that it is a slow-growth state with few of the technology- and defense-based industries that attract federal contracts.
"Illinois does OK in some spending categories. The one where it does really badly is in federal procurement," Duggan says. "The problem is particularly acute in Illinois, but it's a generalized problem in the Midwest. I think what the Midwestern states need to do is sit down and figure out what the federal government is buying and come up with a strategy for selling more of it. Every federal agency buys things."
Illinois has followed such a strategy in recent years, and it is beginning to show results. The improvement in the state's federal balance sheet between fiscal years 1997 and 1998 — when overall federal spending there grew from $52.8 billion to $55.5 billion — was led by a 43 percent surge in procurement, the Census Bureau figures show. The increase propelled the state from 45th to 36th in per capita federal buying.
Nondefense agencies, including the education, agriculture and labor departments, went on a buying spree in Illinois, purchasing $3.3 billion in goods and services in fiscal year 1998, compared to $1.9 billion the year before. "I know that's one thing [the Illinois Department of Commerce and Community Affairs] has been focusing on," says Ray Fitzgerald, a legislative assistant in the state's Washington office.
Still, the $4.6 billion in total procurement remained the smallest category of federal spending in Illinois, dwarfed by the $35.2 billion in direct payments to individuals, like Social Security and welfare, that led the pack.
The impact of federal procurement is well illustrated by Virginia and Maryland, the two small-population states that, respectively, ranked first and second in per capita federal spending in fiscal 1998. Those states surround Washington and are home to scores of high- tech companies and firms that score plenty of defense and nondefense contracts.
Federal buying can have a ripple effect for a state, says Stephen S. Fuller, a federal spending analyst at George Mason University in Virginia. "Procurement
22 / May 1999 Illinois Issues
tends to stimulate the economy by
fueling business expansion."
The wish list Ryan and Daley compiled was dominated by traditional areas
of federal spending. It included $441
million in transportation projects, $382
million for Medicaid, $327 million for
technology initiatives, $319 million for
education, $173 million for the environment, $90 million for housing and urban
development, $82 million for child care
programs and $20 million for prisons.
Members of the state's congressional
delegation say they welcomed the list,
particularly because it was coming from
a Republican governor and a Democratic mayor. "If we can focus on a select
list of issues for our state, I think we can
be more successful," says U.S. Sen. Dick
Durbin, a Springfield Democrat and a
member of the Senate Appropriations
Committee.
But there were plenty of cautionary
notes, too. "Earmarking projects is
always not as easy as you
think," says U.S. Rep.
Jerry Weller, a Morris
Republican.
Indeed, the top item on
the Ryan/Daley agenda,
transportation spending,
was largely locked in last
year by Congress, which
passed a six-year, $203
billion highway and mass
transit bill. Illinois will get about $200
million more in road funds per year
under the law. But the percentage
increase is smaller than all but six
other states, and Illinois actually lost
ground by slipping into "donor state"
status, as more money was tunneled to
faster-growing states in the South and
West. It will get back just 92 cents on
every gas tax dollar it sends to Washington, a sharp drop from the $1.03 it
received under the old law.
The state does have an opportunity to
boost funding for its airports this year.
Congress is considering a reauthorization of the Federal Aviation Administration, and Rep. Bud Shuster, a Pennsylvania Republican, the powerful chairman
of the House Transportation and
Infrastructure Committee, is pushing a
plan that would significantly boost the
amount of grant money flowing to
airports in Illinois and other states.
Ironically enough, other items on the
Ryan/Daley agenda could be stymied by
partisan infighting. Although they urged
the Illinois delegation to support more
federal funding for hiring teachers and
repairing schools, many Republicans in
the delegation are loath to support those
initiatives, which also are on President
Bill Clinton's agenda.
Ryan may also find himself fighting
some defensive battles in Washington. In
his fiscal year 2000 budget, Clinton
proposed grabbing 57 percent of the
$206 billion Illinois and other states are
divvying up from the settlement of their
lawsuits against tobacco companies.
Illinois is due $9.1 billion from the
settlement over the next 25 years.
In a meeting with Ryan and other
governors in January, Clinton said
federal law required him to try to recover
some of the funds for the Medicaid
program, which is jointly funded by the
federal and state governments. But he
offered to back off if the states agreed to
spend the settlement money on health
care and efforts to reduce teen smoking.
Like most governors, Ryan said he
wants the money with no strings
attached, though he added that health
care and anti-smoking programs were
among his priorities for spending it.
The governors recently won a round in
the fight when the Senate rejected a
move to require the states to spend half
the money on anti-smoking programs,
public health and assistance to tobacco
farmers. Durbin supported the requirement, while his Republican counterpart,
Sen. Peter Fitzgerald, an Inverness
Republican, opposed it.
Clinton also has designs on another
pot of money that would otherwise be
destined for the states: a $1.5 billion gas
tax windfall from increased fuel
consumption. The U.S. Department of
Transportation wants to divert the
money to such nonhighway programs as
clean-air initiatives, mass transit and
traffic safety, a move that would cost
Illinois $45 million in road funds.
Shuster is fighting the money grab.
In his efforts to make the state a federal fiscal winner, Ryan considers Speaker
Hastert his ace on Capitol Hill. It's
something of a throwback to when
Hastert served in the Illinois House and
Ryan was lieutenant governor. "I became the person
in appropriations that laid
out the budget," Hastert
recalls. "And it was one of
my jobs to make sure that
we would look at every
federal program and make
sure that we could maximize our state match so
that we could get the maximum federal dollars back."
Having a favorite son in the top House
job can undoubtedly help a state.
Hastert's predecessor, Republican Newt
Gingrich, was known for steering
defense contracts to his home state of
Georgia. Speaker Jim Wright, a Texas
Democrat, once earmarked $25 million
for a private airport in Fort Worth.
Hastert has promised to be helpful
where he can. But, he quickly adds, there
are limits. "When I was elected speaker,
my role changed. I have to represent
everybody in this Congress. I can't be
prejudiced and say everything's going to
go to Illinois," he says. "What's fair and
what's right, we'll make sure that
happens. We'll make sure that Illinois
gets its fair share."
Whether that fair share adds up to
$1.8 billion is another matter.
Toby Eckert is a Washington correspondent
for Copley News Service.
Illinois Issues May 1999 / 23
