Republican Congressman Raul Labrador said Idaho should be cautious when spending federal funds in state budgets and suggested states get more say in how dollars are used.
The congressman’s warning comes the same week as State Budget Solutions, a government spending watchdog, detailed states’ reliance on federal dollars, which the organization believes is too high and restricts innovation.
“States must remember that outside funding means less control,” notes State Budget Solutions’ Joe Luppino-Esposito said in a prepared statement. “Federal dollars generally come with many strings attached.”
Labrador, visiting the Idaho Capitol Tuesday, told IdahoReporter.com, state lawmakers must realize the federal government may not be able to keep its word on funding levels.
“We have a nation that’s $18 trillion in debt,” Labrador said.
It’s a common refrain from Idaho’s all-GOP congressional delegation. U.S. Sens. Mike Crapo and Jim Risch both warned of future fiscal calamity at the federal level, warning that interest on the national debt will eclipse the total military budget within eight years.
“The financial condition of this country is absolutely horrible,” Risch said during his address.
The Congressional Budget Office projects yearly interest could rise to $880 billion in 2014. CNN wrote the explosion in interest costs, pegged at $233 billion in 2013, “consume tax revenue that could otherwise be spent on the country's priorities.”
That would have a trickle-down effect on nearly every local and state government across the land. According to SBS, Idaho is a top offender on using federal dollars to fund programs and initiatives.
In fiscal year 2013, the group explained, Idaho spent more than $7.4 billion in all, $2.5 billion of which came from Washington, D.C. Idaho relies heavily on the feds for health spending, including matching dollars for Medicaid. Idaho pays only about 30 percent of the bill for that program, with the federal government picking up the rest.
In all, SBS said federal dollars made up just more than 34 percent of Idaho’s total spending in 2013. Mississippi checked in at the top, relying on the federal government for nearly 43 percent of outlays.
North Dakota, fueled by the oil boom, came in last on reliance, using federal money for only 19 percent of spending.
One bright spot in the SBS document: Idaho is leading the pack on accountability of federal funds in state budget-setting. The group highlighted efforts the state has made to prepare for cuts in federal dollars.
Gov. Butch Otter issued a little-noticed executive order last year requiring state agencies to prepare plans for 10 percent federal funding reductions, as well as report all federal grants to his office.
SBS warned that policy makers shouldn’t wait until cuts come to prepare for the coming fiscal consequences for federal overspending. “Now is the time for states to prepare for likely cuts in federal aid,” said SBS President Bob Williams.
Labrador, serving his second term in Idaho’s 1st Congressional District, suggested the Gem State find ways to do without federal dollars.
“We need to be less reliant, not more,” he said.
The congressman also suggested the federal government examine more block grants for states, which would give states flexibility to meet policy objectives with few federal guidelines or restrictions.
Note: The Idaho Freedom Foundation, publisher of IdahoReporter.com, was instrumental in pushing Otter to write his executive order last year.