States fare well in federal budget.

• Position: On First Reading

The $20 billion state fiscal assistance package that Congress and President George Bush approved in late May is unquestionably a boon to legislatures.

Included in the $350 billion federal tax legislation, the money is intended to help alleviate the severe economic stress that states have experienced over the past three years.

Forced to close $200 billion worth of budget gaps since FY 2001, state legislators welcomed the assistance package. "Because of their balanced budget requirements, most legislatures have had to make budget decisions that slow national economic recovery," says Oklahoma Senator Angela Monson, president of the National Conference of State Legislatures. "For many states, this money will head off further difficult choices between budget cuts and tax increases.

The assistance package divides the $20 billion into two pots of money. One, called the "flexible grant," can be used for providing essential governmental services and covering the costs of federal intergovernmental mandates. The other half is a temporary increase in the federal matching rate for Medicaid.

Utah Speaker Martin Stephens especially likes the package's focus on unfunded mandates. "The resurgence of unfunded federal mandates has exacerbated state fiscal problems. States...