Governors Attending:

Discussion Subjects:

Federal initiatives in domestic policy; "State of the States"

Points of Interest:

Association Chairman Marvin Mandel of Maryland reported President Richard Nixon’s statement reaffirming that revenue sharing was not a substitute for—nor did it represent dismantling of—federal programs.

In meetings with Administration officials, Governors were told that funding for programs converted to general revenue sharing would be reduced by roughly one-half the following year. However, special revenue sharing (i.e., conversion of categorical aid programs to block grants) was slated to be funded at an amount that would take total federal funding above current levels. Although Governors supported revenue sharing in general, they remained uncommitted to program specifics pending the receipt of more information on what the formula would be for state-by-state distribution of the money, what reporting and accounting requirements would be imposed on states with respect to the money they received, and whether the funding increase being cited by the Administration for the following year allowed for inflation. Concern was also expressed about a plan for federal revenue sharing funds to be withheld on a one-time basis to adjust for changes in the state distribution of funding.

Although no policy positions were adopted during the meeting, Governors also agreed on: providing continued support for the federal Law Enforcement Assistance Administration; the need for the development of a national energy policy in consultation with the Governors; urging the President to release impounded highway funds to ensure continuation of construction programs; and seeking a one-year extension of the federal legislation that funded Title V Regional Commissions.

Memorable Quotes:

Responding to concerns of some other Governors that revenue sharing might ultimately reduce rather than increase money to states, then-Governor Ronald Reagan of California said: "…we are not all lily-white around this table…some states have found the temptation to get easy Federal money was such that [for example] some States have even decided that buying new uniforms for correctional officers was a social service and have managed to get Federal funds to aid them in that. I think that it is a two-way street, and I think…that we have at last—and for the first time—an Administration that is attempting to meet the thing that we have asked for: flexibility on our part, the ability to deal with these programs, to give us the money within broad categories and let us go at it, and hopefully solve it at a lower rate and with less…administrative overhead than we had in the Federal program."

Governor Reagan also said: "…in 1930 governments—federal, state, and local—were taking 15 cents out of the taxpayer’s pocket out of every dollar he earned; by 1950 they were taking 30 cents. Today they are taking 43.84 cents…In a few years, projection of this curve will show that it will be more than half of what the people are earning. This cannot go on. All governments are going to have to reduce government’s appetite and let the people have a little more of their own money in their pockets to spend as they see fit or this system of ours isn’t going to work any longer."

Explaining why some Governors were concerned that revenue sharing would ultimately cause reductions, not increases, in federal money to states, Governor John Gilligan of Ohio said: "…while we have received certain reassurances from Administration spokesmen that there are no cuts—or, at least, cuts that we will find painful or hard to bear—and while some of our Governors have said the same thing, our nervousness increases when the distinguished Governor from California, for instance, not only discerns some substantial cutbacks in Federal spending but applauds those cutbacks."

Governor William Egan of Alaska said: "…in Alaska some five years ago was discovered the largest single pool of crude oil ever discovered on the North American continent. It is estimated that in that one pool there is somewhere between twenty-three billion and twenty-five billion barrels of crude oil in place, together with twenty-three or twenty-six to twenty-nine trillion cubic feet of gas…the trans-Alaska pipeline will be a project that will be a model for people from all of the United States and all over the world to come and view as a model of scientific engineering and safety from the standpoint of at least as little degradation of the land as is humanly possible, by the use of modern technology, that has ever been known to man."