Governors Attending:

Guests:

Discussion Subjects:

No Committee Information Available.

• Plenary Session Discussion Subjects - Education; the impact of the federal budget on states; and tax reform

Points of Interest:

The French Ambassador to the United States presented each Governor with a crystal replica of the Statue of Liberty, crafted from the original model by sculptor Frederic-Auguste Bartholdi. The replicas were produced by Saint-Gobain, a glass manufacturer that had been in business since the reign of Louis XIV, during which they produced the glass in Versailles’s Hall of Mirrors. The Ambassador pointed out that Saint-Gobain worked in collaboration with the American company “Certainteed.”

In his address commemorating the bicentennial of the Constitution, Supreme Court Chief Justice Warren Burger reminded Governors that given their sovereign status, any of what became the original 13 states could have negotiated peace with the enemy. It was a testament to the strength of the founding fathers’ convictions that they worked together instead to found a nation.

During a discussion of education issues, Ted Sizer of Brown University argued for complete redesign of the educational system. He said that the traditional structuring of high school classes by chronological age ignored important developmental differences among students. Classes were also too large, in Sizer’s opinion, and it was wrongly assumed that the best form of learning was via instructional service delivery, with no give and take between teachers and students.

Representing the Committee for Economic Development, Bradford Butler told Governors that 60 percent of all 16- to 24-year-olds in the United States were school dropouts, of whom nearly two-thirds (2.94 million) were illiterate. Of 17-year-olds still in school, 13 percent were illiterate. Ultimately, Butler said, illiterates would make up 40 percent of adults earning less than $5,000 annually, 70 percent of the prison population, and 35 percent of welfare parents. He argued that investing in early childhood education to improve literacy and graduation rates was well worth the savings it would bring to our nation in social and correctional services.

Education Secretary William J. Bennett expressed concern about rising drug use in schools. At the same time, he was heartened by the fact that during the previous three years, test scores had improved among high school seniors in 35 states, the dropout rate had declined in 39 states, and there had been a 22-percent increase in teachers’ salaries. In response to a question about whether a choice/voucher system would cannibalize the public school system, Bennett said that the purpose of school was to benefit children, and if parents believed they could secure a better education for their children by moving them to a different school, they should have every opportunity to do so.

House Ways and Means Committee Chairman Dan Rostenkowski pointed out the ways in which the House tax reform bill incorporated positions taken by NGA. Revenue neutrality, rate cuts, base broadening, greater fairness, and better balance between personal and corporate taxes had all been included. Perhaps most importantly, state and local tax deduction was fully protected, and limitations on tax-free bonds had been applied carefully, permitting liberal growth of government obligations. Moreover, more than 6 million poor and near poor Americans would be removed from the tax rolls, translating into $2.7 billion more that people would have in their pockets.

Rostenkowski said that he opposed trying to achieve tax reform and deficit reduction in one piece of legislation. The greatest obstacle with respect to the budget was that the Reagan Administration proposed defense increases to which Democrats in Congress objected, while the Administration opposed tax increases that Democrats in Congress supported.

Senate Majority Leader Bob Dole’s presentation focused on the 1985 Balanced Budget and Emergency Deficit Control Act—also known as Gramm-Rudman-Hollings—that established a deficit cap. If the deficit exceeded the cap, the President was required to issue a sequester order reducing all non-exempt spending by a uniform percentage.
Governors talked about the ways in which the budget deficit affected states in the areas of the environment, economic development, and transportation. Among the concerns raised was that if federal funding for the environment tightened, a form of deregulation would occur under which states would begin to go in different directions, with industry seeking to settle in states having the weakest environmental laws.

During the consideration of policy positions, it was revealed that NGA’s Transportation Committee had been split on whether to turn back the 9-cent tax currently collected by the federal government for the highway trust fund. Speaking in support of the turnback, Governor Robert Orr of Indiana said that the interstate highway program was winding down, federal regulations and penalties had become too tedious, and payment to the states from the fund frequently had been delayed. But Governor William O’Neill of Connecticut argued that it would be too difficult to get state legislatures to appropriate the amounts now secured from the federal government. There was room for federal involvement in highways and mass transit, which would be left without an anchor, according to Governor James Thompson of Illinois, should the 9 cents be turned back. At the close of discussion, the turnback proposal failed to achieve the number of votes necessary for adoption.

Memorable Quotes:

In his presentation to the Governors on the bicentennial of the U.S. Constitution, Warren Burger, Chief Justice of the U.S. Supreme Court, said: "At one time…each [of the original 13] state[s] put up tariff barriers against the other; each state as we remember issued currency; each state, except they surrendered some rights under the Articles of Confederation, theoretically could have negotiated for peace with an enemy…It's a marvel that they managed to reach an agreement…And then it had to go the rounds of the states, and nine states had to approve it…How did it work that we managed to put this system together under the divided powers of the Federal system is a marvel of all the ages. The philosophers had dreamed about that kind of a government, of checks and balances, but none of them ever really believed it would work."

In response to House Ways and Means Committee Chairman Dan Rostenkowski's comments on budget deficits, Governor John Sununu of New Hampshire said: "I think what has happened in the past 20 years in terms of Congress seeking to take the route by default of increasing budgets has perhaps been checked a bit by Gramm-Rudman [legislation enacted in 1985 to impose a deficit limit], which I consider an effort by Congress…to legislate a backbone…You may doubt that the President [Reagan] has a sense of the heartland of America because you may not feel he has set foot on a hot city street. I suggest to you, Congress, that America is made up [of] much more…than your district, which may be consisting of hot city streets. The State of New Hampshire and other states across the country have a variety of needs that must be addressed more than just by adding to the price tag…And I urge you to go back and take from these Governors—and I hope it's a bipartisan mandate—a plea for flexibility, a plea for constructive legislation, a plea for legislation that doesn't constrain us and require us to spend money the way you folks who have the beltway mentality think it ought to be spent, but in a way where we might deal with the needs that truly exist back in our states. I have said this before in a less forceful tone; I am now going to say it as clearly as I can: I am tired of Congressmen and Senators coming to us as Governors and telling us we don't understand the political pressures you face from the constituency groups that are here in Washington. We live with them day in and day out. We face them in the headlines and must present ourselves to them day in and day out back in the real world. I suggest to you…that the real world extends beyond the Potomac, that the reality of what the American public wants is not an expansionist government, a government that seeks to intrude in their lives, but a government that truly passes legislation that deals with their needs."

Select Policy Positions Adopted:
(1) Giving states additional options to extend Medicaid coverage to poor pregnant women, infants, and children with incomes above the eligibility standard for Aid to Families with Dependent Children (AFDC); (2) seeking forebearance for farmers and agricultural banks with respect to farm finance policy, and urging Congress to create an organization funded by the Federal Deposit Insurance Corporation to buy problem loans at market value and permit agricultural loans to be charged off for a ten-year period; (3) encouraging foreign tourism of the United States; (4) recommending that parking permits issued to handicapped citizens by individuals states be recognized by every state; (5) calling for development of a national program to replace the varied state programs designed to control groundwater contamination, such program developing a federal-state partnership that would require states to act but leave them sufficient flexibility to design and operate control strategies; (6) recommending that geothermal energy be given high priority in research, development, and commercialization efforts, as well as recommending that the nation pursue greater energy self-sufficiency through a balanced national energy policy including conservation and development of renewable and non-renewable resources.