Plenary Session Transcripts

Governors Attending:

Guests:

Discussion Subjects:

State responsibilities; veterans’ housing; water resource and public land use; tax and fiscal policy; education; labor legislation; national preparedness; organization and administration of state government; government agricultural subsidies; and the tourist industry

Points of Interest:

General George C. Marshall appeared before the Conference for a fourth time.

Governors discussed the extent to which the federal government had taken over powers only because the states had failed to act themselves. They also held a lively discussion of the need for coordination of federal and state taxation, and about which taxes were better suited to which level of government. A number of Governors felt that income tax should be solely within the federal government's realm, so long as states were given clear-cut jurisdiction over certain other taxes. But Governors whose states had income taxes objected, arguing that the kinds of taxes states would get in return (e.g., liquor and gasoline) amounted to luxury taxes that would rise and fall according to economic conditions. Concern was also expressed about the fact that the federal government diverted some of the specialized taxes that it collected (e.g., gasoline and unemployment), failing to funnel them back to the states from which they had come, while threatening to cut off aid if the states engaged in any diversion of federal grant money.

Governors also discussed whether federal grants-in-aid for education were inevitable and what effect they would have on state control of education administration. And they talked about the advisability of continuing government subsidies for agriculture.

Memorable Quotes:

Governor Thomas Herbert of Ohio, said, "In recent years...we have seen many of the public services...gradually transferred from local government to state government, and from state government to federal government...in some instances in the past the states were either slow or reluctant to assume duties, responsibilities and even opportunities that were thrown upon government because of changing times and changing conditions...in many instances the federal government reached for these duties and responsibilities as emergency activities--and once these additional powers were taken over...it has proven exceedingly difficult to have them returned to the states."

Gov. Beauford Jester of Texas, spoke to concern on the part of the federal government that states had not done enough to ensure highway safety. The Governor said: "If the federal government is forced to take control of highway traffic because of the paralysis or inertia of state and local government, then democracy will have suffered its greatest reverse in the history of our land...If there are traffic regulatory problems which go beyond the boundaries of any state, they can be solved by interstate cooperation."

Governor James McConaughy of Connecticut said: "I believe very firmly that federal aid to education is coming...Selfishly, from the standpoint of Connecticut, we would be a good deal better off if federal income taxes could be materially cut, and the load for local education borne entirely by ourselves. I don't think that is going to happen...We have already embarked upon a federal matching program for the building of airports and for hospitals, and I cannot conceive of many more Congresses passing without a very significant federal appropriation to the states for school purposes....If...aid to state educational programs is [on the basis of need], we are going to have one program in which the states with the largest fiscal resources are going to pay--perhaps they should--for the improvement of education in other states...I would like to suggest that it seems to me that there have been a good many developments in the last very recent years that show that federal aid to education on the state basis might, perhaps, be upon the basis of students per capita...It is easy to say that we do not want to have the federal government telling us what we may teach in our own states. I don't think that is going to happen...I do not share the fear that if federal aid to state education comes...it will be tied in with federal dictation and control of our schools."

During a discussion about government subsidies and price controls for agriculture, Governor Roy Turner of Oklahoma said: "...No domestic consumption can now be contemplated that would absorb such production. Foreign countries cannot afford to import in volume, at prices represented by our government supported levels for agricultural products...the mechanization of American farms is leading to larger acreages--and a reduction in the number of our small farmers. Unless this trend is reversed by introduction of equipment that will enable our small farmers to compete with those tilling larger acreages, we must face the problem of absorbing a large portion of our farm population into urban industries--and into additional services."

In a presentation on the rise of tourism, Governor George T. Mickelson of South Dakota said: "The oil companies for a number of years have issued credit cards for the convenience of the automobile traveler, making it possible for him to receive practically every service for his car without paying out a cent until his return home."

Selected Resolutions Adopted:
(1) Reaffirming of the Conference's conviction that there was great need for the gradual elimination of tax competition between federal and state governments. A Special Committee on Tax and Fiscal Policy of the Governors' Conference was continued and authorized and directed to further develop proposals for tax coordination between federal and state governments. The Committee was also authorized to study federal grants-in-aid and the degree to which they restricted/curtailed local autonomy vis-à-vis tax and fiscal policy; (2) urging that federal-aid legislation require federal agencies to confer with and secure approval from the Executive Committee of the Governors' Conference in the preparation of rules and regulations governing administration of federal grants to the states; (3) urging Congress to act on measures to provide for state participation in the federal-aid airport program; (4) resolving that the Governors unite in proposing and supporting enactment of legislation to acknowledge and affirm ownership of submerged lands and resources to respective states; (5) resolving that the federal government should relinquish control of state unemployment compensation and employment service programs (which had been delayed from its expected occurrence the previous year); (6) endorsing statehood for Alaska and Hawaii; (7) urging Congress to appropriate adequate funds for full-scale development of reclamation, irrigation, and power projects; (8) urging state adoption of a Uniform Traffic Code as well as legislation requiring driver education in high schools; (9) requesting that the Council of State Governments (CSG) conduct a survey and investigation of states and recommend to Governors a program to strengthen and improve organization and administration of state government; and (10) urging that states be on guard against proposals having a tendency to create interstate trade barriers and requesting CSG to devote attention to promoting programs to eliminate and prevent such barriers. A resolution was rejected that would have objected to federal matching requirements for grants-in-aid, on the ground that such requirements disfavored poor states.