FEDERALLY MANDATED STATE PROGRAMS
DURING FISCAL YEAR 2001-2002
A. Senate Concurrent Resolution No. 102, S.D. 1, H.D. 1, adopted by the Legislature in the 2001 Regular Session, requested the Bureau to update its survey of federally mandated state programs for fiscal year 2001-2002.
B. Findings. The Bureau finds that:
1. Twenty-nine per cent of the entire grand total operating budget for fiscal year 2001-2002 is appropriated for federally mandated programs. State funds for these mandated programs comprise 17 per cent of the budget while federal funds for the programs comprise 12 per cent. As divided between the State and the federal governments, the State provides $1.35 for every $1.00 of federal funds.
2. State funds for mandated programs are composed of general funds, special funds, trust funds, interdepartmental transfers, and revolving funds. Federal funds for mandated programs are composed of other federal funds, interdepartmental transfers, and revolving funds.
3. General funds and federal funds constitute the bulk of funds for all mandated programs. The program areas of the state budget that receive the bulk of federal mandate funds are social services, health, lower education, and employment. Likewise, the departments that receive the bulk of federal mandate funds are the Departments of Human Services, Health, Education, and Labor and Industrial Relations.
4. The most heavily funded federal mandates in the state budget are IDEA (special education), Medicaid, Personal Responsibility and Work Opportunity Reconciliation Act (welfare), and Unemployment Compensation. Total funding for these mandates makes up about 75 per cent of the funding for all federal mandates in the state budget.
5. Between fiscal years 1998-1999 and 2001-2002, state funds for mandated programs increased 23 per cent and federal funds for mandated programs increased 33 per cent while the grand total operating budget increased 25 per cent. As a proportion of the grand total operating budget, state funds for mandated programs made up 17 per cent of the budget while federal funds for mandated programs made up 12 per cent of the budget in both fiscal years. Between the State and the federal governments, the State provided $1.46 for every $1.00 of federal funds for mandated programs in fiscal year 1998-1999 whereas in fiscal year 2001-2002 the State provides $1.35 for every $1.00 of federal funds for mandated programs.
1. The Legislature should consider amending the executive budget law to require the Governor to submit federal mandate information as part of the budget proposals to the Legislature. The requirement will enable the Legislature to receive such information from the administration every fiscal biennium.
2. If the Legislature wishes to free up state funds from federal programs that no longer fit in with state priorities, the Legislature should examine those federal programs that were not reported as federally mandated programs. Alternatively, the Legislature could examine those programs that were reported as federally mandated, but whose sanctions or penalties for noncompliance are not intolerable.
II. Frequently Asked Questions
1. What is a federal mandate?
Answer: A federal mandate is a direct order, a partial preemption statute, or a grant-in-aid condition from the federal government that imposes direct costs on states and prohibits the use of cost-effective alternatives.
2. Are the federal mandate studies a regular publication of the Bureau?
Answer: No, the studies are issued pursuant to requests from the Legislature. The Bureau has conducted studies pursuant to four separate resolutions adopted since the Regular Session of 1994.