Before the Sept. 11 terrorist attacks, state and local governments never saw themselves as defenders of the homeland. Protecting the country from foreign attack was a federal responsibility.
But by the end of this year, states, cities and counties — many of them facing recession-driven budget shortfalls — will have spent about $10.6 billion combined since Sept. 11 to protect public facilities and prepare for potential attacks, according to their own estimates.
“I wouldn’t be surprised to see that number go up,” said Scott Pattison, executive director of the National Association of State Budget Officers. “On September 10 last year, we were talking about the difficult fiscal situation states faced. Post-September 11, we’re talking about significant expenditures that at a state level you just never anticipated you would have to worry about.”
In many states, the National Guard or police have stood guard at nuclear power plants, ports, bridges, water supplies and at borders with Canada in a security buildup that will cost up to $7 billion by the end of 2002. California estimated its extra security costs at $50 million through last April, including $17.5 million for new security systems for bridges.
In cities alone, the cost of police overtime soared with each federal terrorist alert. Overtime accounts for much of the $2.6 billion the cities expect to spend on additional security by the end of 2002 to avoid jeopardizing regular police protection.
“Prior to 9-11, we weren’t guarding our bridges and tunnels, nuclear power plants and any sort of national target you can think of,” said Ann Beauchesne, homeland security director for the National Governors Association. “Now, (states) are doing their assessments of their critical infrastructure and figuring out how to protect it. Are you going to put a cop on something 24 hours a day, seven days a week? Or do you put your National Guard out there? ...That’s a high cost.”
Counties, the primary providers of public health services, anticipate spending nearly $1 billion, much of it to prepare for bioterrorist attacks. Less than 10 percent of 300 counties in 36 states surveyed by the National Association of Counties last January said they were “fully prepared” for a bioterrorism crisis. No counties with a population larger than 250,000 said they were ready.
New Jersey is budgeting $25 million in state funds for a $52 million plan to get its public health system ready to deal with bioterrorism threats such as anthrax. The rest will come from federal sources. Other states are looking to make similar investments, knowing that the upgrades paid for in part with federal aid will bolster public health systems overall.
The attacks on the World Trade Center alone cost New York City and state a combined $3.2 billion in lost tax revenue, according to the federal General Accounting Office.
State and local spending for security — much of it coming at the behest of the federal government — has exacerbated growing budget gaps of recession-battered states and municipalities, which have been hit hard by the worst decline in tax revenue in a decade and by exploding Medicaid costs.
To close a combined $45 billion budget gap in the fiscal year that ended June 30 for most states, state governments cut spending, mostly in transportation and higher education, dipped into cash reserves or laid off employees. Sixteen states raised taxes by more than 1 percent, breaking a nationwide trend of tax cuts that began in 1994, according to the National Council of State Legislatures.
The council says the combined budget deficit will widen to $58 billion in 2003.
Many states are targeting higher education and transportation programs for spending cuts while protecting elementary and secondary education.
“You have the worst fiscal situation in at least a decade,” said Frank Shafroth, director of the Office of State-Federal Relations at the National Governors Association. “To offset the increases in homeland security, something has to give. You either have to come up with more tax revenues or you cut higher education and you cut transportation and other programs.”
Last month, Congress took a first step in providing some relief on Medicaid and social service costs. Under a provision of a Senate-passed bill aimed at reducing the cost of prescription drugs, states would get $6 billion from a temporary increase in the federal share of Medicaid and an additional $3 billion from a temporary social services block grant. The House may consider the measure this fall.
The federal government is also moving to help state and local governments pay for homeland security costs. Nearly $15 billion in the form of grants, including money for security improvements at airports, ports and nuclear power plants, is either on the way or still working its way through the congressional pipeline.
But states and localities have received little of the money because of bureaucratic delays and disagreements between Congress and the Bush administration over overall spending levels.
States have received most of the $1.1 billion for preparing state and county health service networks for bioterrorism attacks. And federal funds for firefighter training and purchases of new emergency, fire and police equipment began trickling down in July.
But half of the $5.1 billion that President Bush says he won’t spend from a $28.9 billion emergency spending bill passed by Congress in July would have gone to states for security improvement, first responder aid and other kinds of aid to states.
The amount withheld includes $50 million for emergency communications systems, $95 million for equipment support, $1.3 million for background investigations and security clearances for state and local responders, and $55 million for their training and mock emergency exercises.
Bush is withholding the $5.1 billion in an effort to stimulate an unsettled economy by holding down the budget deficit. While he supports the homeland security funds, he was required by congressional rules to accept all or none of the projects that Congress listed as optional cuts to hold spending at levels requested by the administration.
“You can bet it was a big shock on August 13 to see all of that money vetoed,” Shafroth said. “We are nearly a year after September 11, and we have repeated calls to governors from the administration (saying) that they need to protect Americans and that the check is in the mail. ... Either the Postal Service is doing a lot of decontamination work or the check hasn’t got to the Postal Service.”
Bush’s national homeland security strategy unveiled in July calls for state and local governments helping to “shoulder the costs.” But states and localities, according to the strategy, would be given plenty of leeway in meeting federal security standards that must still be written for many programs.
“The federal government will focus on specifying outcomes rather than the means by which they will be achieved,” according to an administration report on the strategy.
So far, homeland security mandates to states and localities have focused on bioterrorism preparedness.
States had to submit detailed plans on how they would improve public health systems before qualifying for their full share of the $1.1 billion in federal bioterrorism preparedness aid approved earlier this year.
Under a sweeping $4.6 billion bioterrorism aid bill Bush signed last month, most municipal water utilities would be required to conduct vulnerability assessments, make security upgrades and revise emergency response plans. The law provides $160 million for the studies this year and whatever amounts will be necessary for 2003 through 2005. But the American Water Works Association, an organization of water supply professionals, estimates the work will cost more than $2 billion.
