Schwarzenegger goes to Washington to collect $6.9 billion

California Gov. Arnold Schwarzenegger started calling himself the “Collectinator” shortly after his election in 2003. He had campaigned on becoming the “guy who would get the Feds to give California more money.”

Six years later, Mr. Schwarzenegger is in Washington hoping to collect $6.9 billion in federal funds to help plug part of the state’s $19.9 billion budget deficit. On Wednesday, the governor met with the California congressional delegation and Health and Human Services Secretary Kathleen Sebelius.

Schwarzenegger’s case for more federal help rests on arguments that California gets unfair treatment from Washington. But political analysts say that argument hasn’t worked yet, and are skeptical about the governor's chances.

"The likelihood that California receives $7 billion in additional federal funds is low," says Jessica Levinson, political reform director with the Center for Governmental Studies. "While the governor forcefully contends that Californians send more money to Washington than they get back, and that Californians are owed billions, this argument has not been a successful one [before].”

California currently gets 78 cents back in federal services for every dollar it sends to Washington, according to Schwarzenegger.

But this math has been disputed even by other Californians. Sen. Barbara Boxer (D) of California has noted that with the $85 billion allocated in federal stimulus funds last year, the state may be getting closer to $1.45 back from Washington.

US Rep. Zoe Lofgren (D) of California told KQED Public Radio Wednesday, “The whole premise that somehow California is being disproportionately treated is just false.”

Mr. Schwarzenegger is asking for $5 billion for healthcare for the poor and welfare assistance, $1 billion for special education programs, $95 million for foster care, and reimbursement for the $880 million cost of housing prison inmates that are undocumented immigrants.

“For us to get stuck with the bill of incarceration of undocumented immigrants of $900 million is unfair,” he said in a statement before leaving for Washington. “We are going to fly to Washington and fight for that money.”

Unfair treatment?

He tried to foreshadow his intentions last week in a letter to the California congressional delegation.

“After cutting programs, temporarily raising taxes and instituting reforms in nearly every program in state government to reduce current spending and contain future costs, we must seek permanent relief from unfunded federal mandates and reimbursement formulas that shortchange California taxpayers,” he wrote.

The single biggest inequity in federal funding, Schwarzenegger says, is the way the federal government calculates the reimbursement rate for the Medicaid program. “Congress pays California a lower rate for its share of the federal Medicaid program than it pays most other state,” he says in his letter, adding, "If Congress simply treated states equally, more than $1.8 billion in California tax dollars could be spent here at home to balance our budget instead of being sent to Florida, New Mexico and Texas to balance theirs.”

In addition, the governor says California is owed $700 million in unpaid reimbursement for Medicare disability determination payments. The reimbursements are owed due to a Social Security Administration error that resulted in the state paying for individuals who should have been covered by Medicare, he says.

Budget in the balance

But these arguments aren’t likely to work, say analysts – and that could put his proposed budget in deep trouble. The governor has said he will be forced to cut some essential services if he doesn't get the money he needs.

“It is hard to underscore the depth of breadth of funding cuts necessary for California to balance its budget without federal funds,” says Ms. Levinson. “The ability of many Californians to obtain food, shelter and medical care certainly hangs in the balance.”

Schwarzenegger’s arguments about inequitable treatment haven’t worked before, says Jean Ross, executive director of the California Budget Project, a Sacramento-based, nonpartisan policy research group. “[A]nd there’s no indication that Congress will look more kindly on this approach in 2010.”

“To win the support of Congress, our governor should be going to Washington arm in arm with the 45 other governors who are also facing shortfalls this year,” she says.

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