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Cost of Iraq war filtering down to states and cities
Summit Daily
April 8, 2007

DENVER — The cost of the Iraq war is filtering down to state and local budgets, forcing cuts in transportation funding, Medicaid, education and other federally subsidized programs, according to analysts and lawmakers.

Just how big that impact has been is unclear. What state lawmakers do say is that the $456 billion already spent or appropriated for the war could have gone a long way toward helping them balance their own budgets.

In Colorado, lawmakers expect to lose about $200 million in federal funding for the next fiscal year, forcing the state to cut back on programs that receive federal money.

"These are funds that we aren't going to receive. Low Energy Assistance Program, $9.8 million, gone. Head Start, $3.7 million, gone. Child Care and Development Block Grant, $1.1 million. Community Development Block Grant, $13.5 million. Special Ed, $8.8 million," House Majority Leader Alice Madden, D-Boulder, said during a debate Thursday over a state resolution opposing the escalation of the war in Iraq.

"Also, we're not going to get the Criminal Alien Assistance Program to house criminal aliens, $5 million that was promised and now isn't coming," Madden said. "This is why it's important to take a stand. The more money that's spent over there means our citizens in this state aren't going to get services they need."

Joy Wilson, director of health policy for the National Conference of State Legislatures in Washington, D.C., said the war in Iraq is affecting state and local government spending, but it's impossible to tell how much. She said other factors are influencing the federal budget, including President Bush's pledge to balance the budget by 2012, rising health care and fuel costs, and tax cuts that Bush has refused to rescind.

"That said, Iraq is certainly a part of the mix," Wilson said, noting other states are also being forced to cut back because domestic spending has been almost flat for the past two years.

According to the Colorado Municipal League, Bush's proposed 2008 budget includes only a 1 percent increase in nonmilitary and homeland security programs.

The league said the budget proposal cuts Community Development Block Grants nationwide by $735 million, education by $1.5 billion, the Individuals with Disabilities Education act by $291 million, and $107 million from Head Start. Social Services block grants would be cut nearly in half to $1.2 billion, and Low Income Heating and Energy Assistance would see a $400 million cut.

The league said funding for the Department of Homeland Security would be slashed, including a 63 percent cut for training and exercises, while federal assistance to state and local law enforcement would be cut by more than half. The Clean Water State Revolving Fund would be cut $312 million over the previous year.

Sen. Moe Keller, D-Wheat Ridge, said 24 hospitals in Colorado risk losing federal funding after Bush issued an executive order changing the definition of public hospitals to reduce Medicaid spending, cutting $128 million in federal aid that could force a major hospital in Denver to close. The Colorado Legislature is debating a resolution asking Bush to restore that funding.

Keller said the state also is losing about $48 million in federal funds for transportation, money the state was promised.

She said the cost of the war is trickling down to local governments, with cuts to federal funding for homeland security.

"We're bearing the brunt of the federal cuts. There's no other reason than the war," Keller said.

House Minority Leader Mike May, R-Parker, disagreed.

"She can't draw a direct connection to that. Federal funds go up and down every year," May said.

May said transportation funding is based on a formula, and funds for homeland security were cut because huge startup grants were no longer needed.

He said every department in state government had an increase in federal funding and that it was the increases that were cut back.

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