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<br />I <br /> <br />I <br /> <br />I think with respect to the possibility of future federal funds, we have <br />to take a very careful look at how we are going to approach the Congress <br />in the future. Larry and I and IvaI Goslin, we went through a very <br />frustrating time in the last two months trying to get Congress to over- <br />ride the President's veto. It is an extremely difficult task to over- <br />ride a President on anything, particularly when both houses are con- <br />stituted by majorities of his own party. It is becoming apparent that <br />there is a regional fight that is going on, particularly between the <br />frost-belt states of the northeast and the sun-belt states of the south- <br />west and the west. Then when you combine that with the President's <br />water policy, which seems to create some very significant burdens, <br />particularly for irrigation projects in the west, and his emphasis on <br />the cost effectiveness and interesting disregard of the whole river <br />basin concept that we have relied upon in the past, we have some very, <br />very difficult battles to fight in the future. I think we are going to <br />have to reassess our strategies and reassess the alliances we have <br />fOrmed in the past. I think it is incumbent upon all of us to do that <br />reassessment as soon as possible. If we wait until the last round of <br />Congress and as the budget is going to be prepared, it is going to be <br />too late. <br /> <br />IvaI and I were talking earlier today about the need to go back east <br />and to try to meet with water leaders of many of these northeastern <br />states to explain the value of these projects to the west. When you <br />read the newspapers back east, it is unbelievable the distortions and <br />misconceptions about what we are trying to do out here with our water. <br /> <br />I think we would be myopic if we just assume that we can go back to <br />Congress next year and fight the same battle we fought this year. We <br />have to develop some new ingredients and new strategies if we want to <br />proceed with many of these important projects. <br /> <br />I simply wanted to add that statement to what Larry has already said, <br />because time is of the essence and the development of sophisticated <br />strategies to deal with these new elements that we previously have not <br />had to deal with is critical to our success. <br /> <br />On the question, of funding of the state projects and perhaps the <br />necessity of contributing 10 percent to the development of federal <br />projects in this state, I think everybody ought to be aware of a few <br />factors. Larry has talked about the Kadlecek Amendment, which we live <br />by now, which is a 7 percent limitation on general fund increases. <br />What that means is that like last year we had a one-billion-dollar <br />general fund budget, and a 7 percent increase is approximately 70 <br />million dollars. Inflation and employee benefits will eat up most if <br />not all of that 70 million dollars, leaving almost no money for new <br />programs in the state. <br /> <br />Last year, with all kinds of interesting end runs of the Kadlecek <br />Amendment undertaken by the legislature, we still had about 16 million <br />dollars available for new programs in the state, and that is for <br />virtually all programs, not just natural resources and water programs. <br /> <br />The Governor's budget director anticipates that we are going to have <br /> <br />-7- <br />