State Lawmakers Feel New, Closer Bond to White House but Same Old Anxiety : Government: With an ex-governor in the Oval Office, legislators expect a little empathy. But costly and constricting federal rules are still a fear.

SAN DIEGO —  For the thousands of state legislators who gathered here this week, the Clinton Administration is like a brightly wrapped box with a faint ticking sound: They like the way it looks, but they’re still uncertain about what’s inside.

After years of complaining that Republicans in the White House had slighted domestic problems and dumped responsibilities onto the states without the money to pay for them, state legislators now perceive a sympathetic ear from the former governor sitting in the Oval Office.

“They have opened the door to us,” said Arizona state Rep. Art Hamilton, the outgoing president of the National Conference of State Legislatures, which concluded its annual meeting here Thursday. “We have had better access to this Administration than we have had in a very long time.”

But many here said they are withholding judgment until they see more details about President Clinton’s domestic agenda. And, though the state legislators broadly applauded Clinton for grappling with large domestic problems that Washington had mostly ducked in recent years, several also raised red flags about how states would be affected in grappling with the big three issues of social policy: health, education and welfare.

“I think they are cautiously optimistic that many of these issues will be dealt with,” said Missouri state Rep. Karen McCarthy, an NCSL vice president. “It’s cautious optimism because there is this experience with Washington that in the end what we get is another unfunded mandate.”

State officials worry above all about Washington policy-makers mandating that they provide a service--such as improving health care for the poor--without providing the funds to pay for it. Ranking a close second on their complaint list is federal rules that limit their flexibility to design social programs at the local level.

The arguments about the division of authority between the state and national government trace back to Thomas Jefferson and Alexander Hamilton. But during the 1980s, state leaders gave both the Republican White House and congressional Democrats particularly low marks for usurping power and sloughing off costs.

Clinton’s signing of the so-called “motor-voter” legislation, which requires the states to ease access to voter registration but offers no money to pay for it, annoyed many state legislative leaders. But generally, they say Clinton is speaking their language. “You cannot have been involved in state government as long as Bill Clinton was without having a sense of what this means,” said William T. Pound, the NCSL’s executive director.

Indeed, Clinton voiced all of the right sentiments in a satellite appearance before the legislators’ group on Tuesday. He promised a “historic partnership” with the states and pledged that Vice President Al Gore’s task force on reinventing government would produce recommendations to both reduce unfunded federal mandates on the states and allow states more flexibility in the use of federal dollars.

Those promises earned Clinton a standing ovation. But as they wandered between seminars, working groups and receptions this week, legislators also expressed some pointed concerns about Washington’s direction on several issues:

* HEALTH CARE: Legislative leaders are nervous that the Administration’s final reform package won’t solve their problems with Medicaid, the joint state-federal program of health care for the poor whose skyrocketing costs are straining state budgets.

The states want the Administration to fold Medicaid into its new system of national health care. Speaking before the group earlier this week, Health and Human Services Secretary Donna Shalala said the Administration won’t leave the states “holding the bag on Medicaid.” But she said that no decisions have yet been made on whether to maintain it as a separate program.

Many here, though, worry that all indications are the Administration intends to maintain Medicaid as an independent program and offer the states little financial relief, at least initially. “From the states, our bottom line is very much associated with what happens to the Medicaid program,” said James R. Tallon Jr., the majority leader of the New York State Assembly.

* EDUCATION: The legislators’ beef is more with Congress than the Administration. As part of the Administration-sponsored bill to set national academic standards for students, Democrats in the U.S. House have stiffened requirements that schools also meet so-called “opportunity-to-learn standards.” Those standards would measure the services that elementary and secondary schools provide students, from the quality of school facilities and textbooks to policies that promote “gender equity.”

Over the Administration’s objections--and in contrast to the Senate version--House Democrats voted in committee that states could not receive federal grants to help meet the national academic standards unless they establish specific policies for improving schools that don’t meet the new opportunity-to-learn standards. Local officials fear this requirement could become a backdoor federal mandate to equalize all education spending, or could spur lawsuits from parents whose children attend schools that don’t meet the federal standards.

* WELFARE: Some legislators are nervous both about the cost of the Administration’s overall reform plan and Shalala’s policies toward state reform efforts.

During the presidential campaign, Clinton said repeatedly that he would allow states great flexibility to experiment with welfare reforms, even if he personally disagreed with their policies. But since January, about half a dozen waiver requests from states looking to perform welfare experiments have piled up at HHS, many of them involving sanctioning recipients who don’t work or stay in school, or who have additional children after they are on the rolls.

Over this period, according to an NCSL compilation, HHS has approved only a single welfare waiver, allowing Vermont to experiment with a welfare time limit, like the one Clinton proposed during the campaign.

“We were getting waivers more easily under Bush before he left office,” said Ohio state Sen. Grace L. Drake, co-chairwoman of an NCSL task force on welfare reform.

HHS officials say the slowdown is partially explained by efforts to develop an overall policy on state waivers for welfare and Medicaid programs; one official said that policy is expected to be released in a couple weeks, when Clinton attends the National Governors’ Assn. meeting in Oklahoma.

But there are also some signs that HHS may be more reluctant than Bush to allow states to proliferate these new regulations on the personal behavior of welfare recipients. “If we fail to limit waivers in some ways,” one ranking HHS official said in an interview, “we will have a de facto patchwork welfare reform, which obviously we don’t want to do.”