President Reagan warned a delegation of the nation's governors yesterday that they can expect continued reductions of federal aid to cities and states as long as they are in better fiscal shape than the federal government.
"There's simply no justification . . . for the federal government, which is running a deficit, to be borrowing money to be spent by state and local governments, some of which are now running surpluses," Reagan told 44 members of the bipartisan National Governors' Association.
"I know the states still have their problems," said the president, a former governor of California.
"But," he added, "it's also true that many of your states are in better fiscal shape today because of the courage that you showed and the hard decisions you made during the recent recession. I hope that you can understand that these tough calls have to be made now at the federal level."
During the meeting at the White House, Reagan also stood firm against suggestions from the governors that he freeze Social Security inflation adjustments and defense spending and that he consider tax increases to further lower the deficit.
The executive committee of the governors' group has endorsed such an approach.
The full association is scheduled to vote on that recommendation today.
But yesterday's meeting, according to Kansas Gov. John Carlin (D), chairman of the association, was discouraging for many governors who had offered what they considered positive, bipartisan and comprehensive proposals to curb the federal deficit instead of only crying for more federal dollars.
"It's temporarily very disappointing, but I don't give up," Carlin said after the meeting. "Collectively, between his answers to questions and what budget director David A. Stockman said, it was absolutely clear that revenue was not an item to be discussed, that Social Security adjustments was not an item to be discussed and on the defense budget, they stood with their initial recommendations."
New York Gov. Mario M. Cuomo (D) said some governors left the meeting worried that their votes for a deficit-reduction recommendation that included a tax hike could boomerang.
"It seems to me he's just saying, 'Don't bother. We're just setting you up.' And we remember what they did to Jim Hunt," Cuomo said.
James B. Hunt Jr. tried last year, while governor of North Carolina, to unseat Sen. Jesse Helms (R-N.C.) in a well-financed and bitter campaign. During the contest, Helms, as part of his effort to paint Hunt as a tax-raiser, broadcast a television ad showing Democrat Hunt voting for a 1984 governors' association budget advisory package that included a tax-increase recommendation.
"The ghost of Jim Hunt hangs over this," said Colorado Gov. Richard D. Lamm (D). "People are realizing that these are not just abstract resolutions. They can bite politically."
Republican governors were more optimistic about the White House session. "I thought it was a good meeting . . . . I thought it was helpful," said Tennessee Gov. Lamar Alexander (R), vice chairman of the association.
Pennsylvania Gov. Richard L. Thornburgh (R), chairman of the Republican Governors' Association, said he thought that the president left the door open to all three options recommended by the governors if they were presented in different ways.
"Everything really is on the table," Thornburgh said. "But when you come to the table, you don't lay all your cards down face up."
Reagan's admonition echoed one he had made at a nationally televised news conference last week, where he justified his plans to eliminate funding for the general revenue-sharing program in 1987.
State governments receive no funds from that program, but many localities turn to states to offset revenue-sharing cuts, and overall, the 1986 budget that Reagan has proposed would reduce aid to state and local governments by $10 billion.
The states finished the 1984 fiscal year with $6.3 billion in unspent funds.
The amount for 1985 is projected to be $5.3 billion -- half of it in the coffers of five states: California, Minnesota, New Jersey, Texas and Wisconsin.
The federal budget deficit is estimated to be more than $200 billion a year for the rest of the decade if no action is taken.
Alexander said he told Reagan yesterday, "Mr. President, may I respectfully suggest that the surpluses . . . don't have anything to do with the deficit and it would be better if the members of the administration didn't use those terms?"
Asked how Reagan responded, Alexander said, "He smiled and nodded as if he understood."
Staff writers Dan Balz and David S. Broder contributed to this report.