CONGRESS CAN'T SEEM TO LET GO : STATES STILL WAITING FOR WASHINGTON TO ALLOW THEM TO START RUNNING WELFARE, OTHER PROGRAMS.

Byline: Sam Howe Verhovek The New York Times

When Republicans swept into office on Capitol Hill two years ago, there was much talk about a vast transfer of power and money from Washington to the states. Entire federal programs in such areas as welfare, environmental protection and highway maintenance would be radically transformed into block grants, they said, with state leaders exercising wisdom on how best to spend the money.

In welfare, that process has begun to happen, after Congress passed a sweeping bill last summer that ended the federal government's six-decade-old guarantee of cash assistance to the poor. But even with welfare grants set to flow to the states, federal regulators are still intimately involved in approving scores of details in the states' welfare plans.

And perhaps even more strikingly, as legislators begin gathering here and in state capitols around the nation for their new sessions, a dominant refrain from many people involved in state governments is just how limited the transfer of power to the states has been so far, at least compared with the scale of the promises once held out for the idea.

Many experts do see welfare reform, a topic that is high on the agenda of many state legislatures this year, as the harbinger of the process sometimes called ``devolution'' or the ``new Federalism.'' They say it is the first wave of a movement in which states may eventually have far more freedom to set environmental standards or decide on how to use money for interstate highway projects or mass transit within their borders.

``This is not a sort of one-time, giant hand-off-the-ball to the states kind of occurrence,'' said Brian Weberg, program director for legislative management at the National Conference of State Legislatures, which is based in Denver. ``But we are moving down the field here, and that's different than in the past.''

So far, though, movement has been slow, and many state legislators say they are skeptical that Congress will ever yield significant authority over many spending programs. A survey of many state leaders strongly suggests that the issues that will preoccupy them this year are much the same as the ones that always dominate their agendas: how to put together a budget, whether to raise or lower taxes and how to pay for programs that have long been largely under state or local control, such as schools and prisons.

Speaker Newt Gingrich has already promised that this year's Congress will be ``the implementation Congress,'' with more power for the states a primary goal. One critical example is congressional reauthorization of the $25 billion in annual spending from federally collected gasoline taxes. Many state legislators are pressing Washington to overhaul the program, under which Congress now decides what gets spent on such projects as new highways and roadside beautification.

Still, many legislators wonder whether the transfer of power will happen. ``Philosophically, everyone thinks this is the greatest thing since sliced bread,'' said Bud Burke, a Kansas state senator and former president of the national legislative conference. ``But once we get into the implementation stage, that's when things will start to get sticky.''

And as legislative sessions begin around the country, familiar issues are expected to dominate. ``The three biggest issues this year will be taxes, taxes and taxes,'' said Mary Kramer, the president of the Iowa state Senate and a Republican from suburban Des Moines. She predicted a major battle over the two parties' competing plans for how to use a budget surplus to cut taxes.

In California, ``perhaps the single most difficult issue remains the need to provide for public safety without having our prison budget cannibalize higher education,'' said Bill Lockyer, a Hayward, Calif., Democrat who is president pro tem of the state Senate.

In Texas, several legislators said they did not think that Congress had done much to expand the scope of the Legislature's authority, and the commanding issue of the session may well be a local one that has vexed the state for years, ever since the decline of its once seemingly limitless ability to finance state programs with oil-related tax revenues.

Texas remains one of just six states without an income tax, and a constitutional amendment passed a few years ago requires approval by the state's voters before one could be instituted. Many experts say the state's tax structure, largely dependent on a sales tax, will eventually prove unable to provide enough revenue for services.

At the same time, though, Gov. George W. Bush, a Republican, has firmly pledged to push for property-tax relief for both homeowners and business owners, but just how he will do so remains unclear.

The welfare-reform law, under which the states must essentially devise plans to get welfare recipients off the rolls and into work within set periods of time, will be a major issue in some legislatures.

In California, which has the largest welfare program in the nation, with 2.5 million recipients, Gov. Pete Wilson, a Republican, has agreed with lawmakers on some important elements of welfare reform. Yet a struggle is looming over a proposal Wilson made this week to repeal a decades-old law requiring that counties act as a last-resort provider of help to the poor. Many county leaders say that without the repeal, they could suffer the consequences if welfare reform does not work and many poor people are left both jobless and without state benefits.

In many other states, the issue of welfare reform has largely been settled, although state legislators could still wind up haggling over details later. Thirty-eight states have already submitted broad outlines of their state welfare plans for review by the Clinton administration.

Lawmakers indicate that among other issues likely to be important in legislatures this year are deregulation of the electric utility and telecommunication industries and proposals to deter health-insurance companies from curtailing some services. In several states, lawmakers are to consider proposals requiring companies to pay for at least a 24- or 48-hour stay for patients undergoing certain operations.

In many states, lawmakers' work will be complicated by a split in party control. In 31 states, at least one legislative chamber is controlled by a party different from that of the state's governor. That is the highest number in a decade, and about double the average of the 1950s, according to the National Conference of State Legislatures.