UPDATE 2-New York state asks Washington to cover all storm costs

* Obama could decide to cover up to 100 pct of the costs

* New Jersey Senators asked for more federal money

NEW YORK/WASHINGTON, Oct 31 (Reuters) - New York state on

Wednesday asked the U.S. federal government to pay all the costs

of cleaning up and repairing damage from massive storm Sandy

that tore through the Northeast this week and crippled New York

City.

Governor Andrew Cuomo said he is asking fellow Democrat,

President Barack Obama, to pay 100 percent of the estimated $6

billion bill, at a time that state and local government budgets

remain constrained by a weak economic recovery.

That would be a significant change from last year when the

federal government covered about 75 percent of the $1.2 billion

cost paid by New York to clean up after storm Irene hit the

region.

The two U.S. senators from neighboring New Jersey, the other

state hit hardest by the storm, also asked that the federal

government cover more than the usual share of the cost, given

the size of the disaster and the financially strapped local

coffers.

"Recent storms in New Jersey have already placed a

significant burden on our state and local governments, which

have been forced to pay for disaster response and will need

federal assistance for recovery from Hurricane Sandy," Senator

Frank Lautenberg and Senator Robert Menendez, both Democrats,

wrote in a letter to Obama.

"While we understand the federal share is typically 75

percent of these total costs, the unprecedented and

extraordinary extent of damage Hurricane Sandy has caused to our

state merits an adjustment to this cost-share to 90 to 100

percent federal coverage," the two senators said.

New Jersey Governor Chris Christie, a Republican, did not

reply to request of comments.

Obama and Christie toured storm-stricken parts of New Jersey

on Wednesday, taking in scenes of flooded roads from the air and

telling residents they were moving quickly to get them help.

'WE CAN'T PRINT MONEY'

New York top finance official, Comptroller Thomas DiNapoli,

said Washington should foot the bill, because of lingering

financial pressures on state and local governments from the

2007-09 recession.

"I think the focus will have to be on Washington, for

obvious reasons," DiNapoli told Reuters in an interview.

"They have greater resources. They can print money; we can't

do that here. And given the fact this is not just a New York

disaster, it's really a national disaster, it's probably for the

federal goverment to step up and play a significant role."

"The problem is the state is limited in its resource

capacity. We just put out the mid-year report a week or two ago

and it really showed tax revenues are down," DiNapoli said.

Most U.S. states must balance their budgets, unlike the

federal government, and it is up to Obama to decide if federal

funds can cover all the costs.

"The president has the discretion to go higher. Seventy-five

percent is a floor not a ceiling," said Matt Mayer, a former

senior official at the Department of Homeland Security.

If Obama accepts covering all the costs, this would be

announced by Federal Emergency management Agency, Mayer said.

Former President George W. Bush allowed 100 percent

reimbursement of costs in some states after Hurricane Katrina

struck in 2005, Mayer, who worked at DHS during Bush's

presidency, told Reuters.

Cuomo said in a letter to Obama that "initial estimates

project up to $6 billion in lost economic revenue in the greater

metropolitan area and the state" due to disruption to business

in the world's financial hub.

Cuomo added that "the significant impact from Hurricane

Sandy plainly warrants providing this assistance."

The state, he said, was still battling multi-building fires,

tunnel closures, and power outages at hospitals and other vital

facilities. Plus there are destroyed homes and people needing

shelter.

"Moreover, the cost to restore the complex electrically

driven subway and rail transportation systems after total

inundation from saltwater flooding will place a tremendous

financial burden on New York state," Cuomo said in the letter.

In New York alone nearly 2 million homes and businesses are

still without power.

Cuomo said federal support is key to making sure state and

local governments can respond effectively to the disaster.

New York state is rated AA by Standard and Poor's and Aa2 by

Moody's and its outstanding debt is the second highest among

states, after California.

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