Federal Level

  • Biennial reports: A major report, prepared every two years by the General Accounting Office (GAO) or Congressional Budget Office (CBO) for each new session of Congress, would provide exhaustive information regarding the long-term impact of mandated legislation. At the very least, this report would put the impact of such bills in perspective by drawing a larger picture for federal representatives.

  • Cost estimations: Currently, fiscal impact studies on proposed legislation that imposes costs on state governments are. not required at the federal level. Ignoring the cost of mandates at their inception results in their aggregate impact being unknown or understated, an open invitation for Congress then to blindly pass them. Congress should adopt rules requiring a thorough fiscal assessment of its proposed mandates on the states.

  • Clearly-defined state-federal roles: Alice Rivlin, former Brookings Institution Senior Fellow and now Clinton Administration official, outlines the current relationship between the states and the federal government in her book Reviving the American Dream: The Economy, the States & the Federal Government. Rivlin says that Americans have "lost confidence in their ability to control their own destiny."[11] Her solution is to create a new federalism whereby there are clearly defined roles for the state and federal governments.

Over the last five or six decades the federal government has taken upon itself greater responsibility for solving problems that once fell under state jurisdiction.

In his 1980 book, Free to Choose, Milton Friedman outlines the change that has taken place in the relationship between local, state, and federal governments:

From the founding of the Republic to 1929, spending by governments at all levels, federal, state, and local never exceeded 12 percent of the national income except in time of major war, and two-thirds of that was state and local spending. Federal spending typically amounted to 3 percent or less of the national income. Since 1933 government spending has never been less than 20 percent of national income and is now over 40 percent and two-thirds of that is spending by the federal government.[12]

Has the increased intrusion in state and local matters (with or Without the use of mandates) by the federal government improved the condition of Michigan's citizens? Rivlin suggests that the answer is no and the solution is to restructure the federal-state relationship so that the federal government would remove itself from most programs in "housing, highways, social services, economic development, and job training." The federal government would retain its duties in the international arena and those that require consistency throughout the states.

A recent study by the Advisory Commission on Intergovernmental Relations entitled Changing Public Attitudes on Governments and Taxes suggests that the public would support such changes. Respondents agreed that certain responsibilities are best handled by state and local units of government: low income housing, the sale of insurance, and the use of pesticides were considered state-local issues while other responsibilities, such as health risk labeling for food products and the regulation of banking, should be left up to the federal government. A full 49 percent of the public listed the federal government as giving citizens the least for their tax dollars versus only 16 percent who listed state government. Forty-one percent of respondents also said that they did not have very much faith in the federal government to carry out its responsibilities as opposed to 36 percent expressing the same sentiments for the state level. [13]

Despite the general lack of faith in the federal government, Congress continues to impose its will on the states by using the mandate tool. To limit, if not end, the use of unfunded mandates we must first ask ourselves what is best for the people of Michigan. Are the 535 members of Congress and the Senate, with each member simultaneously fighting to ensure that his/her state receives its "fair-share" while trying to appease both national and international special interest groups, better equipped to solve Michigan's problems, than are the state representatives who are focused squarely on Michigan's problems? The answer would seem to be an emphatic no.

  • Constitutional Amendment: In February 1992, Michigan State Representative Michael Nye (R-Litchfield) joined with 24 legislators from other states to amend the U.S. Constitution. Nye's proposal was designed around this portion of the 1978 "Headlee Amendment" to the Michigan Constitution:

The state is hereby prohibited from reducing the state financed proportion of the necessary costs of any existing activity or service required of units of Local Government by state law. A new activity or service or an increase in the level of any activity or service beyond that required by existing law shall not be required by the legislature or any state agency of units of Local Government, unless a state appropriation is made and disbursed to pay the Local Government for any necessary increased costs . . .[14]

Nye's 1992 effort to amend the federal Constitution languished in a busy and highly-charged election year. He intends to try again in 1993 by pushing to put Michigan on record in favor of such an amendment.

  • Interest group involvement: According to a General Accounting Office (GAO) study prepared for Senator Dave Durenberger (R-Minnesota), the involvement of special interest groups is vital to making committees more responsive to state and local concerns. The GAO also noted that interest group participation made committee members more likely to use the prepared cost estimates in the evaluation of legislation.

If local, state, and federal institutions from the Oakland County Taxpayer's Association to the Taxpayers United for a Michigan Constitution to the National Taxpayers Union had access to public information about unfunded federal mandates, Michigan would develop a natural constituency in opposition to these "hidden taxes." The cost information produced and made available if certain of the above recommendations were implemented should be utilized by grass roots interest groups to help educate the public.

Fortunately, the early days of the new 103rd Congress (convened in January 1993) have brought forth more than a dozen mandate relief bills which, if passed, would implement many of the above recommendations. A compilation of these relief bills secured by the authors from the National Conference of State Legislatures includes the following:

  • HR 140 – No state or local government would be required to comply with federal requirements unless all funds necessary to pay the direct costs are provided by the federal government. The bill is not retroactive; that is, it would not apply to federal mandates enacted prior to its passage. Another bill, HR 369, would accomplish much the same as this one.

  • HR 886 – Cost estimation requirements for legislation and regulations of the federal government would be strengthened. The bill also addresses "the resorting of federal-state responsibilities." Similar to this bill, HR 1006 would also expand existing requirements that legislation be accompanied by cost estimates of impact on state and local governments.

  • HR 894 – The Congressional Budget Office would be required to prepare estimates of the costs incurred by state and local governments in carrying out or complying with new legislation. The Rules of the House would be amended to require the inclusion of such estimates in committee reports on bills and joint resolutions. Like HR 140 and HR 369, this bill would also ensure that federal laws requiring activities by state and local governments would not apply unless all amounts necessary to pay their direct costs are provided by the federal government.

  • HR 1088 – Analysis and estimates of the likely impact of federal legislation and regulations on both the private sector and state and local governments would be required.

  • HR 1295 – The Congressional Budget Office would be required to conduct an impact assessment on legislation that is reported out of committee for action on the House floor. This legislation would also require agencies prior to the implementation of any rule or any other major federal action affecting the economy to perform an assessment of the economic impact of the proposed rule or action and seek public comment on the assessment. It requires, furthermore, that whenever there is more than one option, an agency must adopt the option with the least adverse economic impact or provide a statement of reasons why the agency's failure to do so is consistent with the purposes of the legislation.

  • HCRes 51 – This resolution would express the sense of Congress that unfunded mandates should be rescinded unless they are accompanied by sufficient funds to pay for them.

  • S 81 – Federal legislation and regulations would have to be accompanied by economic and employment impact statements assessing their impact on the private sector and state and local governments.

  • S 563 – Congressional Budget Office analysis would be required of each bill or joint resolution reported in the Senate or in the House to determine the impact of any federal mandates in the bill or resolution.

Given the urgency of the matter to the states, these and other pending mandate relief bills deserve to be top priority for Congress. It is time for Congress to act!

At the state level, legislators are continually struggling to meet the growing demands made upon them by Washington. If Michigan is to be anything more than a puppet of Congress, its leaders must demand that clearly defined roles for each level of government be established, and that mandates from Washington be either funded by Washington or abandoned altogether.

Restoring such a balance would not only safeguard the taxpayer's resources, but would help re-establish a healthy federalism as a pillar of our constitutional system.