S. Hrg. 103-405
FEDERAL MANDATES ON STATE AND LOCAL
GOVERNMENTS
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Federal Mandates on State and Local...
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BEFORE THE
I COMMITTEE ON
GOVERNMENTAL AFFAIRS UNITED STATES SENATE
ONE HUNDRED THIRD CONGRESS
FIRST SESSION
NOVEMBER 3, 1993
Printed for the use of the Committee on Governmental Affairs
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\\V S. Hrg. 103-4
FEDERAL MANDATES ON STATE AND LOCAL
GOVERNMENTS
4. G 74/?: S. HRG. 103-405
deral Mandates on State and Local...
nUiARING
BEFORE THE
COMMITTEE ON GOVERNMENTAL AFFAIRS UNITED STATES SENATE
ONE HUNDRED THIRD CONGRESS
FIRST SESSION
NOVEMBER 3, 1993
Printed for the use of the Committee on Governmental Affairs
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APR 1 9 J994
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U.S. GOVERNMENT PRINTING OFFICE 74-338 cc WASHINGTON : 1994
For sale by the U.S. Government Printing Office Superintendent of Documents, Congressional Sales Office, Washington, DC 20402 ISBN 0-16-043594-3
COMMITTEE ON GOVERNMENTAL AFFAIRS
JOHN GLENN, Ohio, Chairman
SAM NUNN, Georgia WILLIAM V. ROTH, Jr., Delaware
CARL LEVIN, Michigan TED STEVENS, Alaska
JIM SASSER, Tennessee WILLIAM S. COHEN, Maine
DAVID PRYOR, Arkansas THAD COCHRAN, Mississippi
JOSEPH I. LIEBERMAN, Connecticut JOHN McCAIN, Arizona
DANIEL K AKAKA, Hawaii ROBERT F. BENNETT, Utah BYRON L. DORGAN, North Dakota
Leonard Weiss, Staff Director
Sebastian O'Kelly, Staff Assistant
Franklin G. Polk, Minority Staff Director and Chief Counsel
Michal Sue Prosser, Chief Clerk
(II)
CONTENTS
Opening statements: Pas?
Senator Glenn *
Senator Dorgan «>
Senator Cochran 4
Senator Lieberman |
Senator Roth °
Senator Bennett '
WITNESSES Wednesday, November 3, 1993
Hon. Judd Gregg, U.S. Senator from the State of New Hampshire 8
Hon. Dirk Kempthorne, U.S. Senator from the State of Idaho 12
Hon. Carol Moseley-Braun, U.S. Senator from the State of Illinois 15
Hon. Paul Coverdell, U.S. Senator from the State of Georgia 17
Hon. Gregory S. Lashutka, Mayor, Columbus, OH 25
Hon. Edward G. Rendell, Mayor, Philadelphia, PA
Hon. Susan Ritter, Auditor, Renville County, ND 39
S. David Worhatch, Township Trustee, Hudson Township, Summit County,
OH, on behalf of the National Association of Towns and Townships 43
Hon. David Ennis, Representative, Delaware House of Representatives, on
behalf of the National Conference of State Legislatures 47
Alphabetical List of Witnesses
Coverdell, Hon. Paul:
Testimony 17
Prepared statement 85
Ennis, Hon. David:
Testimony 47
Prepared statement 181
Gregg, Hon. Judd:
Testimony °
Prepared statement with attachments 61
Kempthorne, Hon. Dirk:
Testimony 12
Prepared statement 73
Lashutka, Hon. Gregory S.:
Testimony 25
Prepared statement 88
Moseley-Braun, Hon. Carol:
Testimony 15
Prepared statement °0
Rendell, Hon. Edward G.:
Testimony 29
Prepared statement with attachments 91
Ritter, Hon. Susan:
Testimony 39
Prepared statement 162
Worhatch, S. David:
Testimony 43
Prepared statement 170
(III)
IV
Page
APPENDIX
Prepared statements of witnesses in order of appearance 61
What Price Cleanup? New York Times 110
Impact of Unfunded Federal Mandates on U.S. Cities — A 314-City Survey 124
The Burden of Unfunded Mandates — A Survey of the Impact of Unfunded
Mandates on America's Counties 140
Statement with attachments by Senator Glenn for the Record 188
Letter with attachment dated Nov. 4, 1993 to Chairman Glenn from Senator
Hutchison 208
Statement of Senator Domenici, with attachment 212
Statement of Senator Nickles 216
GAO fact sheet dated May 22, 1991 219
Unfunded Federal Mandates: The Cost for States — National Governors Asso- ciation Backgrounder 223
Natural Resources Defense Council News Release dated Oct. 26, 1993 241
The Need for a New Federalism: Federal Mandates and Their Impact on
the State of Ohio 246
FEDERAL MANDATES ON STATE AND LOCAL
GOVERNMENTS
WEDNESDAY, NOVEMBER 3, 1993
U.S. Senate, Committee on Governmental Affairs,
Washington, DC.
The committee met, pursuant to notice, at 9:33 a.m., in room SD-342, Dirksen Senate Office Building, Hon. John Glenn, Chair- man of the Committee, presiding.
Present: Senators Glenn, Levin, Sasser, Lieberman, Dorgan, Roth, Cohen, Cochran, and Bennett.
OPENING STATEMENT OF CHAHiMAN GLENN
Chairman Glenn. The hearing will be in order. Good morning. Today, the Governmental Affairs Committee meets to discuss the costs and burdens that unfunded Federal mandates often place on State and local governments.
As many of my colleagues are aware, last week State and local officials from all over the U.S. gathered here in Washington to send a message to the Federal Government, and the message was very simple: stop burdening us with your responsibilities, your paper- work, your regulations, unless you give us the help to go with it. In layman's terms, I guess they came to Washington and said stop passing the buck without the bucks, and they make a very good case.
Estimates by the Congressional Budget Office show that the cost to State and local governments of Federal legislative and regu- latory mandates rose from $225 million in 1986 to $2.8 billion in 1991, and they tell us that is a very, very conservative estimate. While the CBO data is limited in scope, it clearly shows that the cost of Federal mandates has been increasing at the same time that Federal aid to comply with those mandates has been declining.
One area that is particularly burdensome on small governments is compliance with Federal environmental mandates. A study by the city of Columbus, Ohio, showed that compliance costs of Fed- eral environmental laws, just environmental laws and regulations, in nine Ohio metropolitan areas would rise from $183 million in 1992 to $301 million by 1996, just in a 4-year period. This trans- lates into an indirect tax of $225 per household, up from $137 in 1992.
Clearly, Federal regulatory and legislative burdens are increas- ing at a time when State and local resources are tight. No one needs reminding of the budget problems faced by our State and local governments. To help soften the blows of Federal regulation
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on small government budgets, I, along with Senators Levin, Pryor, Lieberman and Akaka, introduced Senate bill 1604, the Small Gov- ernments Regulatory Improvement and Innovation Act. It is a bill designed to lessen the burdens and costs of Federal regulatory mandates.
In fact, there are a number of bills on this topic before the Com- mittee. Several Senators have introduced legislation on this sub- ject, including Senators Kempthorne, Moseley-Braun, Hatch, Coverdell, Gregg, Dorgan and Sasser. All the bills have merit and I commend my colleagues for their commitment to resolving this very important issue.
Sometimes, because of State and local inaction, it is in the public interest for the Federal Government to impose mandates on small- er governments. I am not saying that all mandates are wrong, but clearly the time has past when Washington can simply pass the buck without the bucks. The public call today for improved services and accountability from all levels of government challenges us to rethink the Federal relationship with States and localities and their ability to provide critical services. We just simply must do a better job of meeting our obligations to help smaller governments implement the mandates that we pass on, no matter how well-in- tentioned they may be.
I want to also point out that regulatory mandates are not just burdening State and local governments, but businesses as well. I ran for reelection last year and nothing got more attention at al- most every stop than businessmen coming up complaining bitterly about the costs of Federal paperwork and Federal regulations and how they are hurting small businesses and adding to their costs of doing business. The Committee will be examining this issue in fur- ther hearings in the coming months. So I look forward to the dis- cussion today and to exploring how we can create better partner- ships between all levels of government.
Before we get to our witnesses, we will see if we have any other statements. Senator Cohen, I believe, was here first.
Senator Cohen. Thank you, Mr. Chairman, and let me welcome our colleague, Senator Judd Gregg, formerly Governor of New Hampshire, who has, I am sure, some very first-hand, working knowledge about this issue.
I might say that I have had my own experience at the local level dealing with Federal mandates. I used to be the mayor of the third largest city in Maine, which sounds impressive initially until you realize that there are about 38,000 people in Bangor, Maine. Ban- gor is a very small city and yet we were faced with enormous costs of complying with laws that were dictated or mandated at the Fed- eral level.
Just to give you an example of the enormity of the problem that small towns, much smaller than Bangor, Maine, are confronted with, for the Safe Drinking Water Act in the small town of Wilton, Maine — 3,500 population, about 900 water users — the compliance cost for the Safe Drinking Water Act was $2.7 million. It worked out to roughly $3,000 per user. For another small town, Andover, Maine, with 135 water users— the cost was $880,000, which worked out to roughly $6,500 per user to comply with the Act.
Whon you impose those kinds of mandates upon local commu- nities, you make it virtually impossible for them to comply or to really prioritize. One of our colleagues, Senator Jim Jeffords, intro- duced a measure a year or so ago that I and others were original cosponsors of called the STEP Act, the Small Town Environmental Planning Act. We incorporated some provisions of that act into leg- islation that was passed by the Congress last session. It would allow communities under 5,000 population to prioritize among all of the Federal mandates that we hand down.
I recall reading at one time a rather blunt assessment by, I think it was the mayor of Lewiston, when he said we are going to have the cleanest water in the country and the dumbest kids. What he was saying is that we can't handle it all; you are forcing us to build all of these environmental cleansing processes to clean up the water, but we don't have enough money to educate our kids any- more; you are putting us in an impossible situation.
So I think it is important that we start addressing this, and I must say that we talk a great game. I recall many years ago one official said watch what we do and not what we say, and some in- terpreted that as perhaps a statement about actions speaking loud- er than words. But we have to watch what we do and not what we say.
For example, we had a great deal of debate about something called the Motor Voter Act recently. I didn't detect any overwhelm- ing demand on the part of the American people that we had to have this particular legislation. In Maine, we have the equivalent of Motor Voter; we have same-day registration. Yet, there was pres- sure built here at the Federal level to pass a Motor Voter Act, and when an amendment was offered to say why don't we pay for it, that was rejected. So we passed a Motor Voter bill and we sent the cost of that legislation on to the local communities.
So while we tend to talk a great game, we are not willing to pay for it in most instances, and I hope that the kind of initiatives that Senators Kempthorne and Gregg and others have brought to our attention will build some momentum for causing Congress to pause, at least. I agree with the Chairman that sometimes it is im- portant that we have to pass Federal legislation to deal with na- tional problems, but the burden should be on us in every case to pay for it except in extraordinary circumstances.
So I want to commend our two colleagues and others who have initiated this legislation, and look forward to their testimony.
Chairman Glenn. Senator Dorgan?
OPENING STATEMENT OF SENATOR DORGAN
Mr. Chairman, thank you very much, and I am anxious to hear my colleagues and others on the witness list today. I introduced S. 1592 last week, with Senator Domenici, a bill on Federal mandates that is a companion bill to one that was introduced in the House of Representatives earlier this year.
I agree with the statement by the Chairman. There are times when Federal mandates have been perfectly appropriate and very much necessary. One can go back to laws like the Voting Rights Act and others that we mandated that I think one would hardly want to criticize because something needed to be done in this coun-
try and the Federal Government took the lead to do it. But that ought to be the exception on broad areas of policies and principle and not the rule. The rule these days is that in virtually every area we decide here is the way we want things to happen in this coun- try, and all toe often impose mandates on others, not just local gov- ernments, but businesses and others, without any thought, without any description, without any discussion really of what costs or reg- ulatory burdens are imposed on someone else.
The remedy I propose, with Senator Domenici, is no better or worse perhaps than other remedies. We have got a number of peo- ple making significant proposals. Senator Kempthorne has been ac- tive in this all year. But I think it is timely and important that the Chairman and this Committee hold this hearing so that we begin moving down the road to responding to this issue.
President Thomas Jefferson shortly before his death said that were we directed from Washington when to sow and when to reap, we should soon want for bread. Well, that may overstate it slightly, but the fact is he was suggesting that not all notions of what is good in this country can or should stem from Washington, D.C., and those of us who not only serve in the Congressional branch but those who write the regulations and the rules, especially in the ex- ecutive branch, tend not to think much of what impact will these have on the rest of the country.
Our legislation, then, includes not only the requirement that all reported bills with over a $50 million impact be accompanied by de- tailed statements of what is this impact and on whom does it fall, but it is also true that this would be required of rulemaking in the executive branch, which I think also imposes significant burdens.
I will not proceed further and I thank you very much for holding these hearings. Let me say that a North Dakota witness who is the new chairperson of the North Dakota Association of Counties is with us and I am very anxious to have her testify as well.
Chairman Glenn. Very good.
Senator Cochran?
OPENING STATEMENT OF SENATOR COCHRAN
Mr. Chairman, let me thank you on behalf of those of us who are interested in this issue for convening the hearing. We appreciate also having the attendance of colleagues who are leading the fight to try to make some changes in the Federal laws that will force the Government to take into account the economic consequences of its regulatory actions.
I can remember as a new member of the other body, we passed legislation to require elementary and secondary schools to provide educational opportunities for all children, irrespective of their phys- ical or mental state or capacity, and directed them to do certain things in that area. I can recall the local school boards and local governments calling and writing and saying this is going to cost enormous sums of money; what is the matching requirement and what will be the Federal offsets financially to help us do this. The answer was there aren't any provided in this legislation.
Many of us tried to get the legislation amended to authorize Fed- eral funds to provide needed financial assistance to those especially poor school districts who were having a very hard time meeting
their obligations anyway to assume these new burdens. All of us agreed that the legislation was a good idea and the school districts should meet the needs of all children, but the funding was a big problem.
I recall also in those early days in the House the requirements on local communities to do something about waste water treatment and to build facilities. It was a big issue then and it still is today. The Federal Government refuses to acknowledge its responsibility to have flexibility in these laws and regulations to permit common- sense alternatives that may be less expensive than those that are state-of-the-art and the most expensive.
I think that is one of the problems in all of this, not only getting the Federal Government to help pay the costs, or in some cases to pay all of the costs where the local governments or local entities cannot do it, but to at least be required to take into account those alternatives that are just as effective and could be just as effica- cious in dealing with the problem as that being required by EPA or other regulatory agencies.
I am hoping that this will lead to something, Mr. Chairman, and I think it will if we all work together and try to come up with some legislative changes that require this new flexibility and Federal re- sponsibility to help pay the costs in certain situations. I am happy to be a cosponsor of Senator Kempthorne's legislation and Senator Gregg's efforts as well, and I commend them and others who are here to help talk about some of the practical consequences of these problems.
Chairman Glenn. Thank you very much.
Senator Lieberman?
OPENING STATEMENT OF SENATOR LIEBERMAN
As you, Mr. Chairman, and other colleagues have said, we have got a real problem here and the question is how to find the appro- priate solution. The problem clearly is that we are mandating State and local governments to carry out responsibilities without giving them the wherewithal to do so, and that is not only unfair, but it is part of an overall problem here in Washington, which is that we have too often responded to both the public's desire and our own desire to do things, but not to have had the nerve or the guts to pay for them.
That has put us into the deficit situation we are in in the Fed- eral Government, and it has also burdened the State and local gov- ernments. These mandates have been, depending on how you look at it, either a response to the appeals of special interest groups or Congress' own expression of public needs by creating programs to fulfill those needs but without being willing to step up to the plate and pay for them. In that sense unfunded mandates conceal the cost of those programs by pushing them down and forcing State and local governments to pay for them.
It is a real problem, and I think as part of our focus now on try- ing to get our fiscal house in order we have to be fair and reason- able about that and do the same here. The problem for me thus far has been, while seeing the problem, I have not found myself able to be comfortable with any of the solutions that I have yet heard about.
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I have talked particularly with Senator Kempthorne and some with Senator Gregg about their bills and my heart is with them. I haven't yet been able to bring my head in correlation with my heart enough to sign on to those bills, and that is why I am inter- ested in the hearings here today.
The basic question, I suppose, stated in very simplistic terms, is can we come up with a remedy, to use the old metaphor, that doesn't catch in the net more than we intend to catch, that doesn't diminish some of the worthwhile and appropriate goals of Federal programs — for instance, dealing with national problems — while also imposing some of the responsibility that we want to impose. Those are the questions I have today.
I guess if there is any bright note to end this on, it is that there is a growing recognition of the bad deeds of the Federal Govern- ment here and the beginning of a response. I find it even here in Congress. In the Environment and Public Works Committee which I serve on, we have just considered a lead poisoning bill. It is a se- rious preventible pediatric problem in our country, and yet when it came to a mandate, as serious as the problem is, we put lan- guage in the bill that said that the State and local governments would only be obliged to respond up to the amount of funding that we had given them. So I think we are hearing the message. Now, the question is whether there are some broader changes in the rules, as expressed in these proposed bills, that we also ought to adopt.
Again, I thank you, Mr. Chairman, and I really look forward to the exchange and the testimony, so hopefully my head can be put in correlation with my heart and I can sign on to one of these pro- posals.
Chairman Glenn. Thank you.
Senator Roth?
OPENING STATEMENT OF SENATOR ROTH
Well, thank you, Mr. Chairman. I, too, appreciate your calling this meeting today. As you know, some time ago I received a call from a State legislator, Dave Ennis, whom I will have the privilege of introducing later, raising the concerns of State legislatures with Federal mandates. As a result of his call, I think it is one of the reasons we are meeting here today and I appreciate your interest in this matter.
We all know that it is very important to our State and local gov- ernments; I can say it is one that has concerned me for some time, most recently during our debate on the motor voter bill, another cost item we passed along to the States. I think we have to recog- nize these are difficult financial times not only for the Federal Gov- ernment, but for the State and local governments as well. They are expected to provide better services to their citizens without raising taxes. Of course, the voters back home hold them accountable for the performance of their governments, and that means addressing the concerns and priorities established close to home.
Yet, these officials are required by decisions made in Washington to also address national priorities. There, they have no choice but to reduce attention to truly local concerns. Unfortunately, I feel that unless we seriously address this problem — and certainly a day
or two of hearings are not going to answer it — the trend will only worsen. The condition of the Federal budget prevents the funding of many new programs. Congress will be consequently tempted to govern by regulation, passing along the costs of implementing its policies.
Nonetheless, I recognize the difficulty of effectively dealing with this problem. Even denning what a mandate is presents problems. Does it include programs like Medicaid, where State participation is legally optional? Does it apply to legal decisions that impose new costs? Does it include requirements that apply to all entities, gov- ernmental and non-governmental alike? Then, of course, we have to figure out a proper remedy to the problem. Is there a legislative solution that is feasible, meaningful and achievable?
For that reason, I look forward to the testimony we will receive today because I think we can get some useful guidance in answer- ing these questions, and I would like to congratulate my colleagues for the leadership they have demonstrated in this most critical matter.
Thank you, Mr. Chairman.
Chairman Glenn. Thank you, Senator Roth.
Senator Bennett?
OPENING STATEMENT OF SENATOR BENNETT
Thank you, Mr. Chairman. I won't repeat all of the comments about the financial aspect of unfunded mandates. I agree with them and I think it is very obvious there is something that needs to be done.
I find it interesting that the four panel members we are faced with all come to this body with experience in State and local gov- ernment. We have a former governor, we have a former mayor, and others who have held State positions who are sitting there, regard- less of party, regardless of gender, saying to us there is something seriously wrong, and I think that is a very interesting phenomenon that the Senate ought to pay attention to from those who are com- ing in representing the new blood and the most recent experience with life outside the Beltway.
The one other thing that I would like to make a point of, how- ever, before we start is that it is not just the money. As we address the issue of Federal mandates, we have to address the issue of suit- ability. The Federal Government is not the repository of all truth and wisdom, and the Federal Government makes decisions in the name of mandates that they put on local governments which, even if they were funded, many times would be the wrong decision be- cause they do not take into consideration local conditions.
We have got to learn to trust local officials. I have never met a mayor who deliberately poisons the water supply of his city and needs the Federal Government to tell him or her, don't do that. I have never met a State legislator, governor, whatever, who goes down that road, and the one example that I add to the mix which is uniquely local is the Federal mandates that have to do with water purification not for the water that is being used in the com- munity, but the discharge that comes out of the community so that the community downstream could drink it, has caused financial problems for many communities in Utah where they have had to
8
purify the water up to this level so the community downstream could drink it, and the community downstream is the Great Salt Lake where the salt content is something like 27 percent. So we are spending millions of dollars to clean up the water that goes into the Great Salt Lake that nobody can drink at all. Even if the Fed- eral Government funded that mandate, it is a stupid mandate as far as the local communities are concerned.
I am delighted that the panel members here come from that world fresh into the Senate with their understanding of what hap- pens in their local States and cities. I look forward to what they have to say, too.
Chairman Glenn. Thank you very much. Obviously, there is a lot of interest in this particular subject. I think we reflect the inter- est back home in this regard, and it is unusual that we have four Senators who want to be heard at a hearing like this this morning. We are glad to have them all attend.
We hope, if possible, you can keep your remarks reasonably under control and fairly short because we do have a number of out- of-town visitors here this morning. We wanted to get the benefit of their wisdom here, too. We are glad to have all four of you here, though. I don't mean to throw cold water on your attendance by any means.
In the order in which they arrived this morning, Judd Gregg, the Senator from New Hampshire. Judd, if you would go ahead with your testimony?
TESTIMONY OF THE HON. JUDD GREGG,* U.S. SENATOR FROM THE STATE OF NEW HAMPSfflRE
Senator Gregg. Thank you, Mr. Chairman. I certainly appreciate your holding this hearing to address what I think is a critical issue and which has already been outlined as a critical issue by everyone here. I look around the room and we have got 10 percent of the Senate right here, so we have got some real opportunity.
Chairman Glenn. Let's vote. [Laughter.]
Senator Gregg. That is right.
Also, it is nice to be on a panel with my colleagues, all of whom, as has been noted by our fellow colleague, are new members, and we are fresh from the field, so to say. Therefore, I think we bring the perspective of the local communities and towns and States that we represent in a very immediate way because of our involvement prior to our activities here as Senators in local, State and county government.
As a former governor, I have dealt with the issue of unfunded mandates for the last 4 years, or did deal with them for the last 4 years, in a firsthand manner. After that experience, I came to the Senate and made my first act the introduction of a piece of legisla- tion to try to address the issue and to try to reform the issue of unfunded mandates, and that is bill number S. 648.
These hearings are important because Congress must be made aware of the magnitude of the unfunded mandate problem. Un- funded Federal mandates are crushing State and local budgets. They are— and I want to underline this— they are Federalizing
i The prepared statement of Senator Gregg appears on page 61.
State and local tax bases and fiscal decisionmaking. In short, they are seriously undermining the whole concept of federalism.
After a normal Federal discretionary program is authorized, its funding is determined by the appropriations process. In contrast, once unfunded Federal mandates are authorized, they resemble en- titlement programs. The mandated spending must occur, confronts no secondary checks, and has been allowed to grow out of control. Yet, unfunded Federal mandates are more pernicious than Federal entitlements because their costs are shifted on to the States and the localities. Congressional shifting of the financing, however, does not shift the responsibility. It is time that we in Congress stepped up, confronted the issue, and devised a workable solution.
Most of the witnesses you are going to hear today will testify as to the problems caused by the unfunded mandate issue. After brief- ly discussing my legislation and some New Hampshire experiences, my testimony will be mainly focused on the elements of a workable solution.
I have proposed three pieces of legislation to deal with the issue of the problem of unfunded mandates. I don't consider them to be all the solutions. In fact, a number of members of this panel have equally good ideas on the issue of addressing the question.
However, the first bill that I introduced, bill S. 648, has three components. The first is that the bill provides that Federal man- dates cannot be enforced against a State or a local government un- less they are fully funded by the Federal Government, something that Senator Lieberman has just referred to as an exercise that his committee has undertaken in the area of lead paint poisoning.
Second, the bill provides a mechanism by which such ftmding would occur. Agencies would be responsible for identifying the mandates they each administer. They would then gather the infor- mation and publish actual cost schedules with respect to each man- date. States and localities would receive Federal payments pursu- ant to these schedules.
Third, the bill contains procedural provisions that would require cost estimates to accompany new mandate legislation and estab- lishes super majority points of order against setting mandate costs by statute.
In addition, on National Unfunded Mandates Day, October 27th, I submitted two resolutions to amend the rules of the Senate. These resolutions, S. Res. 157 and S. Res. 158, are pending before the Committee on Rules and Administration. They would establish super majority requirements for committees to report and for the Senate to pass bills which contained unfunded mandates. They also define what constitutes an unfunded mandate, which I think is a critical issue and which Senator Roth has alluded to.
Recently, I wrote every city and town official in New Hampshire and asked them to provide me with their opinions on unfunded mandates, as well as examples of problems they have confronted. The responses were overwhelming and I would like to briefly detail just a few of the types of responses I received.
The city of Nashua, the second largest city in New Hampshire with 79,000 folks — the mayor of Nashua related how mandates on combined sewer flow problems could cost between $40 and $50 mil- lion. In 1994, the Solid Waste Disposal Act mandate will cost $1
10
million in the city of Nashua. The wetlands mandate will cost $65,000. The Americans With Disabilities Act will cost $80,000. The underground storage tank mandate will cost $36,000. The Clean Air Act will cost $35,000. In 1997, the solid waste disposal mandate will cost $6 million. These types of numbers are consist- ent with the study in Columbus, Ohio, which the Chairman has re- ferred to and which is probably the best study done by any city in the country.
Another example is Lancaster, New Hampshire, population 3,486, and this is similar to the Andover, Maine, situation. The Lancaster town manager collects $1.4 million every year in tax rev- enues from property taxes. It is estimated that to comply with the new Safe Water Drinking Act, it will cost the town of Lancaster $2 million, almost 50 percent more than what their tax is on an an- nual basis.
A town manager, a mayor, a governor sees an unfunded mandate and seethes at the unfairness of being forced to comply. To Federal officials who have caused the problem, the unfunded mandate issue is much more complex, however. The basic issue remains simple, but must be resolved. For the sake of simplicity, however, we can- not enact a solution that causes more problems.
Any bill reported out of this Committee on the unfunded man- date issue should therefore address the matter in a comprehensive fashion. It should define the problem, attack each of its causes, and provide a workable solution. I do not believe any of the bills re- ferred to the Committee, even my own, accomplish all the needs that I have listed above. Let me explain.
First, any bill reported out of this Committee should precisely de- fine what constitutes an unfunded mandate, and the definition can- not be too restrictive. My bill, 648, does not suggest a definition, although my two rules amendments do. An appropriate definition is crucial because it will drive almost everything else that occurs.
Without a precise definition, endless litigation would likely ensue over what is and what is not an unfunded Federal mandate. A true solution to the problem cannot allow it to become more cost-effec- tive to pay the bills than to seek payment. Furthermore, the defini- tion cannot be too restrictive. It would solve nothing to cut off one particular type of unfunded mandate, only to prompt Congressional use of another type of unfunded mandate.
Second, any bill reported out of this Committee should provide a mechanism by which payments for unfunded mandates would be made. As noted earlier, my legislation, 648, suggests one such pay- ment mechanism. The mechanism should be spelled out because leaving it unstated or to executive discretion would create just as many problems as the absence of a good definition. The receipt or level of payment should not depend upon lawsuits or the whims of the sitting administration. Again, uncertainty and litigation costs should not become a factor in seeking payments.
Third, any bill reported out of this Committee should not only recognize that Federal regulations have caused a large part of the growth in unfunded mandates, but also that the Federal regula- tions are under our control. Many of the mandates that most upset New Hampshire towns and cities, for example, are environmental regulations. EPA just continues to churn out new requirements.
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EPA does so, I believe, because of the types of statutes it is admin- istering; namely, basic command and control regulatory regimes that provide the implementing agency with broad discretion and that allow the agency to never believe its job is done.
Furthermore, as New Hampshire towns repeatedly point out, these command and control regulations are one-size-fits-all, a point which has been alluded to here earlier, with that one size being driven by the worst case problems and not necessarily the problem that each town may have.
Congress must reassert control over the Federal regulators. Ei- ther the Administrative Procedure Act or the various underlying statutes should be amended to force the agencies to be more flexi- ble in their regulations to take into account differing situations and small-town budgets. The President's recent executive order moves in this direction somewhat, but a strong process with specific cri- teria should be written into the law.
Fourth, any bill reported out of this Committee should recognize that the Congressional budget process has contributed to the pro- liferation of unfunded mandates. With tight discretionary caps and the PAYGO process restricting new spending, Congress has avoid- ed the painful process of reordering priorities by accelerating the use of unfunded mandates. Congress has increasingly imposed indi- vidual mandates on both businesses and lower levels of government to accomplish new Federal objectives — for example, the family leave bill, the motor voter bill, and the Americans With Disabilities Act.
Just as the Budget Act provides for points of order and imposes super majority requirements to waive them, any solution to the un- funded mandate problem should incorporate such processes as well. My recent rules amendment proposals suggest such procedures. The ability to enact new mandates which are unfunded and to pro- vide exemptions from funding must be restricted.
Fifth, any bill reported out of this Committee should also estab- lish a reliable cost accounting system. In my opinion, fiscal notes accompanying new regulations and legislation are not enough by themselves. Telling States and localities how much they must pay to satisfy Federal requirements does nothing to help them pay them. However, if we legislators and the agency regulators had knowledge of the actual costs about to be imposed, a greater hesi- tancy to do so may result. Certain estimating requirements already exist, but they are woefully inadequate.
Finally, any fiscal note requirement must force each agency to itemize and consider the costs of all of its existing mandates, not just the costs of the one about to be promulgated. One contributing factor to the growth of unfunded mandates is the incremental cost of each particular new mandate seems like a small price to pay to accomplish the overall policy. The present system does not account for the cumulative costs, and it is the cumulative costs that have become so crushing.
Through unfunded Federal mandates, State and local tax bases have become Federalized, and States and localities have lost con- trol over their fiscal decisionmaking. Consequently, unfunded man- dates constitute a serious encroachment upon State and local pre- rogatives and significantly undermines federalism.
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Juxtaposed against these facts is the constitutional role of the Senate, which is unique in this situation. Our Constitution envi- sions the Senate as the protector of State interests against Federal encroachment. Senators were originally elected by the State legisla- tures, not directly by the people, and Senators represent a whole State, not just a portion. Since the adoption of the Seventeenth Amendment in 1913, Senators are no longer dependent upon State legislatures for their election. Nonetheless, the Senate's basic con- stitutional role in our Federal system is as a protector of State in- terests against the Federal Government.
As the proliferation of unfunded mandates demonstrates, the Senate has not been performing that role too well over the last 20 years. The crush of modern problems has caused us to lose our con- stitutional bearings. Devising a bill that properly and comprehen- sively solves the unfunded mandate problem will be difficult, but it is imperative that we try, and it is appropriate that it begin here in this Committee and in this Senate.
Thank you very much.
Chairman Glenn. Thank you very much, Senator Gregg.
Senator Dirk Kempthorne?
TESTIMONY OF THE HON. DIRK KEMPTHORNE,i U.S. SENATOR
FROM THE STATE OF IDAHO
Senator Kempthorne. Chairman Glenn, thank you so much for convening this meeting. I sincerely mean that. At issue today is nothing less than the well-being of the cities, the counties, the schools, and the States throughout this Nation.
Let me share with you what Boyd Boehlje, the president-elect of the National School Boards Association, says about unfunded man- dates, ". . . the very children Congress is trying to protect are the ones who are hurt most often by proliferation of unfunded man- dates." Mr. Chairman, unfunded mandates are just one more straw on the backs of our communities, the very communities that Con- gress is trying to help.
We are discussing a fairness issue here this morning. Is it fair for Congress to make laws and then make other units of govern- ment pay for them? There are those who will argue that with a $4 trillion debt, the Federal Government does not have the money to pay for these mandates. Mr. Chairman, as a former mayor, I will tell you that the cities do not have surplus money, counties do not have surplus money, nor do schools or States. In fact, many face their own deficit situations.
Rhode Island Governor Bruce Sundlun says, "Unfunded Federal mandates regularly force State and local tax increases and service cutbacks, restrict the rights of State and local voters and officials to determine their own priorities, and allow the Congress to avoid responsibility for both setting priorities and increasing revenue."
Mr. Chairman, all mandates by and large are paid for by taxes, but it is not fair to shift the responsibility for funding a national priority to a local property tax. If the Federal Government feels a mandate is well-founded, then the Federal Government should fund it. It is straightforward.
iThe prepared statement of Senator Kempthorne appears on page 73.
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Today, this Committee will hear from local officials, like Mayor Ed Rendell and Mayor Greg Lashutka, who have been leading the effort to stop unfunded Federal mandates, and their examples are abundant. Their testimony is part of a new national movement that was launched on October 27th. Across the Nation last Wednesday, hundreds of mayors told their citizens that unfunded Federal man- dates increase their taxes and cut their local services.
Those press conferences opened the eyes of millions. For the first time, citizens heard and understood what unfunded Federal man- dates were all about. Unfunded mandates are simply hidden Fed- eral taxes and cities have become, in essence, Federal tax collec- tors. Because of that, leaders at the State and local level are send- ing Congress a simple message: stop the practice of passing the bill and then passing the buck. They are holding out hope that this Committee and that this Congress will understand their plight and the financial burdens they face because of an increasing number of unfunded Federal mandates. That chorus will continue to grow as America comes to a realization of how unfunded mandates are af- fecting their local communities.
Right now, Congress can take an issue, can debate it strongly, can debate it passionately, and then resolve to do something about it, but not be responsible for the price tag. Congress gets the credit, local officials get the tab. Mr. Chairman, in all fairness, every man- date is paid for by taxes, and by passing along the costs Congress is clouding the issue of who is responsible for that tax.
This is not a discussion as to the merit of the Clean Air Act, the Clean Water Act, or any other worthy piece of legislation. Those discussions take place in a different arena. Mr. Chairman, what we are talking about here is common sense. Congress should set the policy, but Congress should also pay for the policy it sets — no money, no mandate.
All governments are strapped, and certainly that is the case at the local level. As I have talked to mayors and county commis- sioners across the country, they say Federal mandates are cutting into the basic services of their communities — police and fire protec- tion, infrastructure, and a good education for our children.
I cannot think of a single example where a mayor or a city coun- cil has determined that it is in the best interests of the city to pro- vide police, fire, or other services to a specific neighborhood, but then require that the neighborhood will have to pay for that them- selves.
In Fort Lauderdale, Florida, they are spending $7.6 million to meet Federal mandates this year. We have all heard about the re- cent and unfortunate stories about crime in Florida. If they didn't have to pay $7.6 million for unfunded Federal mandates, Fort Lau- derdale officials state that they could have used that money to hire 153 new police officers. But hiring more police officers is not an op- tion. They must first comply with the Federal mandates before meeting their local problems head-on.
Ironically, we will soon be debating a crime bill which includes up to $3.4 billion in Federal money to hire police officers to help fight crime at the local level. Why are we establishing Congress as a middleman in a local government issue? If we would fund Fed- eral mandates in the first place, we could leave more money at
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home for those local units of government to hire police officers or address other priorities.
The city of Atlanta estimates that it will issue over $400 million in debt in the next 2 years to meet Federal and State environ- mental mandates. That is $400 million at a time when sewers, bridges, roads and other infrastructure is aging and is deteriorat- ing. They are paying for Federal mandates when they have an overburdened and overcrowded criminal justice system. They are paying for Federal programs when there is an urgent need for af- fordable housing in their community.
Mr. Chairman, this revolt is coming from the folks who are on the front lines, the folks who are in the trenches, the people who are struggling day in and day out to implement and pay for the edicts that come from the banks of the Potomac. These local offi- cials are determined to do something about it. The message is being delivered, and while it is not a new message, it is finally being heard in the halls of Congress and in the White House.
This summer, President Clinton told the U.S. Conference of May- ors that, as a former governor, he opposed unfunded Federal man- dates. He said this summer, "I have told our administration clearly that I don't want us up there on the Hill supporting bills to load up a bunch of new burdens on the mayors and the governors when they are broke. . . ." Just last week, as Senator Gregg referenced, the President issued an executive order which, in essence, states that the administrative agencies are to curtail the use of these un- funded Federal mandates.
Mr. Chairman, as a former mayor, the first bill I introduced as a Senator is a bill to lift that burden of unfunded Federal man- dates on local governments and to put the responsibility of funding legislation squarely where it belongs, with the body that puts the regulation in place. Fifty cf my colleagues in the United States Senate share that same vision. More than half of the Senate is on record in support of ending unfunded Federal mandates by cospon- soring Senate bill 993, the Community Regulatory Relief Act.
I have combined my efforts on Senate bill 993 with Democratic Congressman Gary Condit, a former mayor, who has similar legis- lation in the House. Now, in both the House and the Senate, we have good, solid bipartisan support to end unfunded Federal man- dates and to set right what has been going on in Congress for too long.
I have worked with mayors and county officials and made them a part of this process to find a solution. Unfunded Federal man- dates are their number one legislative priority. The U.S. Con- ference of Mayors has appointed a Mandates Task Force to con- tinue to focus the Nation's attention to this issue.
The Conference of Mayor's Executive Committee is backing Sen- ate bill 993. The National Association of Counties strongly endorses this bill. They had hoped to have one of their representatives here to testify today. Since they are not, I would like to introduce their letter of support for Senate bill 993 into the record.
Chairman GLENN. Without objection, it will be included.
Senator Kempthorne. Mr. Chairman, Senate bill 993 says that if laws are important enough to enact, they should be important enough to pay for. I am not against Federal mandates. I am
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against unfunded Federal mandates. If Congress places the order, Congress ought to pay the tab. We need to send a clear message to the Federal regulators who are setting standards that there needs to be an understanding of the fiscal impacts of these man- dates. At a time when technology is beginning to drive policy, we need to realize that there is a dollar sign on those calculators.
I believe that there can be no meaningful discussion of the true national priorities when you are operating in a vacuum, where the costs of some initiatives are funded and some costs are transferred to other units of government. Mr. Chairman, I believe that Con- gress needs to own up to the responsibilities that it sets, and Sen- ate bill 993 accomplishes that.
Thank you, Mr. Chairman.
Chairman Glenn. Thank you very much.
Senator Carol Moseley-Braun?
TESTIMONY OF THE HON. CAROL MOSELEY-BRAUN,i A U.S. SENATOR FROM THE STATE OF ILLINOIS
Senator Moseley-Braun. Thank you, Mr. Chairman and mem- bers of the Committee. I, too, appreciate having the opportunity to appear here this morning and to talk on the subject of mandates and my mandates legislation, S. 563.
As we all know, the Federal Government is in serious fiscal trou- ble. Our annual deficit this year is over $250 billion and our na- tional debt is now over $4.3 trillion. One of the results of this sea of red ink has been that the Federal Government is increasingly in- clined to practice a kind of trickle down economics. Because the Federal Government does not have the money to solve its problems, it proposes solutions and then requires State and local govern- ments to find much of the money necessary to implement those so- lutions. The Federal Government mandates that State and local governments must act in certain ways to solve problems without providing the money needed to fund those solutions.
Now, Mr. Chairman, I didn't like trickle down economics as it was originally proposed. I thought that trickle down economics ben- efitted the rich at the expense of middle-class and poor Americans. And I don't like the mandates variant of trickle down any more than I liked the original. Requiring hard-pressed State and local governments to fund programs mandated by the Federal Govern- ment is not good government. It is not fair to State and local gov- ernments and it is not fair to the American people.
Vice President Gore's report on reinventing Government identi- fied 172 unfunded Federal mandates, and these mandates may have serious consequences for State and local governments throughout my State of Illinois. The city of Chicago, for example, spends over $160 million a year to comply with just 50 of the 172 mandates identified by the Vice President. Chicago spends $27 mil- lion a year just on the paperwork associated with Federal man- dates and regulations.
These figures, as large as they are, do not include the costs in- curred by other units of local government operating in Chicago, such as the Chicago Sanitary District, the Regional Transportation
1 The prepared statement of Senator Moseley-Braun appears on page 80.
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Authority and the Chicago Transit Authority, and the county gov- ernment. All of these units of government have to commit major local resources to complying with unfunded Federal mandates.
Other cities around my State and the State itself have the same problem. They too have to spend substantial taxpayer dollars to comply with unfunded Federal mandates. For the first time, this year my own State of Illinois spent more on health care, for exam- ple, than it did on education. Unfunded Federal mandates are, in part, responsible for that fact.
Mr. Chairman, I am the first one to say that many of the man- dates involved involve very important public purposes and are well- thought-out and well-meaning. However, the issue before us is not whether the objectives are sound. Rather, the issue is what meth- ods should we use to pursue those objectives. We need to fund fed- erally-mandated benefits at the Federal level. We need to stop funding federally-mandated benefits with State and local tax col- lars.
I am very pleased, Mr. Chairman, that the Vice President of the United States is asking the President to issue a directive limiting the use of unfunded mandates by the administration, and that is the administrative order that has been referred to this morning. However, more needs to be done. Congress itself must act. There are a number of steps that Congress could consider &nd should con- sider. One of the most basic is to ensure that we have the informa- tion to make good decisions around the mandates issue.
I come from a background in State and local government, as do my colleagues, where the mandates issue has received serious at- tention for a long time. But when I arrived here in Washington and filed my first bill, which was S. 563, I found that most of the Fed- eral establishment was totally unaware of the impact that Federal mandates have on State and local governments. In fact, the situa- tion was even worse than that. Much of the Government does not even know what a mandate is.
This bill, S. 563, attempts to end that state of affairs. It does not prohibit the Federal Government from issuing new mandates, nor does it repeal any existing Federal mandates. Instead, it simply re- quires that the Senate have information on any mandates in pro- posed legislation and the costs of those mandates when that legis- lation is considered by the full Senate.
This bill adds a section to committee reports on proposed bills. This new section, which would be prepared by the Congressional Budget Office, would include information on, number one, the cost to State and local governments of complying with any Federal man- dates in the reported bill; and, number two, the extent to which Federal funds either contained in the bill or otherwise cover the costs of complying with those mandates.
In addition, this legislation requires the Congressional Budget Office to issue an annual report on the cumulative costs of comply- ing with Federal mandates in all enacted bills, together with an analysis of the extent to which Federal funds cover the costs of complying with those mandates.
For purposes of the CBO analysis, a Federal mandate is a provi- sion in a reported or enacted bill that, number one, requires the creation or expansion of a State and/or local service or activity; sec-
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ond, requires standard different from existing State and/or local law or practice in delivering a service or in conducting an activity; third, creates additional personnel or other administrative costs for State and/or local governments; or requires contracting procedures different from or in addition to those required under existing State and/or local law or practice.
Mr. Chairman, this bill is a modest step forward, but I think it would make a real difference. It would help end the current budg- etary disconnect where the Federal Government makes the deci- sions on benefits, but State and local governments are left to pay for them.
The issue of unfunded mandates is not a liberal issue or a con- servative issue. Rather, it is a federalism issue. This country was founded on the principle that there should be no taxation without representation. What that means to me in the context of the man- dates debate is that those who have to vote the taxes ought to have a say in how those taxes are spent. This is not a revolutionary thought. In fact, it is just common sense, and that, at heart, is what the mandates issue is, common sense.
I do not underestimate the difficulty of legislating common sense, Mr. Chairman, but this is one area where I think we must try. The practice of unfunded Federal mandates must stop.
I would recommend to Senator Lieberman that S. 563 may pro- vide a place where your heart and your head can come together. It takes that initial conservative first step of giving us accurate in- formation of what it is that we are doing so that we are no longer legislating in the dark, so that we know before we take an action what the costs will be on State and local governments and we don't proceed down the path of continuing to push our responsibilities away from ourselves onto those in many instances least able to pay.
So with that, Mr. Chairman, again, and members of the Commit- tee, I thank you for this opportunity to testify.
Chairman Glenn. Thank you very much.
Next in our group is the Honorable Paul Coverdell of Georgia. Paul?
TESTIMONY OF THE HON. PAUL COVERDELL,* U.S. SENATOR FROM THE STATE OF GEORGIA
Senator Coverdell. Well, thank you, Mr. Chairman. I appre- ciate very much the hearing and those members of your Committee taking valuable time to be present to hear this testimony. I com- pliment my colleagues for their intense interest in this very crucial issue and the relationship of the Federal Government to State and local governments.
Let me just, in the nature of the Chairman's plea to be brief, make several comments. First, I do think unfunded mandates point to a very egregious flaw in the separation of powers between the Federal Government and State and local governments. It reminds me of my early days in the State Senate. I had the misfortune of being appointed to the Retirement Committee which dealt with public pensions, and the States had yet to really get a grip on what
i*The prepared statement of Senator Coverdell appears on page 86.
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they were doing to themselves by passing each session enormous numbers of public pension benefits legislation. Of course, the reason they did was because somebody else would
Eay the bill. It was the easiest way for members of the legislative ody to gain the applause and accolades of various interest groups throughout the State, but no bill ever had to be paid until, as we have come into the 1990's, all these bills are now coming due. Any time you have a situation where a legislative body can appeal and address special interest groups and needs and not be accountable for the payment of it, you are building for yourself an enormous problem, and this is analogous to what was happening in the public pension field.
Now, we have a situation where almost any local government is faced with somewhere between 10 and 30-plus percent of their ex- penditures being forced by another government upon them, and the period of awakening is before us. We have counties throughout our State and Nation who are now printing on the property tax bill, which is what they should do, the amount of the bill that is directly related to the members of Congress. So we are in a period of great awakening about the effect and about accountability as it relates to a Congressional pattern of assuaging interest groups but letting somebody else pay for it.
Now, beyond the cost, which I think is very important to address, and Senator Bennett pointed to it, is the inflexibility of many of these mandates. We are a very diverse country. We have many in- terests and we embrace many cultures, and for us here in Wash- ington to impose a one-suit-fits-all mandate across the thousands of municipalities and counties and school districts is illogical.
I held hearings throughout the State of Georgia, and whether it was a mayor or a county commissioner or a school board member, there was one anecdotal story after another of not only the cost, but the inability to have a reasoned process and exchange between Federal regulators and those trying to implement the Federal man- dates. They talked about lack of flexibility. They talked about what appeared to be no understanding of time lines and unrealistic dead- lines that are coming from mandates. I actually heard more com- plaints of the inflexibility issue than I did cost, although I certainly heard a great deal about cost.
With regard to the head-and-heart issue brought to our attention by Senator Lieberman, I have worried a great deal about this. I have coauthored every proposal; I have authored my own. But I think, in practical terms, the search ought to be for a compelling doctrine, that we find a way to assure that there is a compelling need of national interest for the Congress to act.
Now, we have heard Senator Gregg address one of those propos- als that is embraced in mine, and that would be a super majority concept. We need to have additional hurdles. If we can't come to terms with a total foreclosure, we ought to at least set higher standards and hurdles for the Congress to meet because that will raise the consciousness of what we are doing and will perhaps make us think more firmly about whether or not this is really something that the United States Congress wants to impose on every local jurisdiction in this form. So I would point us toward the compelling need doctrine.
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My last thought is this. This is not something that can wait for the refinements that have been addressed by particularly Senator Gregg. We have already passed more unfunded mandates. I was most pleased the other evening that the Senate when considering legislation extending unemployment benefits did formally acknowl- edge that it could have been an unfunded mandate and the sense of the Senate was that it should not be, and we directed the De- partment of Labor to assure that the worker's profile program would not be. That is what I am talking about, that we need to be currently conscious of unfunded mandates, and in our deliberations on a resolution we should remain mindful of the cumulative effect of our actions today and between now and the resolution of this issue.
Mr. Chairman, I very much appreciate the opportunity to join my colleagues before your Committee. Thank you.
Chairman Glenn. Thank you all very much. We will have the opportunity to maybe submit to you more questions for the record. If there are any questions anyone has before we go on to our next panel, we can address them now.
Senator Levin. Can I ask
Chairman Glenn. Sure. Senator Levin?
Senator Levin. Mr. Chairman, first, I want to commend our wit- nesses for what they are doing. I came here as a local official, also, 8 years as a city councilman in Detroit, and the unfunded man- dates and the inflexibility of regulations was one of the reasons I decided to come to Washington because I felt that Washington was arbitrary and did not deal with different circumstances differently. It was imposing costs on us unfairly without an adequate voice, and I still feel very deeply that that is true.
The solution that we are trying to arrive at is a complicated solu- tion, but nonetheless the issue is a real one. The problem is a real one. The difficulties we create for people at local government are very real. I have personally experienced them. I share with you that kind of pain, frankly, when you have something inflicted on you that you can't do anything about that you have got to pay the bill for.
The remedies are complicated, and you have all addressed them, and there are many questions. As the Chairman said, I know he wants to get on to his panel, so I will just ask one, although I have very many questions. In fact, I kind of wish we could just have the four of you stay here for a couple of hours so we could have give- and-take to get your thoughts on the solutions, which are indeed complex solutions.
I will ask one question. I think it was Senator Kempthorne who mentioned Atlanta. States and the Federal Government had im- posed mandates on the city which cost, I think, $400 million. States are good laboratories; they should be good laboratories for our ac- tion. Do we know what States have adopted a no money/no man- date approach from a State capitol perspective so we can try to get a feel as to how it might work?
For instance, there could be- an equal protection problem, it seems to me. Why are we imposing the Americans with disabilities law on small businesses, but then saying, well, the local govern- ments, though, don't have to comply unless we pay for the cost of
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the modification in the building? Is it constitutional to either ex- empt local government from the Disabilities Act or to pay their bill for modification of buildings while we are inflicting the cost on small business?
Those are some of the questions that I would love to ask, but I am not going to. I will try to get to the specific question. Do we know of any States that have adopted a no money/no mandate ap- proach in terms of their imposition of mandates on local govern- ments, and how have they worked? That is the one question I will ask this panel and resist temptation to ask a whole bunch of oth- ers.
Senator Gregg. I am sure a number of States have. I can only speak specifically to New Hampshire's experience. We do have such a law at the State level and it does work.
Senator Levin. So the money goes to State governments?
Senator Gregg. The State government — well, maybe I misunder- stood your question, but the State government has a law which says it cannot pass a mandate on to the local towns and commu- nities unless it pays for it, and it is an effective law.
Senator Moseley-Braun. Senator Levin, in Illinois we found that having the information — and that is why, again, S. 563 focuses in on information. A lot of the mandates happen and everybody fig- ures out how much it is going to cost after the fact, and that was a large part of the experience we had. Legislation would pass or we would have a proposal. Once it was passed, then the locals would come running in. Oh, my God, don't you know this is going to cost us "x"? That was the reason for the disclosure approach.
We don't have in our State legislation that says you cannot pass a lav.r and requirements to the local governments that is going to cost money, but we do have legislation that says, whatever legisla- tion you are going to have, you are going to know up front what it costs, what the impacts are, and whether or not it causes a change that may entail an expense to local governments.
Senator COVERDELL. There is currently legislation before many State legislatures dealing with the same subject. As I said, this is a period of awakening. The Federal mandates, though, are the ones that are catching the attention because of the power of them and because of the distance. I mean, a State legislature — and there are certainly many cases of State mandates, but they are at least closer to the issues within the State. So I think while there is concern about State mandates — we have New Hampshire with a law and Georgia posing a law — the focus will be on the distance and the power of the Congressional mandates.
Senator Kempthorne. Mr. Chairman, I might just add, if I may, because I know you want to get to the next panel. It is going to be colorful and candid.
Chairman GLENN. Go ahead.
Senator Kempthorne. Mr. Levin, it is also creating efforts at the State level to do the same thing we are trying to do. Also, I know that all of us here would take you up on your offer for that session, a shirt-sleeve session, to sit down and really figure this thing out.
Senator Levin. Thank you.
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Chairman Glenn. Maybe we need another hearing on this. You could come back and join us. I am serious about it; I am getting agreement here. We may want to do that.
Senator Bennett had a question.
Senator Bennett. Yes. I have a quick question for Senator Moseley-Braun. I have cosponsored all of the other bills that are on the table and I think I am about to sign on to yours, too.
Senator Moseley-Braun. Thank you.
Senator BENNETT. But you say we need a requirement of the cost in the bill. Would it be subject to a point of order if it came to the floor without such costs attached to it?
Senator Moseley-Braun. Yes, yes. Section 2 amends Rule XXVT of the Standing Rules of the Senate to require such reports, and I would imagine if this legislation were to pass, then that would then create the basis for a point of order if a bill without such a mandates note would be presented or enacted.
Senator Bennett. Thank you, because I think that is essential. Otherwise, it becomes just a wish. Well, we didn't get the cost on this bill, but that is no big deal, if someone could stand up and say, I raise a point of order, we cannot consider this bill until the cost is done, then I think we get serious about it.
Senator Moseley-Braun. Senator Bennett, Section 2 of the bill on page 3 amends paragraph 11 of Rule XXVI of the Standing Rules of the Senate. So it is there for your edification.
Senator Bennett. Good. Well, sign me on.
Senator Moseley-Braun. Thank you.
Chairman Glenn. That was fast.
Senator Lieberman?
Senator Lieberman. Thank you, Mr. Chairman. Senator Moseley-Braun, you are on a roll. I think at least on your bill you have solved my mind-body dilemma, and I am glad to go on. Let me just echo what Senator Levin and the Chairman have said. I think I feel the same frustration; that is, the desire to go on, and I hope we can come back.
I want to follow Senator Levin's precedent and just very briefly state a few of the questions that I would ask to explain what is on my mind. There are some cases in which it seems to me that a fair estimate of responsibility and benefit would suggest that the State or local government should pay part of the problem. That is what I am having trouble dealing with.
For instance, Senator Bennett gave a very good example of the situation with the Great Salt Lake — on its face, a ridiculous man- date to put on the government. On the other hand, Senator Gregg knows the great Connecticut River begins in Canada, flows through New Hampshire, down to Massachusetts and through Connecticut.
Senator Gregg. Not all the way through New Hampshire.
Senator Lieberman. Let's just talk about Massachusetts. [Laugh- ter.]
Senator Lieberman. Here is my problem: Massachusetts is pol- luting the river and it is having a real effect on us in Connecticut. The State of Connecticut can't do anything about that; it needs a Federal mandate. In fact, there is some culpability there in Massa- chusetts, so they ought to be paying part of it.
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Another example is a local dump is polluting groundwater and there should be some assumption of — or should there be some as- sumption of responsibility there as part of what would seem to be a Federal mandate, and yet the local government is causing a prob- lem?
The other kind of problem I have, and this is much broader, is that one of the roles that the Federal Government has played has been to establish, in a sense, a minimum national standard prac- tically to avoid the kind of competition between States that can be harmful, for instance, for businesses. Now, maybe we shouldn't be in that. Maybe part of the answer to this is either we should pay for those minimum standards we set or we shouldn't be in it at all. But those are the kinds of questions that I would like to work through with you.
Then I have one final very brief question just to understand, Senator Coverdell, the compelling needs standard that you would establish. If you found compelling need — that is, a compelling need for a Federal mandate — you would be willing to not fund it? Is that what I understand?
Senator Coverdell. Well, I am getting at the point you just raised.
Senator LlEBERMAN. Right.
Senator Coverdell. If, in the process of analysis, we find multi- jurisdictional impact, I think the Senator points to an issue that might lead to a legislating role of the Federal partner. So what I am suggesting is that we need to establish within our process hur- dles that assure we confront that and we have comforted ourselves that it is indeed a compelling need that might call for a partner- ship in the funding. I suspect you could even find in the history of the country certain compelling needs of mandates that ought to have been directed, but the current situation is a disaster in the making.
Senator Lieberman. It is totally open-ended and without
Senator Coverdell. It is totally open-ended and without nearly enough thought, which brings me to this issue of the compelling need doctrine.
Senator Lieberman. Thank you, Senator. Thank you, Mr. Chair- man.
Chairman Glenn. Anybody else?
Senator Dorgan. Mr. Chairman, one question. I think the testi- mony all of you have given today is excellent testimony, and I think, Mr. Coverdell, you mentioned the Safe Water Drinking Act, or one of you did. It is an excellent example. I mean, it creates and imposes obligations that simply don't fit. You have got a rural water system out there with 1,000 people and we from Washington say, here is your responsibility, and they look at this and say there is no way on God's green earth we can meet this responsibility, and they are right.
I wanted to make one other point, however, that is important. Even as we talk about mandates and the Federal Government being the villain, and often it is the villain in these mandate areas, this friction runs both ways between governments, and I wanted to make that point.
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Mr. Gregg, your State, along with many States, including North Dakota, has been seduced from time to time, or least enticed from time to time, to hook up the hose to some Federal program and just chug money out as quick as it can. I mention the provider tax which there was a story on recently. Our State tried to do that in the last legislative session, and my point is when local or State gov- ernments do that on the provider tax and Medicaid and create a phony tax and suck Federal money out under generally false pre- tenses, in my judgment, we need to deal with that as well.
It is true, we impose mandates that are wholly inappropriate. It is also true that at other levels of government they are taking a look at big pots of money to try to figure out how can they punch a hole in the bottom and drain it in their direction. All of us have to be more responsible in the way we deal with the taxpayers' money, and I shouldn't single out New Hampshire because many States are involved in this and my State tried to be earlier this year.
Chairman Glenn. Limit your replay to only a half hour, please. [Laughter.]
Senator Gregg. Well, there are only 33 States involved and I think it was started by Arkansas. [Laughter.]
Senator Gregg. The reason that can be justified is because of the fact of unfunded mandates. If unfunded mandates didn't exist, it would be very hard for the States to have claimed this money and claimed any legitimacy to it. But when you actually, in the New Hampshire instance, compare the amount of unfunded mandates which the State is confronted with to the amount of money we re- ceived, it just about balanced out.
Senator Dorgan. I should not have singled your State out.
Senator Gregg. No. I am happy because that is a good example, but I think what has created the marketplace perversion, so to say, is the initial fact that all these unfunded mandates were put on the States and the States have become so frustrated that they are will- ing to look at any opportunity to take advantage of getting Federal funds to pay for the various unfunded mandates.
Senator Dorgan. I sort of view it as human behavior.
Senator Coverdell. Beat the system.
Senator Dorgan. I think it is unjustified, but my point is this friction runs both ways and all of us at every level of government have to begin to be more responsible with how we deal with the taxpayers' money, and that is the point I was trying to make.
Senator Kempthorne. Mr. Chairman, I might just add, what I hear so often from both State and local officials with regard to this type of measure is we know that this may not put money in our pockets, but it will stop taking money out of our pockets at the local and State level, and therefore we can combine mind, heart and checkbook.
Senator Dorgan. I would just observe this. Everybody in this room, everybody on this panel and sitting at that table spends much of their political lives and their public lives in meetings with people whose question is, how do we get more Federal money. That is much of our life. I mean, every group, every organization — how do we get more Federal money? So that is the other side of this mandate question.
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Senator Gregg. Well, usually, it is a two-part question. How do we get more Federal money to pay for the mandates that you are putting on us?
Senator Dorgan. I would just say that goes on notwithstanding mandates. How do we get more Federal money? The fact is there isn't going to be more Federal money because we are running out of money. Mostly, we are borrowing about $1 billion a day.
Senator Cohen. Mr. Chairman?
Chairman Glenn. Senator Cohen?
Senator Cohen. Mr. Chairman, I have a compelling need to en- gage in this Socratic dialogue, but I am going to resist the unfortu- nate precedent that has been set by Senators Levin and Lieberman and not ask any questions of this panel so that we can move on to the second one.
Senator Levin. This is a rare occasion. [Laughter.]
Chairman Glenn. Thank you all very much. We may have addi- tional questions. Obviously, your testimony was very good and in- teresting or it wouldn't have sparked so many questions, and we may want to schedule another hearing where we get together just with the group of Senators here and go into this in more depth. I think there was interest expressed here and we may want to sched- ule it later on, so we would appreciate your cooperation then, too.
Senator Gregg. Thank you very much.
Senator Kempthorne. Thank you, Mr. Chairman.
Senator Moseley-Braun. Thank you very much, Mr. Chairman and members of the Committee.
Chairman Glenn. Thank you all very much.
Our second panel is the Honorable Ed Rendell, Mayor of Phila- delphia, Pennsylvania, and the Honorable Greg Lashutka, Mayor of Columbus, Ohio. Gentlemen, I saw both of you earlier this morning on C-SPAN. I don't know when the program was recorded, but you were both on at a press conference somewhere speaking about this same subject and I just happened to see that this morning.
Mayor Rendell. With the panel's permission, Mayor Lashutka is going to go first, but the answer to your question, Senator Levin, before we go on is 17 States, seven by constitutional amendments, the most recent of which was Florida, and 10 by statute.
Senator Levin. Thank you.
Mayor Rendell. And others are coming.
Senator Levin. I think it would be useful for our staff, by the way, if they haven't already done it, to pull together the State laws on this subject and give us an idea as to how they have worked.
Chairman Glenn. I think that is an excellent idea.
Did you two agree among yourselves here as to who was going first?
Mayor RENDELL. Yes.
Chairman Glenn. OK, fine. We may be interrupted in a few min- utes by a vote. We are supposed to have a vote on the Senate floor at 11:00, so we may have to leave.
Senator Cohen. 11:05.
Chairman Glenn. 11:05? Is that it? OK, fine.
Mayor Lashutka was selected today not because I happen to live in his fair city, but because Columbus has been singled out and recognized nationally for some of the work they have done in look-
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ing into unfunded mandates, and has been the subject of some TV documentaries on how he has taken the lead in looking into this subject and coordinating with a number of cities around Ohio to see what the impact was. They have a report that they have submitted to the Committee and I think Committee members all have a copy. So, Mayor Lashutka, we welcome you this morning and look for- ward to your testimony. Thank you for being here.
TESTIMONY OF THE HON. GREGORY S. LASHUTKV MAYOR,
COLUMBUS, OH
Mayor Lashutka. Thank you very much, Senator Glenn and members of this Committee. It is an honor to be with you today, and I will try to keep my remarks relatively brief. We do appre- ciate your interest in this, I think, fundamental matter.
As the name of Thomas Jefferson was mentioned earlier, he also said a little rebellion now and then is a good thing. I think you heard from your peers, Senators Kempthorne and Coverdell and Moseley-Braun and Gregg, that indeed they are hearing at their local government that, in fact, there is a need to give this a hard look, and we appreciate your interest in convening this session today so we can look at it.
One of the issues that was requested by Senator Glenn is an in- vitation to define an unfunded mandate. I will repeat the definition I utilized on October 27th in our local newspaper, the Columbus Dispatch, where I said that an unfunded mandate is when the Fed- eral Government orders a city to do something, whether we need it or not, and then makes the city taxpayers pay for — maybe not as precise as some of the legislation that is being considered in your chamber, but the harsh reality is I believe it does drive home the point that our taxpayers are now carrying the burden on issues that are required under either legislation or regulation or court order to the local level. It is like having Uncle Sam take us out to dinner, order our food, and then hand the check to us, and it is happening more and more. We frankly appreciate the meal, but it is kind of hard to pay the bill.
Columbus has been the focus of some of the interest, and it is a recent phenomenon within the last 24 months. We have been amazed at the increase in the scope and cost of those mandates. I would like to summarize ever so briefly what was looked at.
Major Federal environmental legislation began in 1977 with the Clean Air Act and then the Clean Water Act. During the 1970's, the number of State and Federal toxic management mandates reached 11. In the period from 1980 to 1985, nine more mandates were added. Over the last 4 years, an additional 75 toxic manage- ment mandates have been imposed upon those of us in local gov- ernment, and some scheduled for implementation as late as the year 2015.
In the 1970's, along with the mandates came Federal grants, as some of you have mentioned, to comply, primarily for sewer and water treatment plants and those upgraded to comply. In the 1980's, and even today, the river of Federal grants have been dry- ing up while the unfunded mandates keep pouring in.
1 The prepared statement of Senator Lashutka appears on page 88.
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Concerned about our ability to pay for those mandates, our city set up an interdepartmental committee to identify all the State and Federal mandates affecting Columbus and the estimated cost of compliance. In late 1991, the committee found that the cost to com- ply with the 14 major environmental mandates would cost a little over $1 billion in 1991 dollars, or $1.6 billion at a 7-percent infla- tion rate over the following 10 years. That is quite a big bill.
By the year 2000, each of our Columbus households would be paying $856 per year. This represents a drastic increase in utility fees or local taxes. Just by way of comparison, in our city our aver- age property tax for a household in Columbus is between $800 and $1,200 per year, so it roughly reflects existing property taxes at the lowest level.
I would like to also say that as we looked at our study, we want- ed to make sure it was correct and through the Ohio Municipal League, we embraced nine other cities, including Cincinnati, Cleve- land, Akron, Lima, Mansfield, Springfield, Toledo and Zanesville, and we found that that study documented $2.8 billion in compli- ance costs for those 10 major mandates over the 10 years in 1992 dollars. The annual household cost by the year 2001 would reach $812 per year, even though three of those larger cities only looked at compliance costs for 1 of the environmental mandates.
The scary part about the cost estimates is they may be too low. For example, we saw in the Federal Register our cost to obtain the National pollution discharge elimination system permit as a little over $75,000, but the harsh reality is when the bill came in it was $1.5 million, not understand by anyone. In fact, it caused Mike Pompelli and Ken Button of our health and utility departments, to unabashed environmentalists, to scratch their heads and frankly start this study which has now spread across the country.
Despite all the talk about unfunded mandates and high costs, I am not here asking for more Federal dollars. I am here to say that the Federal Government probably doesn't have the capacity to ex- tend those Federal dollars to our city or Philadelphia or to others. What we do need is a change in the relationship between Federal, State and local government.
The people of our city and our country are asking — as you have heard from Senator Kempthorne and others, they want government to work and they don't believe it is working right now. Senator Moseley-Braun, I thought, hit it home right. It is essentially an issue of federalism and a desire for this process to work. Let me suggest briefly four principles that may be helpful.
One, legislation and resulting regulations should be formulated on facts and well-founded, peer-reviewed science. Let me give you one example. We have utilized the Safe Drinking Water Act which mandates that the corn herbicide, atrazine, in drinking water be less than 3 parts per billion. Atrazine, based on information that we have seen, has never been shown to be carcinogenic with the farmers who have actually handled it for over the last 30 years.
However, because the rats that were given large doses developed tumors, the EPA lists atrazine as a possible human carcinogen. A person would have to consume over 3,000 gallons of water a day that contained atrazine at 3 parts per billion to reach the level that was harmful to rats. Our water supply was typically below that
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standard. However, if we had to just have one sample of over 12 parts per billion, Columbus would have to invest $80 million more in a water treatment plant that would cost $2 to $3 million annu- ally to operate. Somehow, that doesn't make sense to most of us.
My point is even if cities nationwide spend tens of millions of dol- lars currently chasing every molecule of water supply, I do not think the scientific and medical community would say it is the best and most cost-effective way for us to wrestle with high-quality water, and we take pride in the quality of water we have in our city. Quite the contrary, we may be forced to spend a huge amount fixing negligible health risks under the current process while more obvious health problems go begging.
Principle 2: Local governments should be able to prioritize their resources and health risks or other risks to achieve the greatest risk reduction for the funds available. One-size-fits-all regulation is counterproductive at the local level because the environment is so different in many areas. Mandates take decisionmaking power away from those of us at the local level, and you should hold us accountable, but let us be a partner in making those efforts.
For instance, the U.S. EPA requires removal of many of our city's underground fuel tanks. Incidentally, we are going to do this well above what we believe will be further regulations coming about that won't tell us whether we are doing it correctly above the
f round. Our Columbus fire division will have to spend over 800,000 to move those tanks. That means to us we could have hired 24 new firefighters or buy two new engines and ladder trucks for that amount. I didn't get to make that decision. It was forced on us by the Environmental Protection Agency.
Others have called it something like spending without represen- tation. Across this country, mayors and city councils and county commissioners have no vote on whether these mandated spending programs are appropriate for our cities. Yet, we are forced to cut other budget items or raise taxes or utility bills to pay for them be- cause we must balance our budget at our level.
Principle 3: Because of variable local conditions, incorporate flexibility into the Federal and State regulatory process. We think that the ability to look at those local issues, just as was discussed earlier by Senator Bennett, makes some sense. There are other ex- amples around the country.
For example, Ohio cities and others were forced to test for a pes- ticide only used on pineapples in Hawaii. Due primarily to our well-publicized complaint, that has now been resolved and is waived in our State, and for that we are grateful. A landfill in Yuma, Arizona, was forced to close because they could not afford the required double liner that protects groundwater. Yuma, Ari- zona, is decidedly different in climate and temperature than those of us in Columbus, Ohio. Yuma receives only 3 inches of rain a vear, so there is no need to protect a landfill from leaching. Flexi- bility in finding ways to meet mandates should also be granted in- stead of command-and-control solutions which may not be the low- est-cost answer for the unique situations and challenges for each of us.
The last and fourth principle is local governments should be af- forded the opportunity to be fully a participant in the legislative
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and regulatory process. You have heard a number of examples from prior witnesses today, but one final example that I think hits the merits of the crime issue. The goals of the Americans With Disabil- ities Act are something that I support, and I know Ed Rendell sup- ports and virtually every mayor across America. However, the law has produced some unintended consequences.
Prior to the Americans With Disabilities Act, one-half of those who came to our city to apply as a police officer were rejected for not meeting those physical requirements. We can't do that today. Now, the ADA mandates require that no physical exam can be given until an applicant is offered a job. So each one of our appli- cants must be processed through the testing, background checks, polygraph exams, and interviewed before a physical exam can be given. Overtime costs for background checks have doubled, and thus the city is forced to spend a great deal more time and money screening individuals who wouldn't qualify under the old process.
The total cost of all Federal mandates is so large that it virtually dictates to our communities how we will spend significant portions of our budget. That is unfair. We as mayors have to make some hard choices. We have to look at all the problems and look at the priorities and set those accordingly.
In many cities, the public health risk right now is getting shot, not underground tanks or water treatment. Many cities may be forced to cut police, fire, sanitation, or other services to pay for these mandates. In essence, local decisions are not made by local officials. They are made right here, and we think the questions you are raising deserve embracing and we are here to support that. We want to restore some balance and accountability to our Federal sys- tem of Government.
The executive order signed last week by President Clinton with members of the National League of Cities and the U.S. Conference of Mayors and the National Association of Counties and a good number of others represented a good step forward, but an executive order is not nearly as powerful as legislation that we hope that this Congress and this Senate, particularly, will take leadership posi- tions on. The order repeatedly states "to the extent permissible by law," and as I have already stated, Federal law is very flexible on many of these mandates.
I thank you for the opportunity to discuss the situation and a chance to build a new partnership at all levels of government. We believe in protecting the environment. We believe in providing good cost for services, and in order to make government more respon- sible we believe you should hold us accountable also.
It is important for us to recognize that in a recent report that Ed Rendell looked at with the U.S. Conference of Mayors, and echoed even more significantly by smaller cities all across the America, of the roughly 314 cities who looked at 10 of the Federal acts, the bill for 1993 alone is $6.5 billion. That is a heck of a lot of money, some of which does come from Federal largess. Much of it, though, comes from those of us at the local level.
Mr. Chairman, members of the Committee, thank you very much for your courtesy and your interest.
Chairman Glenn. Thank you very much, Greg. We appreciate it very, very much.
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When the vote goes in a little while, I will slip out of here and go over to the floor as fast as I can to vote. Senator Levin will chair until I get back or until he has to vote also so we keep the hearing going as much as possible. I also want to note that Senator Stevens has been very interested in this subject. He was unable to be here this morning. He wanted to let everyone know it wasn't because of lack of interest. He is tied up in a defense appropriations con- ference with the House this morning and could not be here, and I wanted to note that because he has been very, very interested in seeing action in this particular area.
Mayor Rendell, welcome this morning and we look forward to your testimony.
TESTIMONY OF THE HON. EDWARD G. RENDELL,i MAYOR,
PHILADELPHIA, PA
Mayor Rendell. Good morning. Senator. It has been very inter- esting to sit here and listen. I think it has been very encouraging to hear what the 14 of you — there were 14 at one time here — what the 14 of you have said about this issue. I think the issue is finally coming to the point where people are taking strong notice of it, but you have to understand the historical perspective.
In 1960, there were two Federal mandates on local government; today, there are 66. The survey that Greg referred to only com- putes the monetary effect of 10 of the 66. By the way, that in- crease, as you can imagine, didn't come in a nice geometric pattern. It rushed up when all of a sudden the Federal pipeline started to close in the 1980's and when you didn't have the ability to send money along with some of the dictates that you gave us.
In fact, if you look at some of the mandates, they traditionally had Federal matches, and some very high Federal matches, 75 per- cent. They are almost all gone, and yet you — and I don't mean the people in this room, but the cumulative Congress continues to churn out mandates. In fact, as Senator Kempthorne pointed out at one of our meetings, many of the people who signed on as co- sponsors of his bill, a bill which would be an outright prohibition, where my heart and head is, went ahead and in Congress this ses- sion voted for things that were Federal mandates and passed costs on to us. We have got to stop and listen.
What is happening is we are getting killed. In most instances, we can't raise taxes. Many townships are at the virtual legal cap that their State government puts on them, or in my case in Philadelphia I took over a city that had a $500 million cumulative deficit that had raised four basic taxes 19 times in the 11 years prior to my becoming mayor. We have driven out 30 percent of our tax base in that time. I can't raise taxes, not because I want to get reelected or because it is politically feasible to say that, but because that would destroy what is left of our base, and our base isn't good enough.
So when you pass a mandate down to us and we have to pay for it, the police force goes down, the firefighting force goes down. Recreation departments are in disrepair. Our rec centers are in dis-
1 The prepared statement of Mayor Rendell appears on page 91.
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repair because our capital budget is being sopped up by Federal mandates, by the need to pay for Federal mandates.
What it boils down to — I think Senator Cohen, who was the first speaker this morning, used the word "prioritize," robbing local offi- cials of our ability to prioritize. Let me give you an absurd exam- ple, but it makes the point. We try to take care of problems. Be- lieve it or not, we just don't sit around and wait for the Federal Government to tell us that we ought to do something about the dis- abled. We are doing handicapped parking spaces and curb ramps on some of our buildings, maybe not fast enough for everybody's liking, but we were doing it, balancing what it cost against our need to do everything else.
Let's assume for the sake of argument I have got 170 specific needs in the city of Philadelphia that have to be funded. Every year, I sit down with the city council and I make a judgment. I prioritize. I never give one of them enough money, never give one of them enough money, but I have to try to cover as many of them as I can to the best of my ability.
You know, there are killer bees in Texas now. I don't know if you are aware of it, but there are killer bees that have come up from Latin America into Texas. Now, I am not going to do anything, I am not going to spend any of the citizens of Philadelphia's money to prepare to do something about killer bees through our health de- partment or whatever as long as they are in Texas. Now, if they get their way up to Virginia, I may take notice, and when they are in Maryland then I am going to start spending some of my tax- payers' money. But that is my judgment, that is my judgment. That is what I was elected to do. That is what the city council in Philadelphia was elected to do, to make the best possible judg- ments.
If you sat with us at budget time — and many of you were local officials and you have your own budget to do — it is heart-breaking what we cannot do. How mandates impact on us is that we cannot do a whole lot more things that are far more important. I think Senator Kempthorne read that quote from the man in the school system who said our kids have the cleanest water in America, but they can't read anymore because we are being robbed of our ability to do the things that are smart to make our own priorities.
Now, you raised a tremendous amount of questions. Senator Ben- nett said that some mandates are stupid. I don't know if I would use the word "stupid," but I am not a Senator. [Laughter.]
Senator Levin. Go ahead. We are used to it, so just feel free.
Mayor Rendell. One of the things we have to get away from is that all mandates are good. Most of them have laudable goals, but when we discuss this issue we all walk around on eggshells. We support the goals of all of the mandates. That is not true. Some of the mandates are good. ADA is a good idea, but do you know what ADA requires us to do with just one aspect of it, curb cuts? It re- quires us to get curb cuts on every one of our streets by the year 1995. The cost for the city of Philadelphia is $140 million, $70 mil- lion in capital costs in the next 2 years.
Our entire capital budget last year, in a city that is strained and fighting hard to regain fiscal responsibility, was $95 million. Curb cuts would add $70 million a year. I am not sure I can go into the
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bond market and get that type of money. We have applied to the DOJ for a waiver to stretch it out over 10 or 15 years, which would add about $10 or $12 million to our costs. We may not get it be- cause we get fought by the advocates. Special interest groups — that is not a dirty word, but they are advocates; they don't see the broad perspective. They took us into court on ADA and said, while we are waiting for you to do this, any time you repave a street, surface repaving, that is street alteration under the regulations set up by the DOJ and you have got to do curb cuts.
They won in Federal district court — unbelievable, but they won. We are appealing to the Third Circuit, but if that decision holds, it will take one-third of our street repaving budget in a city that doesn't come close to repaving the amount of streets that we should, and take one-third out, suck it out, for curb cuts, leaving me two-thirds of the money in the capital budget to do street repaving. We don't have enough money; we don't even come close.
So, number one, even in ADA where the goals are good, the im- plementation that the regulators put on us is silly. It makes no sense, it is impossible. Secondly, some of the things are just plain stupid, dumb, ludicrous, whatever. The EPA has created in Phila- delphia something called the Delaware River Basin Commission and it monitors the quality of the Delaware River, our great river, Senator Lieberman, like the Connecticut River, and it monitors it from a lot of different standards.
One of the standards is the standard of fishability and we are re- quired to maintain a dissolved oxygen level in the water of 4 milli- grams per liter. Now, we have a primary treatment plant for the Delaware River and we have a secondary treatment plant for the Delaware River. The Delaware River Basin Commission did a study, and in 1989 they began that study and released the results. Our fishability quotient wasn't good enough. Even though for the vast majority of days, 85 percent of the days, we were above 4 mil- ligrams of dissolved oxygen per liter, there were some times in the summer months that we slipped below. Even though the average for the year was well above it, they ordered us to build a tertiary treatment plant; impact: $500 million in capital costs, $30 million a year to operate.
I sent back a message to the Delaware River Basin Commission and I said before I spend that type of money — no fish were dying, understand; there was no evidence of fish dying. I couldn't under- stand how they knew the fish were uncomfortable by the level of — I wish they would explain that to me. I said before I take that type of money and take it away from repairing my police stations, doing street repaving, my recreation centers, my libraries, they would have to put me in jail before I would comply with that. I am deadly serious. That is not a grandstanding act. It is silly, it is ludicrous. The regulators are out of control.
We are for the Kempthorne bill, and the U.S. Conference of May- ors is, NACo is, and the National League of Cities is for the con- cepts of the Kempthorne bill for one reason, because it is only thing that I believe will work. The suggestions that were made by the other Senators — and we laud them for trying to help us with this problem — don't work because it is a question of who tells you what the cost is going to be and who assesses the risk that is involved?
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In my written testimony — and I know you probably aren't going to get a chance to pore over each and every word, so let me just give you a couple of examples of how we get it handed to us by reg- ulators. The EPA wanted us to promulgate rules for the storm water discharge permit. They estimated it would cost us $76,000 and take 4,500 hours of work. That is staggering alone. The final cost was $1 million and 13,000 hours of work.
The EPA estimated nationwide that the improvement of waste water treatment facilities, the construction needed— 2 years ago they said it would cost $80 billion. This year, they revised that esti- mate to $137 billion. The EPA says that to control the regulations that they have passed for filtration of drinking water it will cost $2.3 billion nationwide. The city of New York alone estimates that for them to comply it would be $5 to $8 billion. We could go on and on and on. OMB has taken notice of how conservative these cost estimates are and how local government gets nailed.
Then let's get to risk assessment. You remember Mayor Lashutka talked about atrazine in the water supply of Columbus. This is a New York Times study and in this study they quote an OMB table on the risks and the money we are spending to prevent the risks. It is an interesting one. The standard is regulation and price per life. The cost per premature death averted— for averting a single death by regulation, atrazine, $92 billion, $92 billion. You should read the list; it is stunning, it is stunning.
There is no way to do it properly. If you let the regulators come to you with cost estimates and tell us what we should do or what we shouldn't do, it will never work. If you used the compelling need standard that Senator Coverdell said, there will always be some ex- cuse for appealing to some group and finding a compelling need. If there is a compelling need, you ought to pay for it.
Senator Levin [presiding]. Thank you. Let me ask just a few questions and then I am going to run and vote. First, I think most of us would agree with the direction you are heading and with your frustration. I do. I lived with the same kinds of cases that you have just described. Maybe there weren't as many of them back in the 1970's, but we had them. I also, by the way, said I would go to jail first if something that HUD was trying to do was done. So I have been in your position, Mayor, exactly your position.
There are some very specific problems that have to be worked out in any of this legislation. That is why I am interested as to how the States have worked out their approaches to this issue. For in- stance, Mayor, you mentioned a waiver. You are asking the Depart- ment of Justice, I believe, for a waiver, you said. If you have the approach of no money/no mandate, why would you ever ask for a waiver?
Mayor Rendell. Well, there would be no need to ask for a waiv- er. If you are silly enough to give us $140 million in 2 years, I will put in all the curb cuts you want.
Senator Levin. Exactly.
Mayor Rendell. And do you know what? I will be putting in 40,000 curb cuts, Senator, and about 10,000 of them are on streets that nobody walks on.
Senator Levin. I understand your problem. I know exactly what you are saying, but we have got to address the specifics of a prob-
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lem that there should be waivers. There is room for waivers in leg- islation. Where laws make no darn sense, you want flexibility, so you put in waivers with standards so you can get around some of the stupid, inflexible things that are imposed and you build in some criteria in a waiver. It is done in all kinds of laws.
Mayor Rendell. But how much confidence do you have in the DOJ?
Senator Levin. Well, that is a different question. [Laughter.]
Let's just get to the theory of it because if you want flexibility, if you want to put a waiver in — and I think most of us want waiv- ers at times. No matter how great a law is, we still want to build in flexibility with waivers. If you pay for the mandate, how then would the waiver ever be sought, since there would be no incen- tive? If the Federal Government is going to pay that $180 billion for that one person to be saved from that one chemical — you are seeking a waiver from that, I think, aren't you? There was some- thing you were seeking a waiver from, too, Mayor.
Mayor Lashutka. I am not seeking a waiver for that.
Senator Levin. But there was a waiver that you were seeking on a water issue that you made reference to.
Mayor Lashutka. We thought it was absolutely foolish because the last I checked with my agricultural community, there is not one pineapple being grown in Ohio, let alone Columbus.
Senator Levin. The pineapple issue. You sought a waiver and you got a waiver?
Mayor LASHUTKA. Eventually.
Senator Levin. I understand that. We want flexibility. We have got to make sure that waivers are sought. I would love to adopt perfect laws, too, where you never have a need for a waiver, but we can't. We have got to build in waivers and flexibility. My only question is — and I am going to run here in a minute — do you see any conflict between the need for flexibility, which means waivers under criteria no matter how good the law is, and saying that we will pay for the mandate, in that that would remove any incentive, even with beautifully designed laws that are intelligent and not dumb, to seek a waiver? Do you see any conflict in that?
Mayor Rendell. I believe, though, if you had to pay for the law, you would be very careful in the way that it was drawn.
Senator Levin. We would be.
Mayor Rendell. Right now, you are not.
Senator Levin. I agree with that, I agree with that. No matter how careful you are, you still want to put in waivers, I believe.
Mayor Lashutka. I believe you have this following dynamic oc- curring on Capitol Hill, and this is not just a prospective issue; this is also in some minds on Capitol Hill, maybe not this Committee, a look retrospectively. What is the impact of what has taken place in the past upon Ed Rendell and Greg Lashutka and every town, village and hamlet across America? If that is the approach, then the issue is, yes, there will be a conflict, but we think it is meritori- ous to review where we have been before we know where we are going to go.
Senator Levin. OK I want to get a flavor on it, that is all, and your answer basically is there may be a conflict, but it is worth re-
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solving. In your case, Mayor Rendell, you basically don't see any conflict.
Mayor Rendell. I think if you draw the law well, you will elimi- nate 98 percent of the need for waivers.
Senator Levin. I tend to agree with that, but there is still — I won't repeat where I am coming from.
Next, equal protection. Can we provide, do you believe, exemp- tions for municipalities or States from these mandates without cre- ating an equal protection problem? For instance, under the ADA, if we tell building owners you have got to rehab your building in order to make it accessible, can we exempt municipalities from the same requirement under the Equal Protection Clause?
Mayor Rendell. It is not exempting. Remember, what you are doing is you are funding us.
Senator Levin. I understand that. My question, though, is an ex- emption; it is not a funding question. I am very precise on the question. My question is do you believe we can exempt, if we want- ed to, to avoid the funding of the mandate, which costs us money?
Mayor Rendell. No. Then I think you have trouble, but I think you can constitutionally fund local government and not fund busi- nesses.
Senator Levin. I will get to that in a moment.
Mayor Lashutka. I happen to believe that the same crushing ef- fect as was mentioned, I think, by Senator Kempthorne and per- haps others of your colleagues, is true. The same impact is happen- ing. Eighty percent of the new jobs are coming from small busi- nesses and they too are having the crush, and the same look should be given to both. But we are here representing cities, and economic development, to me, is one of the two pole stars that drives my thinking.
Senator Levin. I agree. Just the way you have got to deal with all your problems and priorities, we have a real problem with small business. We have inflicted mandates on small business, and so if we are going to fund your building correction for disabled people under a funding mandate, then the question is how then do we jus- tify requiring a small business person to make that repair without giving that person the money. But let me get to that in a moment.
Mayor RENDELL. Maybe you give them a credit.
Senator Levin. Can we constitutionally — I don't know if you are lawyers or not, but let me ask you the question. Is it your gut hunch that we could exempt cities? Your answer, Mayor Rendell, is no. Your answer, Mayor? I am not talking funding, I am talking exemption.
Mayor Lashutka. I would like to reserve the right to reply to you in an intelligent way. I can't do that sitting here right now, but I will get back with you, Senator.
Senator Levin. Thank you. Again, I know you are not here giving us legal advice, but I really want gut hunches and then I am going to run.
Now, on the funding issue, do you think it is proper, constitu- tional, fair, for us to fund the city in making its building accessible under ADA, but not to fund through a credit or otherwise the small business person to repair his or her building? Do you think it is just fair?
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Mayor Rendell. I think there are two answers. I think, A, it is clearly legal. B, it isn't fair and I would do some form of tax credit. Even if it is not a full tax credit, do a partial tax credit.
Senator Levin. Mayor Lashutka, do you want to give me a non- legal gut hunch on that?
Mayor Lashutka. My sense is that we are in our city an enter- prise zone. We are trying to create jobs and there has to be some fair treatment both for small business and medium-size business in this. A tax credit, I think, does exist. Is it sufficient? I am not sure, in all candor.
Senator Levin. Let me thank you both. Your testimony was ter- rific.
Mayor Lashutka. Thank you, Senator.
Mayor Rendell. Thank you, Senator Glenn.
Chairman Glenn. Thank you, and I am sorry for the truncated nature of things here, but that is what happens when we get into votes, as you are well aware. Let me ask a couple of questions if I could.
You may already have answered this. What percentage of your budget do you feel goes into federally-mandated programs? Do you have a figure on that?
Mayor Rendell. Well, on the operating side in Philadelphia, it is at this point fairly low. We get the most impact on the capital side because we are usually required to construct things — storm water, waste water, ADA ramps, things like that. But to give you an example, Senator, our capital budget — I said this while you were out of the room— our capital budget last year was $95 million. It averages somewhere around $120 in normal years. We are just coming back from the brink of financial disaster.
ADA alone — if we were to comply with the dictates of the regula- tions, to put in curb cuts on all 40,000 intersections in the city of Philadelphia it would be $140 million in 2 years. So each of the next 2 years, I would have to pay $70 million in additional capital costs on a capital budget that is $95 million. I don't even know if I can finance that.
Secondly, if you take just the 10 environmental mandates that the U.S. Conference of Mayors did the study on, in Philadelphia alone over the next 5 years it is going to be $500 million, so $100 million again on top of a capital budget now that is $95 million. So it is crushing in the capital budget and hurtful in the operating budget, very hurtful.
Chairman GLENN. If you could give us a figure when you get back home — if you could give us just a percentage figure, I would appreciate it, so we could have it for the record. I think that would be useful.
Mayor Rendell. Sure. I can say this. The mayor of Salt Lake City at the thing that you watched on TV, Mayor D.D. Cordini — they estimated that 27 percent of their total budget, capital and op- erating, came from Federal mandates.
Chairman Glenn. Greg, do you have any
Mayor Lashutka. I do, Senator. I believe that you will find dif- ferences between counties in Ohio that are structures really of State government and our city government which has much more flexibility on the operating side. Our budget would be, percentage-
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wise, somewhere between 12 to 18 percent. I think the National League of Cities has looked at the issue and it is somewhere be- tween 10 to 20 percent on the operating side, but the capital budg- et, which takes away lost opportunity for parks and other capital improvements or contributions in matches for economic develop- ment, is where we are seeing the crush even more so.
Chairman Glenn. Most of these laws were passed by Congress with very good intentions in response to a need that people saw — a need that nobody quarrels with. But I have been a little bit un- certain as to where the blame lies. When laws pass here and go over into the administration to be implemented by the rules and regulations writers. Now, some of those people, being the experts that they are, like to put their expertise to work and I think some- times they go too far with some of the rules and regulations.
I don't know whether you have had a chance to look back or have ever taken the time to look back at some of the original legislation and see whether that is an area where we could do some improving in that transfer between what is passed here with good intent and what gets out to you as regulations so detailed and so onerous that you can't live with them. Is that something we ought to look into, also?
Mayor Lashutka. Strongly. In my prepared comments, but also in my oral testimony, Mr. Chairman, the difference between $75,000 for my storm water permit versus $1.5 million generally is pretty far from the mark. I don't think anybody would say that is even in the ball park, and that came from the Federal Register es- timate on what would take place after the law was passed into the regulations process, but we had to live with the final bill, not those who drafted the regulations.
Mayor Rendsll. In fairness to the Senate and the House, it is the regulations that are promulgated after you pass the act that are the crusher. In my testimony — I won't repeat it here — in my written testimony we detail where EPA, for example, gives us a fig- ure of what it is going to cost. It turns out to be incredibly unrealis- tic, I mean just incredibly unrealistic.
For instance, on those curb cuts that I mentioned to you, the reg- ulations say we have to do them by 1995, so that makes it $70 mil- lion a year in capital costs. If the regulations gave me 10 years to do them, Senator, it would be $14 million a year in additional cap- ital costs, still burdensome, but not as debilitating as $70 million. So it is mostly in the regulation. But what you do, maybe uninten- tionally, is you open the spigot a little bit and then those regulators come with a wrench and, boom, it is a flood coming out.
Chairman Glenn. Well, we addressed that in this Committee, or tried to, through OMB in cases where regulations apply to busi- nesses, and so on, and tried to make a regulatory review process where OMB's Office of Information and Regulatory Affairs reviews rules and regulations to make sure they are not excessive and aren't duplicative before they are put out. That is a process that has been revised as part of the new administration's Executive Order, and we are working with them very closely on that and we may see some results from it one of these days, too. I hope we do because that is the logical place to cut out a lot of the folderol.
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A couple of other questions here real quick. Most of things you mentioned are environmental. How about the impact of other legis- lation that is not environmental? Is that a major factor for you? Is it 90 percent environmental, or higher?
Mayor Rendell. I would say it is a majority environmental, but not 90 percent. Right now, ADA is probably as significant a hunk of future capital needs of the city of Philadelphia. That figure I gave you was only curb cuts. It is not ramps and all the other things that Greg talked about. I think one of the Senators referred to Motor Voter, maybe Senator Roth. Motor Voter unintention- ally— I am sure nobody thought it through, but it has a significant impact on our voting commission, I mean in the millions of dollars. So there are a lot of things.
Of the 66 mandates, certainly the 10 environmental ones that the Columbus study was based on are the majority of impact on us, but it would be wrong to say that the only financial impact comes from the environmental.
Mayor Lashutka. Of the 10 that were provided in the U.S. Con- ference of Mayors study, eight of those were environmental, two were non-environmental, the Americans With Disabilities Act and the Fair Labor Standards Act. But the trend certainly disturbs many of us that it is not just environmental, and we are again for a clean environment. It is just what is the standard and what is the broader impact, again, not just from the law, as you have men- tioned, but the regulations coming forward, Senator, that have the big clout on us.
Mayor Rendell. And the regulations, again, don't evidence any real common sense. I don't know, Senator, if you were out of the room for the tail-end of my testimony. You heard Greg talk about the chemical, atrazine, and how much it cost Columbus to test for that. I referenced a New York Times study, "What Price Cleanup," and it is in the packet that I have submitted.1
The New York Times puts a chart in here from the OMB and it is "Regulation and the Price Per Life." It has a number of Federal regulations, not just all environmental. Cost per premature death averted, for one premature death averted — atrazine, $92 bilhon.
Mayor Lashutka. Let me give you a little more realistic example that I can understand, and I think it was Senator Dorgan who talked about his interest in lead. We had a little blip in our water purification system. Our billing period is once every 3 months. Be- cause the rules required a notice in 2 months, it cost us roughly $48,000 to put out a notice that we didn't think was meritorious. That was on lead ingested in water. We don't have a lead problem in Columbus, to our knowledge.
We do have the lead paint problem on our south side, and with that $48,000 we could have reached households by telling mothers and fathers about young people whom we want to bring into one of our six health centers and have them tested and give them infor- mation. That is the last opportunity, I think, that is at issue in numbers that most Americans can understand. We start getting into millions and trillions. I think most get lost, but $48,000 can
1 See page 110.
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go a long way for mailings to inform people that they can help take account of their young people.
Chairman Glenn. How do you keep up with the mandates? Do you have a staff that does nothing but look at the Federal Register every day? How many people are involved with that?
Mayor Rendell. Well, Senator, again, while you were out, on the storm water discharge, the new regulations, to produce a storm water discharge permit under the regulations, the EPA estimated it would cost Philadelphia $76,000 to do the permit and about 3,000 hours of man and woman work. It turned out it cost us $916,000 and over 13,000 hours of man and woman work. Can you imagine that, 13,000 hours to prepare a permit, $1 million to pre- pare a permit? There is something really wrong.
Chairman Glenn. Yes.
Mayor Lashutka. The cost in the Price Waterhouse study rough- ly is between a quarter and a third of the overall. It was $6.5 bil- lion in those 10 mandates I mentioned to you, Mr. Chairman, and the estimated annual cost of staff and the hours, excluding over- time, is a little over $2 million. That, to me, I think tells the story pretty ably that it is costing a heck of a lot of money to really pro- tect ourselves and keep apace with the vast amount of regulations coming in the door.
Chairman Glenn. Well, it was very interesting and we appre- ciate your testimony very much. I don't know whether Senator Roth has any other questions or not. We are prepared to move on unless you have some questions.
Senator Roth. No. Thank you, Mr. Chairman.
Chairman Glenn. I would hope that if there are additional ques- tions— and obviously we have a ton of them here this morning — if there are additional questions, we would hope you would respond in writing so we could include them in our record here. We may want to get back to you for a later hearing some time, since you two are so involved in this issue.
You know, you two have staffs to do this thing. I wonder what happens with a small town out in the country some place where the mayor is part-time and he runs the local dry goods store or something and tries to keep up with being mayor on the side. He doesn't get the Federal Register every day.
Mayor Rendell. You know, some of those towns are literally giv- ing up their charters because they can't comply. They are turning back the keys.
Chairman Glenn. They are unincorporating.
Mayor Rendell. Unincorporating.
Senator Roth. Mr. Chairman, could I just welcome my neighbor, the good Mayor of Philadelphia?
Mayor Rendell. Well, thank you, Senator.
Senator Roth. It is a pleasure to have him here. I apologize for not being here for his testimony. Unfortunately, we have got three committees, all of which have hearings on matters of importance to my State of Delaware. But we are delighted to have you and we look forward to working with you on this matter.
Mayor Rendell. Well, thank you, Senator. I have great feelings for the State of Delaware, not only the first State of our Union, but the State that gave me my wife.
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Senator Roth. We do good work. [Laughter.]
Chairman Glenn. Thank you, gentlemen. We appreciate it very much.
Mayor Lashutka. Thank you very much, Mr. Chairman.
Chairman Glenn. Thank you.
Our next panel is the Honorable David Worhatch, Township Trustee from Hudson Township, Ohio; the Honorable David Ennis, Representative, Delaware House of Representatives; and the Hon- orable Susan Ritter, County Auditor of Renville County, North Da- kota. You represent wide geographical differences in the country and we appreciate your being here this morning.
Susan, if you will go ahead and lead off, we will appreciate your testimony this morning. We will go right across the table there. Pull those mikes up real close, and people will be settling down here in just a second.
Senator Roth. Mr. Chairman, could I just interrupt, first of all, to welcome my good friend and colleague, Dave Ennis. Dave Ennis is a member of the Delaware House of Representatives. He has been an outstanding leader in many areas. For example, he is Chairman of the House Economic Development, Banking and In- surance Committee.
Frankly, I think the primary reason we are here, or at least one of the primary reasons we are here today is because Representative Ennis came to me and talked about the problem, and I want to ex- press my appreciation for his initiative and again thank you for fol- lowing through in these hearings. So it is a great pleasure for me to welcome him today.
Chairman Glenn. Ms. Ritter, if you would lead off, we would ap- preciate it.
TESTIMONY OF THE HON. SUSAN HITTER,* AUDITOR, RENVILLE COUNTY, ND
Ms. Ritter. Thank you, Chairman Glenn.
Chairman Glenn. You are in North Dakota, the Renville County Auditor, right?
Ms. Ritter. Right.
Chairman Glenn. OK, good.
Ms. Ritter. I am Susan Ritter. I am the Renville County Audi- tor. I am also the President of the North Dakota Association of Counties. Before I sat down, I thought I did have the smallest staff in here, but my staff is two and the gentleman sitting beside me has a staff of 1. So all of a sudden I am from a big county.
I am delighted to appear before you to discuss the problems that Federal mandates create in my county and their effects on local ability to provide effective, efficient local services, programs and ac- tivities.
Renville County has a population of 3,160 people. Although our numbers aren't vast, our local governments are very dedicated to providing a variety of services. However, I believe that, in part, Federal unfunded mandates have eroded our local governments' ability to provide these services.
1 The prepared statement of Ms. Ritter appears on page 162.
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Some examples of unfunded mandates in Renville County and two of our cities — specifically for Renville County, we are conduct- ing the Superfund Amendment and Reauthorization Act totally by county funds through our general fund. The Americans With Dis- abilities Act to date has cost us about $30,000. We have estimates for an elevator for $250,000. For us to generate $250,000, we would have to take all of the money that we can levy in our general fund for this year and one-fourth of what we could levy next year to pay for that elevator.
In our Department of Human Services, the director of that de- partment informed me that in 1984 she had seven unfunded social service programs. Today, she has 15. This has contributed to a 31- percent increase in the social service department budget.
In the city of Mohall, our county seat city, we have 931 people. They had to close their landfill because they could not meet the regulations. That cost them $67,000. That is $72 per person in the city of Mohall.
In my home city of Sherwood, we have a population of
Chairman Glenn. Can I ask something before we proceed fur- ther? Just a short interruption here. Who closed them down? Was the State operating on behalf of Federal law, or did the Feds actu- ally come in and close down the landfill?
Ms. Ritter. Mr. Chairman, I believe that it was a Federal law that was regulated by the State and then those enforcements together
Chairman Glenn. One of these arrangements where an agree- ment has been worked out where the State will act on behalf of the Federal Government and they came in, then, and closed it?
Ms. Ritter. Right, right. There were just too many regulations. They have a staff of one, also.
Chairman Glenn. Thank you.
Ms. Ritter. The city of Sherwood, with a population of 286, will spend $2,000 annually to test water. That is one-half of the reve- nues that they can generate in their general fund through the tax- ation process.
These are just a few examples of the mandates that are causing major effects on the funding of local programs and services. When this is multiplied times the many counties and cities of the Nation, it becomes more and more apparent that we need your help in funding these.
One of the major services provided by Renville County is the road and bridge repair and maintenance program. It is vital to our rural population to have a network of roads to provide an efficient means of transporting our agricultural and oil products to market. Although the Federal Government shares the cost of our secondary road systems, there are numerous regulations and standards that drive up the cost of road maintenance and construction.
Local engineers estimate that it costs 35 percent more just to meet Federal specifications. Higher construction costs prevent us from repairing all the roads in our system. Stats show that it costs about four times as much to repair a deteriorated road than a road in better condition. Railroad abandonment is common in our county and, as the trend continues, agriculture will rely more and more on local roads to get their products to market.
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One of the questions that I was asked at last week's press con- ference on unfunded mandates was what would you do with the money that you spend on mandates if they were no longer imposed on your local government. Renville County would use the addi- tional money to improve our roads and bridges and our courthouse that was built in 1937. We would attempt to hire additional staff, especially in law enforcement, where we have been forced to con- tract now with a State radio system to cover non-office-call hours. We would also like to use the outgrowth of technology in purchas- ing a computer system that would network our courthouse with our State.
In Renville County, we have a finite amount of money and we have to provide certain basic services that no one else provides. Our sources of revenue are mainly property taxes and oil and gas production taxes. Our tax base has dropped in the last 5 years by $940,000 and our oil and gas production taxes have decreased by 36 percent in the past 8 years. This puts Renville County in a posi- tion of raising property taxes and/or reducing services.
As more unfunded mandates are imposed on Renville County, we continue to ask the employees to help with the implementation process at no extra compensation. We cannot afford to hire addi- tional staff, so many times the elected officials are asked to add yet another responsibility to their list of duties. Each time we do this, I feel that we are lowering employee morale because we add extra duties without extra compensation. We just don't have the money to pay the extra compensation.
We have raised taxes repeatedly over the years to provide our local services, and although the taxable valuations values have de- creased, we have raised taxes to the maximum allowable levels. In fact, we have even taken them beyond the statutory limits that our State legislature provides. We were given the opportunity to raise taxes above the statutory limit, but in our last legislative session the legislature had considered lowering our taxes back to the statu- tory limit. In my county, that would have taken our General Fund level from 32 mils back down to the statutory 23 mils. Again, that would have been a drastic decrease in our ability to raise local rev- enues.
As you can see, we not only need the support of the Federal Gov- ernment to help with financing and implementing mandates, but also the cooperation of our State government. I think that we need to build an equal partnership among Federal, State and local gov- ernments in the legislative and regulatory development process. We must work together to agree upon and provide a high-quality system for public service. By coordinating our programs, our serv- ices and activities, we can build the trust of our people in the struc- ture of our federalist system.
Based on findings from a recent survey conducted by the Advi- sory Commission on Intergovernmental Relations, which our Sen- ator Dorgan serves on, county government received good grades by the public. We need to protect and improve our standing with the public by ensuring that we provide the services that they want.
I agree with Vice President Gore's proposal which calls for a board to be organized to improve the way the Federal Government works with States and localities. This group will be committed to
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solutions that respect bottom-up initiatives rather than top-down requirements. Renville County prefers a proactive role to change, but many times mandates leave us in a reactive state. We in all levels of government can work together to develop a high-quality system of public service starting now and carry that into the 21 century.
This is in the same vein as President Clinton's executive order enhancing the intergovernmental partnership which we do ap- plaud. This would allow us, as many before me have stated, the flexibility that we need to design solutions to the problems that face us.
Senator Dorgan has introduced the Fiscal Accountability and Intergovernmental Reform Act which will require the Federal Gov- ernment to determine the cost to State and local government and private business of unfunded mandates. I endorse this legislation and I see it as a step to an end to unfunded mandates as we now know them.
Senator Dorgan's office has contacted the North Dakota Associa- tion of Counties and the North Dakota League of Cities in an effort to address the current mandate costs and to work in a cooperative effort to ensure that when a Federal mandate is imposed on us, we have the means of financially implementing it. I would like to thank Senator Dorgan for his commitment to local government, and I would encourage all Senators to work with their local officials in finding solutions to the problems imposed by mandates. By working together, we will all have ownership in our programs, our services and activities that will provide a higher quality of life for the people of this Nation.
Before I conclude, let me submit a copy of the National Associa- tion of Counties survey on unfunded mandates which was released last week. In essence, this says it is costing us $4.8 billion a year to follow 12 mandates. On average, counties are spending 12.3 per- cent of our locally-raised revenue
Chairman Glenn. Are you submitting a copy of that for the record?
Ms. RlTTER. Yes.
Chairmen Glenn. Good. We would appreciate having it.i Thank you.
Ms. Ritter. Again, 12.3 percent of our locally-raised revenues are going for only 12 of these mandates.
Thank you for giving me the opportunity to testify.
Chairman Glenn. Thank you very much, Ms. Ritter. We appre- ciate it very much. I probably should have waited for your testi- mony until Senator Dorgan got back, but we went right ahead any- way. It was good testimony.
Mr. Worhatch, we welcome you this morning from back home in Ohio, Township Trustee of Hudson Township, Ohio, right near Akron, in that general area.
1 See page 140.
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TESTIMONY OF S. DAVID WORHATCH,i TOWNSHIP TRUSTEE, HUDSON TOWNSHD?, SUMMIT COUNTY, OH, ON BEHALF OF THE NATIONAL ASSOCIATION OF TOWNS AND TOWNSfflPS
Mr. WORHATCH. Thank you very much, Mr. Chairman. We are all proud of you in Ohio representing us here in Washington, and when you invited me to come I was very pleased to come.
Mr. Chairman, distinguished Committee members, thank you for the opportunity to testify on the impact of mandates on local gov- ernments. Your leadership in tackling this issue is of such crucial importance to local government that I am here today to try to en- courage you to really take this on.
As the Chairman mentioned, I am David Worhatch. I am a town- ship trustee in Hudson, which is in Summit County in Ohio. I am a part-time official. I work a lot more hours than you would expect from someone in a part-time position. I am a lawyer by profession, but I am testifying here both as a local elected official and also on behalf of the Ohio Township Association and the National Associa- tion of Towns and Townships, known as NATaT.
We especially appreciate your interest in hearing from small gov- ernments on this issue because of the regulatory burdens that they are facing. In many ways, my township is typical of many that are affected by the dual problems of unfunded mandates and regu- latory inflexibility.
Hudson Township boasts a population of 17,600 people. Yet, our size places us squarely within the category of local governments with populations under 25,000 and they constitute 93 percent of all local governments nationwide, according to the last census. Now, Hudson Township, Senator, you might know, is the second fastest growing township of all the 1,317 townships in Ohio, and we have a better than average tax duplicate or tax roll for properties, but we are still increasingly challenged by the problems of mandates and the inflexibility of regulations in the process at both the Fed- eral and State levels.
Mandates take many forms. They can require local governments to undertake and perhaps finance some new responsibilities or they can frequently set minimum standards that are higher than local governments would have set for themselves. Sometimes, they re- quire very rigorous and sometimes unnecessarily expensive or un- suitable means of complying with a mandate, and it is that third form that I would really like to focus in on today.
But before I do so, I think I ought to just make one small point about the way in which we fund at local government levels. Small local governments have a very limited tax base with which they can operate to pay for regulations and mandates. As you are well aware, local governments must rely increasingly on the property tax, which is a particularly unpopular tax.
Most small communities just do not have the option of using a sales tax or an income tax to make up the difference between what can be raised in property tax and the amount necessary to comply with mandates. Without revenue, compliance with costly regula- tions is obviously very difficult, and if a community cannot afford to meet an environmental mandate, for example, it faces enforce-
1 The prepared statement of Mr. Worhatch appears on page 170.
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ment action and possibly steady to increasing pollution or contami- nation.
Let me give you an example. If a small community actually oper- ates a landfill but cannot meet the costly and detailed criteria for continuing to operate that landfill, it then finds itself forced to close the landfill. That has the concomitant effect of increasing the likelihood that midnight dumping might occur, and obviously that is contrary to the intent of regulations to prevent adding to the pol- lution of the environment.
Now, we don't think that exempting communities from regula- tions is the answer. People in small communities do not want to live as second-class communities. They really want to be able to comply with Federal regulations, but they want to be able to com- ply in a sensible manner. All residents should be entitled to benefit from the policy objectives behind Federal mandates. They should not be denied those benefits just because they happen to live in smaller governmental units that can't afford to deliver those bene- fits.
When you consider, Senator Glenn, that 43 percent of the elector- ate in Ohio alone lives in townships, you can readily see that it is a large number of people who stand to be denied benefits from this process just because they live in communities that happen to be or- ganized under the township form of government.
While we don't advocate blanket exemptions for small commu- nities, we do believe that when Federal agencies issue rules that have a significant impact on smaller communities, those agencies should explore ways that rules can be flexibly implemented by small communities. Flexibility should become the norm in Federal agency regulation.
Here are some of the objectives that I think we might try to work into the regulatory process. For example, when agencies regulate, they should seek to achieve statutory goals as effectively and effi- ciently as possible without imposing unnecessary burdens on the public. Laws and regulations designed for application to large-scale governments should be looked at so that there might be some addi- tional flexibility built into them because perhaps the problem that you are trying to solve is unique to the large-scale government, but it is being applied across the board to the smaller-scale.
Uniform Federal regulatory and reporting requirements some- times are unnecessary or disproportionately burdensome on local governments and should be reformed. Treating all regulated gov- ernmental jurisdictions as equivalent may lead to inefficient uses of regulatory agency resources or enforcement problems and in some cases, as I mentioned before with the landfill, actions will take plp.ce that are inconsistent with what the legislative intent really was.
I am actually reading from the purposes of the Regulatory Flexi- bility Act of 1980. These actually were built into that section of the Act that declares that it was Congress' policy to ask that more reg- ulatory flexibility be built into the process. The real question I have for you, Mr. Chairman, and the others members of this Committee is whether or not we can do the job right without looking at pos- sible reforms of the Regulatory Flexibility Act of 1980 as well.
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As you know, that Act is intended to require Federal agencies to analyze fully the effects of their regulations on small entities. A small entity for government is defined as any government with less than 50,000 people living within its jurisdictional limits. The law also is supposed to require agencies to explore alternative compli- ance mechanisms and to involve the smaller entities actively in the development and review of regulations. While the law seeks to en- sure that Federal agencies will develop effective and efficient regu- lations that do not place unnecessary burdens on the public, unfor- tunately we have not seen the fruits of that bill that was passed in 1980.
Alterative regulatory approaches are to be considered and, as ap- propriate, should be made available to small local governments. In addition, regulations are to be developed under the law with suffi- cient opportunities for input, and these are great objectives, but in practice they haven't worked out.
A Federal agency, in looking at a regulation, has two options. It can either certify that its regulation has no adverse impact on small governments or it can conduct an impact analysis. Unfortu- nately, what is happening too often — in fact, I would say in the vast majority of the cases — is that the agency head is simply cer- tifying that there is no adverse impact.
Significant alternatives should be explored, but instead of going through the analysis required for assessing opportunity for regu- latory flexibility, the certification process seems to be a clever and useful dodge. This way is used to avoid that burdensome analysis process, and we frankly think that we can look at what the reason for that is.
At this time, there are no real teeth in the Regulatory Flexibility Act. The bureaucratic dodge is able to take place because the Act simply suffers from the lack of an ability to have some measure of judicial review of what a Federal agency head goes through.
I noticed, Senator Glenn, that you and Senators Levin and Lieberman had put together proposed legislation which I think you have titled the Small Government Regulatory Improvement and In- novation Act of 1993, and I really commend you and the other Sen- ators who have signed on to cosponsor this legislation for doing that because it will take an important first step in making sure that the Nation focuses in on this important element of the overall process of dealing with Federal mandates and improving the way in which smaller governments can cope with those mandates.
Establishing a small-government coordinator, as your legislation suggests, will give Federal agencies a place to focus small-govern- ment policy within the agency. That is good. A regulatory flexibility pilot program will also draw attention to the need to draft regula- tions in something other than the one-size-fits-all approach. A size that fits the larger cities certainly won't fit the smaller, and we cer- tainly welcome that as well.
But as I said, Senator Glenn, these are very good first steps in the right direction, but those of us that are on the front line in this issue have to ask ourselves why, after 13 years of the Regulatory Flexibility Act, we should settle for just pilot programs. The fun- damental problem of the Act will not be solved unless we also at-
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tend to the Regulatory Flexibility Act and make improvements there.
So to correct this problem, what we are recommending — NATaT, the Ohio Township Association, and myself particularly, having seen this situation — is that Congress should amend the Regulatory Flexibility Act itself to subject agency compliance with the Act to judicial review. Individuals aggrieved by an agency's failure to com- ply with the Act — that is to say, with the agency's failure to actu- ally conduct an analysis and establish what those factors were on the Federal Register to establish why there should not be an ad- verse impact seen by the smaller governments — their failure to comply with the Act would be able to be challenged in court. In other words, the agency's certification that its regulations had no impact would simply now be subject to judicial challenge.
House Resolution 830, I believe, which was recently introduced apparently now has 230 cosponsors and it does provide for judicial review of Regulatory Flexibility Act decisions, and we would urge you to consider that bill and maybe incorporate its best provisions into yours, Senator Glenn.
One of the concerns that has been raised, however, on the judi- cial review question is are we just going to have a lot more litiga- tion as a result of all this. I would submit to you, Mr. Chairman, that really we must weigh the difference between continuing with the status quo as we have it now, where Federal agencies are able to pretty much, with a signature on a certification, get away with not looking for more flexible, cost-effective, more innovative or cre- ative ways to be able to administer the law and yet not on a costly basis to the smaller governments — look at that on one hand, versus the real risk of litigation under this kind of judicial review.
The kind of review I am asking you to consider is really limited to the question of whether or not the agency head has been able to satisfy on the record that there are adequate factors in place for the Government agency to justify not conducting the analysis in the first place. It is not asking you to allow the agency head to be subjected to having the entire body of regulations thrown out. In fact, that is to the contrary at this point. We think that it is more important to require the agency to do the analysis because by doing the analysis, not only smaller governments but larger governments and the Federal Government as well will benefit.
Lastly, I would just ask you to recognize that we also recognize that there is not going to be a lot of money to throw at problems any longer. Federal mandates asking for you to send money might not be as realistic for us, and especially since the smaller govern- ments were always at the low end of the chain anyway after the big governments and the counties take their money and the town- ships end up getting a little.
Still, the problems need to be addressed, and the experience of recent times is that unfunded Federal mandates continue to be passed on to States and localities. State and local governments no longer can continue to shoulder these burdens, Mr. Chairman. There is a great sense of resignation and frustration at the local level, and as a result one thing that we see happening among us part-time officials is that good people are either declining to run for office or stepping aside because they know that they will be forced
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increasingly to take unpopular steps simply because they have to start complying with these unfunded Federal mandates or these in- flexible Federal regulations at the expense of eliminating or cutting back on very important and successful local programs that have contributed toward the protection of the health, safety and general welfare interests of the people living in those local communities.
Our Nation, Mr. Chairman, simply cannot afford to run these sorts of risks much longer. The potential of the legislative reforms you are considering could go a long way to restoring public con- fidence in elected officials at all levels of government. I urge you, please, to take this action.
Thank you.
Chairman Glenn. Thank you very much.
Mr. Ennis?
TESTIMONY OF THE HON. DAVID ENNIS,i REPRESENTATIVE, DELAWARE HOUSE OF REPRESENTATIVES, ON BEHALF OF NATIONAL CONFERENCE OF STATE LEGISLATURES
Mr. Ennis. Thank you, Mr. Chairman. Senator Roth, I appreciate your comments. Distinguished members of the panel, I appreciate the opportunity to speak today on the problem of unfunded Federal mandates on behalf of the States. I realize that some of our col- leagues from Ohio, Mr. Chairman, I believe, met with you earlier and we appreciate very much your and Senator Roth's follow- through in the hosting of this panel.
In the late 1970's, I believe it was, I riding in a car listening to the radio and I was made aware of a news event that was taking place in New York. At that time, President Carter was presenting a check to Mayor Koch in New York, and Mayor Koch said a few very brief sentences that I have remembered for a long time. I was not involved in politics at that time. He said our forefathers, with the best of intentions, gave away more than we could afford. I view that statement as applying in many ways to the proposal in reverse of the mandates; that is, the legislation that has been forthcoming from the Federal level with the best of intentions. I am not here to in any way criticize the goals of that legislation. I think you folks have obviously seen problems and have sent messages to us, but I am deeply concerned about the affordability of those goals.
As the sole panelist elected at the State level, I am honored to be asked to testify before you and to carry the banner for State governments, especially through organizations like the National Conference of State Legislatures, which has been working for years to bring this subject to the attention of the public and to other gov- ernmental levels.
We have been publishing since 1990 a document known as the Mandate Monitor, and I would at the end of the session like to leave copies available for all members of the panel, if I may. NCSL has identified 174 — and there have been a few numbers given today; earlier, 172 was mentioned, I believe, from a previous re- port, and I believe at least 2 more bills, the Federal Medical Leave Act and the Motor Voter Act, were added to that, which brings it
iThe prepared statement of Mr. Ennis appears on page 181.
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to 174 — public laws which require some mandate on State govern- ments.
From National Unfunded Mandate Day, which has been de- scribed previously by some of our other elected officials, we did a survey on just five of those Federal mandates. Twenty-two States reported that over the period from 1989 to 1994, when some por- tion of those mandates were in effect, nearly $1.5 billion was re- quired to be spent by State governments. That is based on five of 174 Federal mandates. We can all imagine what the impact would be when you add the entire cost for all of those Federal mandates.
I happen to represent the 6th District, which is an economic dis- trict very mixed in a suburb of North Wilmington. I heard one of the other mayors speak about being an enterprise zone. We happen to be one of those targeted areas where we have a very old suburb with old apartment complexes and other infrastructure that has de- teriorated over the years.
Senator Roth will remind you that we recently passed a resolu- tion in the State government that asks for our Congressional dele- gation to return periodically to the general assembly in our capitol to discuss the impact of Federal mandates, and it is my under- standing that several States have passed similar resolutions.
Our controller general last year was asked to assemble an esti- mate for what the impact was on Delaware's budget, and at that time we prepared an estimate that approximately 15 percent of our State budget would have been controlled by Federal mandates. In preparing for today's testimony, I asked that that be reviewed and I was provided another document that says it could be as high as 38 percent. Now, that is quite discrepancy, and I recognize that.
As I heard the other Senator speak this morning, the data is part of our problem. We are dealing with some very soft data, but I think it is very easy to imagine that the magnitude across the 50 States of budget mandates in the 15 to 25 percent is struggling us.
There is another factor about State government that I think is extremely important. As I heard earlier today some previous State and government officials testify, we go into a budgetary process with relatively little flexibility for the upcoming year's budget. Often, there is an assumption, because we may try mechanically to go through zero-based budgeting processes, that we don't have to fulfill and fund all the things that are in place. But the real world is we can't eliminate 100 percent of the State employment, we can't eliminate the funds to the pensioners, and what have you.
I asked the controller general in Delaware about what would be his estimate for a governor and a legislature, a range of percentage of the budget we really have flexibility with. His estimate was that we are down to as little as 5 percent of the real budget that we have influence over controlling on an annual basis. That doesn't give us much latitude when we can pass a Federal law that will, in fact, require implementation of the Clean Air Act or other Fed- eral mandates that could take anywhere from $15 to $20 million in one piece of legislation.
The State of Delaware, as small as it is, this year has projected a revenue increase for the coming year of a total of $65 million. So we are caught in a terrible trap with the limited flexibility of our State budget, proposals coming from the agencies that are trying
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to meet the needs of the citizens, and the Federal slide that is com- ing our way which is a significant burden. We just don't have enough money to carry it through.
I was asked to give a couple of specific examples, and in talking with my colleagues I was reminded by the chairman of our finance committee, Representative Richard Davis, that in talking with the controller general and the folks who run our public transportation system for specialized citizens, which is known as DAST, because of the ADA law that has been passed they have experienced in the last few months a 30-percent increase in ridership because they are provided that under the ADA law.
We have had to remove from a category of people that we can serve people who have kidney dialysis that had been receiving that as a result of State policy for years. We do not have enough room or transport vehicles or drivers or budget to continue to provide that transportation service to those dialysis patients.
Another very alarming Federal law that has caused a great deal of consternation in Delaware has to do with the Clean Air Act. While many States have implemented all phases, Delaware has been very slow to do so. One of our problems, quite frankly, has to do with our small size and the problem of migrating pollution passing through our State.
I was also informed by some of our technical people — and this is a little bit of an alarming statistic — that 30 percent of Delaware's non-compliance with ozone is bio-genetic in nature. Now, Senator Roth will tell you we go to a lot of chicken dinners in Delaware, and we raise an awful lot of chickens and they leave a residue and, unfortunately, so do the cows and, quite frankly, so do the wet- lands and the marsh lands. All of those natural forces contribute 30 percent of Delaware's non-compliance in the ozone portion of the Clean Air Act.
So when we are being asked by the Clean Air Act to reduce in the first phase by 15 percent the amount of non-compliance, we are not going to be able to do that necessarily in the marsh lands or the wetlands, but we have to do that in the mechanical forces, which really means we might be having to do a 20-, 25-percent re- duction.
An additional experience that I have had with two environmental committees — and I have noted today several times the discussions about environmental law enforcement having been a part of the problem. I was asked several years by the business community to chair a thing called the New Castle County Hazardous Materials Advisory Council because I had been very active in environmental issues. This was a voluntary effort by the State, private industry and regulators.
Shortly after that, the Federal Government passed a law called SARA Title III, or community right to know. While there was very little funding provided by the Federal Government, we have strug- gled for some 5 or 6 years to implement that law and to be in com- pliance. I can share with you the newsletters that are being sent out by Federal publications describing the companies across the country that are being fined by the EPA for non-compliance, and that hammer, while it is legal, is a terrible intimidation to busi- nesses that might exist in our State or in many other States.
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Contrary to that is a Federal program called the Delaware Estu- ary. The Federal Government, through the EPA, has established a 5-year study and implementation plan for a comprehensive man- agement study of the Delaware River. I might say that many of the Federal laws that have been passed over the last 15 or 20 years have contributed significantly to the improvement of the water quality. Quite frankly, the water quality of our river has gone through the second greatest improvement of all the estuaries in the world, second only to the Thames River in England, and many Fed- eral laws have brought that about.
But in the Delaware estuary program, they have worked coopera- tively with the three States of Pennsylvania, New Jersey and Dela- ware. The EPA regional officials serve as policymakers, as do the environmental officers of those three States. The management team, of which I have been a part because I serve on the financial planning committee — the management team is made up of not only State officials, but other Federal agencies that have any environ- mental impact whatsoever.
We are jointly working on a long-range plan that will improve the water quality for years to come, and I think the difference be- tween that Federal "big brother" push in the SARA Title III versus the estuary program — -I would much prefer the estuary type of en- couragement.
There are several other suggestions that I would like to leave with you in terms of improvement. I know that you have been given an awful lot of statistics today. One is that as you work to- ward a balanced budget amendment in the future, we hope that you will be very cautious to not shift the expenses to the State and local governments.
Secondly, I would encourage an improvement and a strengthen- ing of the fiscal note process that Congress uses, and I would par- ticularly be interested in making sure that those fiscal notes apply to reconciliation, tax and appropriation bills. I would further like to recommend that after the implementation of those laws that some office, perhaps the General Accounting Office or other agency of the Federal Government, should do a review of the actual impact after the legislation has had time to be fully implemented. We are beginning to do something like that in Delaware because we have had fiscal notes for years, but we have not always studied the di- rect fiscal impact after the law has been passed.
I notice that Senator Dorgan has left, and I am sorry that he has done that because one of the other points I would like to discuss briefly is the Advisory Commission on Intergovernmental Rela- tions. It is my belief that an organization like this — and there are at least two members of your Committee, Mr. Chairman, I believe, that sit on that group — should be improved and strengthened and given a mandate to serve as a resource because what you have done in this organization is you have brought all the levels of gov- ernment together.
If I have heard it once today, I have heard the words "partners" and "cooperation" and "teamwork" several times, but I have also been told that last year this organization was on the brink of not being funded. What concerns me deeply is that I think we are at a time when we need improved partnerships and I think we ought
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to talk about enhancing and strengthening the role and responsibil- ity for this commission, and that does include the executive branch as well. It is also very interesting to note that one of the represent- atives from the executive branch is Ms. Carol Browner, the Admin- istrator of the EPA, whom we have all heard some comments about today.
From a practical point of view, I cannot tell you anything that you have not heard earlier. I would like to say that we are in a world that is shrinking. Competition of our industries around the world is becoming stronger and stronger with other nations, and from a practical point of view in my world where I work outside of my legislative responsibilities, I am a program coordinator for in- dustrial training of a community college at the Chrysler assembly plant in Newark, Delaware. We have the good fortune of holding on to an automobile plant in Newark, Delaware, while we are on the brink of losing another automobile plant just down the road.
Senator Roth and others have served diligently on a task force that was chaired by the former CEO of duPont, Mr. Irving Shapiro, and one of the great concerns that I have is the undefined impact of Federal law and that has to do with the fact that we are now designated in a non-compliance status by the EPA under the Clean Air Act. Yet, we are trying to market an about to be empty auto- mobile plant to other manufacturers.
As we heard recently, we have some competitors from foreign countries that are coming to this country and opening up plants, and it is extremely difficult for us to market the opening of an automobile plant in an environment where we are presumably al- ready in non-compliance. I might stress that that is based on a rel- atively few incidents of exceeding the standard level because we are not talking about — as was said by Mr. Rendell on his river ex- ample, the environmental air standards that cause us to be in non- compliance were not 75 percent of the time or 10 percent of the time, but a few hour-long incidents in the course of, I think, the late 1980's.
Perhaps in conclusion I would like to suggest one possible oppor- tunity, and it has been mentioned by several members of the panel. The current president of the National Conference of State Legisla- tures is a Delaware State senator, Senator Robert Conner. He will be hosting this May in the State of Delaware the executive commit- tee of NCSL, which is representative of the leadership of our State trade association.
I spoke to Mayor Rendell in the hall before we came in today, and I would like to extend an invitation to this panel and perhaps to broader representatives of Congress to consider extending that meeting or co-forming another meeting that we would host perhaps in Philadelphia to bring the multi-levels of government together for that roll-up-your-sleeves work session.
You certainly mentioned earlier talking to your colleagues here, but I must also say that I think that if we could have a summit of some type that would bring all the levels of government — the county, the city, the States — all into this kind of working forum, perhaps we would also get to realize that we are really in this trip together; we are all working together.
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I guess, in conclusion, I would just say that I listened to the radio this morning. A commentator was talking about a young man in Virginia who had a license plate that was a vanity tag. I will not for the moment share with you the letters of that tag, but I would simply say that he was very uncomplimentary about govern- ment. The realities are that people today have a very hard time distinguishing which level of government has caused them the big- gest pain, and so I think we are truly all in this together.
On behalf of the State of Delaware and NCSL, we would love to work with you and provide any additional resources as you work forward on this legislation. Thank you.
Chairman Glenn. Thank you very much. We appreciate the tes- timony of all of you. It has been excellent. I just have a couple of questions here.
What happens on State mandates? Do you have any problem with those? What happens when the State comes down on local governments? Are they worse than the Feds, or which of the two is the major source of your problem? Are the States usually carry- ing out directives that were mandated originally by the Feds? Or are they imposing their own mandates? What is the balance here?
Mr. WORHATCH. I made a note today as I was reviewing my re- marks for about the third time trying to make sure I kept them fairly brief, and I made a note that I am going to the Ohio General Assembly with this same presentation because in Hudson Town- ship we probably have more mandates from the State than we do from the Federal Government.
Chairman Glenn. Unfunded?
Mr. Worhatch. Unfunded, yes, sir. Some of the mandates come because of Federal programs that condition monies going to the States in order to bring them into the local level, but others are just simply from the States themselves and we are the ones that end up having to shoulder that burden. I would say just from our perspective, it is actually a greater problem at the State level than it is at the Federal, but that is just speaking from a township per- spective.
Chairman Glenn. Ms. Ritter, do you have the same problem?
Ms. Ritter. Chairman Glenn, we too are saddled with many State mandates. I was just trying to think of the number of pages alone that our North Dakota Association of Counties did in 1987 of the number of State mandates, and I am telling you that there are many pages to it. Since then, of course, every 2 years when the State legislature meets, they pass additional ones.
One, in particular, comes to mind that was just passed on gov- ernments the size of ours. We are required to have an audit. Well, now the State makes us pay a $300 fee for them to audit our audits (CPA conducted), and it is things like that. You know, it doesn't have to be big dollars. It can be little dollars, but it is the nuisance factor.
Chairman Glenn. Mr. Ennis, you are in State government. How do you make sure you don't send mandates downhill to people like Ms. Ritter and Mr. Worhatch?
Mr. Ennis. Well, I can confess to you, sir, in public that we do, in fact, have some State mandates. In fact, we just passed a re- quirement for the school districts to provide an audit at their ex-
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pense, and I will share with you that we are not free of that same criticism. I accept that.
I think Delaware perhaps is a little bit unique because we are such a small State and we operate in many instances like a big county. I mean, we are talking about an area with a population of about 660,000 people, and so our technique in Delaware is a little different than many of the larger States. We have adopted many of the services that most communities or counties had been provid- ing. Roads are completely done by the State, prisons are completely done by the State. Health and social services are coordinated com- pletely by the State. So we have taken back many of the things that would have been a local jurisdiction responsibility. We do not have an answer for the bigger States that do pass them down.
Chairman Glenn. At the State level, do you ever give financial help to townships?
Mr. Ennis. Absolutely, sir. Primarily, I would say it is through capital expenditures. The city of Wilmington, our largest metropoli- tan area, comes to the general assembly repeatedly every year for the capital funding of their port and things that are going to keep the vital dynamics of its business processes going.
Chairman Glenn. Are your problems like the other ones that the mayors were talking about earlier? Are most of them environ- mental concerns?
Mr. Worhatch. No, I wouldn't say they are all environmental. There are some of those. For example, we have an entirely vol- untary emergency medical service that is really a state-of-the-art facility that we have offered to the residents, and we just recently had to go through a whole new system with additional cost for bringing that voluntary service up to speed to satisfy a number of additional State-mandated programs.
You know, whenever you talk about a small community like ours that relies on volunteers and you start talking about tens of thou- sands of dollars of additional cost just to comply
Chairman Glenn. Was the clinic mandated by something else to begin with or did you voluntarily set up the clinic and then there were mandates on top of that?
Mr. Worhatch. That is right. A long time ago, a group of resi- dents volunteered to put together the emergency medical service.
Chairman Glenn. So you get hammered for trying to do good in your own community?
Mr. Worhatch. We are being the good Samaritans and we are getting hammered for that, that is right.
Chairman Glenn. Then they come in and regulate you to death.
Mr. Worhatch. This also underscores, Senator Glenn, the cumu- lative effect of all these mandates. It is not only just the Federal, but the Federal to the State, and then the State directly to us and the State from the Federal to us. I would have to say that I was amused by listening to the one comment here concerning getting the money to the city of Wilmington. We have that problem in the city of Akron. That is the county seat in Summit County, and I hope that Mayor Plusquellic doesn't hate me too much for saying this, but the way in which the funding mechanism works
Chairman Glenn. You are on C-SPAN. Watch it.
Mr. Worhatch. I know. [Laughter.]
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Chairman Glenn. The mayor is probably sitting back there watching you.
Mr. Worhatch. I hope you don't mind, Mayor, but here it is. The way in which many of the funding mechanisms work in the State is there are point systems or there are other ways in which the larger cities in the county get a large percentage and the county gets a mandated certain amount up front, and that leaves less and less for the townships to take advantage of.
I would ask you, if you want to really do something for township governments around the country, if you are looking at any opportu- nities for funding of Federal mandated programs, have a set-aside for small governments, truly small governments less than 25,000 in population, that are able then to compete among themselves for those set-aside dollars rather than having to compete with the larg- er cities that seem to have institutional advantages over us.
Chairman Glenn. Judicial review of the Regulatory Flexibility Act was mentioned earlier. I would like each of your comments and then we will go on to Senator Roth. But on legislation to provide judicial review, would that just end up being a lawyer's full em- ployment bill? Now, Mr. Worhatch, you are a lawyer, you said, and so it might not affect you because you could probably put the cases in on your own time. But would judicial review be worthwhile or would it be counter-productive? Are we just making things more complex than they should be by providing judicial review, or do you think that would be a useful tool?
Mr. Worhatch. Who would you like to start with?
Chairman Glenn. Mr. Ennis, why don't you start out?
Mr. Ennis. Well, let me go back to my example of having spent some time now working in the auto industry. Corporate commu- nities today are developing the team approach philosophy about management and they are doing away with the dictatorial. I am not in favor necessarily of judicial review, but I believe that the Commission on Intergovernmental Relations, as an entity which represents the constituent groups that are going to be affected, is a far better vehicle for the review than to have the judicial review sitting in judgment of the legislative process.
Chairman Glenn. Mr. Worhatch?
Mr. Worhatch. Yes. Senator, as I was mentioning in my re- marks before, I really think that the judicial review question should be limited at this point to whether or not the Federal agen- cy has done the job in determining whether its analysis shows that more flexible regulations ought to be promulgated. That is the limit of the judicial review I am particularly asking for, and I don't think that puts any onerous burden on the agency because the agency will be able still to promulgate a regulation and enforce it while the question of whether or not the smaller governments should have a more flexible approach is litigated in the courts. So it is not putting any crimp on their style.
Chairman Glenn. Ms. Ritter?
Ms. Ritter. Mr. Glenn, I agree with the comments of our town- ship representative here. I don't think we need to be burdened with a lot of judicial reviews and things like that. If we could just have the flexibility at home to, you know, if the shoe fits, wear it, that is where we really need the help in small local governments.
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Chairman Glenn. As you said a while ago — and my time is up, but from what you said a little while ago, you have some mandates whose cost to implement exceed your total budget.
Ms. RlTTER. That is correct.
Chairman Glenn. So it is not a matter of a percentage of your budget that you are spending, but if you complied with the law fully you would be spending the whole works, and even not enough then.
Ms. RlTTER. That is true when you consider that that is only one program that we have to fund and there are so many that we are mandated to provide.
Chairman Glenn. Your testimony has been very helpful this morning. Thank you very much.
Senator Roth?
Senator Roth. Well, thank you, Mr. Chairman. First of all, I would like to compliment each one of you for what I think is very excellent testimony, and excellent because not only do you scope out the problem, but you have recommendations. Too often, Mr. Chairman, we have people who come here and I have to say right- fully complain, but they are not constructive, and I appreciate the fact that each of you has addressed the problem we face in this manner.
It seems to me that the problem is multi-level, if I might call it such. You have a problem, first of all, in the enactment of new leg- islation where basically the State and local governments have very little input. Secondly, you have, once the law is passed, the prob- lem of regulations, the inflexibility too often of those responsible for issuing the regulations.
Third, it seems to me you have the cumulative impact of all these matters, which makes we wonder, do we need some kind of a State and local budget insofar as mandates so we know exactly what we are requiring. The problem is that the figures you get are so soft, as you say, Representative Ennis, but nevertheless it does give you some insight.
Then it seems to me the question of post-audit impact is interest- ing, but would you agree that each of these somehow needs to be addressed in some manner? The problem today is that there really is a failure of those in Congress to give adequate attention to State and local concerns. Frankly the reason that is, is because we are broke, too, and this is an easy way to try to address some of the problems that we genuinely face.
I would like to go back to the question of judicial review. There are a number of things we can do, and we already have legislation on the books, but what you are saying to me is that it is being, for all practices, ignored.
Mr. Worhatch. Evaded.
Senator Roth. What is that?
Mr. Worhatch. I think it is being evaded, Senator.
Senator Roth. Evaded, right. Now, the one way you can make sure that the bureaucrat will pay some attention is for there to be some kind of judicial review, so I wonder if that isn't key to what- ever we try to do. What worries me is we can put a number of proc- esses into effect, but the problem here is that we pay a lot of atten-
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tion for 2, 6, 8 months, then another problem comes up and we for- get about it and nothing happens.
But if those responsible for issuing the rules and regulations know that there is some kind of judicial review, won't that put some teeth in this whole situation? Is there any alternative?
Mr. Worhatch. I think, Senator, you have hit the nail right on the head because what is happening in the court system is that they just simply look at Section 611 of the Regulatory Flexibility Act which makes it patently clear that the decision to certify or not to certify is wholly within the discretion of the agency head, and so that is outside the scope of judicial review under the Adminis- trative Procedure Act.
It strikes me that if you are going to at least have an opportunity under Section 605(b) for the agency head to certify an exemption from the regulation effectively which would otherwise require the analysis to be done, a principled basis for making that certification ought to be recorded in the Federal Register with backup support for those determinations. Then it is a simple question under the APA for the litigant to try to assail the factual underpinnings and determine whether there is a rational basis for the decision of the agency head. You are correct. Then the agency head will be com- pelled to go through a rational analysis and come up with a credi- ble reason why there is no adverse impact on the smaller govern- ment.
I think, frankly, Mr. Chairman and Senators, we are forgetting also this Act is to benefit smaller businesses as well. The Act spe- cifically defines smaller entities, and they include smaller busi- nesses, smaller not-for-profit organizations and smaller govern- ments, all three of which will benefit from enhancing the values that were placed in the Regulatory Flexibility Act when it was first enacted as public policy in 1990 by this Congress.
Senator Roth. I think you make a very valid point, and I would say to the Chairman that I think we need to do exactly what we are doing today with respect to the private sector because the same problems, I am persuaded, exist there, including the paper-making problem.
Chairman Glenn. We were talking, Bill, when you were out about maybe having a hearing like this just devoted to small busi- ness.
Senator Roth. I think that is highly desirable and I would cer- tainly urge the Chairman to do so.
Representative Ennis, you talked about using the Advisory Com- mission. It goes seem to me that what is critically important at each of these levels is that there be some direct input from State and local government. I think it has to be both State and local be- cause I think there are some of the same problems between local and State that there are between Federal and State.
In the regulatory process, I don't know that it should be just an advisory process, but should there be some requirement, for exam- ple, in the regulatory process that before issuing new regulations there be some kind of procedures that ensure the State and local associations, whatever they may be, have an opportunity to present their point of view and recommendations?
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Mr. Ennis. Senator Roth, when I used the Advisory Commission on Intergovernmental Relations as an example — there may be a better vehicle, but I happen to be made aware of this because I asked the staff of NCSL, is there a forum where all the players are coming together now.
I would like just to bring out that when I asked the State of Delaware to give me an update on our costs for 1994-95, of the $382 million expected for Federal mandates, $358 million came through Health and Social Services and Education. I would call to your attention that the Advisory Commission on Intergovernmental Relations contains Carol Browner, Administrator of EPA, and Rich- ard Riley, the Secretary of the U.S. Department of Education, and also Mayor Rendell and two members of this Committee, three past presidents of NCSL, and elected officials are also part of it.
It seems to me that my suggestion isn't that we just take the original plan for this organization and try to give it a whole new responsibility. I would like to see you think about changing its pur- pose. I mean, it becomes a more influential group than it has served in the past because I do feel it is extremely important for all the levels of government to be a participant before the law be- comes law. In my mind, it seems to me this is a more participatory process. There is a vehicle that is out there that, if we modify its goals and its purpose, we may make it a better tool for all the lev- els of government in the future.
Senator Roth. My time is up, but I would just make one com- ment. I think what you are saying is very helpful. As one who served many years on that advisory commission, I guess the ques- tion I have in my own mind is you are right, it represents all groups, but do we want that kind of situation or do we want undi- luted recommendations of State and local governments going di- rectly through the regulatory process.
Mr. Ennis. I only saw this as a forum to be strengthened. I did not in any way suggest we wouldn't continue the current direct lines. I had the feeling that organizations that are out there, such as NCSL and the county officials and others, would all continue to keep their groups working diligently as support mechanisms. It just seems to me that we have not had the partnership philosophy. In fact, I have had the feeling from time to time that we are viewed as adversaries, and I don't believe that for a minute. The number of people who have spoken today from the panel who came from other forms of government demonstrates that you all understand the problem very, very well.
Senator Roth. Well, Mr. Chairman, I again want to commend our witnesses and say that as we proceed in our own deliberations, I think it is critically important that we continue to consult and seek the advice of those who are impacted. All government is local, isn't that true?
Mr. Worhatch. Absolutely, as is all politics.
Chairman Glenn. Senator Dorgan?
Senator DORGAN. Mr. Chairman, I was not here when Ms. Ritter testified, at least at the start of it. I heard most of it, but we have the crime bill coming to the floor and I have some amendments on that, along with the Chairman, and I was over working on that.
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But I am pleased that Susan Ritter, who is the elected Auditor of Renville County, and also is the President of the North Dakota Association of Counties, was able to be here and testify. Because I have to go work on these amendments, I am going to be brief, but I want to say that her testimony, I think, underscores the fact that the smallest counties — that is, the sparsely populated coun- ties— and smaller cities are the least able to deal with the burdens of mandates.
I understand that some of the larger cities would probably make the same case, but it is certainly the case when you have a very small county. We have one in North Dakota with 900 people, Slope County. Renville County has several thousand
Ms Ritter 3 100.
Senator Dorgan. 3,100. It might be useful for you just to give us the example of the requirement to put an elevator in your court- house. Tell us about that. It might be a particularly illustrative story about how that affects a small county.
Ms. Ritter. Senator Glenn and Senator Dorgan, the process has taken us not just a few days or a few weeks, but several months. We started out by establishing a local ADA committee. It not only represented Renville County geographically, but we made sure that we had members that were disabled on our committee. We have people who are impaired visually, with their hearing, their walk- ing, many different people to represent this group.
We went through all of the steps of having a walk-through, iden- tifying the barriers that are there. We have done what we can do with the money that we have right now, the $30,000 that we have spent, and now we are in the process of determining through local input, people who work in the courthouse who use the courthouse, at what level do we spend. Should we take this $250,000 and spend it all in one year? Do we have to float a bond issue? Should we put it on the property taxpayer? How do we go about funding this? We did write some grants. So far, we have been turned down, but we understand there is another round that will be coming through our local and regional planning. That is where it is at.
Interestingly enough, the people who are disabled that are on our committee feel that they don't want to spend $250,000 on the ele- vator at this time.
Senator Dorgan. Well, let me ask a question about it. As I un- derstand it, the proposal is that you should have an elevator at the courthouse for a county that has about 3,000 people.
Ms. Ritter. That is correct.
Senator Dorgan. You should spend about $100 per person, roughly, in the county to build an elevator in the courthouse. You have a committee of people with people serving on it who are dis- abled, in wheelchairs, blind, and otherwise with disabilities, who have made recommendations that would say the way you should prescribe access to the courthouse is to move the things that are essential from the upper floors to the lower floors and simply pro- vide easy access to the lower floors instead of building an elevator.
But I understand that the people who administer the ADA, the Americans With Disabilities Act, nationally say, here is what you have to do; you have to fit into this slot. "This slot" means that in that courthouse you need to have an elevator, despite all the evi-
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dence of good sense pointing in the other direction. At the very least, small local units of government are not well advised of the options they have.
We had a case in North Dakota where there was a one-room abandoned school house that was used as a township hall. That was the place where they had elections, local elections. It was only used once a year or so. They had no one in that small township who was disabled, no one, and yet some committee with the ADA was telling them that you have got to substantially modify this and do a whole range of things in this little one-room place where they had no one voting who was disabled.
I took that issue to the author of the ADA bill in the House of Representatives. At that time, I was in the House, and I said, is this the result you intended because you stood on the floor of the House when we passed that bill and promised us that this would not happen; you promised us this would not happen. He said, this cannot happen, this should not happen, this will not happen, and he rushed off with this example I had given him. Then he got into the thicket of how all of this was playing out, all of the folks who were writing rules and describing exactly how, in their vision, this will work in America, and it is a one-size-fits-all prescription. It fits Mohall, North Dakota. It fits Stanley, North Dakota; it fits a little township out near Stanley.
All of a sudden, you have got a good idea which makes America and its services and everything available for 40 million people who have some disability — a good idea turned into a perverse result be- cause one size doesn't fit all and there is not one answer to this national problem. So, that is why I asked the question about this elevator in the courthouse.
You are a county auditor. You know better than anybody how much money you have and how you comply with something that re- quires you to build an elevator in a courthouse that is going to amount to $100 per person in your county.
Senator Roth. Could I just make a comment because I ran into the same problem at home? The mayor pointed out even a prelimi- nary problem. He said one of the difficulties he was having — he took the disability regulations, which were several inches thick, and he said we can't afford a lawyer; we really can't understand what is in these rules and regulations.
Senator Dorgan. Well, that is precisely why the smallest units of government, those with the least population, are unable to com- ply. The larger ones at least have access to a battery of lawyers that are already on their staffs and they can read the other things other lawyers write. But, you know, if you have a small govern- ment, a township government or a county government out there with very few staff and very little resources, you know, they can't begin to find their way through this thicket of rules and regula- tions that are created in these agencies.
I might mention that the legislation that I and Senator Domenici have introduced on the Senate side does deal with rulemaking. I mean, you can't just deal with the laws we pass. You must deal with the laws we pass, but if you stop there, you don't solve the problem. You also have to deal with the rules and the regulations and the impacts that they impose. The Chairman and others who
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have talked about the impact on the private sector — it is just as important and we must deal with that as well.
I did want to point out that Judy Tangen, who is the chairperson of the Ransom County Board of Commissioners, accompanied Susan, and Mark Johnson, the executive director of the North Da- kota Association of Counties, are here as well. They have provided us a substantial amount of good information with which we can now go down the road to deal with this issue of unfunded man- dates.
I want to make one final comment, Mr. Chairman. My comment earlier should not be misconstrued. I made the comment and I stand by it. It is true. I guarantee you, we spend a lot of our day, whether it is back home or here, listening to others from other lev- els of government saying where is the rent so we can take the spig- ot out and move that Federal money to us. That is the way this system works.
We need more responsibility moving in both directions. Our re- sponsibility is to recognize that unfunded mandates are a serious and pervasive problem and we have got to deal with it, and deal with it appropriately. Others' responsibility is to understand this is not a well with no bottom. We have seen the bottom long ago and times are going to have to be different in the future. But I really appreciate the testimony of this panel because the testimony is practical and on the point and I think this is a valuable contribu- tion to the hearing.
Chairman Glenn. Very good. We have had a lot of good testi- mony this morning. Now, we have to put it to work and do some- thing with it. We have about half a dozen different bills before the Committee right now, one of which is the one I put in along with some other people, and it is not sacred any more than any others. I think maybe we need to look at all of them and maybe come up with a stronger bill than any of them that covers a broader scope, perhaps. So we appreciate your being here this morning and your excellent testimony.
The Committee will stand in recess, subject to the call of the Chair. Thank you.
[Whereupon, at 12:48 p.m., the committee was adjourned.]
APPENDIX
Before the Senate Committee on Governmental Affairs
Testimony of Senator Judd Gregg
on
The Impact of Federal Mandates on State and Local Government
November 3, 1993
(61)
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Testimony of Sen. Judd Gregg
Before the Senate Committee on Governmental Affairs
November 3, 1993
Mr. Chairman, 1 first want to thank you and the other members of the Committee for holding this hearing today. In particular, I would like to thank Senator Roth, who I know worked hard to bring this day about. As a former governor, I dealt with unfunded mandates first-hand for the four years prior to my recent election to the Senate. After that experience, my first legislative act as a Senator, in March of this year, was to introduce a bill to address the unfunded mandate problem. S. 648, the Federal Mandates Relief Act, was referred to this Committee .
These hearings are important because Congress must be made aware of the magnitude of the mandate problem. Unfunded federal mandates are crushing state and local budgets. They are federalizing state and local tax bases and fiscal decisionmaking. In short, they are seriously undermining federalism.
After a normal federal discretionary program is authorized, its funding is determined by the appropriations process. In contrast, once unfunded federal mandates are authorized, they resemble entitlement programs: the "mandate spending" must occur, confronts no secondary check, and has been allowed to grow out of control. Tet, unfunded federal mandates are more pernicious than federal entitlements, because their costs are shifted onto the states and localities. Congressional shifting of the financing, however, does not shift the responsibility.
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It is time that we in Congress step up, confront the issue, and devise a workable solution.
Most of the witnesses today will testify as to the problems caused by unfunded federal mandates. After briefly discussing my legislation and some New Hampshire experiences, my testimony will mainly focus on the elements of a workable solution.
A. Gregg Unfunded Federal Mandate Legislation I have proposed three pieces of legislation to deal with the problem of unfunded federal mandates (summaries attached). The bill I referred to earlier, S. 648, has three basic components. First, the bill provides that federal mandates cannot be enforced against a state or local government, unless they are fully funded by the federal government. Second, the bill provides a mechanism by which such funding would occur. Agencies would be responsible for identifying the mandates they each administer. They would then gather information and publish cost schedules with respect to each mandate. States and localities would receive federal payments pursuant to these schedules. Third, S. 648 contains procedural provisions that reguire cost estimates to accompany new mandate legislation, and that establish superma jority points of order against setting mandate costs by statute.
In addition, on National Unfunded Federal Mandates Day, October 27th, I submitted two resolutions to amend the Rules of the Senate. These resolutions, S. Res. 157 and S. Res. 158, are
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pending before the Committee on Rules and Administration. They would establish superma jority requirements for committees to report, and for the Senate to pass, bills containing unfunded federal mandates . They also define what constitutes an unfunded federal mandate.
B. New Hampshire's Experience with Unfunded Federal Mandates
Recently, I wrote every city and town official in New
Hampshire and asked them to provide me with their opinions on
unfunded mandates, as well as examples of the problems they have
confronted. The responses were overwhelming, and I would like to
briefly detail just a few examples of the types of responses I
received .
• Groton, population 318 — Groton officials related how federal landfill mandates became too expensive to meet. The town now pays to truck their trash over 50 miles away. They must also install ground water monitoring wells, for annual testing over the next 30 years. With no factories or stores, all costs must be absorbed by the 318 residents.
• Nashua, population 79.402 — The Mayor of Nashua related how mandates on combined sewer overflow problems could cost between $40 and $100 million. In 1994, Solid Waste Disposal Act mandates will cost $1 million; wetland mandates will cost $65,000; the Americans with Disabilities Act will cost $80,000; underground storage tank mandates will cost
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$36,000; and the Clean Air Act will cost $35,000. By 1997, solid waste disposal mandates will cost over $6 million.
« Meredith, population 4,800 — The town manager of Meredith related how the town will have to spend millions of dollars to install catch basins to road culverts. The town will also have to spend between $500,000 and $1 million to put a cap on its landfill. Forced to close the landfill in 1987, the town now pays over $150,000 annually for waste disposal.
• Lancaster, population 3,486 — The Lancaster town manager
related how Lancaster collects $1.4 million in revenues each year. Complying with new Safe Water Drinking Act requirements alone will cost $2 million. Reflecting the desperate tone so evident in the many letters I received, she says "there is no way the town can keep up."
C. Complexity of Issue Demands Comprehensive Solution A town manager, mayor or governor sees an unfunded federal mandate and seethes at the unfairness of being forced to comply. To the federal officials who have caused the problem, the unfunded mandates issue is a bit more complex. The basic issue remains simple and must be resolved. For the sake of simplicity, however, we cannot enact a solution that causes more problems.
Any bill reported out of this committee on the unfunded mandate issue should therefore address the matter in a
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comprehensive fashion. It should define the problem, attack each of its causes, and provide a workable solution. I do not believe any of the bills referred to the committee, even my own, accomplish all that needs to be done. Let me explain:
1. A Broad and Precise Definition — First, any bill reported out of this committee should precisely define what constitutes an unfunded federal mandate, and the definition cannot be too restrictive. My bill, S. 648, does not suggest a definition, although my two Rules amendments do. An appropriate definition is crucial because it will drive almost everything else that occurs.
Without a precise definition, endless litigation would likely ensue over what is and what is not an unfunded federal mandate. A true solution to the problem cannot allow it to become more cost-effective to pay the bills than to seek payment. Furthermore, the definition cannot be too restrictive. It would solve nothing to cut off one particular type of unfunded mandate, only to prompt Congressional use of another to accelerate.
2. A Workable Funding Mechanism — Second, any bill reported out of this committee should provide a mechanism by which payments for unfunded mandates would be made . As noted earlier, my legislation, S. 648, suggests one such payment mechanism. The mechanism must be spelled out because leaving it unstated or to executive discretion would create just as many
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problems as the absence of a good definition. The receipt or level of payments should not depend upon lawsuits or the whims of the sitting Administration. Again, uncertainty and litigation costs should not become a factor in seeking payments.
3. Codify Agency Regulatory Flexibility — Third, any bill reported out of this committee should not only recognize that the federal regulations have caused a large part of the growth in unfunded mandates, but also that the federal regulators are under our control. Many of the mandates that most upset New Hampshire towns and cities, for example, are environmental regulations. EPA just continues to churn out new requirements. EPA does so, I believe, because of the types of statutes it is administering; namely, basic command and control regulatory regimes that provide the implementing agency with broad discretion and that allow the agency to never believe its job is done. Furthermore, as New Hampshire towns repeatedly pointed out, these command-and-control regulations are one-size-fits-all, with that one size being driven by the worst problems.
Congress must reassert control over the federal regulators. Either the Administrative Procedure Act or the various underlying statutes should be amended to force the agencies to be more flexible in their regulations, to take into account differing situations and small town budgets. The President's recent Executive Order moves in this direction somewhat, but a strong process with specified criteria should be written into law.
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4. Supermaiorities for New Mandates — Fourth, any bill reported out of this committee should recognize that the Congressional budget process has contributed to the proliferation of unfunded federal mandates. With tight discretionary caps and the PAYGO process restricting new spending, Congress has avoided the painful process of reordering priorities by the accelerated use of "mandate spending." Congress has increasingly imposed individual mandates on both businesses and lower levels of government to accomplish new federal objectives — for example, the Family and Medical Leave Act, the Motor Voter bill, and the Americans with Disabilities Act.
Just as the Budget Act provides for points of order and imposes supermajority requirements to waive them, any solution to the unfunded mandates problem should incorporate such processes as well . My recent Rules amendment proposals suggests such procedures. The ability to enact new unfunded mandates, and to provide exemptions from a funding solution, must be restricted.
5. First-rate Cost Accounting — Fifth, any bill reported out of this committee should also establish a reliable cost accounting system. In my opinion, fiscal notes accompanying new regulations and legislation are not enough by themselves . Telling states and localities how much they must pay to satisfy federal requirements does nothing to help them pay. However, if we legislators and the agency regulators had knowledge of the actual costs about to be imposed, a greater hesitancy to do so
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Sen. Judd Gregg Pa6e 8
may result. Certain estimating requirements already exist, but they are woefully inadequate.
Finally, any fiscal note requirement must force each agency to itemize and consider the costs of all of its existing mandates, not just the costs of the one about to be promulgated. One contributing factor to the growth of unfunded federal mandates is that the incremental cost of each particular new mandate seems like a small price to pay to accomplish the overall policy objective. The present system does not account for cumulative costs, and it is the cumulative costs that have become so crushing.
D. The Role of the Senate
Through unfunded federal mandates, state and local tax bases have become federalized, and states and localities have lost control over their fiscal decisionmaking. Consequently, unfunded federal mandates constitute a serious encroachment upon state and local prerogatives, and significantly undermine federalism.
Juxtaposed against these facts is the Constitutional role of the Senate. Our Constitution envisions the Senate as the protector of state interests against federal encroachment. Senators were originally elected by the state legislatures, not directly by the people, and Senators represent a whole state, not just a portion. Since the adoption of the seventeenth amendment, in 1913, Senators are no longer dependent upon state legislatures
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Sen. Judd Gregg PaBe 9
for their election. Nonetheless, the Senate's basic Constitutional role in our federal system as the protector of state interests remains intact.
As the proliferation of unfunded federal mandates demonstrates, the Senate has not been performing that role too well over the past 20 years or so. The crush of modern problems has caused us to lose our Constitutional bearings. Devising a bill that properly and comprehensively solves the unfunded mandates problem will be difficult, but it is imperative that we try. And it is appropriate that it begin here — in this Committee, and in the Senate. Thank you.
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S. 648, The Federal Mandates Relief Act of 1993 — Summary —
Pay-Or-Excuse Mechanism
• During each fiscal year, a state or local government shall be excused from complying with any federal requirement for which it has not received a federal payment for the costs of compliance.
• The Act applies to newly enacted federal mandates, and to existing mandates as the underlying statutes are reauthorized.
Agency Schedules Provide Costs to be Paid
• Each agency shall publish a schedule of the costs to state and local governments of complying with the federal mandates within the programs that the agency administers.
• The agency schedules shall be published through notice and comment rulemaking, shall include costs imposed by implementing regulations, and shall be updated annually.
States and Localities Receive Additional Costs, Refund Excessive Payments
• If the costs of complying with any federal mandate are more than the amount appropriated to it according to an agency schedule, a state or local government shall be paid the additional costs.
• If the costs of complying with any federal mandate are less than the amount appropriated to it according to an agency schedule, the state or local government shall refund the excess payment to the U.S. Treasury.
Congressional Estimates Required; Enforcement through Points of Order
• Each bill considered on the floor of the House or Senate, and each committee report, shall be accompanied by an estimate of the compliance costs imposed upon state and local governments by the provisions of the bill.
• A point of order is created that would prohibit the House or Senate from considering a bill that does not have an accompanying mandate estimate. A point of order is created against bills that would enact a statutory mandate cost schedule.
• A three-fifths vote of the House or Senate is required to amend or waive the points of order.
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Summary of Gregg Unfunded Mandates Resolutions - Amendments to the Senate Rules -
S. Res. 157 - Rules Amendment nn Committee Reporting
• This resolution would amend the Standing Rules of the Senate so that bills containing unfunded federal mandates must:
1. Receive a supermajority (2/3rds) vote to be reported out of committee, and
2. If so reported, be accompanied by an explanation of why the unfunded federal mandate is important enough to be imposed upon state and local budgets without attendant federal funding.
0 The resolution would create a point of order against the floor consideration of any bill that has not satisfied the above requirements. A 2/3rds vote of the Senate would be required to waive the point of order.
• The resolution also would establish a definition of an unfunded federal mandate, and would take effect in the 104th Congress.
S. Res. 158 -- Rules Amendment on Floor Consideration
• This resolution would amend the Standing Rules of the Senate to govern the consideration of legislation or amendments that contain unfunded federal mandates.
1. The Senate could not consider a bill that contains one or more unfunded federal mandates, unless the provisions containing unfunded federal mandates are considered individually or en bloc (at the discretion of the Majority Leader or his designee). Such provisions must receive a supermajority (2/3rds vote) to remain in the bill.
2. An amendment containing an unfunded federal mandate could become part of a bill only after receiving supermajority (2/3rds vote) approval.
• Points of order made against a bill or amendments pursuant to these provisions could be waived only by a 2/3rds vote.
• The resolution also would establish a definition of an unfunded federal mandate, and would take effect in the 104th Congress.
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THE HONORABLE DIRK KEMPTHORNE
Statement before the Senate Committee
on
Governmental Affairs
November 3, 1993
Mr. Chairman. I commend you and this committee for convening today's hearing on unfunded federal mandates. At issue today is nothing less than the well being of cities, counties, schools and states.
Let me share with you what Boyd Boehlje, president-elect of the National
School Boards Association says about unfunded mandates. He says,
"... the very children Congress is trying to protect are the ones who are hurt most often by proliferation of unfunded mandates."
And Mr. Chairman, unfunded mandates are just one more straw on the backs of our communities -- the very communities Congress is trying to help.
We are discussing a fairness issue here this morning. Is it fair for Congress to make laws and then make someone else pay for them?
There are those who will argue that with a $4 trillion debt, the federal government doesn't have the money to pay for these mandates.
Mr. Chairman, as a former mayor, I can tell you that the cities don't have the money, the counties don't have the money, the school boards don't have the money, and the states don't have the money to pay for these mandates.
Rhode Island Governor Bruce Sundlun says,
"Unfunded federal mandates regularly force state and local tax increases and service cutbacks, restrict the rights of state and local voters and officials to determine
1
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their own priorities, and allow the Congress to avoid responsibility for both setting priorities and increasing revenue."
Mr. Chairman, aM mandates, by and large, end up being paid for by taxes, but it is not fair to shift the responsibility for funding a national priority to local property taxes.
If the federal government feels a mandate is well-founded, then the federal government should fund it.
Today, this committee will hear from local officials like Mayor Ed Rendell and Mayor Greg Lashutka who have been leading the effort to stop unfunded Federal mandates. Their examples are abundant.
Their testimony is part of a new national movement that was launched on October 27. Across the nation last Wednesday, hundreds of mayors told their citizens that unfunded federal mandates increase their taxes and cut their local services.
Those press conferences opened the eyes of millions. For the first time, citizens heard and understood what unfunded federal mandates were all about. Unfunded mandates are simply hidden federal taxes and cities have become - in essence -- federal tax collectors.
Because of that, leaders at the state and local level are sending Congress a simple message: Stop the practice of passing the bill and then passing the buck. They are holding out hope that this Committee, and this Congress, will understand their plight and the financial burdens they face because of an increasing number of
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unfunded federal mandates.
Mr. Chairman, that chorus will continue to grow as America comes to a realization of how unfunded mandates are affecting their local communities.
Right now, Congress can take an issue, debate it strongly and passionately, and then resolve to do something about it -- but not be responsible for the price tag.
Congress gets the credit. Local officials get the tab.
Mr. Chairman, in all fairness, every mandate is paid for by taxes, and by passing along the costs, Congress is clouding the issue of who is responsible for that tax.
This is not a discussion as to the merit of the Clean Air Act, the Clean Water Act, or any other worthy piece of legislation. Those discussions take place in a different arena. Mr. Chairman what we're talking about here is common sense: Congress should set policy, but Congress should also pay for the policy it sets. No money, no mandate.
All governments are strapped, and certainly that is the case at the local level. As I've talked to Mayors and County Commissioners across the country, they say federal mandates are cutting into the basic services of their communities - - police and fire protection, infrastructure, and a good education for their children.
I cannot think of a single example where a Mayor or City Council has determined that it is in the best interest of the City to provide police, fire or other services to a specific neighborhood — but then require that the neighborhood will
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have to pay for that themselves.
In Fort Lauderdale, Florida they're spending $7.6 million to meet federal mandates this year. We've all heard the recent stories about crime in Florida. If they didn't have to pay millions for unneeded federal mandates, Fort Lauderdale could have used that money to hire 1 53 new police officers. But hiring more police officers is not an option. They must first comply with the federal mandates before meeting their local problems head on. Ironically, we will soon be
debating a Crime Bill which includes up to $3.4 billion in federal money to hire police officers to help fight crime at the local level.
Why are we establishing Congress as a middleman in a local government issue? If we would fund federal mandates in the first place, we could leave more money at home for those local units of government to hire police officers or address other priorities.
Congress gets the credit. Local officials get the tab. In Garden
City, Michigan, nearly a quarter of a million dollars were spent on one federal mandate this year. That's money they could have used to replace deteriorating police cars. They have reduced staff levels because of the costs of federal mandates. They say the quality and quantity of service is bound to suffer because you can only cut staff so far without affecting service. They also point out that police cars with 90,000 miles are unsafe.
The City of Atlanta estimates it will issue over $400 million in debt in the next two years to meet federal and state environmental mandates. That's $400
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million at a time when sewers, bridges, roads and other infrastructure is aging and deteriorating. They're paying for federal mandates when they have overburdened and overcrowded criminal justice system. They're paying for federal programs when there is an urgent need for affordable housing in their community.
This issue is so critical to the City of Atlanta that Mayor Maynard Jackson led a march of more than a hundred local officials on City Hall to carry this message to the public.
Mr. Chairman, this revolt is coming from the folks who are on the front- lines, the folks who are in the trenches, the folks who are struggling day in and day out to implement and pay for the edicts that come from the banks of the Potomac.
These local officials are determined to do something about it. The message is being delivered, and while it's not a new message, it's finally being heard in the halls of Congress and in the White House.
This summer. President Clinton told the U.S. Conference of Mayors that as a former Governor, he opposed unfunded federal mandates. He said, "I have told our administration clearly that I don't want us up there on the Hill supporting bills to load up a bunch of new burdens on the mayors and the governors when they're broke..."
And just last week, the President issued an executive order which, in essence, states that the administrative agencies are to curtail the use of these
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unfunded federal mandates.
Mr. Chairman, as a former mayor, the first bill I introduced as a Senator is a bill to lift that burden of unfunded federal mandates on local governments and to put the responsibility of funding legislation squarely where belongs — with the body that puts the regulation in place.
The Senator from Delaware, Mr. Roth, put the proper perspective on this entire issue last week when he said, "Citizens expect their local governments to deal with those problems the community has defined to be of importance. They do not expect City Hall to focus on so-called national problems as defined by Congress. Nor do they want the cost of local services -- and as a result, their local taxes -- driven up by decisions made in Washington, D.C." I'd like to thank the Senator from Delaware for helping raise the level of this issue.
Mr. Chairman, 50 of my colleagues share that same vision. More than half of the Senate is on record in support of ending unfunded federal mandates by co- sponsoring Senate Bill 993, the "Community Regulatory Relief Act." I have combined my efforts on S. 993 with Democratic Congressman Gary Condit - a former mayor — who has similar legislation in the House. Now, in both the House and the Senate we have good, solid, bipartisan support to end unfunded federal mandates and to set right what's been going on in Congress for too long.
I have worked with the Mayors and County officials and made them a part of this process to find a solution. Unfunded federal mandates are their number one legislative priority. The U.S. Conference of Mayors' has appointed a Mandates
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Task Force to continue to focus the nation's attention to this issue.
The Conference of Mayor's Executive Committee is backing S. 993. The National Association of Counties strongly endorses this bill. They had hoped to have one of their representatives here to testify today. Since they are not here, I'd like to introduce their letter of support for S. 993 into the record.
Mr. Chairman, S. 993 says if laws are important enough to enact, they should be important enough to pay for.
I am not against federal mandates. I'm against unfunded federal mandates. No money, no mandate.
If Congress places the order. Congress ought to pay the tab. We need to send a clear message to the federal regulators who are setting standards that there needs to be an understanding of the fiscal impacts of these mandates. At a time when technology is beginning to drive policy, we need to realize that there is a dollar sign on the calculator.
Mr. Chairman, I believe there can be no meaningful discussion of the true national priorities when you are operating in a vacuum - where the costs of some initiatives are funded, and some costs are transferred to local communities.
Congress needs to own up to its responsibilities, and S. 993 does just that.
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NOVEMBER 3, 1993
STATEMENT OF SENATOR
CAROL MOSELEY-BRAUN
BEFORE THE SENATE COMMITTEE
ON GOVERNMENTAL AFFAIRS
MANDATES
MR. CHAIRMAN AND MEMBERS OF THE COMMITTEE, I APPRECIATE HAVING THE OPPORTUNITY TO APPEAR HERE THIS MORNING TO TALK WITH YOU ON THE SUBJECT OF MANDATES, AND MY MANDATES LEGISLATION, S.563. AS WE ALL KNOW, THE FEDERAL GOVERNMENT IS IN SERIOUS FISCAL TROUBLE. OUR ANNUAL DEFICIT THIS YEAR IS OVER $250 BILLION, AND OUR NATIONAL DEBT IS NOW OVER $4.3 TRILLION.
ONE OF THE RESULTS OF THIS SEA OF RED INK HAS BEEN THAT THE FEDERAL GOVERNMENT IS INCREASINGLY INCLINED TO PRACTICE A KIND OF "TRICKLE DOWN" ECONOMICS. BECAUSE THE FEDERAL GOVERNMENT DOES NOT HAVE THE MONEY TO SOLVE PROBLEMS, IT PROPOSES SOLUTIONS, AND THEN REQUIRES STATE AND LOCAL GOVERNMENTS TO FIND MUCH OF THE MONEY NECESSARY TO IMPLEMENT THOSE SOLUTIONS. THE FEDERAL GOVERNMENT MANDATES THAT STATE AND LOCAL GOVERNMENTS MUST ACT IN CERTAIN WAYS TO SOLVE PROBLEMS, WITHOUT PROVIDING THE MONEY NEEDED TO FUND THOSE SOLUTIONS.
NOW, I DIDN'T LIKE TRICKLE-DOWN ECONOMICS AS IT WAS ORIGINALLY PROPOSED. I THOUGHT TRICKLE DOWN ECONOMICS BENEFITTED THE RICH AT THE EXPENSE OF MIDDLE CLASS AND POOR AMERICANS.
I DON'T LIKE THE MANDATES VARIANT OF TRICKLE DOWN ECONOMICS ANY MORE THAN I LIKE THE ORIGINAL. REQUIRING HARD-PRESSED STATE AND LOCAL GOVERNMENTS TO FUND PROGRAMS MANDATED BY THE FEDERAL
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GOVERNMENT IS NOT GOOD GOVERNMENT. IT IS NOT FAIR TO STATE AND LOCAL GOVERNMENTS, AND IT IS NOT FAIR TO THE AMERICAN PEOPLE.
VICE PRESIDENT GORE'S REPORT ON REINVENTING GOVERNMENT IDENTIFIED 172 UNFUNDED FEDERAL MANDATES, AND THESE MANDATES HAVE SERIOUS CONSEQUENCES FOR MY STATE AND FOR UNITS OF LOCAL GOVERNMENT THROUGHOUT MY STATE.
THE CITY OF CHICAGO, FOR EXAMPLE, SPENDS OVER $160 MILLION PER YEAR TO COMPLY WITH JUST 50 OF THE 172 MANDATES IDENTIFIED BY THE VICE-PRESIDENT. CHICAGO SPENDS $27 MILLION PER YEAR JUST ON PAPERWORK ASSOCIATED WITH FEDERAL MANDATES AND REGULATIONS. THESE FIGURES, AS LARGE AS THEY ARE, DO NOT INCLUDE THE COSTS INCURRED BY OTHER UNITS OF LOCAL GOVERNMENT OPERATING IN CHICAGO. THE CHICAGO SANITARY DISTRICT, THE REGIONAL TRANSPORTATION AUTHORITY AND THE CHICAGO TRANSIT AUTHORITY, AND THE COUNTY GOVERNMENT ALSO ALL HAVE TO COMMIT MAJOR LOCAL RESOURCES TO COMPLYING WITH UNFUNDED FEDERAL MANDATES.
AND OTHER CITIES AROUND MY STATE, AND THE STATE ITSELF, HAVE THE SAME PROBLEM. THEY, TOO, HAVE TO SPEND SUBSTANTIAL TAXPAYER DOLLARS TO COMPLY WITH UNFUNDED FEDERAL MANDATES.
FOR THE FIRST TIME, THIS YEAR, MY OWN STATE OF ILLINOIS SPENT MORE ON HEALTH CARE THAN ON EDUCATION. UNFUNDED FEDERAL MANDATES ARE, IN PART, RESPONSIBLE FOR THAT FACT.
MR. PRESIDENT, I AM THE FIRST ONE TO SAY THAT MANY OF THE MANDATES INVOLVE VERY IMPORTANT PUBLIC PURPOSES. HOWEVER, THE ISSUE IS NOT WHETHER OUR OBJECTIVES ARE SOUND. RATHER, THE ISSUE
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IS — WHAT METHODS SHOULD WE USE TO PURSUE THOSE OBJECTIVES?
WE NEED TO FUND FEDERALLY -MANDATED BENEFITS AT THE FEDERAL LEVEL. WE NEED TO STOP FUNDING FEDERALLY-MANDATED BENEFITS WITH STATE AND LOCAL TAX DOLLARS.
I AM VERY PLEASED, MR. PRESIDENT, THAT THE VICE PRESIDENT IS ASKING THE PRESIDENT TO ISSUE A DIRECTIVE LIMITING THE USE OF UNFUNDED MANDATES BY THE ADMINISTRATION. HOWEVER, MORE NEEDS TO BE DONE. CONGRESS ITSELF MUST ACT.
THERE ARE A NUMBER OF STEPS CONGRESS SHOULD CONSIDER. ONE OF THE MOST BASIC IS TO ENSURE THAT WE HAVE THE INFORMATION TO MAKE GOOD DECISIONS ON MANDATES ISSUES.
I COME FROM A BACKGROUND IN STATE AND LOCAL GOVERNMENTS, WHERE THE MANDATES ISSUE HAS BEEN RECEIVING SERIOUS ATTENTION FOR A LONG TIME. BUT WHEN I ARRIVED HERE IN WASHINGTON, I FOUND THAT MOST OF THE FEDERAL ESTABLISHMENT WAS TOTALLY UNAWARE OF THE IMPACT THAT FEDERAL MANDATES HAVE ON STATE AND LOCAL GOVERNMENTS. IN FACT, THE SITUATION WAS EVEN WORSE THAN THAT. MUCH OF THE GOVERNMENT DOES NOT EVEN KNOW WHAT A MANDATE IS.
I HAVE INTRODUCED A BILL, S.563, THAT ATTEMPTS TO END THAT STATE OF AFFAIRS. IT DOES NOT PROHIBIT THE FEDERAL GOVERNMENT FROM ISSUING NEW MANDATES, NOR DOES IT REPEAL ANY EXISTING FEDERAL MANDATES. INSTEAD, IT SIMPLY REQUIRES THAT THE SENATE HAVE INFORMATION ON ANY MANDATES IN PROPOSED LEGISLATION, AND THE COST OF THOSE MANDATES, WHEN THAT LEGISLATION IS CONSIDERED BY THE FULL SENATE.
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THE LEGISLATION ADOS A SECTION TO COMMITTEE REPORTS ON PROPOSED BILLS. THIS NEW SECTION, WHICH WOULD BE PREPARED BT THE CONGRESSIONAL BUDGET OFFICE, WOULD INCLUDE INFORMATION ON:
1) THE COST TO STATE AND LOCAL GOVERNMENTS OF COMPLTING WITH ANY FEDERAL MANDATES IN THE REPORTED BILL, AND
2) THE EXTENT TO WHICH FEDERAL FUNDS, EITHER CONTAINED IN THE BILL OR OTHERWISE, COVER THE COSTS OF COMPLYING WITH THE MANDATES.
IN ADDITION, THE LEGISLATION REQUIRES THE CONGRESSIONAL BUDGET OFFICE TO ISSUE AN ANNUAL REPORT ON THE CUMULATIVE COSTS OF COMPLTING WITH FEDERAL MANDATES IN ALL ENACTED BILLS, TOGETHER WITH AN ANALYSIS OF THE EXTENT TO WHICH FEDERAL FUNDS COVER THE COSTS OF COMPLTING WITH THE MANDATES.
FOR PURPOSES OF THE CBO ANALYSIS, A FEDERAL MANDATE IS A PROVISION IN A REPORTED OR ENACTED BILL THAT:
— REQUIRES THE CREATION OR EXPANSION OF A STATE AND/OR LOCAL SERVICE OR ACTIVITT;
— REQUIRES STANDARDS DIFFERENT FROM EXISTING STATE AND/OR LOCAL LAW OR PRACTICE IN DELIVERING A SERVICE OR IN CONDUCTING AN ACTIVITT;
— CREATES ADDITIONAL PERSONNEL OR OTHER ADMINISTRATIVE COSTS FOR STATE AND/OR LOCAL GOVERNMENTS; OR
— REQUIRES CONTRACTING PROCEDURES DIFFERENT FROM OR IN ADDITION TO THOSE REQUIRED UNDER EXISTING STATE AND/OR LOCAL LAW OR PRACTICE.
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MY BILL WOULD BE A MODEST STEP FORWARD, MR. CHAIRMAN, BUT I THINK IT WOULD MAKE A REAL DIFFERENCE. IT WOULD HELP END THE CURRENT BUDGETARY DISCONNECT WHERE THE FEDERAL GOVERNMENT MAKES THE DECISIONS ON BENEFITS, BUT STATE AND LOCAL GOVERNMENTS ARE LEFT TO PAY FOR THEM.
THE ISSUE OF UNFUNDED FEDERAL MANDATES IS NOT A LIBERAL ISSUE OR A CONSERVATIVE ISSUE. RATHER, IT IS A FEDERALISM ISSUE. THIS COUNTRY WAS FOUNDED ON THE PRINCIPLE THAT THERE SHOULD BE NO TAXATION WITHOUT REPRESENTATION. WHAT THAT MEANS TO ME, IN THE MANDATES CONTEXT, IS THAT THOSE WHO HAVE TO VOTE THE TAXES OUGHT TO HAVE A SAY IN HOW THOSE TAXES ARE SPENT.
THAT ISN'T A REVOLUTIONARY THOUGHT. IN FACT, IT IS JUST COMMON SENSE. AND THAT, AT ITS HEART, IS WHAT THE MANDATES ISSUE IS — JUST COMMON SENSE.
I DO NOT UNDERESTIMATE THE DIFFICULTY OF LEGISLATING COMMON SENSE, BUT THIS IS ONE AREA WHERE I THINK WE MUST TRY. THE PRACTICE OF UNFUNDED FEDERAL MANDATES MUST STOP.
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PAUL COVERDELL
GEORGIA
AGRICULTURE. NUTRITION AND FORESTRY
FOREIGN RELATIONS
SMALL BUSINESS
WASHINGTON. DC 20510-1004
United States Senate
STATEMENT BT U.S. SENATOR PAUL COVERDELL (R-GA)
U.S. SENATE COMMITTEE ON GOVERNMENTAL AFFAIRS
WEDNESDAY, NOVEMBER 3, 1993
Mr. Chairman, members of the Committee, I want to thank you for the opportunity to testify on the impact of Federal mandates on our state and local governments.
Opposition to the burden unfunded Federal mandates place on our states and local communities is not partisan. There is broad support across party lines to bring these mandates under control, and I believe it is growing.
The recent success of National Unfunded Mandates Day 1993 is a recognition of the growing awareness that these burdens place on our local budgets. In my state of Georgia, thousands of individuals attended 10 rallies from Savannah to Dalton. At each event, Democrats and Republicans agreed to work together to let Washington know who the real enemy is — unfunded mandates . As the support grows, so does the likelihood that we in Congress will act to bring an end to this burdensome practice.
The 1992 election, or revolution as I see it, was clearly about changing the way Congress and the Federal Government do business. As a product of the last election I heard this message loudly wherever I traveled. My Freshman Republican colleagues were elected from very diverse and distant states — Idaho, Utah, Texas, North Carolina and New Hampshire. Our backgrounds also are diverse — the business community, state houses, the office of mayor, governor, or an agency of state government. Yet, we came here with a common goal to tackle unfunded Federal Mandates . In addition to my own legislation on this issue, I am also proud to co-sponsor my colleagues efforts.
We have met with some success. On Thursday, October 28, 1993, the Senate unanimously passed a Senate Resolution I introduced that would instruct the U.S. Department of Labor to provide resources to cover the costs of development and implementation of a new workers profiling program.
President Clinton, also is to be commended for his efforts to focus attention on unfunded mandates. I support his initiatives to unravel the bureaucratic red tape and regulatory process that has hindered state and local governments, and I look forward to working with him to reach common ground on tearing down these mandates. He is on the right track and his support is critical if we are to succeed.
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Recently, a banner headline in a Georgia newspaper told a powerful message, "City Votes Storm Water Tax: Federal Mandate Left No Choice, Council Says." These few words bring home the ugly truth of what unfunded Federal Mandates cost our cities and communities throughout Georgia — higher taxes.
The article states that Congress has decreed, or mandated, that local communities must catch and control rainwater so that it meets quality standards and does not mix with sewage and overload collection and treatment facilities. What Congress has forgotten to do is provide communities with any funds for compliance .
The result is that local communities must raise taxes or dig deep into their property tax base to foot the bill for Federal mandates. This practice is just another example of Congress
passing legislation, and passing the buck for implementing such legislation onto local communities.
It's time to put an end to this practice, and in June of this year I introduced legislation aimed at stopping Congress from spending local property taxes to pay for expensive Federal regulations that the Federal Government won't pay for itself.
The bill entitled "The Federal Mandate Relief Act of 1993", states that passage or implementation of Federal legislation without appropriate funding to cover the cost of local government compliance, will require a two-thirds majority vote.
The principle behind the legislation is simple — if Congress believes there is a compelling reason for passage of an unfunded Federal mandate, then let us pass it by a compelling majority.
On the surface, it is easy to see how the Federal Government got into this mess of unfunded mandates . Congress and the Federal Government have spent every dime they have — and over $4 trillion they don't have — to carry out their unending desire to spend, spend, and spend. Now, Congress has turned to local communities and has begun a full scale raid on property taxes in their hunt for more dollars.
Property owners throughout the country probably don't realize it but the Federal Government currently consumes as much as 10% of their property taxes to pay for these mandates. The burden on local community budgets is even greater, reaching as much as 30%, according to the Georgia Department of Community Affairs.
On Coastal Georgia, Liberty County officials estimate that 30% of their budget goes to paying for unfunded Federal mandates. Glynn County officials estimate that 42% of their total budget consists of requirements resulted from state and Federal unfunded
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mandates. In counties and municipalities throughout our state the story is the same.
And, as new mandates are enacted, that percentage could rise, meaning local communities will be forced to raise property taxes to pay for this Federal raid on their finances.
During the month of August I met with local officials, community leaders, and business representatives in Georgia in a series of roundtable discussions concerning mandates and their affects on local budgets.
In each meeting state legislators, mayors, county commissioners and local administrators, state that the crushing weight of unfunded Federal mandates on their budgets is the number one fiscal problem they are facing. As one mayor told me, "unfunded mandates are foreclosing our local governments from being able to deal with our own priorities . "
On the state level, researchers at The National Conference of State Legislators (NCSL), identified more than 172 Federal laws containing unfunded mandates with which the states must comply. The NCSL also found that from 1991 to 1992, in the 102nd Congress, 15 new unfunded mandates were enacted.
On a national level, government regulation costs at least $8,000 per household and may reduce the national output by as much as $1.1 trillion per year.
Mandates, however, cost more than money. They also cost jobs — as many as 3 million jobs over the past two decades according to the Heritage Foundation.
Many regulations or mandates directly increase the cost of employing workers and thereby act like a hidden tax on job creation and employment. These regulations place especially heavy burdens on small businesses, the primary engines of job creation.
The Federal Mandate Relief Act is a start at redirecting our focus to the costs Congress pass on to local governments through mandates. Identifying these financial burdens will cause Congress to stop and think about the consequences of its actions on property taxpayers and local governments BEFORE it passes unfunded mandates. This undisciplined appetite for spending has to stop if we are to get our financial house in order.
Again, I want to thank the committee for this opportunity to discuss mandates and I look forward to working with its members in the future.
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Testimony of
Mayor Gregory S. Laahutka
Columbus, Ohio
U.S. Senate Committee on Governmental Affairs
November 3, 1993
Thank you, Mr. Chairman, for the opportunity to testify on the subject of unfunded federal mandates.
Your invitation asked me how I would define an unfunded federal mandate. I will repeat the definition I wrote in the Columbus Dispatch last week: An unfunded mandate is when the federal government orders a city to do something, whether we need it or not, and then makes the city taxpayers pay for it. It is like having your Uncle Sam take you out to dinner, then order your food, and hand you the check.
Columbus has been a national leader in pointing the dramatic increase in the scope and high cost of mandates. I'd like to briefly go over what we found.
Major federal environmental legislation began in 1970 with the Clean Air Art and then the Clean Water Act. During the 1970s, the number of state and federal toxic management mandates reached 11. In the period 1980-85, nine more mandates were added. Over the last four years, an additional 75 toxic management mandates have been imposed on local government, some scheduled for implementation as late as 2015.
In the 70s, along with the mandates came federal grants to help comply - primarily for sewer and water treatment upgrades. In the 80s and today, the river of federal grants is drying up, while the unfunded mandates keep pouring in.
Concerned about our ability to pay for these mandates, the City of Columbus set up an interdepartmental committee to identify all the state and federal environmental mandates affecting Columbus and estimate the cost of compliance. The Committee found the cost to comply with 14 major environmental mandates would total $1,088 billion in 1991 dollars, or $1.6 billion at a 7% inflation rate, over ten years. By the year 2000, each Columbus household's share of thai cost will be $856 per year. This represents a drastic increase in utility fees and/or local taxes. Just for comparison, the average property tax for a house in Columbus is $800 to $1,200.
The Columbus study received wide-spread attention in cities across the country, causing mem to launch similar studies. Nine Ohio cities - Columbus, Cincinnati, Cleveland, Akron, lima, Mansfield, Springfield, Toledo, and Zanesville - documented $2.8 billion in compliance costs for 10 major mandates over 10 years in 1992 dollars. Annual household costs by 2001 reached as high as $812 a year, even though three of the larger cities only detennined compliance costs for one environmental mandate.
The scary part about that is the cost estimates may be too low. For example, to obtain a National Pollutant Discharge Elimination System permit for Columbus, it was estimated in the Federal Register to cost $76,681. The actual cost was $1.5 million.
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Now, despite all this talk about unfunded mandates and high costs, I'm not leading up to a pitch for more federal dollars. Bveryone knows the federal government doesn't have the money cither. What we ne^m do is chat^ the nature cf the relate and local government
Let me suggest four basic principles.
Principle i: T^<Ti«rt«« md resulting regulations should be formulated on facts or well-founded peer-reviewed science.
Let me give you an example. The Safe Drinking Water Act mandates that the corn herbicide atrazine in drinking water be less than 3 parts per billion, Atrazine has never been shown to be carcinogenic with the farmers who have actually handled it for the last 30 years. However, because rats mat were given large doses developed tumors, the EPA lists atrazine as a "possible human carcinogen. "
A person would have to over 3,000 gallons of water a day that contained atrazine at 3 parts per billion to reach the level that was shown as harmful to the rats. Columbus' water is typically below the extremely low 3 parts per billion standard. However, if we ever have just one sample that is over 12 parts per billion, Columbus would have to install $80 million in new water treatment equipment that cost S2-3 million to operate annually.
My point is, even if cities nationwide spend the tens of billions of dollars currently required chasing every last molecule in the water supply, I do not think the scientific and medical community would say that is the best and most cost-effective way to improve public health. Quite the contrary, we may be forced to spend a huge amount fixing negligible health risks, while more obvious health problems go begging.
Principle 2: Local governments should be able to prioritize their resources to achieve the greatest environmental risk reduction for the funds available.
One-size-fits-aU regulation is counter-productive at the local level because the environment is so different in different areas. Mandate* take decision-making power away from local officials. For instance, the U.S. EPA requires removal of maiiy of the dty's underground
fuel tanks. Incidentally, weare going to have to do this in advance of our suspicions that above ground will eventually have their own set of regulations. The Columbus Fire Division will have to spend $880,000 moving these tanks. We could hire 24 new firefighters, or buy two engines and a ladder truck for the same amount
I didn't get to make that decision. EPA did. I call mat "spending without representation. * Mayors, city councils, and county commissioners have no vote on whether these mandated spending programs are appropriate for our city. Yet we are forced to cut other budget items, or raise taxes and utility bills, to pay for mem, because we must balance our budget
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Principle 3: Because of variable local conditions, incorporate flexibility into the federal and state regulatory process.
For instance, Ohio cities were forced to test our water for a pesticide that was only used on pineapples in Hawaii. Due primarily to our well-publicized complaint, this mandate was recently waived. A landfill in Yuma, Arizona was forced to close because they could notafford the required double liner that protects ground water. Yuma only receives 3 inches of rain a year, so there was no need to protect the landfill from leaching.
Flexibility in finding ways to meet mandates should also be granted, instead of command- and-oontrol solutions that may not be the lowest cost answer for a unique situation.
Principle 4: Local governments should be afforded the opportunity for fuller participation in the legislative and regulatory process.
One final example. The goals of the ADA are something I support. However, the law has unintended consequences. Prior to the ADA, one half of the people who apply to become Columbus police officers were rejected for not meeting the physical requirements. Now the ADA mandates that no physical exam can be given until after an applicant is offered a job. So every applicant has to be processed through the testing, background checks, and interviews before a physical can be given. This has doubled overtime costs for background checks. Thus, the city is forced to spend a great deal more time and money screening people who will never become police officers.
The total cost of all federal mandates is to large that it virtually dictate to communities how their budgets will be spent Furthermore, mandates only look at one problem at a time. That's not what mayors have to do. They have to look at all of a city's problems and set priorities. In many cities, the greatest risk to public health right now is getting shot, not underground tanks or water treatment.
Many cities may be forced to cut police, fire, sanitation, or other services to pay for these mandates In essence, local decisions would not be made by local officials; they would be made in Washington. That's wrong. We have to restore some balance and accountability to our federal system of government.
The Executive Order by President Clinton last week was a step in the right direction. But an executive order is not nearly as powerful as legislation. The order repeatedly states, "to the extent permissible by law," and as I have already stated, federal law is very flexible on many of these mandates.
I thank you for the opportunity to discuss this situation. By building a new partnership between all levels of government, we can better protect the environment, reduce the cost of services, and make government more responsive, as well as accountable to the people we serve.
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EDWARD a. REMDBLL
MAYOR
CITT Or PHILADELPHIA
TBSTIKOHT BEPORE THE 0.8. 3BMATB COMMITTEE OH OOVERMMEMTAL APPAIR8
NOVEMBER 3, 1993
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Good morning Senator Glenn and members of the Committee on Governmental Affairs. It is extremely timely for you to be holding these hearings today because exactly one week ago, over 1,000 mayors, city managers, and county commissioners held simultaneous press conferences throughout the nation to decry the debilitating effect that unfunded federal mandates are having on local government.
This action was taken because of the increasing tendency of Congress to burden local government with unfunded mandates, while not providing the funding to help them achieve the mandated goals. A study by the Advisory Commission on Intergovernmental Relations ("ACIR") found that the number of federal mandates grew from two in 1960 to 61 by 1990 to 66 this year — an incredible 3,000 percent plus increase. While many of these mandates originally were handed down with full or partial funding for compliance during the 1980s, a process began to reduce and then eliminate all federal grants and funding. For example, all construction grants and even loans for compliance with the Clean Water Act are being completely phased out. As the problem with the federal budget deficit has grown, it has become easier and easier for Congress to meet the demands of special interest groups by passing laws that require local government to take certain actions, but not to pay for the cost of complying with these requirements. We are afraid that this practice will continue, and Congress will go on passing the bill and passing the buck to us.
The situation affects every city, large and small.
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To comply with the Clean Air Act, Chicago's Northwest Incinerator must be retrofitted at a cost of $73 million. In addition, under the Resource Conservation and Recovery Act, the City may be required to spend an additional $17 million per year to treat the incineration ash as hazardous. The combination of these two mandates could make the Northwest Incinerator so costly to operate that the city would have to shift to greater reliance on space-eating and environmentally less sound landfills.
Installation of curb ramps at intersections, consistent with the ADA mandate, is estimated to cost Royal Oak, Michigan $2.5 million. In many cases, the sidewalks leading to these intersections are in need of repair; estimated cost: $10 million. To comply with ADA, the city would be forced to rip out and replace functional curbs, while leaving the broken sidewalks unrepaired.
The National Pollutant Discharge Elimination Study requires that Tucson, and other cities, conduct an ongoing study of the sources and amounts of pollutants carried by stormwater runoff into streams and rivers. Tucson is a desert community in which waterways are dry most of the year, yet the city must spend millions to monitor pollutants in nonexistent water in dry stream beds.
In Columbus, Ohio, a medium-size city, a comprehensive study showed that federal environmental mandates would cost its taxpayers more than $1.6 billion over the next decade — an extra $856 in fees and taxes per household by the year 2000. Under the Safe Drinking Water Act, Columbus must monitor its municipal
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water system for at least 133 specified pollutants. Many of the substances are not significant in local water supplies, but must be tested anyway. One of the pesticides tested, DBCP, was used on pineapples in Hawaii and has been banned for 15 years.
To comply with the Americans with Disabilities Act, Knoxville must add lift bus service to its Saturday fixed route bus service. Because of the high cost of adding the service, the City must consider eliminating Saturday fixed route service altogether to avoid noncompliance with ADA. Funds currently used in Knoxville for federal mandates could be applied to several pressing needs, including expanded fixed route bus service or the addition of evening bus services to benefit a larger group of people.
In California, things have gotten so bad and the costs so overwhelming that last spring, state and local governments threatened to give enforcement of drinking water programs back to the EPA (Congressional Record, 1/21/93, S. 549-552).
A study of the effect of just 10 unfunded federal mandates was conducted by the U.S. Council of Mayors. The total cost is incredible and will grow dramatically in the next five years as a survey for Philadelphia indicates. A copy of both surveys is attached.
My fellow mayors and I are not contending that federal mandates are bad — in fact, the goals of most of them are ones which we all can agree are very worthwhile. We are simply saying that local governments do not have the resources to pay for their implementation. Many local governments have no further ability
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to raise resources. In many instances, their taxing power is legally capped or in others it is capped in a practical way because high tax structures have already caused an alarming erosion of the tax base. In Philadelphia, in the 11 years prior to my becoming Mayor, we endured 19 increases in our four major taxes, causing a massive decrease in our tax base. As a result, cities must pay for the cost of unfunded federal mandates by slashing other services, like police, fire, recreation, parks, libraries, etc. Unfunded federal mandates have robbed local mayors and city councils of the ability to prioritize their resources according to the real needs of their constituents. The effect of "unfunded federal mandates" on local government is being felt dramatically by business, consumers and just ordinary citizens. For example, there is a growing problem with the affordability of water as a result of these mandates.
I recognize the "affordability" can mean different things to different people. However, it is important to realize that if consumers cannot afford the water from the public water supply, they will turn to other sources of water. This problem is real and is happening throughout the county today. (Thousands of water consumers are abandoning their public water supplies by drilling unregulated, private wells.) Very small utilities are trying to encourage enough customers to abandon the system so that they fall under the Federal law's regulatory threshold of fifteen permanent customer connections. Consumers are turning to bottled water and "pure" mountain springs for drinking water in unprecedented numbers. Further, and perhaps most frighteningly,
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developers are choosing not to install public water systems in new developments; forcing consumers to rely on unregulated, private wells. All of these actions have real, and serious, drinking water-related public health consequences, and they are a direct result of concerns about the af fordability of water service from a public water supplier.
These consequences of failing to recognize af fordability are in addition to the far more serious, but more difficult to quantify, effects of forcing poor and near-poor consumers to use their scarce resources for drinking water. Every day, the poor are making choices among food, shelter, medical care, heat, medicine, and other essential needs. Greatly increasing the cost of drinking water necessarily increases the public health threat to the poor and near-poor: more money for water will mean less money to spend on other equally essential goods and services which are needed to protect their health.
As a further example, in Philadelphia, a family of four receiving Aid to Families with Dependent Children ("AFDC") will spend 7.5 percent of their total household income for the cost of water and wastewater services.
Some "unfunded federal mandates," though having laudable goals, have been given unrealistic implementation schedules, and others are just plain ludicrous and silly. Here are two case studies that are perfect examples to demonstrate this point:
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American with Disabilities Act ("ADA")
Every American agrees with the goals of ADA — to ensure fair and equal access for the disabled. This is clearly a good unfunded federal mandate, but an illogical interpretation of it will have an extremely damaging effect on Philadelphia.
The ADA requires the City to put in curb cuts in all City blocks by the end of 1995 at a cost of $130 billion — a sum the City of Philadelphia simply does not have. As a result, we are petitioning the Justice Department to allow us a hardship waiver to allow the City a more reasonable period of time — 12 to 15 years — to complete the work at the more affordable cost of approximately $10 million per year. DOJ has made no decision on the City's request.
ADA also required the Department of Justice to promulgate regulations to implement the goals of the Act. One of these regulations reads as follows:
Newly constructed or altered streets,
roads, and highways must contain curb
ramps or other sloped areas at any
intersection having curbs or other
barriers to entry from a street level
pedestrian walkway.
On July 15, 1993, a number of disabled individuals who live and work in the City of Philadelphia filed suit in U.S. District Court for the Eastern District of Pennsylvania seeking to compel the City to install curb ramps or curb
0171 .DIC
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cuts on all streets which the City resurfaces after the effective date of the ADA. The City contended that resurfacing is not "new construction or alteration" of the street and, therefore, it would not be required to do curb cuts each time it does ordinary repairs. On February 2, 1993, the Court ruled in favor of the plaintiffs. The City has appealed the case, and at present, no decision has been handed down. The federal District Court expressed sympathy for the City having to deal with the burdens that unfunded mandates impose, stating: "Congress often fails to provide the means of financing the obligations it imposes."
If we are forced to comply with this Court order, basic street repairing will be severely curtailed in Philadelphia. There is currently $15 million in our capital budget for street resurfacing. If we are required to do curb cuts on every street we resurface, a full one-third of that money would have to be spent on curb cuts — leaving only $10 million for resurfacing. That is extremely damaging for Philadelphia where, because of our financial crisis, we have fallen way behind in resurfacing those streets that desperately need it. The DRBC and Water Quality of the Delaware River
In 1986, the Delaware River Basin Commission ("DRBC"), which was created by the EPA, began a federally mandated Use Attainability Assessment ("OAA") of the Delaware Estuary. The study was designed to assess the potential to upgrade water quality standards of the Delaware
D171.0IC
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River to meet the Clean Water Act's "fishable and swimmable" goals.
The UAA, which used water quality data from 1985 and 1986, was released in 1989 and concluded that the "swimmable" goal could not be achieved until regulations controlling combined sewer overflows are adopted. However, the UAA also concluded that the "fishable" goal could be met in the Philadelphia area by maintaining dissolved oxygen levels in the river of 4 milligrams/liter (mg/1) or above. According to the UAA, such a standard could only be achieved if Philadelphia upgraded to tertiary wastewater treatment.
The Philadelphia Water Department estimates that building a tertiary treatment plant would cost as much as $500 million in capital funds. The City of Phoenix just built such a facility at a cost of $500 million. Annual costs to operate such a facility would be approximately $30 million.
What makes the DRBC's order so unbelievable is that the City had attained an average of 4 mg/1 of oxygen in the Delaware River during the critical summer months. At other times of the year, the level of oxygen is even better. The DRBC indicated that the level of milligrams of oxygen per liter must never fall below four during the summer, even if, as is the case, the City seldom drops below that level and consistently averages 4 mg/1 or better.
There never was any evidence presented that fish were dying or died as a result of those few summer days when
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the level fell below 4 mg/1. Fortunately, the City, at my direction, refused to comply, and the ORBC, as a result, is reevaluating its decision.
Senator Glenn, in his invitation to me, has asked that I define "unfunded federal mandate." I believe that the definitions contained in S.993, which has the enthusiastic support of the U.S. Conference of Mayors — Democrats and Republicans alike — define it perfectly:
"the term x Federal mandates' means a statute or regulation that requires a State or local government to —
(A) take certain actions (including a requirement that a government meet national standards in providing a service) ; or
(B) comply with certain specified conditions in order to receive or continue to receive Federal assistance and which requires the termination or reduction of such assistance if such government fails to comply with such conditions.
SEC. 4 FEDERAL FUNDING REQUIREMENT.
(a) In General, — Notwithstanding any other provision of law, any requirement under a Federal statute or regulation that creates a Federal mandate shall apply to the State or
0171 .01C
101
local government only if all funds necessary
to pay the direct costs Incurred by the State
or local government in conducting the
activity are provided by the Federal
Government tor the fiscal year in which the
direct cost is incurred." Absent the type of funding set forth in S.993 Sec. 4(a) above, a federal mandate is an "unfunded federal mandate."
Senator Glenn also inquired about what criteria should be used in making distinctions among federal mandates and what alternate, more flexible regulatory approaches might relieve the burden of compliance on local government. The answer is there should be no distinction drawn among unfunded federal mandates and there are nc alternate approaches which will provide real relief for local government. Only a total ban on unfunded federal mandates can give local government any true protection. Once distinctions or exceptions are made allowing for some "unfunded federal mandates," Congress will simply not be able to picK and choose — to say yes to some special interests and no to others. The floodgates will open, and local government will continue to drown in a sea of red ink.
Similarly, there are no effective alternative approaches that offer any real protection either. Requiring "cost-benefit" or "risk-reduction" analyses provide little or no benefit because history has shown that through the process of creative estimation, federal regulators can justify virtually any mandate through a purportedly objective cost-benefit analysis.
10
102
What follows are a shocking list of examples of this:
In its November 16, 1990 final rule governing stornwater discharges, the Environmental protection Agency ("EPA") estimated that preparing the stormwater permit for Philadelphia would cost $76,681 and take 4,534 hours. Our actual costs to apply for the permits have been $916,950, and it has taken us 13,520 hours to comply!
in September 1993, the EPA issued its biennial needs survey of construction and improvement of wastewater treatment facilities for the next 20 years, estimating needs at $137 billion nationwide. This figure was $57 billion higher than EPA's estimate of $80 billion only two years earlier, an increase of over 70 percent. While some of the rise can be attributed to more specific regulations in the areas of combined sewer overflows and stormwater, most of it is due to the fact that the previous survey was developed in the office on a computer model due to lack of EPA staff and funding. This time, the EPA actually went out and surveyed needs, resulting in a much larger estimate.
11
103
In its June 29, 1989 final rule regulating filtration of drinking water, the EPA estimated that total nationwide costs for currently unfiltered systems to install or avoid filtration at $2.3 billion. Because Philadelphia already has filtration, we can meet these requirements with relatively minor and inexpensive modifications to our system. New York, Boston, San Francisco, and other cities which do not currently filter would face huge costs if their applications for a waiver from this regulation are not approved. New York City alone now estimates a cost of $5 to 8 billion if it has to build filtration. Even allowing for inflation and exaggeration, the EPA estimate is low.
The EPA is working to promulgate a rule setting limits for arsenic in drinking water, lowering the allowable standard from 50 parts per billion to 1 to 10 parts per billion. The agency estimates that a standard of 2 parts per billion would cost $6 billion to implement nationwide. One large water agency we have worked with estimates that its compliance cost alone would be $10 billion. Again, the EPA estimate is very low.
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The above are all examples of how federal government regulators Intentionally or inadvertently minimize cost impact on local government. The same pattern holds true when these regulators are required to do risk reduction analysis:
The Office of Management and Budget ("OMB")
made certain very astute observations on the
current system of risk assessment and
standard setting (Current Regulatory Issues
in Risk Assessment and Risk Management.
i22fll:
1. The continued reliance on conservative (worst-case) assumptions by federal agencies distorts risk assessment, yielding estimates that may overstate likely risks by several orders of magnitude.
2. Conservative biases embedded in risk assessment impart a substantial margin of safety. The choice of an appropriate margin of safety should remain the province of responsible risk-management officials, and should not be preempted through biased risk assessments.
3 . Conservatism in risk assessment distorts the regulatory priorities of the Federal Government, directing societal resources to reduce what are often insignificant
13 0171. Die
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carcinogenic risks while failing to address more substantial threats to life and health.
A perfect example of the total lack of common sense by regulators in making risk assessments is found under The safe Drinking water Act ("SDWA") , which requires municipal water treatment plants to monitor streams for a number of chemicals that have been assigned safety levels by the EPA. For the herbicide atrazine, the EPA established the level of 3 parts per billion ("ppbM) as acceptable for people to drink every day for a lifetime. If water contained 3 ppb every day, one would have to drink 3,082 gallons of water daily for life to equal the atrazine dose that caused an effect in a laboratory animal.
We already know from years of monitoring, that drinking water supplies never contain atrazine levels of 3 ppb every day for even a year. In fact, that level is exceeded on only a few days in spring, when herbicides are used. The EPA has said that a concentration of 100 ppb for up to 10 days does not pose an unacceptable risk.
But it's possible under the SDWA for a single springtime detection of 13 ppb to create an annual average that would put a water supply out of compliance, even if samples taken in summer, fall, and winter show no atrazine traces whatsoever. Cities could then be required to install very costly equipment to filter atrazine.
In a report that is fast becoming a model for other cities waking up to the drain on their treasuries, Columbus
14
106
officials estimated it would cost $2 to 3 million annually to operate such equipment once it is installed.
I have attached as an exhibit to my statement a compelling Mew York Times series entitled "What Price Cleanup?" which details the absurdly high costs local governments have been required to shoulder for what is often minimal risk reduction. Special attention should be given to the chart it contains which details cost per regulation for premature death averted. You will note that the cost for atrazine in drinking water is over
$92 billion.
Senator Glenn has also asked for comment on President Clinton's September 30, 1993 executive order on regulatory planning and review. Because it does not totally ban regulators from passing down unfunded mandates, it does not provide the full protection local government needs, but it is a small step in the right direction because of Sections (b)(5) and (11): (5) When an agency determines that a regulation is the best available method of achieving the regulatory objective, it shall design its regulations in the most cost- effective manner to achieve the regulatory objective. In doing so, each agency shall consider incentives for innovation, consistency, predictability, the costs of enforcement and compliance (to the government, regulated entities, and the
15 om.oic
107
public) , flexibility, distributive impacts,
and equity.
(11) Each agency shall tailor its
regulations to impose the least burden on
society, including individuals, businesses of
differing sizes, and other entities
(including small communities and governmental
entities) , consistent with obtaining the
regulatory objectives, taking into account,
among other things, and to the extent
practicable, the costs of cumulative
regulations. If the regulators follow those directives and implement them honestly and fairly, the President's executive order will have some benefit.
Senator Gregg has asked me to comment on S 993, Senator Kempthorne's bill, and S 648, which he introduced. Senator Gregg's bill has one advantage over S 993, and we recommend that it be appended to it, and that is that it makes clear that the legislation applies to any newly enacted federal mandates and to existing mandates as the underlying statutes are reauthorized. S 993 is silent on its applicability to reauthorization.
Senator Gregg's bill is not as good as S 993 because it leaves a loophole — a great one — through which Congress can avoid funding one of its mandates. It would allow a waiver to occur by three-fifths of the House or Senate. As I stated earlier, there can be no loopholes, no waivers, no outs. Only if
16 0171 .oic
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Congress acts now and passes S 993 will it put an end to a practice that is figuratively eating cities alive.
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110
NEW YORK TIMES
•
What Price Cleanup?
March 21 -March 26, 1993
Copyright © 1993 by The New York Times Company. Reprinted by permission.
Ill
THE NEW YORK TIMES NATIONAL SUNDAY. MARCH 21, 1993
New View Calls Environmental Policy Misguided
By KEITH SCHNEIDER
Spcrul i " n* New York Time*
WASHINGTON. March 20 — A gen- eration after the United States re- sponded to poisoned streams and filthy air with the world's first comprehen- sive strategy to protect the environ- ment, many scientists, economists and Government officials have reached the dismaying conclusion that much of America's environmental program has gone seriously awry.
These expert's say lhai tn (he last 15 years environmental policy has too often evolved largely in reaction to popular panics, not in response tc sound scientific analyses of which envi ronmental hazards present the great est risks.
As a result, many scientists and pub- lic health specialists say, billions ol dollars are wasted each year in bat- tling problems that are no longer con- sidered especially dangerous, leaving little money for others that 'cause far more harm.
At First, Clear Benefits In the first wave of the modern envi- ronment! movement, starting about .10 years ago, the focus was on broad efforts to eliminate the most visible pollution pouring from smokestacks and sewer pipes — programs with clear goals that had obvious benefits. Bui a second wave began in the late 1970's. with a new strategy intended to limit visible pollution further — and to begin attacking invisible threats from toxic substances.
To that end. states and the Federal Government began writing sweeping environmental laws, some of which in- cluded strict regulations to insure that cenain toxic compounds were not present in air. water or the ground at levels that did not exceed a few parts per billion, concentrations that could be measured with only the most sophisti- cated equipment.
What Price Cleanup?
first article of a series.
V-w Yof* Time-*
Times Beach, Mo.
The result was a tangle of regula- tions that the Environmental Protec tion Agency estimates cost more than SI 40 billion a year, roughly $100 billion spent by industry and $40 billion by Government
But what is now becoming apparent some scientists and public health spe c lalists say. is that some of these laws — written in reaction to popular con- cerns about toxic waste dumps or as- bestos in the schools, as examples —
were based on little if any sound re- search about the true nature of the threat Since 1980, for instance, thou- sands of regulations were written to restrict compounds that had caused cancer in rats or mice, even though these animal studies often fail to pre- dict how the compounds might affect humans.
And with rare exceptions. Congress approved new laws without subjecting ihem to even rudimentary cost-benefit analyses. One reason was that during the 1980s, when the economy seemed healthier, there was far less pressure on Congress to consider the cost of environmental policy
Overpriced and Misguided?
Now a new Administration intent on strengthening environmental policy is settling into office when competition for scarce financial resources is keen. At the same time, a wealth of new research shows that some of the na- tion's environmental protection efforts arc excessively costly — though no one knows how much of this money is mis- spent — and devoted to the wrong problems
This view is the vanguard of a new. thud wave of environmentahsm that is sweeping across America It began in
Continued on Page 30. Column I
The Series: A Recap of the Articles
The first article in this series, which appeared on Sunday, report- ed that leading scientists, econo- mists and Government officials had reached the dismaying conclu- sion that much of America's envi- ronmental program had gone seri- ously awry They said the nation's environmental policy had been al- lowed to evolve in reaction to popu- lar panics rather than in response to sound scientific analyses.
The article on Monday de- scribed how Congress banned the practice of dumping sewage in the sea after trash, industrial waste
and worse washed ashore on the East Coast in 1988
Tuesday's article described the serious doubts being raised about the validity of rat and mouse stud- ies, long the Government's most important tool for identifying envi- ronmental hazards and setting pri- orities for Federal regulation Chemicals often have different ef- fects in animals and humans
Wednesday's article described how a movement born in Colum- bus, Ohio, prompted the National League of Cities to call for an update of environmental laws
Note: The article on sea-dumping is not included in this reprint.
112
THE NEW YORK TIMES NATIONAL SUNDAY. MARCH 21. 199?
New View on Environment: Policy Driven by Panic, Not Science
Can r-iTiphr)l fitr Thr Mr* York Timc-
A worker wore protective clothing as he removed soil contaminated with toxic waste in Columbia, Miss., pan of a $20 million Superfund cleanup. Once it is finished, a child could eat half a teaspoon of dirt every month for 70 years and not get cancer.
Continued From Page I
ihe late l»80's among farmers, homeowners and others who were upsei largely by the growing cost of regulations that didn't ap- pear to bring any measurable benefits. Cor- porate executives had long been making sim- ilar arguments but had gone unheeded, even during 12 years of Republican rule, because often they were seen as interested only in saving money
Richard J- Mahoney. chairman and chief executive of Monsanto, the chemical compa- ny, said the nation may start listening to industry now
"People want to know, even with the envi- ronment, what wc are getting for our mon- ey," he said. "The most positive thing since the election is that we are beginning to recog- nize that we do have finite resources, and one must make choices."
But leaders of the nation's conservation organizations believe the new view is mis- guided.
"We don't need a new paradigm," said David D Doniger, a senior lawyer with the Natural Resources Defense Council. "For 35 years, the policy of the Government has been that when there is uncertainty about a threat it is better to be safe than sorry. When you are operating at the limits of what science knows, (he big mistake would be to underesti mate the real danger and leave people unpro tected."
Still, in the last few years the wave has moved inio universities, city halls, state capi tols and even to the highest levels of the E.P.A., whose Science Advisory Board in 199C concluded (hat environmental laws "arc more reflective of public perceptions of risk than of scientific understanding of risk." Law Follows Panic
William K Reilly. (he EPA. Admimstra tor ai the iimc. agreed. And in a recent interview, he argued "People have a right tc expert that public officials are making the right choices for (he right reasons. We need to develop a new system for taking action on
the environment that isn't based on respond ing (o the nightly news
"We're mtsallocating large amounts ol money." added Mr Reilly, who is now a senior fellow at of the World Wildlife Fund "What we have had in the United States is environmental agenda-setting by episodic panic. We've had Love Canal. Valley of the Drums, ihe Exxon Valdez and with virtuall> every case of a new environmental crisis (here is a new legislauve priority and a new, budgei allocation That has created a mix ol programs that don't respect the biggest risks 10 health and ecology "
Richard D Morgenslern. Ihe acting admin islruior for polity planning and evaluation ai the E PA., explains the problem this way "Our society is very reactive, and \r' r concerns are raised people wani action, problem in a democracy is you cant easily sii idly hack and roll people it would be bettei to learn more."
The result, he added, is thai "we're now ir (he position of saying in quite a few of oui programs. Oops, we made a mistake.1 "
113
THE NEW YORK TIMES NATIONAL SUNDAY, MARCH 21. 199}
PoHcy Now
Costly Solutions Seeking Problems
Almost everyone involved, including com- munny and local environ menial groups. agrees lhai the loxic waste program stands as the most wasteful effort of all- It began 15 years ago when the nation rose in revulsion over the discovery of seeping chemicals at Love Canal in New York. Hundreds of people were evacuated from their homes.
In response. Congress passed two laws: ihe Superfund law of 1980 and amendments lo the Resource Conservation and Recovery Act in 1984. A decade later, those laws have driven the Government to spend almost $2 billion a year for the Super-fund, which cleans up toxic waste sues, and more than $8 billion more a year on similar programs in other agencies, even though many of the sites pose little if any danger.
The Superfund law. which is a foundation for the Government's toxic cleanup policy, established a formula for ranking the poten- tial hazards of toxic sites, and then devised a rigid recipe for cleaning them up
'Throwing Money at a Problem'
"Does it make sense to spend millions of dollars cleaning up a site that only has a ^-»onih of an ounce of contamination?" asked V Richard Goodwin, a private environmen- tal engineer in Upper Saddle River. N.J., who
President Clinton is clearly aware of this view As Governor of Arkansas, he continual ly complained as a Federal toxic wast* cleanup project in Jacksonville devoured $2.[ million in state. Federal and private money State officials said nearly a decade of wort has pnxJuced little more than piles of techni cal documents, exorbitant legal bills ant public discord.
Greater Consequences
To be sure, some of the $140 billion th( nation is spending this year pays for environ mental programs that are indisputably use ful As an example, few experts question tht value of spending roughly $3 billion each year on new sewage treatment plants Many ex peri s. however, quest ion the wisdom of spending billions of dollars to protect people from traces of toxic compounds
The new school of thought has blossomed as policy makers confront planetary threats like global warming, ozone depletion and deforestation in which the consequences of wrong action are much greater. Unless the nation rethinks its approach to environmen- tal protection, some experts say. the United States could repeal us mistakes.
"The President is aware of this dilemma, and there is leadership in this Administration lor trying to change the way we do business ^ every aspect of governing, including envi- onmental protection." said Carol M. Browner, the Administrator of the Environ- mental Protection Agency. "We have to al- low for change to occur as new information becomes available. This is not an area where a solution will fit forever "
has overseen more than 20 toxic waste clean- ups. "I say no. Alt we're doing in most cases is throwing money at a problem without improving public health or the environ- ment "
Hugh B Kaufman, a hazardous waste spe- cialist at the EPA. who helped uncover the problem at Love Canal, said that in the few ruses in which a sue is near populated areas. "Ihe best thing we can do is evacuate people if ihey want, then put up a fence and a flag that says 'Slav Away ' "
Mr Kaufman said he knows that his idea represents a marked change in the tradition- al view of how the nation should care for its land But he and other experts says it does not make sense to clean up these wastes at costs that frequently exceed $10 million an acre
Even a principal author of the Superfund law. Gov Jim Florio of New Jersey, who was c hanman of a House environmental subcom- mittee in the 1970's. now argues that inflexi- ble rules mean that Superfund resources are loo often devoted to making sites pristine
"It doesn't make any sense to clean up a rail yard in downtown Newark so it can be a dunking water reservoir." he said, speaking rhetorically
Toxic waste cleanups are one example of a program gone awry Here are others:
* Early in the I980's. Government scien- tists argued that exposure to asbestos could cause thousands of cancer deaths. Since as- bestos was used as insulation in schools and public buildings, parents reacted with alarm So in 1985 Congress approved a sweeping law ihat led cities and states to spend between $15 billion and $20 billion to remove asbestos from public buildings But three years ago. the E.P A completed research that prompt- ed officials to admit that ripping out the asbestos had been an expensive mistake; the removal often sent tiny asbestos fibers into the air Now, except in cases when the asbes- tos is damaged or crumbling, the Govern- ment's official advice is: Don't touch it.
* In 1982. high concentrations of dioxin were discovered in the dirt roads of Times Beach. Mo, near St. Louis Residents were alarmed, ihe Government had designated dioxin as one of ihe most toxic substances known The furor came in the middle of a scandal at the E.P. A., the agency's chief. Anne Gorsuch Burford. was accused of not cnfoicing environmental law and being too close to industry And as that scandal domi- nated the news, the Reagan Administration decided to evacuate all 2.240 residents of Times Beach, a project that cost the Govern- ment $.17 million But new research indicates thai dioxin may not be so dangerous after all. None of the former residents of Times Beach have been found to have been harmed by dioxin. and two years ago. Dr Vernon N Houk. the Federal official who urged the evacuation, declared lhat he had made a mistake
Yet even as enormous sums of money were hemg spent on these problems, Washington was doing little about others. Here are two
* Mercury, a highly tojeic metal, has con- taminated thousands of lakes across the na- tion, poisoning wildlife and threatening hu- man health, state environmental officials
say. Twenty states, including New York, have warned consumers not to eat lake fish because they are tainted by mercury, which can cause nervous system disorders. During debate on the Clean Air Act. in 1990. Congress considered limiting mercury emissions from coal-burning electric plants, but lawmakers decided not to act because they believed utilities had already been asked to spend enough to control acid rain. Senate and House leaders said.
* In ihe last two years, several Federal agencies have called exposure to lead the largest environmental ihreal to the nation's children Although some scientists dispute that, several studies have shown that lead poisoning in children leads to reduced intelli- gence, learning disabilities and hyperactivi- ty. The problem is that most houses built lief ore the 1970s could have some lead-based paint, and the fear is that children are eating paint chips or inhaling lead-laden dust. Some experts have said removing the lead paint will cost at least $200 billion. This year, the Government will spend $234 million on the problem, far less than n spends on cleaning up toxic wastes.
The Path to PoHcy
When Politics Mixes With Fear
Even the advocates of change acknowl- edge that as science evolves, experts may change their views again on the dangers posed by these and other substances. But at the least, "sound science should be our com- pass," as Mr Rcilly put n two years ago.
After all. it was politics, misinterpreted or inaccurate scientific findings and a newly influential national environmental move- ment ihat combined lo set America down its present path.
During the I970"s. the United States had successfully dealt with many obvious envi- ronmental problems. When the Cuyahoga River in Cleveland caught fire in 1969. as an example. Congress passed the Clean Water Act About the same time came the Clean Air Act. the Endangered Species Act and other landmark environmental statutes — laws thai are now widely acclaimed.
Partisan Battles
By the late 1970s, many Democrats in Congress believed the public wanted even stricter environmental law But when Ronald Reagan was elected in 1980. he promised to reduce regulation. While the White House and Congress battled over this, the national environmental movement, with help from the news media, took on the job of warning the publu about new threats and enlisting popu- lar support for new regulations. They were spectacularly effective at this, and Congress passed two dozen bills that laid down man- dates
In the 1970's, environmental statutes rare- ly ran more than 50 pages. In the 1980s, these bills seldom numbered fewer than 500 pages.
114
THE NEW YORK TIMES NATIONAL SUNDAY, MARCH 21, 1993
The reason was thai Congress wanted to mandate safety limits so specific that the Administration could not ignore or evade them. Mr Reilly, the former E.P.A. chief, said he was largely unable to change the Governments thinking, despite his strong opinion that environmental policy was on the wrong course, because "this represented a pretty significant change of direction."
Ai the leading environmental groups, staff members dispute the developing view that environmental policy is off track. Legitimizing Pollution?
"It's an effort to legitimize pollution," said Daniel F. Becker, director of the Global Warming and Energy Program at the Sierra Club "There are powerful forces who have an economic stake in de-emphasizing envi- ronmental damage."
But others who analyze environmental is- sues said these groups are in danger of becoming the green equivalent of the mili- tary lobby, more interested in sowing fear and protecting wasteful programs than in devising a new course.
"We are in danger of losing credibility and ihus losing public support if we don't modify the whole way we go about protecting public health and the environment," said Dr. Devra Lee Davis, a senior research fellow at the National Research Council of the National Academy of Sciences.
A Case Study
Making Dirt Safe Enough to Eat
Perhaps no environmental program has come under more criticism than the Super- fund and its progeny The Federal programs to clear toxic or radioactive wastes will con- sume more than one-quarter of the roughly $38 billion that the Federal Government spends for environmental protection this year Experts in and out of the Government assert, though, that the justification for these expenditures is often questionable.
Consider the case of Columbia. Miss. The EPA. is overseeing the last phases of a $20 million Superfund cleanup project there. Like many others around the country, this one was guided by the Government's as- sumption that children will eat dirt. Lots of it. And from that dirt, the Government theo- rized that they could develop cancer
Some evidence suggested that this was an exaggcraied concern. In 1981. a study for the Congressional Office of Technology Assess- ment, which has been endorsed by the Na- tional Cancer Institute, found that only I to 3 percent of all cancers in people are caused by exposure to toxic chemicals in the environ- ment. This finding, however, has had little influence on Federal policy
The problem in Columbia was an 81-acre site thai over its long life had been home to a lumber mill, a naval turpentine and pine tar plant and a chemical manufacturer.
Soil tests taken in 1986 showed traces of compounds the Government defines as haz- ardous. The concentrations rarely exceeded 50 pans per million, or about two ounces of chemicals mixed in a ion of soil. But that level exceeded the Federal limn, and the E.P A. placed (he land on us list of dangerous toxic waste sites.
Some experts told the E.P.A. that such tiny amounts of contamination were harmless. They said the safest and most economical way to solve the problem would be to spread a layer of cleaner soil and call it a day. The cost: about $1 million.
Most Expensive Solution
But two years ago. the E P A. settled on the most expensive possible solution. The Gov- ernment ordered Reichhold Chemical, the plant's former owner, to dig up more than 12,500 tons of soil and haul most of it to a commercial dump in Louisiana — 450 dump i ruck loads, each one costing $7,500.
E.P.A. officials said they wanted to make the site safe enough to be used for any purpose, including houses — though no one was proposing to build anything there. With that as the goal, the agency wanted to make sure children could play in the dirt, even eat it, without risk. And since a chemical in the dirt had been shown to cause cancer in rats, the agency set a limit low enough that a child could eat half a teaspoon of dirt every month for 70 years and not get cancer.
Last month, the E.P.A. officials acknowl- edged that at least half of the $14 billion the nation has spent on Superfund cleanups was used to comply with similar "dirt-eating rules." as they call them.
"I don't think any way you look at this it could be seen as a practical solution," said W. Scott Phillips, an engineer with Malcolm Pirnie. an environmental planning company that manages the cleanup. "It's a lot of money to spend moving dirt."
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THE NEW YORK TIMES NATIONAL TUESDAY. MARCH 23. 1993
Many Say Lab-Animal Tests Fail to Measure Human Risk
By JOEL BRINKLEY
Specul to Tl* N«w Yort Ttinn
GAITHERSBURG. Md . March 20 - Dozens ol caged rats and mice spend their days here in a laboratory chewing on Purina rodent chow laced with as much boric acid as they can tolerate without risk of death from poisoning.
These rodents and more than 1.000 others are being used to study seven common environmental and household chemicals to see if any cause reproduc- tive problems. The rats and mice are allowed to breed at will. Then scientists here at ROW. Sciences, a research laboratory that works under Federal contract, examine several generations of offspring for abnormalities or de- fects.
This project is just one of roughly 65 rodent studies under way at 15 labora- tories across the country at an average cost of about $2 million each. For much of the last two decades, these studies have been the Government's most im- portant diagnostic tool for identifying environmental problems that are health hazards and setting priorities for Federal regulation.
Billions Down (he Drain'
But now the animal-studies program is being hobbled by doubts about its worth. So much evidence has accumu- lated that chemicals frequently have wholly different effects in animals and humans that officials throughout Gov- ernment and industry often do not act , on the studies* findings.
And with that growing skepticism, the rationale behind a large portion of
What Price Cleanup?
Third article of a scries.
the nation's environmental regulation ts thrown into question.
As a result, even Dr Kenneth Olden, director of the National Institute of Environmental Health Sciences, the branch of the National Institutes of Health that directs the animal studies. asks whether the nation is wasting billions of dollars regulating sub- stances that might pose little risk.
The findings from about 450 animal studies over the last several decades.
Continued on Page AlB, Column 1
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THE NEW YORK TIMES NATIONAL TUESDAY. MARCH 23, 1993
Many Say Lab- Animal Tests Don't Measure Environmental Risk to Humans
The use of rodents as a diagnostic tool for identifying health hazards is being met with growing skepticism because of evidence that chemicals frequently have wholly different effects
Oujnr HjII hir rhc Now Yurh Time-
in animals than in humans. Dr. Kenneth Olden, director of the National Institute of Environmental Health Sciences, reviewed tests in his laboratory in Research Triangle Park, N.C.
Continued From PageAl
Dr Olden said, have led Federal and stale governments lo write thousands of regula- tions forcing government and industry to spend tens of billions of dollars a year regu- lating the use and disposal of several dozen chemicals, or finding alternatives for chemi- cals lhat have been restricted or banned.
For instance, it was data from rodent studies that led the Government 10 ban or restrict the use of (wo kinds of artificial sweeieners, cyclamates and saccharin, as well as the pesticide DDT and the industrial byproduct dioxin.
In Dr Olden's view, "That's an awful lot of money to be spending to be regulating sub- stances we might not have to be regulating at all if we had more information."
Alter spending many billions of dollars to clean up dtoxin. the Government is midway through a reassessment because new studies of people exposed to dioxin — once consid- ered one of the most poisonous substances in the world — show u is not nearly as harmful as originally believed.
Similarly, John A. Moore, a former assist- ant administrator for the Environmental Protection Agency who now heads the pri- vate Institute for Evaluating Health Risks, noted that DDT was banned because it was believed to be a carcinogen.
But new data show that u poses "a rela- tively modest cancer risk," Dr Moore said, (hough DDT does present other environmen- tal hazards And as for some of the other chemicals (hat have caused cancer in ro- dents. Dr Richard A. Gnesemer. deputy director of Dr. Otdcn's institute, offered some addilmnal revisionist ideas
"Saccharin doesn't have much risk." he said, "and 1 don l think cyclamates have any risk at all."
Scott Green understands the weaknesses of his research. He is ROW'S laboratory manager, and he did note thai the reproduc- tive studies "are already finding some ef- fects." Some rats and mice are producing fewer litters (hat ure smaller than average "Bui is ihai relevant lo what's happening out there m the environment^" he asked. "I can't (ell you."
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THE NEW YORK TIMES NATIONAL TUESDAY, MARCH 23. 1993
Origins
Rodents Are Used In War on Cancer
The Government first began experiment- ing with rodent studies in (he early 1960s, and the program grew exponentially after the Nixon Administration announced the Government's "war on cancer" in 1971. Even with some known weaknesses, scientists en- thusiastically embraced the animal studies as clear indicators of cancer risks.
Though there was no legal requirement to act on the studies' results, a wetter of laws did require Government agencies to protect the public from foods, drugs, household prod- ucts, industrial chemicals and other sub- stances that caused cancer. So Government officials responsible for protecting the public health accepted the data as justification for many new regulations in the 1970's.
Then in the 1980s, new data from the rodent studies helped fuel another wave of modern environmentalism — the push to insure that certain compounds believed to be toxic were not present in air. water or the ground even at minute levels.
With each new piece of environmental leg- islation — the Superfund law, revisions to the Safe Drinking Water Act and others — Con- gress required the EPA and other agencies to set safe exposure limits for hundreds of specific pesticides, industrial chemicals and other substances. Those new limits were derived from rodent-study data, thousands of new regulations were written as a result.
By the mid-1980's, however, new research findings began to cast new doubts on the validity of the animal research. Government was no longer so quick to accept the results automatically in every case But by then, dozens of substances had been ruled safe or dangerous based on the animal studies alone.
By the lime Or Olden took over as director of ihc Health Sciences Institute in 1991. the animal studies were increasingly being called into question. Almost immediately, he empaneled a group of the nation's leading experts to study his agency's toxicology- research program to help him decide wheth- er to look for a new approach.
Last summer, the group's report said many of ttfe assumptions driving the rat and mouse research "do not appear to be valid." The experts particularly questioned the prac- tice of feeding rodents the "maximum toler- ated dose" of the chemical being tested, the M.T.D., as it is called.
Finding the Poison Level
With thai technique, used in almost every animal study, scientists feed a test group of mice larger and larger quantities of a sub- stance until they find the level that actually poisons ihe animals. Then during the actual test, they feed new animals what they have determined is the maximum dose the animal can tolerate without death from poisoning.
The reasoning is that high doses will more reliably produce tumors or other effects in statistically significant numbers. Scientists might have to use thousands of animals to get
a meaningful result at doses close to normal human exposure — 65,000 mice for the sac- charin study, Dr. Gnesemer said.
So using the high-dose reactions, scientists devised scales helping them to speculate on how people might react at lower levels. But Di Olden 's review committee said it did not believe that this reasoning was valid. The review committee wrote, "Approximately two-thirds of the carcinogens would not be positive, i.e.. not considered as carcinogens, if (he M.T.D. was not used."
In oi her words, two-thirds of (he sub- stances that proved to be cancerous in the animal tests would present no cancer danger in humans at normal doses.
Dr Gnesemer and others disagreed with (hat particular finding. They said that proba- bly only one-third, not two-thirds, of the chemicals shown to be carcinogens in ani- mals would likely be benign at lower levels. Still. Dr. Gnesemer acknowledged, a possi- ble error rate of even 33 percent is worri- some.
He and others at the institute's headquar- ters in Research Triangle Park, N.C.. agree that animal research, by itself, should no longer be accepted as a reliable means of judging risks for humans.
■thc problem is we don'l know what the findings really mean." Dr. Robert Maronpot. chief of the institute's experimental-pathol- ogy laboratory, said of the animal studies.
As illustration. Dr Allen J. Wilcox, chief of the institute's epidemiology branch, cited a recent institute study showing that rodents consuming cola beverages "showed an asso- ciation between the cola beverages and renal failure." or loss of kidney function.
"But (he results are murky." he went on. And so the institute is choosing not to draw conclusions until more research is done
Another study, completed about a year ago. found that rats and mice develop cancer when fed high doses of oxazepam, a direct chemical relative of Valium. Valium is among the nation's mosi-often prescribed drugs, and the rodents taking the maximum tolerated dose of oxazepam "had a 100 per- ceni incidence of tumors, all over the body — very quick." Dr Maronpot said.
And so the institute began a rare, crash study, devoting all available resources to see what more could be learned.
Examining frozen DNA sections from the affected animals, "we found this was an M.T.D. result." Dr Maronpot said. "Oxaze- pam would not be a problem even for a mouse at normal human dosage levels. "
But this kind of research is costly and time-consuming, and the technology has ex- isted for only a few years.
Dr Maronpot swept his hand toward a long row of blue books stretching more than 10 feci along an upper shelf, reports on all 450 animal studies the Government has conduct- ed over the last 30 years.
"It's an impressive product, not produced by anyone else in the world," he said. Still, Dr Maronpot acknowledged, neither he nor anyone else at the institute knows how many of the tested substances that produced tu- mors or other harmful effects in animals — about half the total — might now be shown to be benign at normal levels.
A More Vexing Question Even more worrisome, perhaps, is the opposite question: How many substances that caused no harm to rodents might be dangerous to humans? One chance finding demonstrated this problem.
"Arsenic is not a carcinogen in animal studies." said Dr. Joseph F Fraumeni, direc- tor of epidemiology and biostatistics at the National Cancer Institute But several years ago. he recalled, a study of smelter workers exposed to high levels of arsenic in the air showed a high level of lung cancer.
From that. Dr Olden's review committee concluded thai the Government should no longer rely only on animal studies. They should be simply one part of a program of research also involving studies of population groups found to have been exposed to the substances without knowing of the possible risk, and laboratory analyses showing how the chemicals interact with cells.
That is easy to say, institute officials agree, but difficult and costly to do.
Progress
Studies of Cells At Cutting Edge
Since the review committee's report, more and more attention has been directed toward Dr. Maronpoi's little shop, the institute's pathology laboratory. It is here that the crash oxazepam study was carried out. And it is in laboratories like these that the future of toxicology research is believed to lie
Here, scientists try to figure out how sub- stances interact with human cells, whether they cause muiauons (hat can lead to cancer. And when research like this works, scientists believe (hey have (he most credible findings now achievable
"That's what were focusing on now, un- derstanding (he responses at the most basic level." Dr. Maronpot said. "We're making progress ." But he is at (he cutting edge of science, and he acknowledged that "there's still so much we do not know."
As it is, if a substance that produces a carcinogenic effect in mice is referred to Dr Maronpoi's lab, "typically it can take two three, maybe even five, seven, eight years" to carry out one of these studies. So Dr. Maronpoi's laboratory can offer a second opinion on fewer than 10 percent of the sub- stances subjected to animal studies.
Nearby. Dr. Wilcox heads the department that offers the second-best hope for validat- ing findings from the animal studies. He and seven other epidemiologists try to find spe- cific groups of people who have been exposed to the substances to see if they have suffered ill effects. The smelter workers exposed to arsenic are an example But unfortunately. Dr Wilcox said, similar examples of epide- miological studies are rare.
"The whole area of environmental epide- miology is a frustrating one." he said. The principal problems are that people are gener- ally exposed to low levels of the suspect
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THE NEW YORK TIMES NATIONAL TUESDAY, MARCH 23. 1993
substances. And even if they suffer unusual health problems, it is hard to know whether the illnesses were caused by the substance or something else — smoking, poor diet, etc.
"Epidemiology is a real crude tool for looking for associations." Or. Wilcox ac- knowledged. It is also time-consuming. As a result, his department, like the pathology laboratory, is able to examine only a tiny percentage of the substances subjected to animal studies.
That means the institute and the rest of the Government can seldom offer much more than the animal studies as warnings of a substance's possible danger to humans.
""We're looking for alternative approach- es," Dr. Griesemer said. "But right now. that's what we've got."
Quite orten, that means no one takes the institute's warnings seriously any longer.
Problem*
Frustrations Grow With Knowledge
Almost two years ago, the results came in from rat and mouse studies of 1.2,3 t nchloro- propane, an industrial solvent used as a paint and varnish remover or a degreasing agent.
Almost every animal exposed to the sub- stance was riddled with tumors "in several organs," said Dr. Richard D. Irwin, the insti- tute toxicologist who wrote the report. "This is the type of chemical that shows the great- est potential for human effect."
"Our understanding is that workers wash themselves in this," Dr. Griesemer said. And since the chemical is absorbed in the skin, he and others said, the finding was particularly troubling.
In Dr. Irwin's view, "It would be real good to get some human data because I'm sure there were people who were exposed to it in the past, maybe even now."
So did the epidemiologists look for people who had been exposed to the substance?
"This isn't one we're looking at," Dr. Wil- cox said. But maybe, he added, the National Cancer Institute's epidemiologists did look at it. The cancer institute has what is probably the world's largest cancer epidemiology de- partment — 100 scientists and support staff — and they get the animal-study reports automatically. But they seldom choose to begin a study based on the animal research, and they did not initiate one in this case.
In 1990, when a rodent study suggested that fluoride might be a carcinogen, "we took that one on," said Dr. Fraumeni, head of epidemi- ology for the cancer institute. "We found nothing, and that was the last time."
As for tnchloropropane, he said, "I haven't heard of it."
Dr Irwin wondered if the Occupational Safety and Health Administration might have done a survey or found a way to check on workers exposed to the chemical.
But Dr Edward Stein, a health scientist for OS.H.A.. said the agency had done no sur- veys and had not changed its standards for tnchloropropane since January 1989, when it issued a regulation limiting airborne emis- sions of ihe substance.
As for telling people of the dangers. Dr. Stein added, "The primary manufacturers of (he product would be responsible."
"I presume when updating training pro- grams at companies that use this, say annu- ally, whoever is doing (hat would be aware of the new information," Dr Stein said. "They would make the employees aware of it, but I'm not sure if that is actually being done."
"We always have a battle on the issue of what to do with the animal data," Dr. Stein added. "I'm not trying to downplay it, but I do believe other things ought to have priority."
So back in North Carolina, Dr. Irwin said: "I really haven't heard of anything happen- ing. It's almost as if our work just goes into a black box."
Acknowledging that problem. Dr. Olden said: "I have to say we don't serve the American people very well right now. Bui that's where we are."
Next: When enforcement of the rule? brings exasperation.
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THE NEW YORK T,MES NATIONAL WEDNESDAY. MARCH 2<
1993
How a Rebellion Over Environmental Rules Grew From a Patch of Weeds
By KEITH SCHNEIDER
Spcrul 10 Tlw N<t» Yor* Tmh
COLUMBUS. Ohio - This cily did- n'l warn to pave paradise for a park- ing lot. Il jusi warned to cover a patch of weeds and mud behind the Short Street garage, where the city main- tains us fleet of police cruisers and garbage trucks
But two years ago. city engineers here in Ohio's capital discovered traces of chemicals in the dirt and learned that the Federal hazardous- waste law might require a J2 million cleanup before the first ounce of pavement could be laid. Right then a forgettable little stretch of urban America became the focus of anger and exasperation so profound that it started a national campaign among cities and states.
After the city issued a report on its problems, all of a sudden Columbus s leaders were joined by hundreds of city officials, slate leaders and many private homeowners across the coun- try as they advocate a cause that until now big business has been argu- ing most forcefully that many of the nations environmental rules bring enormous expense for little gain.
Although independent safety spe- cialists said the chemical concentra- tions were too small to cause any harm. Federal law defined several of the compounds as hazardous and re- quired that they be removed, if de- tectable in the soil at all.
What the Law Demanded In effect, the law required the city to take these expensive steps:
•^Dig up 2.4 million pounds of dirt containing no more than a few pounds of toxic chemicals from a patch of ground no larger than a baseball dia- mond.
•!Ship that din I.SOO miles south to Texas to be burned in an incinerator ^Install detection equipment to monitor the air for up to 25 years for traces of any contaminants that might remain
All this, the engineers asked to expand a parking lot?
They called a meeting at Cily Hall and that led to the first major study to identify the cost of complying with Federal environmental regulations. It showed that environmental costs were about to swamp Columbus in red ink — or generate a revolt
Now nearly 1.000 other cities have asked to see the report. And prompt- ed by the Columbus study, the Nation- al League of Cities has made updat- ing the nation's environmental laws — and through that reducing costs — one of its top five political priorities in Washington.
What Price Cleanup?
Fourth article nfa series.
In January, mayors from 1 14 cities in 49 states opened the campaign by sending President Clinton a letter urging ihe White House to focus on how environmental policy-making had. in their view, gone awry.
"Noi only do we sometimes pay too much to solve environmental prob- lems, we've been known to confront the wrong problems for the wrong reasons with ihe wrong technology.'' the mayors said.
During the Bush Administration William K Reilly. the Administrator of the Environmental Protection Agency, offered public support for this campaign and even began offer- ing grants to states that wanted to re- evaluate their priorities
With that money, Michigan and Vermont were among the first to ap- point panels of citizens and scientists to examine environmental policy In published reports, both state's panels concluded thai ihe largest sums of money were being spent on the leasi threatening environmental problems like exposure to toxic and radioactive wastes. In the view of these state panels, more important issues like damage to farmland and forests were being largely ignored
"Were really just about at the end ol the reductions in risk that you can achieve by the conventional ap- proach, which is to crank down on the pollution coming out of the end of the pipe." said Dr William Cooper an ecologist at Michigan State Universi- ty who helped lead his state's study "Now were into more subtle issues How clean do we really want our environment? How much are we real- ly willing to pay for H?"
THe 5eeo<
Benefits Are Vague As Policy Shifts
The seeds of this grass-roots push lay in the Federal Government's shift in focus over the last 15 years from promoting broad environmental goals (purifying the air. cleansing the water) to regulating specific toxic substances: dioxin. asbestos and doz- ens of other compounds found at trace levels in drinking water chemi- cal-waste sues and the like.
Controlling the kind of pollution that poured out of automobile tail- pipes or factory smokestacks, and
stopping waste discharges into rivers and streams, showed clear social benefits And so public acceptance usually came easily
But the improvements in health or environmental safety from the more recent efforts have been less obvious Scientists continue to debate how dangerous dioxin may really be An industrial byproduct, dioxin was once considered the most toxic substance known to man Reducing dioxin levels to the Federal standard - less than 13 parts per quintillion in drinking water, the equivalent of a single drop in Lake Michigan - is difficult and terribly expensive, even though no one really knows what, if any bene- fits result
More lhan 10 years ago, the Fed- eral Government adopted the view ihat when there is any doubt tt is better to lake ihe prudent approach than do nothing But a decade later the economic costs of this policy are painfully clear while the benefits re- main largely immeasurable
Last year, home owners, farmers miners and umber industry workers roared imo Washington and brought to a standstill Congressional efforts to reauthorize ihe Endangered Spe- cies Act and ihe Clean Water Act two of ihe laws thai form ihe foundation of American environmental policy Presideni Bush focused on this theme during his re-election campaign largely siding wnh these protesters ' This year, city and state leaders have joined in a campaign lo write imo statutes a provision requiring the Federal Government to evaluate sci- entific evidence and the cost to com- munities before issuing new environ- mental directives
Leaders of ihe major environmen- tal groups are fighting this idea They argue lhal n would set a level of proof so difficuli to meet that the Govern- ment could not wrne new regulations until people siarled dying
But backers of the provision assert that unless changes are made, public suppori for environmental protec- tions will crumble as costs rise
The Anger
Counting the Costs In a City Hall
It was precisely ihis issue of cost lhal promplcd the Columbus engi- necrs in call a meeting in January IWI One participant, Michael j Pompih. who was in charge of the Columbus Health Departments envt- iiinmrnlal-hcallh division, had on his own been quictlv studying how much the city would have lo pav to comply
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THE NEW YORK TIMES NATIONAL WEDNESDAY. MARCH 24, 1993
with a new wave of rules coming out of Washington These were intended lo prevent public exposure to minute levels of chemicals in air and water. "The guys were talking about spending all that money for nothing
at 'he Short Street garage," he said in an interview "They were complain- ing about the $2 million And I said, the issue isn't $2 million. It's a lot more than that I told them my guys had identified millions more in costs ctivwidc to meet Federal environ- mental requirements, and where were we going to gel the money to meci those mandates0"
Columbus's Mayor at the time. Dana Buck Rinehart, a Republican. promptly named Mr Pompili chair- man of the city team that published the environmental study in May 1991.
The report said that to meet dozens of Federal environmental require- ments, Columbus faced SI. 3 billion to $1.6 billion in new expenses from 1991 through the end of the decade, de- pending on the inflation rate. Virtual- ly all of that money was to come from the Columbus city treasury.
Of the $591 million 1991 city budget. $62 million, or 11 percent, was de- voted to environmental protections. That year, the average Columbus household paid $160 for that purpose.
The study said that by the end of the decade, if every Federal require- ment were met, Columbus's environ- mental budget would more than triple, to $218 million, or roughly 27 percent of the city's $810 million budget projected (or the year 2000 The cost to a household for environ- mental protection would be $856 that year — more than the cbst of fire or police protection.
' ' When we ca me up with i hese kinds of costs, we also looked for the justification and just couldn't find much there." Mr. Pompili said. "I had to wonder. Am I out of touch? 1 have worked all my life to protect people from environmental harm. Am I looking at these issues in the wrong way?"
Now. he said. "1 no longer ask those questions because I'm convinced that we arc doing the right thing."
Mr Pompili said he wants clean air and water as much as anyone else ("This city will not survive without a (lean environment "), but he added: "What bothers me is that the new rules coming out of Washington are taking money from decent programs and making me waste them on less importanl problems. It kills you as a city official to see this kind of money being speni for nothing."
Regulation and the Price per Life
Two years ago. the Office ot Manqament arifl PllHff*' triad to estimate the cost ot certain environmental and satety regulations by dividing the cost ot enforcing each rule by the number ot lives it appeared to save.
The estimate is highly subiectjve since it is virtually impossible to know how many lives might have been lost without a certain rule. In addition, the analysis did not account for non-fatal injuries. But this cost-benefit analysis did demonstrate the Bush Administration's attitudes toward the laws it was enforcing.
Now, state and local governments are distributing this analysis widely to support their criticism of national environmental policy Here is a partial list of regulations
Cost par premature death averted Regulation In millions of dollars
Ban on unvented space heaters $ |
0.1 |
Aircraft cabin fire-protecuon standards |
0.1 |
Auto passive restraint/seat belt standards |
0.1 |
Trihalomethane drinking-water standards |
0.2 |
Aircraft floor emergency lighting standard |
0.6 |
Concrete and masonry construction standards |
0.6 |
Ban on flammable children's sleepwear |
0.8 |
Grain dust explosion-prevention standards |
2.8 |
Rear seat auto lap/shoulder belts |
3.2 |
Ethylene debromide drinking-water standard |
5.7 |
Asbestos exposure limit for workers |
8.3 |
Benzene exposure limit for workers |
8.9 |
Standards for electrical equipment in coal mines |
9.2 |
Arsenic emission standards for glass plants |
13.5 |
Ethylene oxide exposure limit for workers |
20.5 |
Hazardous-waste listing for petroleum-refining sludge |
27.6 |
Acrylonitrile exposure limit for workers |
51.5 |
Asbestos exposure limit for workers |
74.9 |
Arsenic exposure limit for workers |
106.9 |
Asbestos ban |
110.7 |
1 ,2-Dichloropropane limits in drinking water |
653.0 |
Hazardous waste land-disposal ban |
4,190.4 |
Formaldehyde exposure limit for workers |
82,201.8 |
Standard for atrazine/alachlor in drinking water |
92,069.7 |
Hazardous-waste listing for wood-preserving chemicals
5,700,000.0
10
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THE NEW YORK TIMES NATIONAL WEDNESDAY. MARCH 24. 1993
The Revolt
Battling Radon: Changing Targets
Officials in rrunv other cities feel the same way Late last year. Has- tings. Nob. began its own review of cm m on mental costs and concluded thai the single biggest drain on us treasury was (he $65 million it would take to build a treatment plant to meet a proposed EPA. rule for re- moving radon from the city's water
Radon is a radioactive gas formed naturally when radium decays in rocks and soil. It is frequently found at trace levels in water pumped from the ground Before the E.P.A. pro- posal, made under authority of the Safe Drinking Water Act, almost no public-health specialist had consid- ered radon in drinking water to be any sort of threat. And for years Hastings had been boasting that its water supply was so clean that it could be pumped from an under- ground aquifer directly into the homes of 2.1.000 residents.
Last year, however, the E.P.A. said Hastings did have a problem with water: Radon levels exceeded the proposed safety limn. Bui critics of ihc proposal, including some agency officials, said the E.P.A.'s decision to tackle (he issue was a lesson in the dangers of using weak scientific as- sumpnons to write an expensive new regulation, even while many experts found the idea absurd.
Many studies of radon have shown ih.ii ii is harmful only if inhaled at high levels over a long period. Almost It) years ago. the Government did confirm that uranium miners in (he West contracted lung cancer after years of working in the mines, where they were exposed to some of the highest levels of radon ever recorded. Among those who died, though, many were heavv smokers.
Then, during the 1980s, (he E.P.A. found significant levels of radon in 10 percent of the homes they surveyed across the country. Thai led the E.P.A. to call radon the most serious envixonmenial public health threat the nation faced. It was a menace so great, ihe agency said, thai radon u~.«; nmhohlv r:iminM im In ?0 000
cases ol lung cancer a year.
That estimate has come under in- tense criticism from many radiation- health specialists, who have called it unscientific and wildly exaggerated. Going After the Water
But the EPA. ignored the criti- cism and sei an unofficial guideline for the amount of rador. it considered safe in homes The agency has been reluctant to make the limit legally enforceable because of the backlash that some EPA officials feared
from homeowners. Hundreds of thou- sands would have had to spend thou- sands of dollars on ventilation equip- ment la clear radon from basements.
Since (he agency was unwilling to regulate ihe air in private homes. E.P.A. scientists and technical ex- perts chose to defend their assess- ment (hat radon was a menace by taking action against Ihe only other source in homes: tap water So the E PA. proposed a legally enforceable limn on radon in water.
Scientists who have looked ai ihe issue said the threat to health from radon in water, if there is one at all. run come only from inhaling radon that evaporates, particularly during showering. In other words, the Gov- ernment was trying (o prevent some- one from getting lung cancer from (heir morning showers.
Independent radial ton-health ex- ports said that in virtually every area of the United Slates, ihe amount of radon that evaporates from water is only one-thirt leth to one one-hun- dredth of what is already naturally in ihe an These experts said the regula- tion does nothing to protect health. "It's a silly thing that E.P.A. is pro- posing because radon in water is an insignificant public health hazard.'' said Or Ralph E Lapp, a radiation physicist in Alexandria. Va.. and au- thor of 22 books on radiation and public health.
If the regulation becomes final, the cost to install filtering equipment in public water systems in the United Slates would be Sin billion to $20 billion, according to estimates made by several states The Association of California Water Agencies recently estimated that the cost in California would approach $-1 billion
How do wc explain to our resi- dents the need for a regulation that rusts as much as this one will and doesn't provide any public -health benefits?" asked Dr. Adi Pour, the loxicologist for (he Nebraska Depart- ment of Health. "If this kind of rule- making continues, it's going to hurt public confidence in environmental protection."
The protests prompted Congress last year lo pass legislation spon- sored by Senator John H. Chafee, Republican of Rhode Island, that pre- vented the E.P.A. from making the radon rule final until the agency looked at Ihe benefits and costs again. When asked about the rule. Martha G. Pruthro. the acting Assistant Admin- istrator for Water at the E.P.A.. ac- knowledged "We may have gone fur- ther than we need to in human health concerns. It's appropriate to go hack and look .it (his proposal."
So for now. Hastings, Neb., has Ix-en given a reprieve.
Back (n Columbus
As for that parking lot in Columbus. Cnv engineers are still working on the problem One idea they proposed was to dig up the dirt, turn u over and allow (he chemicals to evaporate.
But (he state said Federal law for- bade ihai The engineers then pro- posed inserting pipes beneath the ground, pumping an to the surface and (rapping and filtering chemicals that are released The slate environ- mental agenev is considering that idea The estimated cost: $250,000 to $500,001]
Next: Thinking of solutions.
122
THE NEW YORK TIMES NATIONAL FRIDAY, MARCH 2t. 1993
Second Chance on Environment
Opportunity to Redefine Core of American Policy on Pollution
By KEITH SCHNEIDER
Sprrj.il ki The New York Time*
WASHINGTON, March 25 — Four laws that help form the foundation of United States environmental policy are up for renewal in the next two years, and leading environmental advocates in Congress say they intend to use the opportunity to begin rede- fining how the nation safe- News guards its air, land and Analysis water.
The Clean Water Act, the Endangered Species Act, the Superfund law for cleaning up toxic wastes and ihe Resource Conser- vation and Recovery Act for disposing 3f hazardous chemicals all are under Congressional review. Calls for change from lawmakers focus on their desire for more rigorous science and better analyses of the costs and benefits. Sev- eral leading members said that too often Congress has moved from panic to panic and not developed a uniform approach to consider risks.
"Costs are out of sight," and the benefits from many recenl environ- mental programs are not apparent, said Representative Mike Synar. the Oklahoma Democrat who is chairman of a House subcommittee on the envi- ronment. Now. he added, "we have a chance to end (he quilt-patch form of environmental lawmaking."
Senator John H. Chafee of Rhode Island, the ranking Republican on the Senate Commiuee on Environment and Public Works, said current policies had already controlled 90 percent of the pollution. "But now there is in- creasing recognition of the costs," he said. "It will cost twice as much or three times as much to get the last little percent. Do we want to do thai?" Others in Congress, notably Repre- sentative Henry A. Waxman. Demo- crat of California, see it as (heir job to make sure thai cost savings do not compromise safety.
What Price Cleanup?
Lost of five umdei
Several members of Congress said that one lesson of environmental poli- cy-making in the 1980s was that acting on the basis of being safe rather than sorry had unintended consequences. Not the least of them has been many costly rules that are not producing measurable improvements in public health or the environment.
There is a higher premium on pre- venting such mistakes in the 1990's. and not only because of scarce finan- cial resources. With even larger global environmental problems becoming ap- parent from climate change to defores- tation, the nation could make even big- ger mistakes if it acts aggressively without a measured, careful analysis of the consequences.
4 Laws as One Program
This week. Senator Max Baucus. the Montana Democrat who heads the Committee on Environment and Public Works, began a series of hearings to develop a comprehensive and effective environmental program.
Mr. Baucuss effort is the first time a Congressional committee has attempt- ed to consider four separate laws as related pans of a unified program of environmental protection In an inter- view, he said that it was too early to make specific recommendations about amending the laws, but he also said that all would undergo some changes
Senator Baucus and Representative Synar said their work was guided by two mam questions.
First, what should lawmakers and regulators do after they discover a new environmental problem that seems dangerous — but before careful scien- tific analysis has shown the degree of risk? Many environmentalists say waiting for more data might mean (ha(
the Government reacts only after peo- ple have begun dying.
Second, what should be done about regulations enacted over the last 15 years that set inordinately strict stand- ards for toxic compounds in air, water or the ground? Most were based on rodent studies now perceived to be flawed, and even scientists who con- ducted the studies say that as many as two-thirds of the compounds deemed carcinogenic would present no danger to humans.
William K. Reilly. head of the Envi- ronmental Protection Agency in the" Bush Administration, said one problem was the air of crisis that surrounded every new environmental concern.
'Cost Considerations'
"It is far past time when we become mature enough as a nation to address an environmental issue, mobilize to support it, and do so without acting in an emergency atmosphere," he said. "Not everything is a crisis that has to be corrected tomorrow. And we need to make clear that cost considerations are relevant to any remedy Cities just aren't going to keep spending more on cleaning up toxic dumps, for instance, than they are on their schools."
Senator Daniel Patrick Moynihan, Democrat of New York, has introduced a bill that would require the Govern- ment to amass much stronger scientif- ic proof and convene expert panels to consider a new environmental rule be- fore it is issued.
Environmentalists call that thinking a recipe for disaster
"As a scientist, we always hope to have more research to answer com- plex questions. " said Dr Adam Finkel of Resources for the Future, an envi- ronmental research group in Washing- ton "But in 1993 we don't have the scientific basis for rejecting the cur- rent approach, which says we should be prudent when faced with uncertainty "
Many experts also assert that, just as damage from forest fires is revers- ible, so too is damage from many pol- lutants. At the same time, the National Cancer Institute and the Centers for Disease Control and Prevention in At- lanta say that even after a generation of study, there is no confirmed evi-
12
123
THE NEW YORK TIMES NATIONAL FRIDAY. MARCH 26. 1993
dence thai pollutants are causing epi- demics of cancer, birth defects or other chronic diseases.
The cancer institute says about 500,000 people die from cancer each year. Some institute officials estimate that between 1 and 3 percent of those deaths resulted from environmental pollutants. That would be between 5.000 and 15,000 people Other scientists say that exposure to the panoply of chemi- cals in the environment causes other affects in people, among them infertil- ity and nervous system disorders
Experts urging the most conserva- tive course say environmental poisons
Lawmakers hope to avoid costly rules that provide little benefit.
may be causing as many as 15 percent of all cancer The higher number takes into account research indicating that farm and factory workers exposed to high levels of toxic substances are dy- ing at higher than normal rates from certain types of cancers.
Senator Moymhan believes research like this can be improved and put to better use.
'We're entirely capable of moving on to a more productive period of envi- ronmental protection that is based on clear factual assessments of what pro- duces risks (o human health and (he environment," he said.
If the Government decides to undo existing regulations it faces years of work, following much the same process of hearings and notification periods thai ted to the rules.
'Once something is decided as being a threat, it is very hard to recognize that new information suggests that its not." said Carol M. Browner, the Ad- ministrator of the Environmental Pro- tection Agency.
Whatever new approach Congress or the Clinton Administration takes in the next two years, leading lawmakers say they want to be careful not to weaken a number of regulations that are widely believed to provide valuable protec- tions for public health. High on that list are the landmark environmental laws passed in the 1970s like the Clean Water Act and the laws establishing protection for public lands.
Mil liw I flu i mil i.., it*. -.<■« >o.k Iim*-
Senator Max Baucus. who heads the Committee on Environment and Public Works, as he began a series of hearings on Wednesday to try to develop a comprehensive and effective environmental program.
But environmental experts say many other programs do not offer clear benefits. With this in mind. Mr Synar and other lawmakers have be- gun talking about some principles they hope to use as they consider the four major laws that are up for renewal:
«1 Require the Government to consid- er the cost of a regulation before it is issued. Several environmental stat- utes, including the 1972 Clean Water Act. prohibit the Government from tak- ing costs into account
*l Increase spending on problems now regarded as more important, like pro- tecting endangered plants and ani- mals, and reducing financing for less dangerous problems, like cleaning up toxic waste sites.
<tGive businesses and cities more flexibility to decide how to comply with environmental standards, ending the expensive and rigid approach demand- ed under most laws.
Even as they work toward these goals, the lawmakers said they were fully aware that 15 years from now that it was likely that Congress would look back and see that other kinds of mis- takes had been made But at least, they said, in the 1990s the United Slates would have begun to take more me- thodical steps based on better science to solve environmental problems
124
Impact of Unfunded
Federal Mandates
on U.S. Cities
A 314 - City Survey
October 26, 1993
Price Waterhouse
125
Survey Research Center Telephone 202 296 0800
1801 K Street. N.W. Suite 901 Washington. DC 20006
PriceWaterhouse \jy
October 22, 1993
The Honorable Jerry Abramson, President The United States Conference of Mayors 1620 Eye Street, N.W. Washington, DC 20006
Dear Major Abramson:
This report summarizes our findings from the U.S. Conference of Mayors' Unfunded Feaeral Mandates Survey.
I. Background
The survey collected data on the costs incurred by cities to implement the following ten unfunded Federal mandates:
(1) Underground Storage Tanks
(2) Clean Water Act
(3) Clean Air Act
(4) Resource Conservation and Recovery Act
(5) Safe Drinking Water Act
(6) Asbestos Abatement
(7) Lead Paint Abatement
(8) Endangered Species Act
(9) Americans with Disabilities Act
(10) Fair Labor Standards Act
Background on the survey and these unfunded Federal mandates, provided to us by The U.S. Conference of Mayors, appears in Appendix A.
We received survey responses from 314 cities. Because larger cities tended to respond to the survey more often than smaller cities, the population represented by the 314 respondent cities is approximately one-half of the population among all cities with 30,000 or more residents.
The responses were key entered and 100 percent verified to create a computer database. While we did not audit the data reported by respondents, we did test the database to identify potential anomalies (e.g., detail not summing to reported total, unusual costs relative to the size of the city, etc.). We followed
126
The Honorable Jerry Abramson iJL^
October 22, 1993 WW
Page 2 ^l,r
up on potential anomalies by reviewing the supporting worksheets and documentation and, as necessary, through telephone contact with respondents.
Because only a sample of cities could respond to the survey, and because respondents could not always estimate the costs of all of the unfunded mandates, a simple total of the respondent data would understate the total cost of unfunded mandates. We therefore extrapolated the survey data to estimate the total cost of unfunded mandates to all cities. The extrapolation is based on the proportion of total population represented by those cities reporting costs. For example, if the population of those cities that could estimate the cost of a particular mandate is SO percent of the total population of cities, we multiply the sample total costs by a factor of two to arrive at an estimate of national costs for that mandate. Our extrapolation is based on 1990 census figures for cities over 30,000 in population, and therefore excludes costs incurred by smaller cities.
EL Total Cost of Ten Unfunded Federal Mandates to Cities
Table 1 provides the estimated cost of unfunded Federal mandates to cities. The total estimated cost for 1993 is $6.5 billion. Estimated costs for the five years 1994 through 1998 total $54.0 billion. The three most costly unfunded Federal mandates in 1993 were the Clean Water Act ($3.6 billion), Solid Waste Disposal ($0.9 billion) and Safe Drinking Water Act ($0.6 billion).
Cities reported that unfunded Federal mandate costs consume an average of 11.7% percent of their locally raised revenues.
m. City-by-City Costs
Table 2 summarizes the 1993 unfunded Federal mandates costs reported by each respondent city. The table identifies those mandates for which the city reported 1993 data and the total costs reported by the city. Note that these data may understate costs for two reasons: (1) cities often could not estimate costs for some of the mandates, and (2) some cities could not estimate all of the costs for a mandate, for example reporting either staff costs or direct/indirect costs but not both.
127
The Honorable Jerry Abramson A\±
October 22, 1993 A4
Page 3 ^lir
IV. Other Analyses of Survey Results
The U.S. Conference of Mayors conducted additional analyses of the survey responses which we have included as appendices to this report. Appendix B presents an analysis of superfund costs, Appendix C summarizes comments provided by cities on the impact of unfunded Federal mandates, and Appendix D summarizes comments provided by cities on problems with unfunded Federal mandates.
*****
We appreciate the opportunity to assist you in this effort. Should you have any questions, please do not hesitate to call Dr. Glenn Galfond at (202) 828-9057.
Yours very truly,
128
Table 1
Estimated Costs of Unfunded Federal Mandates to Cities (Hours and Costs in Thousands)
Man dales |
Fiscal Year 1993 |
FY 94 - 98 |
|||
Estimated Annual Staff Hours (Excluding Overtime) |
Estimated Annual Staff Costs |
Estimated Annual Direct/ Indirect Budget Costs |
Total Costs |
Projected Total Costs |
|
1. Underground Storage Tank Regulations {VST) |
862 |
23,393 |
137,755 |
161,148 | |
1,040,627 |
2. Clean Water Act (CWA)/Wetlands |
57,378 |
1,185,549 |
2,426,984 |
3,612,533 | |
29.303.379 |
3. Clean Air Act (CAA) |
12.138 |
195,526 |
208,294 |
403,820 | |
3,651,550 |
4. Solid Waste Diiposal/RCRA |
9,680 |
173,384 |
708.191 |
881,575 1 |
5,475,968 | |
5. Safe Drinking Water Act (SDWA) |
4,444 |
94,549 |
467,783 |
562,332 | |
8,644,145 | |
6. Asbestos (AHERA) |
898 |
19.554 |
109,754 |
129,308 1 |
746,828 | |
7. Lead Based Paint |
374 |
7,875 |
110,342 |
118,217 |
1,628,228 | |
8. Endangered Species |
252 |
6.934 |
30,024 |
36,958 |
189,488 J |
9. Americans With Disabilities Act |
4,701 |
114.935 |
240,746 |
355.681 |
2,195,808 1 |
10. Fair Labor Standards Act (Exempt Employee & Other Costs) |
1,227 |
22,765 |
189,358 |
212,123 |
1.121,524 1 |
TOTAL |
91,954 |
1,844,464 |
4,629.231 |
6,473,695 |
53,997,545 | |
129
Table 2
FY93 Cost of Unfunded Federal Mandates to Cities
(Page 1 of 11)
1 |
Total Costs for FY93 |
Mandate to* «Wch Costs m Reported |
||||||||||
City, State |
~^V |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
|||
Anchorage, AX |
22,514,856 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Fairbanks, AK |
499,400 |
X |
X |
X |
X |
X |
X |
X |
X |
|||
Birmingham AL |
2,445,300 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Gadsden, AL |
373,000 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Huntsville, AL |
9,076,087 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Fayetteville, AR |
4.662,587 |
X |
X |
X |
X |
X |
||||||
Fort Smith, AR |
13,599,542 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
x |
|
North Little Rock, AR |
2.890.322 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Phoenix, AZ |
35.960.732 |
X |
X |
X |
X |
X |
X |
X |
X |
|||
Scottsdale, AZ |
4,663.962 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Township of Gilbert, AZ |
1,271,436 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Tucson, AZ |
10,239,452 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Alhambra, CA |
237,674 |
X |
X |
X |
X |
|||||||
Anaheim, CA |
20,359,785 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Antioch, CA |
234,786 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Bakersfield, CA |
932,984 |
X |
X |
X |
X |
X |
||||||
Bell Gardens, CA |
827,017 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Berkeley, CA |
5,575,910 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Carson, CA |
249,000 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Cathedral, CA |
208,635 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Chino, CA |
582,160 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
| Culver City, CA |
6.166,053 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
J Cypress, CA |
1,738,900 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Encinitas, CA |
999,827 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Fremont, CA |
1,677,103 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Fresno, CA |
11,106,446 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
FuUerton, CA |
2.240.256 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Garden Grove, CA |
911,083 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
1 Gilroy, CA |
3,376,773 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
130
Table 2
FY93 Cost of Unfunded Federal Mandates to Cities
(Page 2 of 11)
City, State |
Total Costs for FYM |
Mandates for winch Costs arc Reported |
|||||||||
1 |
2 |
3 |
4 |
s |
6 |
7 |
8 |
9 |
10 | |
||
Irvine, CA |
2,217,190 |
X |
X |
X |
X |
X |
X |
X |
X |
X 1 |
|
Lancaster, CA |
225,700 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X 1 |
Lompoc, CA |
3,067,768 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X | |
Los Angeles, CA |
581,996,000 |
X |
X |
X |
X |
X |
X |
X |
X |
||
Manhattan Beach, CA |
35,424 |
X |
X |
X |
X |
X |
X |
||||
Merced, CA |
942,900 |
X |
X |
X |
X |
X |
X |
X |
X 1 |
||
Milpitu. CA |
1.619,200 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X 1 |
National City, CA |
4,343,361 |
X |
X |
X |
X |
X |
X |
X |
X | |
||
Newark, CA |
577,340 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Newport Beach, CA |
1.629,090 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Orange, CA |
2,334,145 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Oxnard, CA |
2,673,658 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Palm Springs, CA |
1,267,113 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Pico Rivera, CA |
231,940 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Plesaanton, CA |
1.385,880 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Redwood City, CA |
919,009 |
X |
X |
X |
X |
X 1 |
|||||
Riverside, CA |
4,360,950 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Rohnert Park, CA |
275,988 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
San Bernardino, CA |
30,627,618 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
San Diego, CA |
58,041.395 |
X |
X |
X |
X |
X |
X |
X |
X |
X I |
|
San Francisco, CA |
165.415,802 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X 1 |
| San Leandro, CA |
1,454,955 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X 1 |
San Marcos, CA |
811.810 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Santa Barbara, CA |
1.089,209 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X 1 |
Santa Cruz, CA |
2.589,120 |
X |
X |
X |
X |
X |
X |
X |
X |
X 1 |
|
Santa Monica, CA |
4,750.605 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Simi Valley, CA |
2,257,070 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Sooth Gate, CA |
1,960,000 |
X |
X |
X |
X |
||||||
Stockton, CA |
1,560,595 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
131
Table 2
FY93 Cost of Unfunded Federal Mandates to Cities
(Page 3 of 11)
Or/, State |
Total Costs for |
Mandates for which Costs are Reported |
|||||||||
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
||
Sunnyvale, CA |
1.703,000 |
X |
X |
X |
|||||||
Temple, CA |
359,931 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
x |
Tustin, CA |
450,787 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
UpUnd, CA |
990,056 |
X |
X |
X |
X |
X |
|||||
VaUejo, CA |
4,429,340 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Victorville, CA |
804,885 |
X |
X |
X |
X |
X |
X |
X |
X |
||
Visalia,CA |
1,537,186 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Westminster, CA |
919,009 |
X |
X |
X |
X |
X |
|||||
Arvada, CO |
2,942,000 |
X |
X |
X |
X |
X |
X |
||||
Aurora, CO |
609,000 |
X |
X |
X |
X |
X |
X |
||||
Colorado Springs, CO |
13,360,501 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Lakewood, CO |
903,065 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Thornton, CO |
254,130 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
x |
Bridgeport, CT |
3,262,429 |
X |
X |
X |
|||||||
Fairfield, CT |
612.212 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Hamden, CT |
125.360 |
X |
X |
X |
X |
||||||
Middletown, CT |
148,145 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Norwalk, CT |
6,440,349 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Shelton, CT |
2,115,395 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Torrington, CT |
1,880,936 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Waterbury, CT |
8,624,470 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Baco Raton, FL |
5,408,406 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Boynton Beach, FL |
10,633,198 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Cape Coral, FL |
5,729,602 |
X |
X |
X |
X |
X |
X |
||||
Coral Springs, FL |
1,187,732 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Fort Lauderdale, FL |
7,645.700 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Fort Pierce, FL |
865.747 |
X |
X |
X |
X |
X |
X |
X |
X |
||
Gainesville, FL |
4,056.984 |
X |
X |
X |
X |
X |
X |
X |
X |
||
Hollywood, FL |
18,658,071 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
132
Table!
FY93 Cost of Unfunded Federal Mandates to Cities
(Page 4 of 11)
City, State |
Total Costs for FYM |
Mandates for which Costs are Reported |
|||||||||
1 |
2 |
i |
4 |
5 |
6 |
7 |
8 |
9 |
io 1 |
||
Jackson, FL |
6,613.861 |
X |
X |
X |
X |
X |
X |
||||
Lauderhill. FL |
274.583 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Melbourne, FL |
964,337 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Miami, FL |
2.305,600 |
X |
X |
X |
X |
||||||
North Miami, FL |
36.522 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Orlando, FL |
8,636,179 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Pompano Beach, FL |
307,350 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Sarasota, FL |
1.271.839 |
X |
X |
X |
X |
X |
X |
||||
Tamarac, FL |
296.400 |
X |
X |
X |
X |
X |
|||||
Tampa, FL |
8.962,562 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Athens-Clark, GA |
2.184,222 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Atlanta, OA |
48,597.174 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Augusta, GA |
1.940,647 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
East Point, GA |
2.674,166 |
X |
X |
X |
X |
X |
X |
X |
X |
||
Macon, GA |
5,781,049 |
X |
X |
X |
X |
X |
X |
||||
Savannah, GA |
2,999,752 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Smyrna, GA |
265,404 |
X |
X |
X |
X |
X | |
|||||
Valdosta, GA |
257,590 |
X |
X |
||||||||
Hilo, HI |
1,343,000 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Boise, ID |
3.057,287 |
X |
X |
X |
X |
X |
X |
X |
X |
||
f Addison, IL |
102,300 |
X |
X |
X |
X |
X |
X |
||||
Arlington Height, IL |
622.770 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Bloormngton, IL |
1.105.926 |
X |
X |
X |
|||||||
Chicago, IL |
70.822,000 |
X |
X |
X |
X |
X |
X |
||||
Chicago Heights, IL |
39,386 |
X |
X |
X |
|||||||
DeKalb, IL |
836,970 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Decatur, IL |
242.455 |
X |
X |
X |
X |
X |
X |
||||
Elk Grove, IL |
79,296 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
J Hanover Park, IL |
156,472 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
* |
133
Table 2
FY93 Cost of Unfunded Federal Mandates to Cities
(Page 5 of 11)
City, State |
Total Costs for FY93 |
Mandates for whith Costs ar* Reported |
|||||||||
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
||
Highland Park, IL |
324,321 |
X |
X |
X |
|||||||
Moline, IL |
863,511 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Ndes, IL |
1,118.000 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
North Chicago, IL |
92,510 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Northbrook, IL |
154,215 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Orland Park, IL |
2,059,844 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Palatine, IL |
1,144,025 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Quincy, IL |
3,300.936 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Rock Island, IL |
1.156,557 |
X |
X |
X |
X |
X |
X |
X |
X |
||
Rockford, IL |
339,439 |
X |
X |
X |
X |
X |
X |
X |
X |
||
SchaUimburg, IL |
3,407,121 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Skohe. IL |
715,049 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Urbana, IL |
328,000 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Anderson, IN |
6,831,940 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Columbus, IN |
1,382.719 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Elkhart, IN |
2,162,928 |
X |
X |
X |
X |
X |
X |
X |
X |
||
Fort Wayne, IN |
5,837,492 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Hammond, IN |
1,051,701 |
X |
X |
X |
X |
X |
X |
X |
|||
Laiayette, IN |
132.000 |
X |
X |
X |
X |
||||||
Mishawaka, IN |
162,447 |
X |
X |
X |
X |
X |
X |
X |
|||
South Bend, IN |
2,751,150 |
X |
X |
X |
X |
X |
X |
X |
X |
||
Terre Haute, IN |
151.585 |
X |
X |
X |
X |
||||||
Sioux City, 10 |
3.432,750 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Waterloo, IO |
879,800 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
West Des Moines, 10 |
187.451 |
X |
X |
X |
X |
X |
X |
X |
X |
||
Olathe, KS |
217,600 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Overland Park, KS |
1,834,725 |
X |
X |
X |
X |
X |
|||||
Topeka, KS |
1,685,310 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
x |
Wichita, KS |
509,779 |
X |
X |
X |
X |
X |
134
Table 2
FY93 Cost of Unfunded Federal Mandates to Cities
(Page 6 of 11)
City, State |
Total Coats for FY93 |
Mandate* tiw which CnaH mm Reported |
|||||||||
1 |
2 X |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 J |
||
Covington, KY |
254.450 |
X |
X |
X |
X |
X |
X |
X |
X |
x 1 |
|
Louisville. KY |
14,590.540 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Alexandria, LA |
1,062.688 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Baton Rouge, LA |
78,590,067 |
X |
X |
X |
X |
X |
X |
X |
|||
Houma, LA |
7,648,583 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Lafayette, LA |
3,669,189 |
X |
X |
X |
X |
X |
X |
* |
|||
New Iberia, LA |
2,271,425 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
New Orleans, LA |
3,446.900 |
X |
|||||||||
Shreveport, LA |
950.019 |
X |
X |
X |
X |
X |
X |
X |
|||
Boston, MA |
4,554,960 |
X |
X |
X |
X |
X |
X |
X |
X |
||
Brockton, MA |
3.479,641 |
X |
X |
X |
X |
X |
X |
||||
Everett, MA |
970,561 |
X |
X |
X |
X |
X |
|||||
Haverhill, MA |
1,293,193 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Holyoke, MA |
2.677,540 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Lynn, MA |
17,812,010 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Springfield, MA |
14,631,448 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Worcester, MA |
2.572,528 |
X |
X |
X |
X |
X |
X |
X |
|||
Baltimore, MD |
83,712,370 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Frederick, MD |
98.366 |
X |
X |
X |
X |
X |
X |
X |
|||
Hagerstown, MD |
6.157,683 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
RockviUe, MD |
1,021,901 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
x |
Lewiston, ME |
1.629,613 |
X |
X |
X |
X |
X |
X |
||||
Allen Park, MI |
950,493 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Bay City. MI |
4,097,212 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Farmington Hills, MI |
530,000 |
X |
X |
X |
X |
X |
|||||
Flint, MI |
18.105.718 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Garden City, MI |
403.750 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Grand Rapids, MI |
38.907,000 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Inkster, MI |
158,296 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
10
135
Table 2
FY93 Cost of Unfunded Federal Mandates to Cities
(Page 7 of 11)
City, State |
Total Costs for FY93 |
Mandates for which Costs are Reported |
||||||||||
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
|||
Jackson, MI |
275,667 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Kalamazoo, MI |
11,607,680 |
X |
X |
X |
X |
X |
X |
X |
||||
Midland, MI |
312,572 |
X |
X |
X |
X |
X |
X |
X |
||||
1 Rochester Hills, MI |
1,141.888 |
X |
X |
X |
X |
X |
X |
X |
||||
1 Romulus, MI |
1.691,850 |
X |
X |
X |
X |
X |
X |
X |
X |
|||
Royal Oak, MI |
5,668,980 |
X |
X |
X |
X |
X |
X |
X |
X |
|||
j Saginaw, MI |
44,673,892 |
X |
X |
X |
X |
X |
X |
|||||
| Sterling Heights, MI |
2,299,583 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Warren, MI |
13.028,332 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Brooklyn Park, MN |
1,029,630 |
X |
X |
X |
X |
X |
X |
X |
X |
|||
| Fridley, MN |
161,754 |
X |
X |
X |
X |
X |
X |
X |
X |
|||
St. Paul, MN |
20,113,345 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Columbia, MO |
930,132 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Independence, MO |
1.366,002 |
X |
X |
X |
X |
X |
X |
X |
X |
|||
Jefferson City, MO |
394,173 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
1 St. Charles, MO |
333,342 |
X |
X |
X |
X |
X |
X |
X |
||||
— ■ St. Joseph, MO |
448,195 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
St. Louis, MO |
4,180,000 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
University City, MO |
132.880 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Jackson, MS |
1.948,691 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Meridian, MS |
1,492,325 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Missoula, MT |
29,622 |
X |
X |
X |
X |
X |
X |
X |
X |
|||
Burlington, NC |
1,621,928 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
||
Charlotte, NC |
6,139,538 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
||
Durham, NC |
2,571,813 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Greensboro, NC |
6,166.223 |
X |
X |
X |
X |
X |
X |
X |
||||
Greenville, NC |
3,266,256 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Rocky Mount, NC |
2,584,174 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
| Winston-Salem, NC |
4,925,780 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
11
136
Table 2
FY93 Cost of Unfunded Federal Mandates to Cities
(Page 8 of 11)
Chy, State |
Total Costs for FYS3 |
Mandates for which Costs an Reported |
|||||||||
1 |
2 |
3 |
4 |
s |
6 |
7 |
8 |
9 |
- |
||
Nashua. NH |
763,555 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
« |
Bridgewater, NJ |
296,550 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Camden, NJ |
3,343,980 |
X |
X |
X |
X |
X |
X |
X |
|||
Hamilton Township, NJ |
424,786 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Jersey City, NJ |
11.363,163 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Lakewood Township, NJ |
83,459 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
New Brunswick, NJ |
768.000 |
X |
X |
X |
X |
X |
|||||
Union City, NJ |
11.250 |
X |
X |
X |
X |
X |
X |
X |
|||
Vineland, NJ |
3.638.052 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Santa Fe, NM |
2,565,856 |
X |
X |
X |
X |
X |
X |
||||
Canon, NV |
4,015,117 |
X |
X |
X |
X |
X |
X |
||||
Grand Island, NV |
1,687.670 |
X |
X |
X |
X |
X |
X |
X |
|||
Lincoln, NV |
9,281.816 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
North Las Vegas, NV |
1,379,243 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Albany, NY |
3.130,275 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
| Auburn, NY |
29,143,950 X |
X |
X |
X |
X |
||||||
| Brighton, NY |
15,300 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
I Elmira, NY |
1,331.297 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
| Mount Vernon, NY |
246,200 |
X |
X |
X |
X |
X |
X |
X |
|||
New Yotk City, NY |
475,645,900 |
X |
X |
X |
X |
X |
X |
X |
|||
North Tonawanda, NY |
61,830 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Syracuse, NY |
3.730,160 |
X |
X |
X |
X |
||||||
1 White Plains, NY |
4.374,260 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
1 Akron. OH |
21.007,800 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
| Chillicothe, OH |
470,067 |
X |
X |
X |
X |
X |
X |
X |
|||
Cincinnati. OH |
20.256.942 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Cleveland, OH |
12.243.616 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Cleveland Heights, OH |
1,043,425 |
X |
X |
X |
X |
X |
1 |
||||
Columbus, OH |
65,860.429 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
ill |
12
137
Table 2
FY93 Cost of Unfunded Federal Mandates to Cities
(Page 9 of 11)
p-" City, State |
Total Costs for FY93 |
Mandates for which Costs are |
Reported |
||||||||
1 |
2 |
3 |
4 |
5 |
€ |
7 |
8 |
9 |
10 |
||
Cuyahoga Falls, OH |
1,377,299 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Dayton, OH |
5,979,468 |
X |
X |
X |
X |
X |
X |
X |
X |
||
Lima, OH |
1,278,901 |
X |
X |
X |
X |
X |
X |
X |
|||
Lorain, OH |
349,940 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Springfield. OH |
1,771,065 |
X |
X |
X |
X |
X |
X |
X |
|||
Toledo, OH |
37,719.726 |
X |
X |
X |
X |
A |
X |
||||
University Heights, OH |
120,771 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Youngstown, OH |
3,722,760 |
X |
X |
X |
X |
X |
|||||
Broken Arrow, OK |
555,789 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Lawton, OK |
752,348 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
1 Moore, OK |
373,661 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
| Norman, OK |
1,310,500 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Oklahoma City, OK |
1.391,584 |
X |
X |
X |
X |
||||||
Tulsa, OK |
28,935.289 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Gresham, OR |
728,566 |
X |
X |
X |
X |
X |
X |
||||
Lake Oswego, OR |
1,051,100 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Springfield, OR |
747,652 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Allentown, PA |
1,983.672 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Altoona, PA |
4.000,000 |
X |
|||||||||
Philadelphia, PA |
6.724.912 |
X |
X |
X |
X |
X |
X |
X |
|||
Pittsburgh, PA |
3,196,133 |
X |
X |
X |
X |
X |
X |
X |
X |
||
Wilkes-Barre, PA |
342,156 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
York, PA |
880,724 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Cranston, RI |
1,315,776 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Providence, RI |
225,573 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Columbia, SC |
6,091.558 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Rock Hill, SC |
2,150,435 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Rapid City, SD |
574,545 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
J Chattanooga, TN |
9,924.342 |
X |
X |
x |
X |
X |
X |
X |
X |
X |
13
138
Table 2
FY93 Cost of Unfunded Federal Mandates to Cities
(Page 10 of 11)
City, State |
Total Costs for FY93 |
Mandates for which Costs are Reported |
|||||||||
1 |
2 |
3 |
4 |
5 |
6 |
7 |
s |
9 |
10 |
||
Kingsport, TN |
1,144,840 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Knoxville. TN |
1,549,116 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Amarillo, TX |
27,092,500 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Arlington, TX |
11.109.045 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Austin, TX |
8.452.992 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Beaumont, TX |
3.485,816 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Brownsville, TX |
1.633.435 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Bryan, TX |
984,284 |
X |
X |
X |
X |
X |
X |
X |
|||
CarroUton, TX |
3.838,095 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X 1 |
Corpus Chrtsti, TX |
5,674,303 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X I |
Dallas. TX |
20,000,758 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X 1 |
El Paso. TX |
26,697,500 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Fort Worth, TX |
12.426,460 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Garland. TX |
2.803,000 |
X |
X |
X |
X |
X |
X. |
X |
X |
X |
X |
Grand Prairie. TX |
4,263,036 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Houston, TX |
154,326,169 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Irving, TX |
500,700 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Laredo, TX |
3,756,234 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Lubbock, TX |
11,199.789 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
x 1 |
Lufldn, TX |
361.109 |
X |
X |
X |
X |
X |
|||||
Mesquite, TX |
1,620.821 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Nacogdoches, TX |
1,257,564 |
X |
X |
X |
X |
X |
X |
X |
|||
Odessa, TX |
2,345,745 |
X |
X |
X |
X |
X |
X |
||||
Piano. TX |
6,642,015 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Port Arthur, TX |
1,696,990 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
San Marcos, TX |
1.266.133 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Sherman, TX |
789.995 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Waco, TX |
2.894,039 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Wichita Falls, TX |
332,987 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
"1 |
14
139
Table 2
FY93 Cost of Unfunded Federal Mandates to Cities
(Page 10 of 11)
City, State |
Total Coats for FY93 |
Mandates for which Costs arc Reported |
|||||||||
1 |
2 |
3 |
4 1 5 |
6 |
7 |
8 |
9 |
10 |
|||
Kingsport, TN |
1.144,840 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Knoxville, TN |
1,549.116 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Amarillo. TX |
27,092.500 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Arlington, TX |
11.109,045 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Austin, TX |
8,452.992 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Beaumont, TX |
3.485.816 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Brownsville, TX |
1.633,435 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X | |
Bryan, TX |
984,284 |
X |
X |
X |
X |
X |
X |
X | |
|||
Carrollton, TX |
3,838,095 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X 1 |
Corpus Chnsti, TX |
5,674,303 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Dallas, TX |
20,000,758 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
El Paso. TX |
26,697,500 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Fort Worth, TX |
12,426,460 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Garland, TX |
2,803.000 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Grand Prairie, TX |
4,263.036 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Houston, TX |
154,326,169 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Irving, TX |
500,700 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Laredo, TX |
3,756.234 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Lubbock. TX |
11,199,789 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Luflrin, TX |
361.109 |
X |
X |
X |
X |
X |
|||||
Meaquite, TX |
1.620,821 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Nacogdoches, TX |
1,257,564 |
X |
X |
X |
X |
X |
X |
X |
|||
Odessa, TX |
2,345,745 |
X |
X |
X |
X |
X |
X |
||||
Piano, TX |
6,642,015 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Port Arthur, TX |
1,696,990 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
San Marcos, TX |
1.266.133 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Sherman, TX |
789.995 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Waco, TX |
2,894.039 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
1 Wichita Falls, TX |
332,987 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
14
140
THE BURDEN OF UNFUNDED MANDATES
A survey of the impact of unfunded mandates on America's counties
National Association of Counties
"Counties Care For America"
141
The Burden of UnfundedMandates
A survey of the impact of unfunded mandates on America 's counties
October 26, 1993
^Kfc NATIONAL 41k
£ 7 ! association mum
-Wj^ i of Counties ^\\W
^*r 'Counfe ****"*■ Price Waterhouse
142
Executive Summary NACo Unfunded Federal Mandates Survey
In a survey conducted by the National Association of Counties to determine the cost of unfunded federal mandates, it was estimated that counties are spending $4.8 billion annually to comply with just twelve of the many unfunded mandates in federal programs.
It was estimated that the costs of these same programs to counties over the next five years (1994-1998) will be $33.7 billion.
The results of the survey were analyzed and compiled by the Price Waterhouse national accounting firm. Survey responses were received from 128 counties whose population represents approximately twenty percent of all people in the United States.
The three most costly unfunded mandates in 1993 were the Immigration Act ($1.5 billion), Clean Water Act/Wetlands ($1.2 billion) and solid waste requirements in Subtitle D/Resource Conservation and Recovery Act ($0.6 billion). Table 1 in the attached Price Waterhouse report shows the cost of each of the unfunded mandates for 1993 and 1994 - 1998.
The counties reported that the cost of the unfunded federal mandate surveyed consumed an average of 12.3 percent of their locally raised revenues. Individual counties reported much higher percentages.
Selection of the federal programs surveyed was based on discussions with county officials about their most burdensome and costly unfunded federal mandates. The total number of federal unfunded mandates is unknown. The following twelve unfunded federal mandates were included in the survey:
1. Underground Storage Tanks ^
2. Clean Water Act/Wetlands
3. Clean Air Act
4. Subtitle D/Resource Conservation and Recovery Act (solid waste)
5 . Safe Drinking Water Act
6. Endangered Species Act
7. Superfund
8. Americans with Disabilities Act
9. Fair Labor Standards Act
10. Davis-Bacon Act
1 1 . Arbitrage (municipal bonds)
12. Immigration Act
143
Executive Summary Page 2
A description of these mandates is attached.
A summary table of the 1993 unfunded mandates costs reported by each county is included in the Price Waterhouse report. The table identifies those mandates for which the county reported data and the total costs reported by the county. It is noted that the data often understate costs because some counties were unable to estimate costs of some of the mandates.
In the Price Waterhouse report, there is a description of the methodology used by the firm to test the survey responses, review the county worksheets and documentation and estimate the total cost of unfunded mandates to all counties.
144
Impact of Unfunded Federal Mandates On U.S. Counties
A 128-County Survey
October 26, 1993
145
#
TABLE OF CONTENTS
Section Page
Survey Report 1
Table 1: Estimated Costs of Unfunded Federal Mandates to Counties 4
Table 2: FY93 Cost of Unfunded Federal Mandates to Counties 5
Table 3: Counties Reporting Superfund Liabilities or Costs 10
Appendix A; Summary of Unfunded Mandate Problems A-l
146
Survey Research Center Telephone 202 828 9050
1801 K Street. N W Suite 901 Washington, DC 20006
Price I Vaterhouse f\^
October 25, 1993
The Honorable Barbara Sheen Todd, Commissioner National Association of Counties 440 First Street, N.W. Washington, DC 20001
Dear Commissioner Todd:
This report summarizes our findings from the National Association of Counties' Unfunded Federal Mandates Survey.
I. Background
The survey collected data on the costs incurred by counties to implement the following twelve unfunded Federal mandates:
(1) Underground Storage Tanks
(2) Clean Water Act/Wetlands
(3) Clean Air Act
. (4) Subtitle D /Resource Conservation and Recovery Act
(5) Safe Drinking Water Act
(6) Endangered Species Act
(7) Superfund
(8) Americans with Disabilities Act
(9) Fair Labor Standards Act
(10) Davis-Bacon Act
(11) Arbitrage
(12) Immigration Act
A description of these mandates, provided by the National Association of Counties, appears in Appendix A.
We received survey responses from 128 counties. The population represented by the 128 respondent counties is approximately twenty percent of the population among all counties.
The responses were key entered and 100 percent verified to create a computer database. While we did not audit the data reported by respondents, we did test the database to identify potential anomalies (eg., detail not summing to
147
The Honorable Barbara Sheen Todd M\±
October 25, 1993 WM
Page 2 ^lir
reported total, unusual costs relative to the size of the county, etc.). We followed up on potential anomalies by reviewing the supporting worksheets and documentation and, as necessary, through telephone contact with respondents.
Because only a sample of counties could respond to the survey, and because respondents could not always estimate the costs of all of the unfunded mandates, a simple total of the respondent data would understate the total cost of unfunded mandates. We therefore extrapolated the survey data to estimate the total cost of unfunded mandates to all counties. The extrapolation is based on the proportion of total population represented by those counties reporting costs. For example, if the population of those counties reporting costs for a particular mandate is 20 percent of the total population of counties, we multiply the sample total costs for that mandate by a factor of five to arrive at an estimate of national costs. Our extrapolation is based on 1990 census figures.
In our extrapolation, we treated Los Angeles County as a special case because its unfunded mandates costs were so large (approximately $1 billion) as to raise questions about its representativeness of other counties. To be conservative, we extrapolated the data from the sample of respondent counties excluding Los Angeles County (e.g., multiplied the sample total excluding Los Angeles by a factor of five) and then added Los Angeles County to that total (without any multiplier).
II. Cost of Twelve Unfunded Federal Mandates to Counties
Table 1 provides the estimated cost of unfunded Federal mandates to counties. The total estimated cost for 1993 is $4.8 billion. Estimated costs for the five years 1994 through 1998 total $33.7 billion. The three most costly unfunded Federal mandates in 1993 were the Immigration Act ($13 billion), Clean Water Act/Wetlands ($12 billion) and Subtitle D/Resource Conservation and Recovery Act ($0.6 billion)
Counties reported that unfunded Federal mandate costs consume an average of 123 percent of their locally raised revenues.
m. County-by-County Costs
Table 2 summarizes the 1993 unfunded Federal mandates costs reported by each respondent county. The table identifies those mandates for which the
148
The Honorable Barbara Sheen Todd M^
October 25, 1993 wM
Page 3
county reported 1993 data and the total costs reported by the county. Note that these data often understate costs for two reasons: (1) counties often could not estimate costs for some of the mandates, and (2) some counties could not estimate all of the costs, for example reporting either operating or capital costs but not both.
IV. Superfund
Twenty counties stated that they had been notified by the Environmental Protection Agency that they were potentially liable for Superfund clean-up costs. Eighteen of these counties provided us with information on potential liabilities and the costs they had already incurred related to Superfund clean- up. These responses appear in Table 3. Los Angeles County reported the largest Superfund amounts: $80 million in potential liability and $3 million in costs incurred.
*****
We appreciate the opportunity to assist you in this effort. Should you have any questions, please do not hesitate to call Dr. Glenn Galfond at (202) 828-9057.
Yours very truly,
149
Table 1
Estimated Costs of Unfunded Federal Mandates to Counties (Costs in Thousands)
Mandates |
Fiscal Year 1993 |
FY94-98 |
|||
Total Operating Costs |
Total Capital Costs |
Total Costs |
Projected Total Costs |
||
I. |
Underground Storage Tanks |
91.012 |
84.694 |
175,706 |
641.244 |
u. |
Clean Water Act/Wetlands |
441,498 |
744.493 |
1.185.991 |
6,480.183 |
m. |
Clean Air Act (CAA) |
68.469 |
233,252 |
301.721 |
2.682.570 |
IV. |
Subtitle D/RCRA |
271,800 |
374.335 |
646,135 |
4.550,856 |
v- |
Safe Drinking Water Act |
41.562 |
122,748 |
164,310 |
870.365 |
VI. |
Endangered Species Act |
57.493 |
62.768 |
120.261 |
601,835 |
vn. |
Superfund Amendments |
37,233 |
5.815 |
43,048 |
242.743 |
vm. |
Americans with Disabilities Act (ADA) |
127,448 |
166.202 |
293,650 |
2,809,840 |
DC |
Fair Labor Standards Act |
262.075 |
77 |
262.152 |
1,345.482 |
X. |
Davis-Bacon Act |
10,979 |
0 |
10,979 |
104,069 |
XL |
Arbitrage |
70,874 |
6,885 |
77,759 |
238.481 |
xn. |
Immigration Act |
1.534.188 |
1.471 |
1.535,659 |
13,134.358 |
TOTAL |
3.014.631 |
1.802.740 |
4,817.371 |
33.702.026 |
150
Table 2
FY93 Cost of Unfunded Federal Mandates to Counties
(Page 1 of 5)
County, State |
Total Costs for FY93 |
Mandates for which Costs are |
Reported |
1 |
|||||||||
1 |
2 |
3 |
4 |
5 |
6 |
7 |
s |
9 |
10 |
11 |
12 |
||
Navajo, Arizona |
2,309,350 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
||
Pima, Arizona |
15,092,522 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Phillips, Arkansas |
7,640 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Washington, Arkansas |
38,227 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Alameda, California |
10,723,701 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|||
Fresno, California |
6,057,738 |
X |
X |
X |
X |
X |
X |
X |
|||||
Kern, California |
10,504.058 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Los Angeles, California |
1,008,238,000 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Orange, California |
5,700,000 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
||
Riverside, California |
55,646,339 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Sacramento, California |
1,482,875 |
X |
X |
X |
X |
x |
|||||||
San Diego, California |
15,566,067 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
San Mateo, California |
7,063,807 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Ventura, California |
6,793,286 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Adams, Colorado |
1,047,450 |
X |
X |
X |
X |
X |
X |
X |
X |
||||
Boulder, Colorado |
952,408 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Brevard, Florida |
11,867,278 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Broward, Florida |
5,490,984 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
||
Highlands, Florida |
9,800 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|||
Hillsborough, Florida |
4,838,910 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
||
Orange, Florida |
56,396,577 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Pinellas, Florida |
21,354,034 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|||
Polk, Florida |
2,024,320 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Sarasota, Florida |
1,876,131 |
X |
X |
X |
X |
X |
|||||||
Seminole, Florida |
8,676,282 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
St. Lucie, Florida |
740,632 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|||
Volusia, Florida |
18,713,095 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
||
Cobb, Georgia |
2,587,150 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
||
Fulton, Georgia |
352,268 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
151
Table 2
FY93 Cost of Unfunded Federal Mandates to Counties
(Page 2 of 5)
Count;, State |
Total Costs for FW3 |
Mandates for which Costs are Reported |
|||||||||||
1 |
2 |
3 |
4 |
5 |
6 |
T |
8 |
» |
10 |
11 |
12 |
||
Gwinnett, Georgia |
10.862.67S |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
||
Bannock, Idaho |
8.133.250 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Boise, Idaho |
374,906 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Du Page, Illinois |
217.170 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Kane, Illinois |
584.516 |
X |
X |
X |
X |
X |
X |
X |
X |
||||
Lake, Illinois |
3,429,946 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Tazewell, Illinois |
161,275 |
X |
X |
X |
|||||||||
Polk, Iowa |
270,400 |
X |
X |
X |
X |
X |
X |
||||||
Warren, Iowa |
247,500 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Winnebago, Iowa |
39.300 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Cowley, Kansas |
16.987 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Decatur, Kansas |
72.050 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Johnson, KaBjEaj |
8,522,079 |
X |
X |
X |
X |
X |
X |
X |
X |
||||
Russell, Kansas |
162.753 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
||
Sedgwick, Kansas |
1,532.792 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|||
St. John The Baptist, Louisiana |
603.290 |
X |
X |
X |
X |
X |
X |
X |
X |
||||
Union, Louisiana |
900.000 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Vernon, Louisiana |
28,000 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Lincoln, Maine |
7,725 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Carroll, Maryland |
3.367,315 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Montgomery, Maryland |
7.495.370 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Prince George's, Maryland |
59,375.102 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Hampden, Massachusetts |
MOO |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Berrien, Michigan |
30,420 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Genesee, Michigan |
227,862 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Kent, Michigan |
746,925 |
X |
X |
X |
X |
X |
X |
X |
X |
||||
Midland, Michigan |
34.250 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Washtenaw, Michigan |
1.046,964 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Anoka, Minnesota |
575.500 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
152
Table 2
FY93 Cost of Unfunded Federal Mandates to Counties
(Page 3 of 5)
County, State |
Total Costs for FY93 |
Mandates for which Costs are Reported |
"1 |
||||||||||
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
M |
||
Dakota, Minnesota |
688,600 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Hennepin, Minnesota |
7,482.925 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Olmsted, Minnesota |
88S.932 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|||
Gallatin, Montana |
879,820 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|||
Yellowstone, Montana |
393,093 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Sarpy, Nebraska |
80,300 |
X |
X |
X |
X |
X |
X |
||||||
Clark, Nevada |
8,236,777 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
||
Douglas, Nevada |
3,475.954 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Bergen, New Jersey |
8,031,574 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
||
Essex, New Jersey |
1,393,000 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Morris, New Jersey |
982.142 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|||
Somerset, New Jersey |
771,535 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Union, New Jersey |
1,672,000 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|||
Bernalillo, New Mexico |
2,932,641 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|||
Eddy, New Mexico |
1,341,000 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
||
Santa Fe, New Mexico |
1,865.470 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Cattaraugus, New York |
424.900 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Erie, New York |
24,951,166 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
||
Monroe, New York |
4,821,560 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Niagara, New York |
111,500 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|||
Suffolk, New York |
11,642,082 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
||
Alamance, North Carolina |
14,095,843 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Catawba, North Carolina |
1,223,238 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Cumberland. North Carolina |
5,059,122 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Durham, North Carolina |
1,224,976 |
X |
X |
X |
X |
X |
X |
X |
|||||
Forsyth. North Carolina |
2,617,230 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
||
Mecklenburg, North Carolina |
1,274,874 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Orange, North Carolina |
196,600 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Yadkin, North Carolina |
1,142,995 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
153
Table 2
FY93 Cost of Unfunded Federal Mandates to Counties
(Page 4 of 5)
Count;, State |
Total Costs for FY93 |
Mandates for which Costs are Reported |
|||||||||||
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
12 |
||
Traill, North Dakota |
11.062 |
X |
X |
X |
X |
X |
X |
X |
|||||
Greene, Ohio |
1.043,310 |
X |
X |
X |
X |
X |
X |
X |
X |
||||
Hamilton. Ohio |
1,447,945 |
X |
X |
X |
X |
X |
X |
||||||
Summit, Ohio |
6,760,761 |
X |
X |
X |
X |
X |
X |
X |
|||||
Cleveland, Oklahoma |
308.320 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Clackamas, Oregon |
2.587,752 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Curry, Oregon |
3,520,000 |
X |
X |
X |
X |
X |
X |
X |
|||||
Lane, Oregon |
4,112.749 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
||
Linn, Oregon |
686.212 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
||
Washington, Oregon |
34.161.190 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Dauphin, Pennsylvania |
281.634 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Lehigh, Pennsylvania |
200.006 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Mercer, Pennsylvania |
49,500 |
X |
X |
X |
X |
||||||||
Northampton, Pennsylvania |
3.360.000 |
X |
X |
X |
X |
X |
X |
X |
X |
||||
Beaufort, South Carolina |
164.000 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Horry, South Carolina |
3.653.620 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Spartanburg, South Carolina |
128.100 |
X |
X |
X |
X |
||||||||
Sumter, South Carolina |
1,458.000 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Brown, South Dakota |
944,050 |
X |
X |
X |
X |
||||||||
Pennington, South Dakota |
190.151 |
X |
X |
X |
X |
X |
X |
X |
|||||
Knox, Tennessee |
676,713 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Madison, Tennessee |
136.800 |
X |
|||||||||||
Montgomery, Tennessee |
2.164.117 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Shelby, Tennessee |
2,211,780 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Bexar, Texas |
117.141 |
X |
X |
X |
X |
X |
X |
X |
X |
||||
Ellis, Texas |
83,628 |
X |
X |
X |
X |
X |
|||||||
| Franklin, Texas |
38,100 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
| Galveston, Texas |
6,020,000 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
||
Harris, Texas |
43.022.186 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
154
Table 2
FY93 Cost of Unfunded Federal Mandates to Counties
(Pace 5 of 5)
County, State |
Total Costs for FY93 |
Mandates for which Costs are Reported |
|||||||||||
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
12 1 |
||
Hemphill, Texas |
1,087,148 |
X |
X |
X |
X |
X |
x I |
||||||
Travis, Texas |
322,000 |
X |
|||||||||||
Val Verde, Texas |
79,900 |
X |
X |
X |
X |
||||||||
Box Elder, Utah |
914,500 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Weber. Utah |
889,027 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|
Arlington, Virginia |
3,934,698 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
|||
Fairfax, Virginia |
30,114,126 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
||
Franklin, Virginia |
587,042 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Henrico, Virginia |
11,110.007 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Louisa, Virginia |
1,912,172 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Prince William, Virginia |
1,836,101 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
Milwaukee, Wisconsin |
14,969,139 |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
155
Table 3
Counties Reporting Superfund Liabilities or Costs
(Page 1 of 2)
County |
Liability |
Cost Incurred |
Settlement |
Los Angeles, CA |
$80,000,000 |
$3,000,000 |
N/A |
San Mateo, CA |
Dismissed |
$2,000 |
$0 |
Broward, FL |
Unknown |
+/-$25,000 |
Unknown |
Hillsborough, FL |
Peak Oil Site (generator) (deminimus party) Sydney Mine (operator) (170 parties) Taylor Road Landfill (owner) (18 parties) |
$8,000,000 |
Peak Oil Site $1,000 Sydney Mine $180,000 |
Orange, FL |
Minimal (have participated inPRP agreements) |
Minimal |
$0 |
Pinellas, FL |
No Suit at this time. Estimated damages on pro rata basis $200,000. |
$50,000 |
No |
Polk, FL |
Unknown |
$8,914 |
|
Volusia, FL |
Unknown |
$75,000 |
N/A |
DuPage, IL |
$600,000 already paid |
$100,000 |
$600,000 |
Kent, MI |
Undetermined |
$1,100,000 |
$6,200,000 |
Anoka, MN |
Unspecified |
$10,000 |
$40,000 |
Clark, NV |
$0 |
$175,000 |
$0 |
10
156
Table 3
Counties Reporting Superfund Liabilities or Costs
(Page 2 of 2)
County |
Liability |
Cost Incurred |
Settlement |
Monroe, NY |
Unknown |
None Yet |
|
Greene, OH |
Unknown |
Unknown |
Unknown |
Beaufort, SC |
$1,900,000 |
$5,000 |
No |
Knox, TN |
$30,000 |
$30,000 (county staff) |
N/A |
Shelby, TN |
$1,000,000 |
$50,000 |
N/A |
Milwaukee, WI |
Not yet formally sued. It could be $1,000,000 if EPA sues. If the other party sues, it could range from $1-5 million. |
$400,000 |
None |
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SUMMARY OF UNFUNDED FEDERAL MANDATES PROBLEMS
Under Ground Storage Tank Regulations (UST)
The federal Underground Storage Tank Law regulates the underground storage tanks that store petroleum and hazardous substances, preventing, detecting and correcting the damage done by leaks and spills from these tanks. Many counties are required to regulate private tanks in their jurisdictions and are also responsible for tanks they own and operate.
The program is a worthy and laudable program, but it places the costs entirely on local governments to correct what is perceived to be a national problem. It also places the responsibility on local governments to remove and/or clean up abandoned tanks that others have discarded.
Clean Water Act (CWA)
- regulates discharges of wastewater into navigable waters
- sets standards for improving and maintaining water quality
- regulates and requires permits for point source discharges
- controls discharges to public waters by county-owned wastewater treatment works
Several distinct sets of regulations adopted by EPA under the Clean Water Act are particularly expensive and burdensome to local governments because of inflexible procedures and a "cookie- cutter" approach for all communities, regardless of local conditions. The requirement for secondary treatment of all wastewater imposes hugely expensive sewage treatment plants to be built and operated, with only federal loans to help pay for the construction.
Some of the regulatory programs that most recently have been imposed on counties include stormwater regulations that require large communities to collect and treat rainwater runoff; sludge regulations that require wastewater treatment plant biosolids to be treated, then limits their disposal; and wetlands regulations that prohibit the cleaning of some drainage ditches without a permit from the Corps of Engineers.
Removal of CFC's
The Clean Air Act governs emissions from stationary and mobile sources and sets air quality standards throughout the country. It requires State Implementation Plans which local governments participate in carrying out, and requires permits for all major sources of pollution. A number of very costly mandates in the Clean Air Act include:
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-Congestion control and traffic mitigation
-Making local transportation plans conform to federal
limitations on new sources of pollution -Retrofitting or replacing of vehicles in county fleets
(in some places) -Retrofitting publicly-owned stationary sources of
pollution, including waste -to -energy facilities, sludge
incinertors, etc. -Monitoring ambient air quality, as well as mobile and
stationary sources -Obtaining required permits on yearly or bi-annual basis
Subtitle D/RCRA
The Resource Conservation and Recovery Act (RCRA) governs the regulation of solid and hazardous waste. Subtitle D of RCRA requires many communities to upgrade or close existing landfills. For those counties that will upgrade, the expenses involve the following:
-operating requirements, including procedures to detect and
prevent hazardous waste and PCB wastes from entering the
site -daily cover requirements of a specified amount of dirt -rodent, insect and bird control -methane gas monitoring and remediation -compliance with Clean Air Act gas emissions discharges -rainwater run-off control -collection and treatment of leachate (water that seeps
through the landfill) -groundwater monitoring -assuming liability for all detecting and correcting
potential future pollution from the site for the next 30
years -setting aside a trust fund of local money for capping the
site, performing monitoring, and all necessary correction
activities
If the county does not wish to incure the above costs at an existing landfill, it must stop accepting waste and find another landfill to handle the solid waste or build its own new site. A new site generally costs about $100,000 per acre to construct, and must perform all of the items listed above.
Safe Drinking Water Act (SDWA)
The Safe Drinking Water Act is the primary federal statute regulating drinking water standards. It:
-establishes maximum contaminant levels for contaminants which are assumed to occur in public water systems (such as pesticides used in the cultivation of pineapples)
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-certifies analytical techniques which must be used by each
system, regardless of size or capability -specifies treatment techniques -establishes public notification procedures
One of the more recent SDWA mandates that is especially expensive is the "Lead and Copper" rule, which makes local governments responsible for locating and correcting corrosive piping even if the pipe is on private property and not on public right-of-way.
Endangered Species Act & NEPA
The Endangered Species Act provides for the conservation, protection, restoration, and propogation of species of fish, wildlife and plants facing potential extinction. Various federal agencies have the authority to disapprove public and private projects which have the potential to destroy natural habitats of protected species.
The mandate under the Act (as well as the National Environmental Policy Act [NEPA] ) , that affects the most counties is the requirement to prepare an "environmental impact statement", and accompanying studies, before undertaking any action that might endanger a protected species. In addition, activities to mitigate the impact of projects on endangered species must be undertaken, often at great expense to the county.
Davis -Bacon Act
Local governments receive federal assistance under Community Development Block Grants (CDBG) and the Intermodal Surface Transportation Act to construct and repair buildings, roads and other public facilities. When federal funds are used, the Davis- Bacon prevailing wage must be paid to construction workers. Our counties have complianed for years that the Davis -Bacon prevailing wage for many construction occupations is significantly higher than the local prevailing wage for the same occupations. They have also complained because the law applies to all contracts over $2000. Because of this problem, we are paying much more for federally assisted construction projects than we would have to pay if federal funds were not involved.
Immigration Act/Refugee Act
The number of immigrants and refugees admitted into the United States is determined by the national government. If these people require medical care, social services or other assistance and cannot afford it, states and counties have to provide these services . Some federal reimbursement of these costs is provided but states and counties have to shoulder most of the cost. This
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is an underfunded mandate and is a heavy cose burden in a number of states (California, Florida, Illinois, Minnesota, New York and Texas) .
Americans With Disabilities Act
Under the American With Disabilities Act, local governments are required to make public facilities accessible to handicapped individuals. New construction or major renovation of public buildings and roads, and the purchase of new buses and rail cars must meet ADA specifications. Our primary concern is the enormous cost involved in complying these regulatory requirements .
Fair Labor Standards Act
Under the Fair Labor Standards Act, executive, administrative and professional employees in the public sector were intended to be exempt from the time-and-a-half overtime pay requirements. However, because of a quirk in the federal regulations, federal courts have held many counties, cities and states liable for overtime pay for highly paid executives in the public sector. The Department of Labor has observed that under the courts interpretation of the regulations, state and local governments are being inappropriately deprived of the opportunity to use the executive, administrative and professional exemptions. We have been ordered to pay overtime to individuals earning between $50,000 and $100,000 in annual income. Under the courts interpretation of the regulations, very few employees in the public sector will meet the exemption requirements. The potential liability is enormous. Several of our counties have law suits pending in the millions of dollars.
SARA, Title III, - Hazardous Materials *
The Emergency Planning and Community Right -to -Know Act (popularly known as "SARA-Title III") requires local governments to develop chemical emergency preparedness plans, collect and store information provided by private companies and public institutions that produce or store chemicals, and make that information available to the public.
Under the Act a county must develop a hazard analysis of all potential chemical risks in the community, and prepare a hazardous material emergency plan outlining how chemical spills and other emergencies will be handled. The county must also collect from each individual company or facility information on the type of chemicals they use, how they are stored, and what will happen in an emergency. This information must be organized and retained by the county, and provided in a usable form to citizens who want information about the chemicals that are used in their areas.
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Federal Tax Code Mandates
There are numerous examples of federal tax law changes and implementing regulations that have been made in recent years that affect state and local debt management, cash management, and pension and benefits administration. Some of the more onerous examples are :
- requirements for state and local governments to pay to the federal government any interest earnings accrued on bond funds while waiting to start a project
- Dollar limitations on employer provided pensions that an employee can receive if it had been accumulated on a tax - deferred basis (Section 415)
- Mandatory distribution of pension benefits to employees at age 70 1/2
- Mandatory medicare coverage for new state and local government employees
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162 STATEMENT OF
THE HONORABLE SUSAN RITTER
AUDITOR, RENVILLE COUNTY, NORTH DAKOTA
AND PRESD3ENT,
NORTH DAKOTA ASSOCIATION OF COUNTIES
ON THE IMPACT OF UNFUNDED MANDATES ON NORTH DAKOTA COUNTffiS
BEFORE THE
GOVERNMENTAL AFFAHtS COMMITTEE UNITED STATES SENATE
ON BEHALF OF THE NORTH DAKOTA ASSOCIATION OF COUNTIES
NOVEMBER 3, 1993 WASHINGTON, D.C.
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THANK YOU FOR THE OPPORTUNITY TO TESTIFY MR. CHAIRMAN. I AM SUSAN A. RITTER, RENVILLE COUNTY (ND) AUDITOR AND PRESDDENT OF THE NORTH DAKOTA ASSOCIATION OF COUNTIES. WITH ME IS JUDY TANGEN, A COMMISSIONER IN RANSOM COUNTY (ND) AND BOARD MEMBER OF THE COUNTY COMMISSIONERS ASSOCIATION. THE ASSOCIATION DIRECTOR, MARK JOHNSON, IS ALSO WITH ME. I AM DELIGHTED TO APPEAR BEFORE YOU TO DISCUSS THE PROBLEMS THAT FEDERAL MANDATES CREATE IN MY COUNTY AND THEIR EFFECTS ON LOCAL OFFICIALS' ABDHTHCS TO PROVIDE EFFECTIVE, EFFICIENT LOCAL PROGRAMS, SERVICES, AND ACnvnTES.
RENVILLE COUNTY HAS A POPULATION OF 3,160 PEOPLE. ALTHOUGH OUR NUMBERS ARE NOT VAST, OUR LOCAL GOVERNMENTS ARE VERY DEDICATED TO PROVTOING A VARIETY OF SERVICES INCLUDING: SERVICES FOR THE POOR, ROAD REPAffi AND MAINTENANCE, LAW ENFORCEMENT, HEALTH SERVICE, GARBAGE PICK UP, EMERGENCY SERVICES, HISTORIC PRESERVATION, WEED CONTROL, AGRICULTURAL RELATED PROGRAMS, SENIOR CITIZEN PROGRAMS AND CLEAN DRINKING WATER. THERE WAS A TIME WHEN FUNDING THESE SERVICES WAS NOT AS MUCH OF A STRAIN AS IT NOW IS. I BELD2VE THAT, IN PART, FEDERAL UNFUNDED MANDATES HAVE ERODED OUR LOCAL GOVERNMENTS' ABILITY TO PROVIDE THESE SERVICES.
MY DEFINITION OF AN UNFUNDED MANDATE IS THE PRACTICE OF IMPOSING BUT NOT FUNDING, A COSTLY PROGRAM OR REQUIREMENT THAT LOCAL GOVERNMENTS ARE DIRECTED TO CARRY OUT. SOME EXAMPLES OF UNFUNDED MANDATES IN RENVILLE COUNTY AND ITS CITIES FOLLOW:
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RENVILLE COUNTY:
• SUPERFUND AMENDMENT AND REAUTHORIZAITON ACT - COSTS OF THE PROGRAM HAVE BEEN ABSORBED BY THE GENERAL FUND.
• AMERICANS WITH DISABILITIES ACT - COSTS-TO-DATE ARE APPROXIMATELY $30,000 WITH ESTIMATES OF A NEW ELEVATOR AMOUNTING TO $250,000.
• DEPARTMENT OF HUMAN SERVICES- IN 1984 THERE WERE ONLY SEVEN MANDATED SOCIAL SERVICE PROGRAMS. IN 1993 THERE ARE 15 FEDERAL MANDATED SERVICES AND PROGRAMS. THIS HAS CONTRD3UTED TO A 31 PERCENT INCREASE IN THE SOCIAL SERVICE DEPARTMENT'S BUDGET FROM 1983 TO PRESENT.
MOHALL CITY (POPULA TION OF 931):
THE CLOSING OF A LANDFILL COST THE CITY OVER $67,000. SHERWOOD CITY (POPULA TION OF 2R6\:
TESTING REQUIREMENTS UNDER THE SAFE DRINKING WATER AND CLEAN WATER ACT WDLL COST THE CITY $2,000 ANNUALLY.
THESE ARE JUST A FEW EXAMPLES OF THE MANDATES THAT ARE CAUSING MAJOR EFFECTS ON THE FUNDING OF LOCAL PROGRAMS AND SERVICES. WHEN THIS IS MULTIPLIED TIMES THE NUMBER OF COUNTIES AND CITIES OF THE NATION, IT BECOMES MORE APPARENT THAT THE COSTS SHOULD BE SHARED WITH THE FEDERAL GOVERNMENT.
ONE OF THE MAJOR SERVICES PROVIDED BY RENVILLE COUNTY IS ROAD REPAIR AND MAINTENANCE. IT IS VITAL TO OUR RURAL POPULATION TO HAVE A NETWORK OF ROADS TO PROVTOE AN EFFICDINT MEANS OF TRANSPORTING OUR AGRICULTURAL PRODUCTS AND OH PRODUCTS TO MARKET. ALTHOUGH THE FEDERAL
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GOVERNMENT SHARES THE COSTS OF OUR SECONDARY ROADS SYSTEM, THERE ARE NUMEROUS REGULATIONS AND STANDARDS THAT DRIVE UP THE COST OF ROAD MAINTENANCE AND CONSTRUCTION. LOCAL ENGINEERS ESTIMATE THAT ROAD PROJECTS THAT ARE PARTIALLY FUNDED WITH FEDERAL DOLLARS COST TfflRTY-FIVE PERCENT MORE JUST TO MEET FEDERAL SPECD7ICATIONS. HIGHER CONSTRUCTION COSTS PREVENT US FROM REPAmiNG ALL OF THE ROADS IN THE SYSTEM IN A TIMELY MANNER. STATISTICS SHOW THAT IT COSTS FOUR TIMES AS MUCH TO REPAIR A DETERIORATING ROAD THAN A ROAD IN BETTER CONDITION. RAILROAD ABANDONMENT IS COMMON IN OUR COUNTY AND AS THE TREND CONTINUES, AGRICULTURE WILL RELY MORE ON THE ROAD SYSTEMS THAT WE PROVIDE AT THE LOCAL LEVEL.
ONE OF THE QUESTIONS ASKED OF ME AT A LOCAL PRESS CONFERENCE ON UNFUNDED MANDATES WAS "WHAT WOULD YOU DO WITH THE MONEY THAT YOU SPEND ON MANDATES IF THEY WERE NO LONGER IMPOSED ON YOUR GOVERNMENT?" RENVILLE COUNTY WOULD USE THE MONEY TO IMPROVE OUR ROADS AND BRIDGES, OUR COURTHOUSE, TORE ADDITIONAL STAFF, AND PURCHASE A NEW COMPUTER SYSTEM.
IN RENVILLE COUNTY WE HAVE A FINITE AMOUNT OF MONEY, AND WE HAVE TO PROVTOE CERTAIN BASIC SERVICES THAT NO ONE ELSE PROVIDES. OUR SOURCES OF REVENUE ARE MAINLY PROPERTY TAXES AND OIL AND GAS PRODUCTION TAXES. OUR TAX BASE HAS DROPPED IN THE LAST FIVE YEARS BY $940,000 AND OUR OIL AND GAS PRODUCTION TAXES HAVE DECREASED BY TfflRTY-SIX PERCENT IN
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THE PAST EIGHT YEARS. THIS PUTS RENVILLE COUNTY IN A POSITION OF RAISING PROPERTY TAXES AND/OR REDUCING SERVICES.
AS MORE UNFUNDED MANDATES ARE IMPOSED ON RENVILLE COUNTY WE CONTINUE TO ASK THE EMPLOYEES TO HELP WITH THE IMPLEMENTATION PROCESS, AT NO EXTRA COMPENSATION. WE CANNOT AFFORD TO HIRE ADDITIONAL STAFF SO MANY TIMES, THE ELECTED OFFICIALS ARE ASKED TO ADD YET ANOTHER RESPONSIBILITY TO THED* LIST. EACH TIME WE DO THIS I FEEL WE ARE LOWERING THE EMPLOYEE MORALE BECAUSE WE ADD THE EXTRA DUTIES WITHOUT ADDITIONAL COMPENSATION - THE MONEY JUST ISN'T THERE.
OUR SHERIFF'S OFFICE CAN BE USED TO ILLUSTRATE THE LIMITATION ON LOCAL SERVICES. JUST RECENTLY THE SHERIFF'S OFFICE CONTRACTED WITH STATE RADIO TO TAKE EMERGENCY CALLS FOR THE DEPARTMENT DURING NON-OFFICE HOURS. WE CANNOT AFFORD TO HIRE ADDITIONAL DEPUTIES AND AT THIS TIME IT IS THE ONLY SOLUTION TO OUR PROBLEM.
WE HAVE RAISED TAXES REPEATEDLY OVER THE YEARS TO PROVIDE OUR LOCAL SERVICES AND THOSE IMPOSED ON US BY STATE AND FEDERAL GOVERNMENTS. ALTHOUGH THE VALUES OF PROPERTY HAVE DECREASED, WE HAVE RAISED OUR TAXES TO MAXIMUM ALLOWABLE LEVELS - WE HAVE TAKEN ADVANTAGE OF A PROVISION IN STATE LAW THAT, IN EFFECT, PERMITS LOCAL GOVERNMENTS TO LEVY TAXES ABOVE THE STATUTORY LIMITS. THIS METHOD OF TAXATION IS VERY UNPOPULAR AMONG TAXPAYERS. THE 1993 LEGISLATIVE BODY NEARLY ELIMINATED THIS SOURCE OF REVENUE FOR THE LOCAL GOVERNMENTS AND CONSIDERED
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DROPPING OUR LEVIES TO STATUTORY LIMITS. THIS WOULD HAVE HAD A DRAMATIC EFFECT ON THE AMOUNT OF DOLLARS RAISED THROUGH THE PROPERTY TAX METHOD.
AS YOU CAN SEE WE NOT ONLY NEED THE SUPPORT OF THE FEDERAL GOVERNMENT TO HELP WITH FINANCING AND IMPLEMENTING MANDATES BUT ALSO THE COOPERATION OF THE STATE GOVERNMENT. I THINK THAT WE NEED TO BUILD ON AN EQUAL PARTNERSHIP AMONG FEDERAL, STATE, AND LOCAL GOVERNMENTS IN THE LEGISLATIVE AND REGULATORY DEVELOPMENT PROCESS. WE MUST WORK TOGETHER TO AGREE UPON AND PROVIDE A HIGH-QUALITY SYSTEM OF PUBLIC SERVICE. BY COORDINATING OUR SERVICES, PROGRAMS, AND ACTIVITIES, WE CAN BUILD THE TRUST OF OUR PEOPLE IN THE STRUCTURE OF OUR FEDERALIST SYSTEM. BASED ON FINDINGS FROM A RECENT SURVEY CONDUCTED BY THE ADVISORY COMMISSION ON
INTERGOVERNMENTAL RELATIONS, COUNTY GOVERNMENT RECEIVED GOOD GRADES BY THE PUBLIC. WE NEED TO PROTECT AND IMPROVE OUR STANDING WITH THE PUBLIC BY INSURING THAT WE PROVIDE THE SERVICES THAT THEY WANT.
IT IS THROUGH A GOOD WORKING RELATIONSHIP OF ALL GOVERNMENTS AT ALL LEVELS THAT WE WILL GAIN THE TRUST OF THE PEOPLE. WE MUST WORK TOGETHER TO MATCH FUNCTIONS OF EACH LEVEL OF GOVERNMENT WITH AVAILABLE RESOURCES AND TO USE THE LEVEL OF GOVERNMENT CLOSEST TO THE COMMUNITY FOR ALL PUBLIC FUNCTIONS THAT IT CAN HANDLE. I AGREE WITH VICE PRESIDENT GORE'S PROPOSAL (CREATING A GOVERNMENT THAT WORKS BETTER AND COSTS LESS) WHICH CALLS FOR A BOARD TO BE
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ORGANIZED TO IMPROVE THE WAY THE FEDERAL GOVERNMENT WORKS WITH STATES AND LOCALITIES. THIS GROUP WILL BE COMMITTED TO SOLUTIONS THAT RESPECT "BOTTOM-UP" INITIATIVES RATHER THAN "TOP-DOWN" REQUIREMENTS. RENVILLE COUNTY PREFERS A PROACTIVE ROLE TO CHANGE, BUT MANY TIMES MANDATES LEAVE US IN A REACTIVE STATE. WE, IN ALL LEVELS OF GOVERNMENT, CAN WORK TOGETHER TO DEVELOP A HIGH-QUALITY SYSTEM OF PUBLIC SERVICE, STARTING NOW, AND CARRY THIS SYSTEM INTO THE 21ST CENTURY.
SENATOR DORGAN HAS INTRODUCED THE FISCAL ACCOUNTABILITY AND INTERGOVERNMENT REFORM ACT (FAIR ACT) WHICH WILL REQUIRE THE FEDERAL GOVERNMENT TO DETERMINE THE COST TO STATE AND LOCAL GOVERNMENTS AND PRIVATE BUSINESSES OF UNFUNDED MANDATES. I ENDORSE THIS LEGISLATION AND SEE IT AS A STEP TOWARD AN END TO UNFUNDED MANDATES AS WE NOW KNOW THEM.
SENATOR DORGAN HAS CONTACTED THE NORTH DAKOTA ASSOCIATION OF COUNTffiS AND THE NORTH DAKOTA LEAGUE OF CITIES IN AN EFFORT TO ADDRESS THE CURRENT MANDATE COSTS AND TO WORK IN A COOPERATIVE EFFORT TO INSURE THAT WHEN A FEDERAL MANDATE IS IMPOSED ON US, WE HAVE THE MEANS OF FINANCIALLY IMPLEMENTING IT. I WOULD LDXE TO THANK SENATOR DORGAN FOR HIS COMMITMENT TO LOCAL GOVERNMENT AND WOULD ENCOURAGE ALL SENATORS TO WORK WITH THEIR LOCAL OFFICIALS IN FINDING A SOLUTION TO THE PROBLEMS IMPOSED BY MANDATES. BY WORKING TOGETHER WE WILL ALL HAVE OWNERSHIP IN THE PROGRAMS, SERVICES, AND ACTIVITIES THAT
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WILL PROVIDE A HIGHER QUALITY OF LIFE FOR THE PEOPLE OF THIS NATION.
BEFORE I CONCLUDE, LET ME SUBMIT A COPY OF THE NATIONAL ASSOCIATION OF COUNTIES SURVEY ON UNFUNDED MANDATES, WHICH WAS JUST RELEASED LAST WEEK. THIS SURVEY SHOWS THAT COUNTIES WILL SPEND AN ESTIMATED $4.8 BILLION IN 1993 ON JUST 12 MANDATES. IT ALSO SHOWS THAT WE WILL SPEND AN ESTIMATED $33.7 BILLION OVER THE NEXT 5 YEARS. ON AVERAGE, COUNTIES SPEND AN ESTIMATED 12.3 PERCENT OF THEIR LOCALLY RAISED REVENUES EACH YEAR ON THESE 12 MANDATES.
THANK YOU FOR THE OPPORTUNITY TO TESTIFY AND I WOULD BE HAPPY TO ANSWER ANY QUESTIONS AT THE APPROPRIATE TIME.
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National Association of Towns and Townships
TESTIMONY OF
S. DAVID WORHATCH
TOWNSHIP TRUSTEE
HUDSON TOWNSHIP. SUMMIT COUNTY. OHIO
BEFORE THE
SENATE GOVERNMENTAL AFFAIRS COMMITTEE
HEARING ON
UNFUNDED FEDERAL MANDATES
NOVEMBER 3. 1993
1 522 K Street. N.W.. Suite 600. Washington. DC. 20005 1 202
(202) 737-5200 FAX (202) 289T996 fa p , , w , t
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Mr. Chairman, distinguished Committee members, thank you for the opportunity to testify on the impact of mandates on local governments. Your leadership in tackling this issue of such crucial importance to lo- cal governments is very much appreciated. My name is S. David Worhatch, and I am a Township Trustee of Hudson Township in Sum- mit County, Ohio. I am testifying as a local elected official, but also on behalf of the Ohio Township Association and the National Association of Towns and Townships, or NATaT.
We especially appreciate your interest in hearing from small local gov- ernments on the issue of the regulatory burden they face. In many ways, my township is typical of many that are affected by the dual problems of unfunded mandates and regulatory inflexibility. Hudson Township boasts a population of but 17,600, yet our size places us squarely within the category of local governments with populations under 25,000. around 93 percent of all local governments nationwide according to census data.
I would like to preface my remarks by recalling what a former chair- man of the U.S. Advisory Commission on Intergovernmental Relations once said about our federal system. He observed that the United States has moved from a period of cooperative federalism — when the federal government was a source of funding and innovation — to an era of potentially coercive federalism, due in part, to a deficit- driven agenda.
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One characteristic of this coercive federalism is the proliferation of unfunded federal mandates which are imposed on state and local gov- ernment.
Mandates take many forms. They can require a local government to undertake and perhaps finance new responsibilities or assume funding for existing responsibilities; they frequently set minimum standards which are higher than a local government would have set for itself; or they sometimes require very rigorous and unnecessarily expensive or unsuitable means of complying with the mandate.
Mandates typically are created to address or achieve laudable goals — cleaning up streams, making drinking water safe. Increasing access for the disabled — and are often enacted in response to constituent de- mands. Since they tend to serve important, publicly agreed upon goals, it is important that they be capable of being implemented in all localities so that everyone can benefit. Sadly, small communities too often find themselves unable to comply.
Many mandates tend to have their most pronounced impact on grass- roots governments, where the potential for direct benefit for the peo- ple is the greatest. But. little consideration is given to the cumulative financial impact of many mandates on local governments. The lack of program flexibility for enforcement at the local level frustrates imple- mentation of policy objectives embraced by the mandates. And all too often only minimal technical assistance is offered to local governments
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to cope with mandates. Mandates create a number of problems for lo- cal officials, especially in smaller communities:
• While mandates shift responsibility for program implementation to the local level, inflexible mandates eliminate the benefits of local implementation.
• Accountability is diluted. Federal lawmakers seem to be unwill- ing to confront voters with the true costs of public policy. Moreover, local officials sometimes don't know whether mandates are coming from the state or the federal government, especially in cases where states assume program administration and enforcement and tell localities how to implement a program. This is a tremendous problem in getting small community leaders to participate in the policy devel- opment process.
• Local tax increases, especially in the unpopular property tax, must increasingly be relied on to pay for mandates. Faced with the prospect of raising taxes and confronting civic opposition, many local officials may be inclined to leave public office, rather than to vote for the elimination of successful local programs Just to be able to meet the financial burden of unfunded state or federally-mandated programs. As a result, communities lose the talents of experienced local officials: leadership declines and cynicism increases.
Small communities are simply not like larger urban areas. A com- munity of 1.000-or 10.000. for that matter-simply cannot do the same things that a community of 100,000 can. Many small local gov-
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ernments have part-time elected officials, and many have part-time employees. Though they work virtually full-time on local government business, they're paid just part-time wages and salaries, meaning that most have to earn their living from another job.
Getting information on proposed or final regulations to small govern- ments is terribly difficult. Eighty-six percent of the country's 39.000 local governments are under 10,000 in population and half are under 1,000. The officials of these communities do not get the Federal Reg- ister and chances are they do not have a source for it nearby. If they did, they would probably balk at the prospect of reading some of the more comprehensive regulations. Just the prospect of getting effec- tive participation when an agency rule is proposed is daunting, given the window to provide comments and the time it takes for organiza- tions like NATaT to digest the rule and communicate it to its membership. And when you stop to consider that NATaT must stay on top of proposed regulations from scores of federal agencies at the same time, the cumulative effect of all of this regulatory activity simply makes it less likely that small governments will ever have enough re- sources to stay on top of things.
Finally, small local governments have a very limited tax base which can be used to pay for regulations and mandates. As you are well aware, local governments must increasingly rely on the property tax, which is a particularly unpopular tax. Most small communities do not have the option of using a sales tax or an income tax to make up the difference between what can be raised in property tax and the amount necessary
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to comply with mandates. Without the revenue, compliance with costly regulations is obviously difficult. If a community cannot afford to meet an environmental mandate, it faces enforcement action and pos- sibly steady to increasing pollution or contamination. For instance, if a small community cannot meet costly and detailed criteria for landfill design and must close its landfill, there is a strong likelihood that midnight dumping will occur, adding to pollution.
Exempting small communities from regulations is not the answer in most cases. People in small communities do not want to live in sec- ond-class communities. They want to be able to comply with federal regulations in a sensible manner. All residents should be entitled to benefit from the policy objectives behind federal mandates; they should not be denied those benefits just because they happen to live in a smaller governmental unit that cannot afford to deliver those bene- fits.
We realize that, given budget realities, unfunded federal mandates will not simply cease. Nonetheless, there are still several things Congress can do to soften the blow of unfunded mandates on local governments. Congress should get some sense of how much it is asking local gov- ernments to spend on mandates, not only per mandate but also the cumulative burden. Congress should also prioritize mandates, espe- cially environmental mandates, so that the burden will not fall on communities all at once. For that federal funding that is available, a portion should be set-aside Jbr small local governments so that they can compete amongst themselves for funds, rather than with large ur-
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ban areas which have better resources to apply for and administer funds.
While we do not advocate blanket exemptions for small communities, we do believe that when federal agencies issue rules that have a sig- nificant impact on small communities, those agencies should explore ways the rules can be flexibly implemented by small communities. Flexibility should become the norm in federal agency regulations.
One tool for increasing the flexibility of regulations and reducing the burden of federal regulations on small local governments is the Regulatory Flexibility Act of 1980 (Public Law 96-354). The act re- quires all federal agencies (1) to analyze fully the effects of their regu- lations on "small entities," (2) to explore alternative compliance mechanisms, and (3) to involve these entities actively in the develop- ment and review of the regulations. The act defines a small entity as a small governmental jurisdictions with a population of less than 50,000. such as cities, counties, towns, townships and villages, as well as school districts and special districts. A small entity may also be a small business.
The law seeks to ensure that federal agencies will develop effective and efficient regulations that do not place an unnecessary burden on the public. Alternative regulatory approaches are to be considered and. as appropriate, made available to small local governments. In ad- dition, regulations are to be developed with sufficient opportunities for input from small entitles. These are great objectives. Unfortunately.
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In practice, local governments over the past 13 years have been de- nied the benefits of the Regulatory Flexibility Act.
The act gives a federal agency Issuing a regulation two options. It can certify that its regulation will have no significant impact on small gov- ernments. Or. if it determines there is an Impact, it must conduct a regulatory flexibility analysis. Any such analysis, which must be pub- lished in the Federal Register in conjunction with the proposed regu- lations, must discuss the impact upon small governments, including the projected reporting, record keeping and compliance require- ments. It must also include a list of significant alternatives which would accomplish the stated objectives and minimize the economic impact of the regulations upon small governments.
Significant alternatives may include, but are not limited to. establish- ing different compliance or reporting requirements for small entities: using performance rather than design standards; or allowing exemp- tions to the rule for small entities.
Instead of going through the analysis required for assessing the opportunity for regulatory flexibility, most agencies simply issue the certification stating that their rule will have no significant impact on small governments. This way they can avoid examining alternative means of compliance for small governments. Issuing the certification implies that the agency has conducted some analysis as to what the impact of the regulation will be on small governments, but in reality.
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the certification is almost always issued without the agency ever con- ducting an evaluation where there will be an impact.
Unfortunately, this bureaucratic dodge is able to take place because the act suffers from a lack of "teeth" to force agencies to comply with its intent. "The Small Governments Regulatory Improvement and In- novation Act of 1993" will serve to refocus agency attention on RegFlex decisions. Establishing Small Government Coordinator positions will give federal agencies a place to focus small government policy within the agency. A Regulatory Flexibility Pilot Program will also draw attention to the need to draft regulations in something other than a one-size-fits-all approach. But, we must ask ourselves why, 13 years after the passage of the 1980 Act. are we settling for "pilot" programs? The fundamental problem with the 1980 Act-lack of agency compli- ance-will not be solved by the Small Governments Regulatory Im- provement and Innovation Act of 1993.
To correct this problem. Congress should amend the Regulatory Flexi- bility Act itself to subject agency compliance with the act to judicial review. Individuals aggrieved by an agency's failure to comply with the act would be empowered to challenge the agency's actions in court. In other words, an agency's certification that its regulations had no im- pact on small governments would be subject to possible judicial chal- lenge. Or, if an agency agrees its regulations will impact small com- munities but doesn't consider alternative approaches, the agency could be challenged in court. To avoid potential litigation, agencies would have to pay much more attention to how their regulations affect small
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governments, meaning that we would be restoring the original Intent of Congress In passing the Regulatory Flexibility Act In the first place.
H.R §30. Introduced by Representative Tom Ewlng. R-Ill., would allow judicial review of the Regulatory Flexibility Act. H.R 830 now has over 230 cosponsors. a majority of the House. Judicial review of the Regu- latory Flexibility Act was also one of the recommendations of Vice- President Gore's National Performance Review Report on Reinventing Government. There is clearly bipartisan support for judicial review.
To be sure. Congress, too. must accept its share of the blame in often passing overly-prescriptive legislation, which eliminates much of the flexibility agencies have in how policies are Implemented. If Congress does not have enough funds for all Its mandates, then it must leave some flexibility for agency discretion in implementing law.
In conclusion, small communities are ill-served by the current regula- tory process. It is difficult for them to play a significant part in the rule development process and make their concerns known. Often, what they are being told to do Is not explained clearly. They may not know who is telling them to do what because by delegating permitting and enforcement powers to the states, authority is diffused. And many times they are told how they must do things when there are cheaper ways to go about it, for example, by the use of performance-based standards rather than technology-based standards.
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We know we do not have money to throw at these problems that we have tried to regulate. Still, the problems need to be addressed and the experience of recent times is that unfunded federal mandates continue to be passed along to the states and localities. State and local governments no longer can continue to shoulder these burdens. There is a great sense of resignation and frustration at the local level as a result, and one thing we see is good people declining to run for office because they know they would be forced to take unpopular steps simply to be able to comply with federal mandates at the expense of eliminating or cutting back successful local programs that have con- tributed toward the direct protection of the health, safety and general welfare interests of the people.
Our nation cannot afford to run these sorts of risks much longer. The potential of the legislative reforms you are considering could go a long way to restoring public confidence in elected officials at all levels of government.
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mm
NATIONAL CONFERENCE OF STATE LEGISLATURES
WASHINGTON OFFICE: 444 NORTH CAPITOL STREET, NW SUITE SOO WASHINGTON. DC 2000J
TESTIMONY OF
REPRESENTATIVE DAVID ENNIS
DELAWARE HOUSE OF REPRESENTATIVES ON BEHALF OF THE
STATE OF DELAWARE
AND
THE NATIONAL CONFERENCE OF STATE LEGISLATURES
BEFORE THE SENATE COMMITTEE ON GOVERNMENTAL AFFAIRS
REGARDING
UNFUNDED FEDERAL MANDATES
NOVEMBER 3, 1993
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Chairman Glenn, Senator Roth, and distinguished members of the committee, thank you for the opportunity to speak to the problem of unfunded federal mandates on the states. Knowing that some of my colleagues from Ohio met with you earlier this Spring, I thank you for following through on your promise to hold hearings on this important subject. And I also want to extend my personal thanks to Senator Bill Roth for the outstanding job he does for Delaware and for the leadership role he has taken in government reform efforts.
As the sole panelist elected at the state-level, I am honored to be asked to testify before you and to carry the banner for state governments, who, especially through the work of organizations such as the National Conference of State Legislatures, have been calling attention to the problems of unfunded federal mandates for several years now. Since 1990, NCSL has published the Mandate Monitor, which tracks federal legislation containing mandates and pre- emptions on states. NCSL has identified 174 public laws reguiring action by state governments. For National Unfunded Mandates Day, NCSL surveyed legislative fiscal officers for state costs for just 5 of those mandates. Twenty-two states reported costs of nearly $1.5 billion over several years. If this is the cost of only 5 of the 174, imagine the burden of the additional 169.
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Since we have been at this for some time, we welcome the input of the representatives of local governments, and hope that working together, we can finally get some measure of progress toward ending these mandates. The voters are now seeing through these attempts at sliding the costs of federal initiatives down to our level, and want each of us to take responsibility for funding the programs that we feel are necessary to establish.
I represent the 6th House District of Delaware, and also chair the Economic Development, Banking and Insurance Committee. As Senator Roth knows, we recently passed a resolution calling on our state's Congressional Delegation to meet with the General Assembly annually to discuss unfunded federal mandates. To put the magnitude of the problem in some perspective, our state's Controller General estimates that the cost of federal mandates represents 15 percent of our state's budget. If you think you have difficulty balancing the federal budget now, just think what kind of problems you'd have if the states forced Congress to administer and pay for about $250 billion, about 15 percent of the federal budget, worth of programs that you couldn't do away with.
But as I was asked to provide examples of specific costs to our state and to react to several points and offer
184
suggestions for how to make the situation better, let me
speak to our experience with:
o The Americans with Disabilities Act, and
o The Clean Air Act :
It is not the goals of these laws that state legislators are opposed to, but the fact that the states are required to perform a specific service that supersedes any decisions we've made locally, without federal funding, or even any estimate of the budgetary impact on the states. Furthermore, the hard-line manner in which federal regulations provide inflexible implementation guidelines is counter to the very foundation of our federal system. If states and localities were allowed to participate in the development of the programs that we eventually have to administer, we could come up with more cost effective methods of program implementation that are tailored to our local needs. A concrete example of this point is the difference between SARA TITLE III and the Estuary Management Program.
The lesson here is that if the states can be seen as partners and participate in the development of the specific ways to achieve a federally determined end, then we can build a program partnership that does not necessarily increase the costs unilaterally on one level of government
185
and that produces a greater level of satisfaction among the public.
If this sounds like a market approach to government, that's because I think that the private sector should not have a monopoly on customer satisfaction. In the same way that the private sector test markets a new product, major federal initiatives should be tried out in a few select localities before enacting nationwide policies and programs, especially when we have no real understanding of the unintended consequences and costs of the federal action. With more pilot demonstration projects and waivers, the states can serve more effectively as laboratories of democracy. We can gather information on the actual effects of implementing a program and project more accurately the cost of implementation for every level of government. Congress could then revisit the legislation with results in hand before making blanket policy.
Other ideas for improving our fiscal relationship include :
o Safeguards need to be taken with the enactment of any
Balanced Budget Amendment to ensure that costs will not be shifted to the states.
186
As I understand, a vote on an amendment may be scheduled soon. If a balanced budget is going to be constitutionally required, then there needs to be some language added to ensure that deficit reduction does not happen at the expense of states and localities and disproportionately impact domestic discretionary spending.
o Congress should improve its fiscal note process by
including reconciliation, tax and appropriations bills, and you might also consider having the General Accounting Office (GAO) or some other entity do a post- implementation review 3 years afterward to see if the identified costs were anywhere close to the target.
o Also, you could strengthen organizations such as the ACIR, and build upon the positive work of this intergovernmental review body by giving them the responsibility to analyze the feasibility of certain mandates before the legislation is passed.
o Finally, I would recommend that you consider seriously all of the mandate relief bills that were discussed by the Senators in their earlier testimony, as well as others such as the FAIR (Fiscal Accountability and Intergovernmental Reform) Act legislation that was recently introduced by Senators Domenici and Dorgan and has some 220 House co-sponsors. You should also
187
consider specific mandates contemplated in other pending legislation, and if they are passed, provide the funds necessary to carry out those mandates as a matter of fiscal fairness for states and localities and to ensure effective program implementation.
To conclude, the Executive Order that President Clinton signed last week was a tremendous start. I am very pleased that the Executive Branch gave the states substantial input in the development of the order. But, fundamental mandate relief requires Congressional action; our constituents are not going to settle for anything less than complete fiscal responsibility at all levels of government.
Again, thank you, Mr. Chairman, for holding this hearing and listening to perspectives of the states. On behalf of the Delaware Legislature and my legislative colleagues across the country represented through the NCSL, we will strongly support federal legislation that provides relief from unfunded federal mandates.
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Statement by Senator Glenn For The Record
I would like to describe my efforts to bring the matter of mandates to the attention of the Clinton Administration. On March 24, I wrote President Clinton, along with Senators Levin and Dorgan, asking that he seriously consider the issue of regulatory mandates on smaller governments during the formulation of the Administration's regulatory review process .
I was pleased, therefore, when the Administration issued its regulatory review order (E.O. 12866) with its attention to involving State and local goverments in the rulemaking process, and in instructing Federal agencies to more closely scrutinize potential regulatory burdens on the States and localities .
The issuance last week of E.O. 12875, "Enhancing the Intergovernmental Partnership," strengthened this commitment to reducing burdens on State and local governments.
To find out more clearly how the Administration plans to impelement the two orders, I wrote to OIRA Administrator Sally Katzen on October 27th. I have now received her response. It further reassures me that this Admininistration is serious about reducing regulatory burdens on States and localities. I will place all of these letters and the executive orders into the record of today's hearing.
189
JOHN i, ihk Ohio Chairman
SAM NUN N GfO*Gi* WliAIAMV ROT* J« DELAWARE
CAR, LEVIN M)CH.WAS TCOSTFVtNl A.ASKA
jim&aSSIB iinih-.i: WILLIAM 5 COHEN. ma>N[
DAvid Rhtq* MUAN&4S In*; COChkas HUSSISSf
JOS!"*. LltfilRMAN CONMCTICLT JOHN MttAlN AM. ZONA DANIEL * ANANA HAWAi. 6'RON L DORGAN NORTH DAKOTA
HONARD WtlSS 5TA<« DIRECTOR FRANKLIN G POLK MINORITY STAFF DIRECTOR AND CHIEF COUNSIl
Hnitrt States Senate
COMMITTEE ON GOVERNMENTAL AFFAIRS
WASHINGTON. DC 20510-6250
October 27, 1993
Ms. Sally Katzen
Administrator
Office of Information and Regulatory Affairs
Office of Management and Budget
Executive Office of the President
Washington, D.C. 20503
Dear Ms. Katzen:
When you came before our Committee for your confirmation hearing earlier this year, we agreed on the need for you to give highest priority to revising the regulatory review process inherited by the Clinton Administration. I believe it is fair to say that we have seen eye to eye all along on the need for the President to have a mechanism that provides both rigorous analysis of agency regulatory proposals and public accountability for regulatory review decisions.
Accordingly, I was pleased when on September 30th, President Clinton issued Executive Order No. 12866, "Regulatory Planning and Review." The order sets forth a clear set of regulatory principles, a sensible regulatory review process, and needed sunshine procedures to ensure public accountability for both rulemaking and regulatory review decisions.
I am writing to you today concerning what may well be the first test of the new order. As you know, among continuing complaints about Federal regulation, some of the most compelling come from State and local governments who are finding it very hard to comply with the reguirements of Federal mandates. E.O. 12866 addresses this problem by reguiring rulemaking agencies to consider the impact and minimize the burdens of regulations on State and local governments. The order also establishes several points of access for those governments to identify burdensome rules and advise agencies and 0MB on reducing their burdens.
These regulatory review reguirements have now been reinforced by President Clinton's October 26th issuance of another executive order, "Enhancing the Intergovernmental Partnership." This new order spells out even more clearly the steps agencies must take to try to reduce unfunded
190
Ms. Sally Katzen October 27, 1993 Page 2
mandates. It also parallels many of the provisions of legislation, the "Small Governments Regulatory Improvement and Innovation Act of 1953," which I am introducing today.
In order to understand the details of the Administration's efforts, and hov: they might be affected by my legislation, please describe for me your plans for implementing the two executive orders with regard to reducing mandates on State and local governments. I would also appreciate any other insights or suggestions you may have for further initiatives the Committee might consider to help meet our shared goal of reducing burdensome mandates.
Thank you very much for your attention to these matters. Should you have any questions, please contact David Plocher of the Committee staff (224-4751).
Best regards.
Sincerely,
Glenn Chairman
JG/dp
191
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE Oc MAMAOEMEWT ANO BUDGET WA9HNGTDN. O.C. 20503
NOV - 2 1993
Honorable John Glenn
Chairman
Committee on Governmental Affairs
United States Senate
Washington, D. C. 10510-6250
Dear Mr. Chairman:
Thank you for your letter of Octcb- 27, 1993, asking about our plans for implementing Executive Order Nos. 12866 and 12875 with regard to reducing unfunded mandates on State and local governments .
E.o. 12866, "Regulatory Planning and Review," contains provisions designed to assure that as part of their rulemaking development process agencies consider and seek to reduce the cost of implementing Federal mandates to state, local and tribal governments. Among other things, the Order provides that each agency "shall assess the effects of Federal regulations" on these units of government, "including specifically the availability of resources to carry out those mandates, and seek to minimize those burdens . . ., consistent with achieving regulatory objectives." The Order further provides that "[w]herever feasible, agencies shall seek views of appropriate State, local, and tribal officials before imposing regulatory requirements that might significantly or uniquely affect" them.
E.O. 12875 is more specific. It provides, among other things: "To the extent feasible and permitted by law, no . . . agency shall promulgate any regulation that is not required by statute and that creates a mandate upon a State, local, or tribal government, unless:
"(1) funds necessary to pay the direct costs incurred by the State, local, or tribal government in complying with the mandate are provided by the Federal Government; or
"(2) the agency, prior the formal promulgation of regulations containing the proposed mandate, provides the [OMB Director] a description of the extent of the agency's prior consultations with representatives of affected State, local, and tribal governments, the nature of their concerns, any written communications submitted to the agency by such units of government, and the agency's position supporting the need to issue the regulation containing the mandate."
192
E.O. 12B66 assigns the Office of Information and Regulatory Affairs (OIRA) the task of ensuring that agencies fulfill their responsibilities when they are developing significant regulatory actions. The definition of significant regulatory actions includes "any regulatory action that is likely to result in a rule that nay [h]ave an annual effect on the economy of $100 million or more or adversely affect in a material way . . . state, local, or tribal governments or communities." For each regulatory action that OIRA reviews, an agency is to include "an assessment of the potential costs and benefits of the regulatory action, including an explanation of the manner in which the regulatory action . . . avoids undue interference with State, local, and tribal governments in the exercise of their governmental functions." For those regulatory actions that are "economically significant" within the terms of the Order, an agency is also to include an assessment of "costs and benefits of potentially effective and reasonably feasible alternatives to the planned regulation, . . . and an explanation why the planned regulatory action is preferable to the identified potential alternatives. "
E.O. 12866 also establishes a mechanism by which oira is to consult regularly with representatives of state and local governments: "The Administrator of OIRA shall meet quarterly with representatives of state, local, and tribal governments to identify both existing and proposed regulations that may uniquely and significantly affect those governmental entities." The first of these conferences will take place in Washington, D.c. on December 6, 1993. At that conference, panels of experts from State, local, and tribal governments will discuss such subjects affecting intergovernmental relations as (l) the nature of the regulatory partnership between Federal, State, local end tribal government; (2) the burdens imposed on State, local and tribal governments by existing Federal regulations; and (3) the manner in which State, local and tribal governments should be involved in the development and assessment of Federal regulations. I anticipate that one of the products of this first conference will be a number of initiatives to facilitate better communications among all units of government concerning Federal regulatory requirements .
Briefly stated, these two Executive Orders require agencies to consider the implications of their actions on state, local and tribal governments; to consider alternatives to the planned regulation; to discuss both the planned regulation and the alternatives with representatives of the units of government; and to satisfy both themselves and the Director of 0MB that they have done everything they can to reduce or eliminate any unfunded mandates as a result of their regulatory activities. I have discussed the importance of these requirements with the OIRA staff, and we will be incorporating them into our review process. We will be systematically evaluating agencies' analyses regarding
- 2 -
193
unfunded mandates that may be included in regulatory actions submitted for review. "If unfunded mandates do exist, we will be working closely with agencies to ensure that they have satisfied the consultative requirements of the applicable Orders.
Thank you for your interest and support for the concerns of i, local, and tribal governments. Should you have any :ione, please do not hesitate to call.
State, questions
Sincerely yours,
SallyNSatzen Administrator Office of Information and Regulatory Affairs
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Federal Relator Vol. 53. No. :C7 Thursday, October ZS. 1993
58093
Presidential Documents
Title 3—
The President
Executive Oder 1287S of October 26, 1993 Enhancing the Intergovernmental Partnership
The Federal Government is charged with protecting the health and safety, as well as promoting other national interests, of the American people. How- ever, the cumulative effect of unfunded Federal mandates has increasingly strained the budgets of State, local, and tribal governments. In addition, the cost, complexity, and delay in applying for and receiving waivers from Federal requirements in appropriate cases have hindered State, local, and tribal governments from tailoring Federal programs to meet the specific or unique needs of their communities. These governments should have more flexibility to design solutions to the problems faced by citizens in this country without excessive micromanagement and unnecessary regulation from the Federal Government.
THEREFORE, by the authority vested in me as President by the Constitution and the laws of the United States of America, and in order to reduce the imposition of unfunded mandates upon State, local, and tribal govern- ments; to streamline the application process for and Increase the availability of waivers to State, local, and tribal governments: and to establish regular and meaningful consultation and collaboration with State, local, and tribal governments on Federal matters that significantly or uniquely affect their communities, it is hereby ordered as follows:
Section 1. Beduction of Unfunded Mandates, (a) To the extent feasible and permitted by law. no executive department or agency ("agency") shall promulgate any regulation that Is not required by statute and that creates a mandate upon a State, local, or tribal government, unless:
(1) funds necessary to pay the direct costs incurred by the State. local, or tribal government in complying with the mandate are provided by the Federal Government; or
(2) the agency, prior to the formal promulgation of regulations containing the proposed mandate, provides to the Director of the Office of Management and Budget a description of the extent of the agency's prior consultation with representatives of affected State, local, and tribal governments, the nature of their concerns, any written communications submitted to the agency by such units of government, and the agency's position supporting the need to issue the regulation containing the mandate.
(b) Each agency shall develop an effective process to permit elected officials and other representatives of State, local, and tribal governments to provide meaningful arid timely Input in the development of regulatory _ proposals containing significant unfunded mandates.
Sec. 2. Increasing Flexibility for State and Local Waivers, (a) Each agency shall review its waiver application process and take appropriate steps to streamline that process.
(b) Each agency shall, to the extent practicable and permitted by law, consider any application by a State, local, or tribal government for a waiver of statutory or regulatory requirements In connection with any program administered by that agency with a general view toward increasing opportuni- ties for utilizing flexible policy approaches at the State, local, and tribal level in cases In which the proposed waiver is consistent with the applicable Federal policy objectives and is otherwise appropriate.
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58094 Federal Register / Vol. 56. No. 207 / Thursday, October 28, 1993 / Presidential Documents
FK Doc S>-»771
MM »-3f-*X lia J «oil
MStop qkI* 31M-01-P
(?) Each agenrv shall, lo the fullest exttn: practicable and pcrmitvec b\ law, render a decision upon e complete application for a waiver within 120 days of receipt of such application by the agency. If the application for a waiver is not granted, the agency shall provide the applicant with timely written notice of the decision and the reasons therefor.
(d) This section applies only to statutory or regulatory requirements of the programs that are discretionary and subject to waiver by the agency. Sec 3. Responsibility for Agency Implementation. The Chief Operating Officer of each agency shall be responsible for ensuring the Implementation cf and compliance with this order.
Sec 4. Executive Order No. 12B66. This order shall supplement but not supersede the requirements contained in Executive Order No. 12866 ("Regu- latory Planning and Review").
Sec. 5. Scope, (a) Executive agency means any authority of the United States that is an "agency" under 44 U.S.C 3502(1), other than those consid- ered to be independent regulatory agencies, as defined in 44 U.S.C 3502(10).
(b) Independent agencies are requested to comply with the provisions of this order.
Sec. 6. Judicial Review. This order is intended only to improve the internal management of the executive branch and is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or equity by a party against the United States, its agencies or instrumen- talities, its officers or employees, or any other person.
Sec 7. Effective Date. This order shall be effective 90 days after the date of this order.
\)jVJjilJJU\/3\k>J<>*r^
THE WHITE HOUSE, October 26, 1993.
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Vo!. '.«. No. ISO Monday. October 4. 1983
51735
Presidential Documents
Title 3—
The President
Executive Order 12866 of September 30, 1993 Regulatory Planning and Review
The American people deserve a regulatory system that works for them, not against them: a regulatory system that protects and improves their health, safety, environment, and well-being and improves the performance of the economy without imposing unacceptable or unreasonable costs on society: regulatory policies that recognize that the private sector and private markets are the best engine for economic growth; regulatory approaches that respect the role of State, local, and tribal governments: and regulations that are effective, consistent, sensible, and understandable. We do not have such a regulatory system today.
With this Executive order, the Federal Government begins a program to reform and make more efficient the regulatory process. The objectives of this Executive order are to enhance planning and coordination with respect to both new and existing regulations; to reaffirm the primacy of Federal agencies in the regulatory decision-making process: to restore the integrity and legitimacy of regulatory review and oversight; and to make the process more accessible and open to the public. In pursuing these objectives, the regulatory process shall be conducted so as to meet applicable statutory requirements and with due .regard to the discretion that has been entrusted to the Federal agencies.
Accordingly, by the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered as follows:
Section 1. Statement of Regulatory Philosophy and Principles, (a) The Regu- latory Philosophy. Federal agencies should promulgate only such regulations as are required by law, are necessary to interpret the law, or are made necessary by compelling public need, such as material failures of private markets to protect or improve the health and safety of the public, the environment, or the well-being of the American people. In deciding whether and how to regulate, agencies should assess all costs and benefits of available regulatory alternatives, including the alternative of not regulating. Costs and benefits shall be understood to include both quantifiable measures (to the fullest extent that these can be usefully estimated) and qualitative meas- ures of costs and benefits that are difficult to quantify, but nevertheless essential to consider. Further, in choosing among alternative regulatory ap- proaches, agencies should select those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity), unless a statute requires another regulatory approach.
(b) The Principles of Regulation. To ensure that the agencies' regulatory programs are consistent with the philosophy set forth above, agencies should adhere to the following principles, to the extent permitted by law and where applicable:
(1) Each agency shall identify the problem that it intends to address (including, where applicable, the failures of private markets or public institu- tions that warrant new agency action) as well as assess the significance of that problem.
(2) Each agency shall examine whether existing regulations (or other law) have created, or contributed to, the problem that a new regulation
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51736 Federal Register t Vol 'SB. No 'W / Monday. October^: 1WH / PresidentiaT Documents
is intended in correct and whether liiosi: regulation!! lor other law, should be modified to achieve the intended goal of regulation more effectively.
(3) Each agency shall identify and assess available alternatives to direct regulation, including providing economic incentives to encourage the desired behavior, such as user fees or marketable permits, or providing information upon which choices can be made by the public.
(4) In setting regulatory priorities, each agency shall consider, to the extent reasonable, the degree and nature of the risks posed by various substances or activities within its jurisdiction.
(5) When an agency determines that a regulation is the best available method of achieving the regulatory objective, it shall design its regulations in the most cost-effective manner to achieve the regulatory objective. In doing so, each agency shall consider incentives for innovation, consistency, predictability, the costs of enforcement and compliance (to the government, regulated entities, and the public), flexibility, distributive impacts, and eq- uity.
(G) Each agency shall assess both the costs and the benefits of the intended regulation and, recognizing that some costs and benefits are difficult to quantify, propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs.
(7) Each agency shall base its decisions on the best reasonably obtainable scientific, technical, economic, and other information concerning the need for. and consequences of. the Intended regulation. r
(8) Each agency shall identify and assess alternative forms of regulation and shall, to the extent feasible, specify performance objectives, rather than specifying the behavior or manner of compliance that regulated entities must adopt.
(9) Wherever feasible, agencies shall seek views of appropriate State, local, and tribal officials before imposing regulatory requirements that might significantly or uniquely affect those governmental entities. Each agency shall assess the effects of Federal regulations on State. local, and tribal governments. Including specifically the availability of resources to carry out those mandates, and seek to minimize those burdens that uniquely or significantly affect such governmental entities, consistent with achieving regulatory objectives. In addition, as appropriate, agencies shall seek to harmonize Federal regulatory actions with related State, local, and tribal regulatory and other governmental functions.
(10) Each agency shall avoid regulations that are inconsistent, incompat- ible, or duplicative with its other regulations or those of other Federal agencies.
(11) Each agency shall tailor its regulations to impose the least burden on society, including individuals, businesses of differing sizes, and other entities (including small communities and governmental entities), consistent with obtaining the regulatory objectives, taking into account, among other things, and to the extent practicable, the costs of cumulative regulations.
(12) Each agency shall draft its regulations to be simple and easy to understand, with the goal of minimizing the potential for uncertainty and litigation arising from such uncertainty- Sec 2. Organization. An efficient regulatory planning and review process is vital to ensure that the Federal Government's regulator)' system best serves the American people.
(a) The Agencies. Because Federal agencies are the repositories of signifi- cant substantive expertise and experience, they are responsible for developing regulations and assuring that the regulations are consistent with applicable law, the President's priorities, and the principles set forth in this Executive order.
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(b) Titc Oftict u! Mana^tnivnt unci Uudfivl. Coordinated nwi-v. u: agency rulemaking is necessary to ensure that regulations arc consistent with applica- ble law, the President's priorities, and the principles set forth in this fcxecu- tive order, and that decisions made by one agency do not conflict with the policies or actions taken or planned by another agency. The Office of Management and Budget IOMB] shall carry out that review function. Within OMB. the Office of Information and Regulatory Affairs (OIRA) is the repository of expertise concerning regulatory issues, including methodolo- gies and procedures that affect more than one agency, this Executive order, and the President's regulatory policies. To the extent permitted by law, OMB shall provide guidance to agencies and assist the President, the Vice President, and other regulatory policy advisors to the President in regulatory- planning and shall be the entity that reviews individual regulations, as provided by this Executive order.
(c) The Vice President. The Vice President is the principal advisor to the President on, and shall coordinate the development and pesentation of recommendations concerning, regulatory policy, planning, and review, as set forth in this Executive order. In fulfilling their responsibilities under this Executive order, the President and the Vice President shall be assisted by the regulatory policy advisors within the Executive Office of the President and by such agency officials and personnel as the President and the Vice President may, from time to time, consult.
Sec. 3. Definitions. For purposes of this Executive order: (a) "Advisors" refers to such regulatory policy advisors to the President as the President and Vice President may from time to time consult, including, among others: (1) the Director of OMB; (2) the Chair (or another member) of the Council of Economic Advisers; (3) the Assistant to the President for Economic Policy; (4) the Assistant to the President for Domestic Policy; (5) the Assistant to the President for National Security Affairs; (6) the Assistant to the President for Science and Technology; (7) the Assistant to the President for Intergovern- mental Affairs; (8) the Assistant to the President and Staff Secretary; (9) the Assistant to the President and Chief of Staff to the Vice President; (10) the Assistant to the President and Counsel to the President; (11) the Deputy Assistant to the President and Director of the White House Office on Environmental Policy; and (12) the Administrator of OIRA, who also shall coordinate communications relating to this Executive order among the agencies, OMB, the other Advisors, and the Office of the Vice President.
(b) "Agency." unless otherwise indicated, means any authority of the United States that is an "agency" under 44 U.S.C. 3502(1). other than those considered to be independent regulatory agencies, as defined in 44 U.S.C. 3502(10).
(c) "Director" means the Director of OMB.
(d) "Regulation" or "rule" means an agency statement of general applicabil- ity and future effect, which the agency intends to have the force and effect of law. that is designed to implement, interpret, or prescribe law or policy or to describe the procedure or practice requirements of an agency. It does not. however, include:
(1) Regulations or rules issued in accordance with the formal rulemaking provisions of 5 U.S.C. 556, 557;
(2) Regulations or rules that pertain to a military or foreign affairs function of the United States, other than procurement regulations and regula- tions involving the import or export of non-defense articles and services;
(3) Regulations or rules that are limited to agency organization, manage- ment, or personnel matters; or
(4) Any other category of regulations exempted by the Administrator of OKA.
(e) "Regulatory action" means any substantive action by an agency (nor- mally published in the Federal Register) that promulgates or is expected
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to lint: i;> the promulgation of » final ruit- or regulation. i:u.!;:d;nr. notice.1 c' inqi..-\ advance notices of proposed rulemaking, and notices of proposed rulemaking
(f) "Significant regulatory action" means any regulatory action that is likely to result in a rule that may:
(1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities:
(2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency:
(3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof: or
(4) Raise novel legal or policy issues arising out of legal mandates, the Presidenfs priorities, or the principles set forth in this Executive order. Sec. 4. Planning Mechanism. In order to have an effective regulatory program, to provide for coordination of regulations, to maximize consultation and the resolution of potential conflicts at an early stage, to involve the public and its State, local, and tribal officials in regulatory planning, and to ensure that new or revised regulations promote the President's priorities and the
finnciples set forth in this Executive order, these procedures shall be fol- owed, to the extent permitted by law: (a) Agencies' Policy Meeting. Early in each year's planning cycle, the Vice President shall convene a meeting of the Advisors and the heads of agencies to seek a common understanding of priorities and to coordinate regulatory efforts to be accomplished in the upcoming year.
(b) Unified Regulatory Agenda. For purposes of this subsection, the term "agency" or "agencies" shall also include those considered to be independent regulatory agencies, as defined in 44 U.S.C. 3502(10). Each agency shall prepare an agenda of all regulations under development or review, at a time and in a manner specified by the Administrator of OIRA. The description of each regulatory action shall contain, at a minimum, a regulation identifier number, a brief summary of the action, the legal authority for the action. any legal deadline for the action, and the name and telephone number of a knowledgeable agency official. Agencies may incorporate the information required under 5 U.S.C. 602 and 41 U.S.C. 402 into these agendas.
(c) The Regulatory Plan. For purposes of this subsection, the term "agency" or "agencies" shall also include those considered to be independent regu- latory agencies, as defined in 44 U.S.C. 3502(10). (1) As part of the Unified Regulatory Agenda, beginning in 1994. each agency shall prepare a Regulatory Plan (Plan) of the most important significant regulatory actions that the agency reasonably expects to issue in proposed or final form in that fiscal year or thereafter. The Plan shall be approved personally by the agency head and shall contain at a minimum:
(A) A statement of the agency's regulatory objectives and priorities and how they relate to the President's priorities:
(B) A summary of each planned significant regulatory action including, to the extent possible, alternatives to be considered and preliminary estimates of the anticipated costs and benefits:
(C) A summary of the legal basis for each such action, including whether any aspect of the action is required by statute or court order:
(D) A statement of the need for each such action and. if applicable, how the action will reduce risks to public health, safety, or the environment, as well as how the magnitudo of the risk addressed by the action relates to other risks within the jurisdiction of the agency;
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(E) TIk ag'-ncv'.s schedule for action, iiu.iuding ;• sliitemi:'.: (if ai.\ ii|>|i«i- cablc statutory or judicial deadlines, and
(F) The name, address, and telephone number of a person the public may contact for additional information about the planned regulatory action
(2) Each agency shall forward its Plan to OIRA by June 1st of each year.
(3) Within 10 calendar days after OIRA has received an agency's Plan. OIRA shall circulate it to other affected agencies, the Advisors, and the Vice President.
(4) An agency head who believes that a planned regulatory action of another agency may conflict with its own policy or action taken or planned shall promptly notify, in writing, the Administrator of OIRA. who shall forward that communication to the issuing agency, the Advisors, and the Vice President.
(5) If the Administrator of OIRA believes that a planned regulatory action of an agency may be inconsistent with the President's priorities or the principles set forth in this Executive order or may be in conflict with any policy or action taken or planned by another agency, the Adminis- trator of OIRA shall promptly notify, in writing, the affected agencies, the Advisors, and the Vice President.
(6) The Vice President, with the Advisors' assistance, may consult with the heads of agencies with respect to their Plans and, in appropriate instances, request further consideration or inter-agency coordination.
(7) The Plans developed by the issuing agency shall be published annu- ally in the October publication of the Unified Regulatory Agenda. This publication shall be made available to the Congress; State, local, and tribal governments; and the public. Any views on any aspect of any agency Plan, including whether any planned regulatory action might conflict with any other planned or existing regulation, impose any unintended consequences on the public, or confer any unclaimed benefits on the public, should be directed to the issuing agency, with a copy to OIRA.
(d) Regulatory Working Croup. Within 30 days of the date of this Executive order, the Administrator of OIRA shall convene a Regulatory Working Group ("Working Group"), which shall consist of representatives of the heads of each agency that the Administrator determines to have significant domestic regulatory responsibility, the Advisors, and the Vice President. The Adminis- trator of OIRA shall chair the Working Group and shall periodically advise the Vice President on the activities of the Working Group. The Working Group shall serve m> a forum to assist agencies in identifying and analyzing important regulatory issues (including, among others (1) the development of innovative regulatory techniques, (2) the methods, efficacy, and utility of comparative risk assessment in regulatory decision-making, and (3) the development of short forms and other streamlined regulatory approaches for small businesses and other entities). The Working Group shall meet at least quarterly and may meet as a whole or in subgroups of agencies with an interest in particular issues or subject areas. To inform its discussions, the Working Group may commission analytical studies and reports by OIRA. the Administrative Conference of the United States, or any other agency.
(e) Conferences. The Administrator of OIRA shall meet quarterly with representatives of State, local, and tribal governments to identify both existing and proposed regulations that may uniquely or significantly affect those governmental entities. The Administrator of OIRA shall also convene, from time to time, conferences with representatives of businesses, nongovern- mental organizations, and the public to discuss regulatory issues of common concern.
Sec. 5. Existing Regulations. In order to reduce the regulatory burden on the American people, their families, their communities, their State, local. and tribal governments, and their industries; to determine whether regula-
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tions promulgated by tilt: executive brand, oi tn»- heaeral Governmen: have become unjustified or unnecessary as s result of changed circumstances; to confirm that regulations are both compatible with each other and not duplicative or inappropriately burdensome in the aggregate; to ensure that all regulations are consistent with the President's priorities and the principles set forth in this Executive order, within applicable law; and to otherwise improve the effectiveness of existing regulations: (a) Within 90 days of the date of this Executive order, each agency shall submit to OIKA a program, consistent with ;;•- resources and regulatory priorities, under which the agency will periodically review its existing significant regulations to deter- mine whether any such regulations should be modified or eliminated so as to make the agency's regulalory program more effective in achieving the regulatory objectives, less burdensome, or in greater alignment with the President's priorities and the principles set forth in this Executive order. Any significant regulations selected for review shall be included in the agency's annual Plan. The agency shall also identify any legislative mandates that require the agency to promulgate or continue to impose regulations that the agency believes are unnecessary or outdated by reason of changed circumstances.
(b) The Administrator of OIRA shall work with the Regulatory Working Group and other interested entities to pursue the objectives of this section. State, local, and tribal governments are specifically encouraged to assist in the identification of regulations that impose significant or unique burdens on those governmental entities and that appear to have outlived their justifica- tion or be otherwise inconsistent with the public interest.
(c) The Vice President, in consultation with the Advisors, may identify for review by the appropriate agency or agencies other existing regulations of an agency or groups of regulations of more than one agency that affect a particular group, industry, or sector of the economy, or may identify legislative mandates that may be appropriate for reconsideration by the Congress.
Sec. C. Centralized Review of Regulations. The guidelines set forth below shall apply to all regulatory actions, for both new and existing regulations, by agencies other than those agencies specifically exempted by the Adminis- trator of OIRA:
(a) Agency Responsibilities. (1) Each agency shall (consistent with its own rules, regulations, or procedures) provide the public with meaningful participation in the regulatory process. In particular, before issuing a notice of proposed rulemaking, each agency should, where appropriate, seek the involvement of those who are intended to benefit from and those expected to be burdened by any regulation (including, specifically. State, local, and tribal officials). In addition, each agency should afford the public a meaning- ful opportunity to comment on any proposed regulation, which in most cases should include a comment period of not less than GO days. Each agency also is directed to explore and. where appropriate, use consensual mechanisms for developing regulations, including negotiated rulemaking.
(2) Within 60 days of the date of this Executive order, each agency head shall designate a Regulatory Policy Officer who shall report to the agency head. The Regulatory Policy Officer shall be involved at each stage of the regulatory process to foster the development of effective, innovative, and least burdensome regulations and to further the principles set forth in this Executive order.
(3) In addition to adhering to its own rules and procedures and to the requirements of the Administrative Procedure Act. the Regulatory Flexi- bility Act. the Paperwork Reduction Act. and other applicable law. each agency shall develop its regulatory actions in a timely, fashion and adhere to the following procedures with respect to a regulatory action:
(A) Each agency shall provide OIRA. at such times and in the manner specified by the Administrator of OIRA. with a list of its planned regulatory actions, indicating those which the agency believes are significant regulatory
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actions within the meaning of this Executive order. Absent a material change in the development of the planned regulator)' action, those not designated as significant will not be subject to review under this section unless, within 10 working days of receipt of the list, the Administrator of OIRA notifies the agency that OIRA has determined that a planned regulation is a significant regulatory action within the meaning of this Executive order. The Adminis- trator of OIRA may waive review of any planned regulatory action designated by the agency as significant, in which case the agency need not further comply with subsection (a)(3)(B) or subsection (a)(3)(C) of this section.
(B) For each matter identified as, or determined by the Administrator of OIRA to be, a significant regulatory action, the issuing agency shall provide to OIRA:
(i) The text of the draft regulatory action, together with a reasonably detailed description of the need for the regulatory action and an explanation of how the regulatory action will meet that need; and
(ii) An assessment of the potential costs and benefits of the regulatory action, including an explanation of the manner in which the regulatory action is consistent with a statutory mandate end, to the extent permitted by law, promotes the President's priorities end avoids undue interference with State, local, and tribal governments in the exercise of their governmental functions.
(C) For those matters identified as, or determined by the Administrator of OIRA to be, a significant regulatory action within the scope of section 3(f)(1). the agency shall also provide to OIRA the following additional infor- mation developed as part of the agency's decision-making process (unless prohibited by law):
(i) An assessment, including the underlying analysis, of benefits antici- pated from the regulatory action (such as, but not limited to, the promotion of the efficient functioning of the economy and private markets, the enhance- ment of health and safety, the protection of the natural environment, and the elimination or reduction of discrimination or bias) together with, to the extent feasible, a quantification of those benefits:
(ii) An assessment, including the underlying analysis, of costs anticipated from the regulatory action (such as, but not limited to. the direct cost both to the government in administering the regulation and to businesses and others in complying with the regulation, and any adverse effects on the efficient functioning of the economy, private markets (including produc- tivity, employment, and competitiveness), health, safety, and the natural environment), together with, to the extent feasible, a quantification of those costs; and
(iii) An assessment, including the underlying analysis, of costs and benefits of potentially effective and reasonably feasible alternatives to the planned regulation, identified by the agencies or the public (including im- proving the current regulation and reasonably viable nonregulatory actions), and an explanation why the planned regulatory action is preferable to the identified potential alternatives.
(D) In emergency situations or when an agency is obligated by law to act more quickly than norma) review procedures allow, the agency shall notify OIRA as soon as possible and, to the extent practicable, comply with subsections (a)(3)(B) and (C) of this section. For those regulatory actions that are governed by a statutory or court-imposed deadline, the agency shall, to the extent practicable, schedule rulemaking proceedings so as to permit sufficient time for OIRA to conduct its review, as set forth below in subsection (b)(2) through (4) of this section.
(£) After the regulatory action has been published in the Federal Register or otherwise issued to the public, the agency shall:
(i) Make available to the public the information set forth in subsections (a)(3)(B) and (C);
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|:iS Idcnliiv u>r liif jiuuln. in <i ton:i>l«::r. ciear. and simpii niannci. the substantive changes between the draft submitted to OIRA for review and the action subsequently announced; and
(iii) Identify for the public those changes i:i the regulatory action that were made a: the suggestion or recommendation of OIRA.
(F) All information provided to the public by the agency shall be in plain, understandable language.
(b) OIRA Responsibilities. The Administrator of OIRA shall provide mean- ingful guidance and oversight so that each agency's regulatory actions are consistent with applicable law. the President's priorities, and the principles set forth in this Executive order and do not conflict with the policies or actions of another agency. OIRA shall, to the extent permitted by law. adhere to the following guidelines:
(1) OIRA may review only actions identified by the agency or by OIRA as significant regulatory actions under subsection (a)(3)(A) of this section.
(2) OIRA shall waive review or notify the agency in writing of the results of its review within the following time periods:
(A) For any notices of inquiry, advance notices of proposed rulemaking, or other preliminary regulatory actions prior to a Notice of Proposed Rule- making, within 10 working days after the dale of submission of the draft action to OIRA:
(B) For all other regulatory actions, within 90 calendar days after the date of submission of the information set forth in subsections (a)(3)(B) and (C) of this section, unless OIRA has previously reviewed this information and. since that review, there has been no material change in the facts and circumstances upon which the regulatory action is based, in which case, OIRA shall complete its review within 45 days: and
(C) The review process may be extended (1) once by no more than 30 calendar days upon the written approval of the Director and (2) at the request of the agency head.
(3) For each regulatory action that the Administrator of OIRA returns to an agency for further consideration of some or all of its provisions, the Administrator of OIRA shall provide the issuing agency a written expla- nation for such return, setting forth the pertinent provision of this Executive order on which OIRA is relying. If the agency head disagrees with some or all of the bases for the return, the agency head shall so inform the Administrator of OIRA in writing.
(4) Except as otherwise provided by law or required by a Court, in order to ensure greater openness, accessibility, and accountability in the regulatory review process, OIRA shall be governed by the following disclosure requirements:
(A) Only the Administrator of OIRA (or a particular designee) shall receive oral communications initiated by persons not employed by the execu- tive branch of the Federal Government regarding the substance of a regulatory action under OIRA review;
(B) All substantive communications between OIRA personnel and per- sons not employed by the executive branch of the Federal Government regarding a regulatory action under review shall be governed by the following guidelines: (i) A representative from the issuing agency shall be invited to any meeting between OIRA personnel and such person(s):
(ii) OIRA shall forward to the issuing agency, within 10 working days of receipt of the comrr.unication(s). all written communications, regardless of format, between OIRA personnel and any person who is not employed by the executive branch of the Federal Government, and the dates and names of individuals involved in all substantive oral communications (in- cluding meetings to which an agency representative was invited, but did
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no! attend, and telephone conversations between OIKA personnel and any such persons): and
(iii) OrRA shall publicly disclose relevant information about such communication(s). as set forth below in subsection (b)(4)(C) of this section.
(Cl OIRA shall maintain a publicly available log that shall contain, at a minimum, the following information pertinent to regulator)' actions under review:
(i) The status of all regulatory actions, including if (and if so. when and by whom) Vice Presidential and Presidential consideration was re- quested:
(ii) A notation of all written communications forwarded to an issuing agency under subsection (b)(4)(B)(ii) of this section; and
(iii) The dates and names of individuals involved in all substantive oral communications, including meetings and telephone conversations, be- tween OIRA personnel and any person not employed by the executive branch of the Federal Government, and the subject matter discussed during such communications.
(D) After the regulatory action has been published in the Federal Register or otherwise issued to the public, or after the agency has announced its decision not to publish or issue the regulatory action. OIRA shall make available to the public all documents exchanged between OIRA and the agency during the review by OIRA under this section.
(5) All information provided to the public by OIRA shall be in plain, understandable language.
Sec 7. Resolution of Conflicts. To the extent permitted by law, disagreements or conflicts between or among agency heads or between OMB and any agency that cannot be resolved by the Administrator of OIRA shall be resolved by the President, or by the Vice President acting at the request of the President, with the relevant agency head (and. as appropriate, other interested government officials). Vice Presidential and Presidential consider- ation of such disagreements may be initiated only by the Director, by the head of the issuing agency, or by the head of an agency that has a significant interest in the regulatory action at issue. Such review will not be undertaken at the request of other persons, entities, or their agents.
Resolution of such conflicts shall be informed by recommendations devel- oped by the Vice President, after consultation with the Advisors (and other executive branch officials or personnel whose responsibilities to the President include the subject matter at issue). The development of these recommenda- tions shall be concluded within 60 days after review has been requested.
During the Vice Presidential and Presidential review period, communications with any person not employed by the Federal Government relating to the substance of the regulatory action under review and directed to the Advisors or their staffs or to the staff of the Vice President shall be in writing and shall be forwarded by the recipient to the affected agency(ies) for inclu- sion in the public docket(s). When the communication is not in writing, such Advisors or staff members shall inform the outside party that the matter is under review and that any comments should be submitted in writing.
At the end of this review process, the President, or the Vice President acting at the request of the President, shall notify the affected agency and the Administrator of OIRA of the President's decision with respect to the matter.
Sec 8. Publication. Except to the extent required by law. an agencv shall not publish in the Federal Register or otherwise issue to the public any regulatory action that is subject to review under section 6 of this Executive order until (1) the Administrator of OIRA notifies the agency that OIRA has waived its review of the action or has completed its review without
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any requests for furlner consideration, or [2J the applicable time period in section 6fb)(2! expires without OIRA having notified the agenc% that it is returning the regulatory action for further consideration under section 0(b)(3). whichever occurs first If the terms of the preceding sentence have not been satisfied and an agency wants to publish or otherwise issue a regulatory action, the head of that agency may request Presidential consider- ation through the Vice President, as provided under section 7 of this order Upon receipt of this request, the Vice President shall notify OIRA and th9 Advisors. The guidelines and time period set fPrth in section 7 shall apply to the publication of regulatory actions for which Presidential consider- ation has been sought.
Sec 9. Agency Authority. Nothing in this order shall be construed as displac- ing the agencies" authority or responsibilities, as authorized by law. Sec. 10. Judicial Rexiew. Nothing in this Executive order shall affect any otherwise available judicial review of agency action. This Executive order is intended only to improve the internal management of the Federal Govern- ment and does not create any right or benefit, substantive or procedural enforceable at aw or equity by a party against the United States, its agencies' or instrumentalities, its officers or employees, or any other person. Sec. 11. Revocations Executive Orders Nos. 12291 and 12498 all amend- ments to those Executive orders; all guidelines issued under those orders- and any exemptions from those orders heretofore granted for any category of rule are revoked. ' e '
(XTtUAILUA<ftOuudk^^
I Kit Doc 9J-2452J Filed 10-1-93. 12:12 pm\ Billing code 3195-01-M
THE WHITE HOUSE. September 30. 1993.
^Jh"^ £*?• F°' ,""* PT^!°L* """^ on 'W""* ,htt E"cu"*» outer. •« issue 39 of lh« WeeUy Compilation ol Presidential Documents.
206
JOHN CI.IMN OHtO CHAIRMAN
UU nuxh GtORGlA WIUiAW V MOTH. J- . M LAW ARC
CARL LCVW MICHIGAN T|0 ITvlNS ALASKA
JtM tASflH. TINNf ISfl WMUM I COHIN. HAMI
DAV10 '«iO« ARKANSAS THAO COCHRAN MISSISSIPPI
JOSlPM I LKIIRMAN CONNICTiCUT JOHN UlCajn AAiIONA OANltL « AKAAA. HAWAII
■ '•ON i DOROAN NORTH DAKOTA
Bnitd States Senate
LIOKW WI.SS «.AT, O.MCTO. COMMITTEE ON
-M..U- o «« ■«. .t«. omcto, «. aw town. GOVERNMENTAL AFFAIRS
WASHINGTON. DC 20510-6260
March 24, 1993
The President The White House Washington, DC 20500
Dear President Clinton:
As Members of the Senate Committee with jurisdiction over government management, Federalism and the regulatory process, we are writing you regarding the issue of regulatory-flexibility for small governments and the need for a Federal regulatory process that gives greater weight to the capabilities and resources of small towns, cities, and counties in implementing law. We believe that an improved Federal regulatory and regulatory review process that considers alternate approaches can both strengthen small government compliance with environmental and other statutes, while minimizing the cost burden imposed by these laws.
Hearings held by the Committee in the 100th Congress and a subsequent report by the General Accounting Office (GAO) revealed that the major regulatory agencies were not complying with the Regulatory Flexibility Act (RFA) with respect to the Act's requirement that Federal agencies conduct regulatory-flexibility analyses on proposed regulations expected to impact small governments. More specifically, the agencies were using broad waiver authority granted by the Act to certify that proposed regulations did not have a significant economic impact on "small entities . " Both the hearing record and GAO report showed that various agencies often misused this waiver authority to not do the reg-flex analyses, even when it was later demonstrated that the proposed regulations would substantially affect small governments.
The authority for enforcing the RFA lies with the Chief Counsel for Advocacy at the Small Business Administration (SBA). Given its mission and responsibilities, it comes as no surprise that SBA focuses its reg-flex enforcement efforts on behalf of small business, with assistance to small governments being a much lesser priority. Since the evidence suggests that SBA has even had difficulty in getting agencies to address regulatory-flexibility as it applies to small business, one can easily see how small government concerns fall through the cracks. Also, as GAO noted in its report, SBA lacks expertise on small government issues. The result is that small governments don't have a place to turn to within the Federal bureaucracy that will effectively voice their concerns about flexibility in the regulatory process.
President Clinton March 24, 1992 Page 2
207
In the 101st Congress, the Chairman introduced S. 1758 — the "Small Governments Regulatory Partnership Act" -- with the aim of giving small governments that voice. The legislation would have established small government ombudsmen in each of the major regulatory agencies and would have created an Office for Small Government Advocacy within the Office of Management and Budget (OMB) . This Office would monitor agency compliance with the RFA and propose ways to reduce regulatory costs and burdens on small governments .
However, we decided not to move the legislation because of our objection to the previous Administration's use of OMB's Office of Information and Regulatory Affairs and the White House Council on Competitiveness in regulatory review. Working behind closed doors, those instrumentalities polarized and politicized regulatory review to the detriment of the rulemaking process. Passage of S. 1758 would have been an implicit endorsement of that unfair and secretive process.
While we support the right of the President to review and oversee agency rulemaking, such a process must be based on the principles of openness and sunshine. We applaud your commitment to ensuring that your regulatory review process will meet these tenets and look forward to working with you to accomplish these objectives .
As you work to define your approach to, and assign organizational responsibility for, regulatory review, we ask that you address the need for improving implementation of the RFA, so that the concept of regulatory-flexibility for small governments may actually be translated into practice.
Best regards.
Sincerely,
Cad(\&<(*±^
John Glenn
Sen. Carl Levin
Sen'. Byron Dorgan u
JHG/sok
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KAY BAILEY HUTCHISON
TEXAS l ..- •* >- COMMITTKS:
ARMED SERVICES
6
United States Senate
SMALL BUSINESS COMMERCE. SCIENCE AND TRANSPORTATION
WASHINGTON. DC 20510-4304
November 4, 1993
Honorable John Glenn
Chairman
Committee on Governmental Affairs
United States Senate
Washington, D. C. 20510
Dear Chairman Glenn:
Enclosed please find a statement that I respectfully request be included in the record for the hearing held yesterday pertaining to federal mandates on state and local governments.
I understand you are considering holding another hearing on this matter. Let me strongly encourage you to do so. This is an issue of major concern across the nation and it deserves additional consideration by your Committee. Should another hearing be scheduled, I hereby request the opportunity to testify.
I stand ready to work with you, Members of your Committee and any other Senators to address the problems created by federally unfunded mandates .
Sincerely,
ILEY HUTCHISON
Enclosure
Honorable William V. Roth, Jr. Ranking Minority Member
209
STATEMENT OF THE HONORABLE
KAY BAILEY HUTCHISON
SUBMITTED TO THE SENATE COMMITTEE ON GOVERNMENTAL AFFAIRS
HEARING ON
FEDERAL MANDATES ON STATE AND LOCAL GOVERNMENTS
NOVEMBER 3, 1993
Mayors from across the nation are in an uproar because the financial burdens of environmental mandates on towns and cities resulting from Federal environmental laws and regulations may soon be intolerable. According to a 1992 survey of the National Council of State Legislatures, there are at least 172 major, unfunded federal mandates on the books .
The Heritage Foundation estimates that the indirect cost of federal regulation added to the direct cost of compliance equals at least $900 billion. That puts the cost of federal regulation on par with the $1 trillion in federal income taxes paid each year.
There are major shortcomings in the way Congress and the Executive Branch make decisions on environmental protection:
♦ Environmental issues are addressed in a vacuum, without examining the impacts mandates have on local government costs, personal incomes, private property rights and the economy in general .
♦ Mandates often respond to preconceived rather than real risks and benefits. For example, in order to meet requirements of the Safe Drinking Water Act, residents of Piano, Texas, are paying to have their water tested for a chemical banned 20 years ago that was used to grow pineapples. Pineapples were never grown in Piano, why do they have to test this chemical?
♦ Federal funding for its mandates has decreased, leaving communities with the responsibility of raising tax revenues to meet the requirements .
By EPA's own admission, its share of total environmental spending is expected to decrease from 18% in 1981 to 8% in the year 2000. Correspondingly, in 1981 local governments paid 76% of environmental costs, but will be responsible for 87% in 2000.
Texas cities will spend more than $26 billion on federal environmental mandates during the 1990' s. An estimated $7 billion over just the next five years will be spent to meet federal clean water standards alone. That is money being taken away from schools, health care, housing, law enforcement and fire protection that hard-working, tax-paying citizens want and need.
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♦ Federal mandates are enacted with a "one size fits all" mentality. Here a only a few of the many examples brought to my attention during my trips throughout the State:
LUBBOCK
The City of Lubbock, with a population of 190,000, is located in an arid area. It receives less than 20 inches of rain a year. Here are two examples of the problems they're having:
Subtitle D regulations, governing landfills, require landfills to have, among other things, clay liners to protect from groundwater contamination. Because it is an arid area, there is little threat of groundwater contamination due to rains which might cause landfill leaching. Over the next 8 months, it is going to cost Lubbock $500,000 for a clay liner for one cell in the landfill. It is being paid for by an increase in garbage rates.
The Clean Water Act requires municipalities with a population of 100,000 or more to obtain National Pollutant Discharge Elimination System (NPDES) permits. Due to staff limitations, and the real need to conduct other city business, to meet the deadline for submitting the permit application, Lubbock had to spend $750,000 to contract an outside consultant to prepare the voluminous documentation required for a permit application. Once the permit is issued, they can expect additional compliance costs of between $500,000 and $900,000.
BROWNWOOD
In April 1990 and again in December 1991, the City of Brownwood experienced floods . Brownwood is in the area where it is only expected to flood once every 100 years. The EPA, under its effluent discharge regulations, requires storm water treatment plants to make plans to upgrade when they reach 75% of capacity, and be under construction to upgrade when plants reach 95% of capacity. Because of the back-to-back floods, Brownwood exceeded 95% of plant capacity for 3 months in a row. That's how the EPA makes its determination that additional construction is necessary - - exceeding 95% of capacity for 3 months in a row, regardless of natural disasters, such as floods.
Brownwood is being required to spend $8.1 million to accomplish this. This is on top of the $2.5 million spent in 1982 and the $3.6 million spent in 1986 to upgrade the plant. Brownwood is still paying debt service on the 1982 and 1986 construction.
On Subtitle D landfill regulations, Brownwood is required to be bonded for $300,000 per landfill cell for a 30-year period.
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Over the next five years, the citizens of Brownwood will spend $7.2 million to comply with landfill regulations. To accomplish this, landfill use rates will increase 28% this year, an additional 28% in 1994, and another 10% in 1995. Sewer charges will increase 17% this year and another 17% next year.
Brownwood city officials estimate that 37.5% of the budget for the water department, the sewer department and the landfill is directly related to unfunded federal mandates .
Brownwood has a population of 18,300.
ABILENE
Abilene is spending $1 million for a clay liner for their landfill. Abilene has clay soil and no problem with leaching.
COLLEGE STATION
College Station is being required to set aside $500,000 per year for 13 years to assure that the landfill will be covered when it is no longer in use.
ODESSA
In Odessa, 18% of the $65.7 million 1994 budget is allocated to pay for unfunded state and federal mandated projects. Perhaps one of the most costly items is the $1.2 million that the city must spend to install a clay liner and monitoring wells at the municipal landfill in order to comply with tough environmental regulations.
SAN ANTONIO
In order to meet its EPA mandated water requirements, San Antonio tacked $1.99 per month onto every household water bill and hundreds per month onto every commercial water bill. To affect the increase, the City Council of San Antonio had to pass a bill, which it appropriately titled, "The Federal Storm Water Fee."
States and municipalities should be given the flexibility to ensure good environmental quality through rational, logical and affordable approaches. There must be a way to address legitimate environmental concerns without bankrupting our towns and cities .
Mr. Chairman, I stand ready to work with you, the Members of this Committee and any other Senators to remove these burdens from local governments, and ultimately local taxpayers. I am grateful for the opportunity to submit this statement.
*****
212
STATEMENT OF PETE V. DOMENICI, U.S.S. COMMITTEE ON GOVERNMENTAL AFFAIRS
FISCAL ACCOUNTABILITY AND INTERGOVERNMENTAL REFORM ACT The Issue of "Unfunded Federal Mandates"
MR. CHAIRMAN: I thank you and the committee for holding hearings about the issue of unfunded federal mandates, a concern that needs to be addressed to the fullest extent possible. I appreciate the opportunity of providing my comments to the committee .
Last week, on the "National Unfunded Mandates Day," Senator Dorgan and I introduced S. 1592, the Fiscal Accountability and Intergovernmental Reform Act — identified as the "FAIR Act." This bill is a companion to H.R. 1295, sponsored by Congressmen James Moran and William Goodling, and which now has 189 cosponsors. The "FAIR Act" requires that before a committee of either body reports a bill for consideration, the committee report will contain an analysis — prepared after consultation with the Director of the Congressional Budget Office — of the effects of the new requirements on state and local governments, private businesses, and on economic growth and competitiveness. It also requires federal agencies to provide an economic impact statement at both stages of rulemaking — the proposed and final rule stages .
As I mentioned in my statement when Senator Dorgan and I introduced S. 1592, over this past year I have received a significant increase in appeals from small businesses, as well as state and local officials, about the costs passed onto them from the federal level. Senior-level State officials contact me about the costs of implementing legislation that, on the face of it, seem almost cost neutral, such as the National Voter Registration Act. While the officials support the concept of the legislation, they are legitimately concerned that even a relatively low estimate of $80,000 to implement the components of the bill will require a significant adjustment in the department's budget.
I received a letter from the Mayor of one of my State's small towns, Las Vegas, New Mexico, imploring me to break Washington's habit of making local governments, and ultimately the citizens, pay the cost of federal programs. As the City stated in its press release about its support for "National Unfunded Mandates Day," for cities and towns, unfunded mandates have the "...effect of distorting local priorities by diverting resources that might have been assigned to other community needs." And, like the State officials, the Mayor notes that the City has no quarrel with the intentions of Washington's laws, but that the costs "and tasks of these good intentions are all too often left for us to pay for and carry out . " I would like to have the attached copy of Mayor Tony
213
Martinez ' letter included as a part of these remarks .
2
Mayor Martinez' concerns are justified. The fact of the matter is that we find it far too easy to pass on the costs of our laws to the states, local governments, and the private sector. The national press in Washington, D.C. will report extensively on the substance of our legislation, who supports or does not support the bill, and how the compromises may be reached. However, little information filters back to the state and local levels about the potential economic ramifications of these measures. It is probably fair to say that it is special interest groups that most often attempt to calculate the costs and the concommitant impacts on their membership.
This is not a particularly good or fair way to legislate. While it may ultimately be determined that legislation affecting the social good outweighs the costs, at least that decision should be based upon a solid economic analysis .
I recognize there are numerous measures before this Committee that address the issue of unfunded mandates and that several of my Senate colleagues will be testifying on behalf of their bills . I urge this Committee to consider very seriously the testimony and the bills. I naturally believe that S. 1592 is an excellent approach that can respond to the pleas and protests from our constituents — state and local governments, and the private sector. At the same time, I urge this Committee to investigate thoroughly the full scope of the impacts of unfunded federal mandates and to act upon this serious problem as expeditiously as possible. All of us who care deeply and seriously about the federal budget must also begin to care as passionately about the effects and impacts our actions have upon all the other budgets in this country, keeping in mind that, ultimately, it is the American taxpayers who legitimately demand we do so.
Thank you, again, for the opportunity to share my views with the Members of this Committee.
214
5%
CITY OF LAS VEGAS
P.O. Bo« 179 • 1 700 N Brand Ave. . Las V«ga«. N»w Mejlco 87701 -0500 • 505-4S4-1401
OFFICE OF THE MAYOR
October 15, 1993
The Honorable Senator Pete Domenici SD434 Dirksen Building Washington, D.C. 20510
Dear Senator Domenici :
We are writing on behalf of the citizens and taxpayers of our city to ask you to reduce the current unfunded federal mandate burdens and to urge your action to force change in the way the federal government considers future mandates.
The cumulative impact of federal legislative and regulatory requirements to perform duties without consideration of local circumstances, costs, or capacity, or be subject to civil and criminal penalties for noncompliance directly affects the citizens of our cities and towns. Federal mandates require compliance regardless of other pressing local needs and priorities affecting the health, welfare and safety of our citizens. This ultimately forces a combination of higher local taxes and reduced local services.
Too often federal rules and regulations are inflexible: "one- size-fits-all" requirements that impose unrealistic time frames and specify procedures or facilities where less costly alternatives might be just as effective are becoming the norm. It is time for that to change.
Today we are beginning a public education campaign in our city about what federal mandates are and what they mean to our mutual constituents. We intend to make clear the real costs that are passed on to the taxpaying citizens of our city.
We want to take a leadership role in turning back the tide. Enclosed is a copy of a resolution on federal mandates adopted by our governing body. We would like to report that Congress will act to reduce stormwater and drinking water mandates before this session adjourns. We would like to report that no future law or regulation will be imposed without close consultation with local leaders and without the federal government picking up its share of the costs.
TOfr MaBmlEZ -IB
MeyOr
JOSEPHPBACA fRANK A BEflEED III CBL!ZR.0EeS CAP4.0S D GAU.EG0S SB CM«PiES0.HJ1.0Emi RETNALOO BR1TO MACARID B. GONZAL E7. AHTHUHM.VGH
GounckX M«yor Pnxtn. Councaor Courtclw Counclor C».r..i™- toff*, r„*w~
215
Page 2
We will make progress reports to our governing body and community about what you are doing to help us. So please join our campaign to end unfunded federal mandates and to reintroduce government as a partnership to serve our citizens.
Sincerely,
Tony Martinez Jr. Mayor
TM/vpg
216
U. S. SENATOR
DON NICKLES
— O K L A H O M A
FOR IMMEDIATE RELEASE CONTACT: ERNIE SCHULTZ OR BROOK SIMMONS
202/224-5754
Statement by Senator Don Nickles
The Economic and Employment Impact Act
Before the Senate Committee on Governmental Affairs
November 3, 1993
Mr. Chairman, as we all know the purpose of this hearing is to address the problem of unfunded federal mandates and their cost to state and local governments.
State and local governments are giving a loud and clear signal that they and the citizens they serve can no longer afford the exploding costs of federal mandates. The simple fact is when the federal government passes a mandate on to states and local governments, they must then raise taxes, reduce other spending or borrow. The ultimate loser in this cycle is the U.S. taxpayer. The first step in addressing the problem of federal mandates is to shed light on the costs of those laws and regulations mandated on state and local governments before they become law.
Today, I come here to talk about legislation which Senator Reid and I first introduced last Congress and re-introduced this Congress. This legislation, the Economic and Employment Impact Act, will require a full disclosure of all costs associated with legislation considered by Congress as well as any regulations promulgated by a federal agency.
According to the latest study published in 1991, the total annual cost of federal regulation was estimated to be upwards of $533 billion dollars in 1992 and is projected to be as much as $688 billion by the year 2000. While the American taxpayer is aware of the costs associated with the federal budget, they are less sensitive to the hidden cost of burdensome legislative and regulatory requirements. According to the 1991 report,
217
entitled "The Cost of Regulation" authored by Thomas Hopkins at the Rochester Institute of Technology, the estimated regulatory cost per household in 1992 was $4,272 and will rise to $4,647 in the year 2000.
State and local governments have also been heavily burdened by excessive regulation and unfunded mandates. The National Conference of State Legislatures estimated that 20 direct mandates enacted in the 101st Congress alone cost the states $15 billion over five years, plus another $133 billion in projected costs from regulations required by other statutes passed by the 101st Congress.
In the past two years, at least 30 studies have been published by state and local governments and other institutions on the direct impact of unfunded mandates on specific states or localities. In a March 1993 survey conducted by the Oklahoma Municipal League, the city of Weatherford, Oklahoma (population 10,124) estimated that it will spend $1.1 million or $286 per household this year on unfunded federal mandates. The City of Columbus, Ohio, estimated the environmental compliance costs alone were $62 million in 1991 or about 11 percent of its total budget.
Often, Congress fails to consider how much a new law or regulation increases the cost of products and services to consumers, the loss in jobs when businesses have to cut back in response to growing federal demands or the burden on states and localities. The Economic and Employment Impact Act will make Congress and the Administration aware of the impact, positive and negative, that legislation has on the private sector, individuals, and state and local governments.
This proposal would require that all legislation considered by Congress be accompanied by an "economic and employment impact statement." The statements will contain the positive and negative effects on employment, Cross Domestic Product, the ability of U.S. industries to compete internationally, the cost to consumers, and the cost to state and local governments. Further, it would require that proposed and final regulations promulgated by Executive branch agencies also be accompanied by such a statement.
To prevent an unwarranted delay in the legislative and regulatory process, a
218
detailed assessment will not be required if a preliminary analysis indicates that the aggregate monetary effect of the legislation is less than $100 million or results in an employment change of less than 10,000 jobs. Congress may also waive the provisions regarding the impact statement by a three-fifths vote of either House.
The co-author of this legislation, Senator Reid, and I have made efforts to move the Economic and Employment Impact Act through the legislative process. Before today, no action has been taken by the Committee either in the 102nd or 103rd Congress. During these difficult economic times amid calls for greater government efficiency, I am pleased the Committee is taking some action on this and other legislation regarding the cost and benefit relationships of legislation and regulation.
Some will say the purpose of this legislation is to hinder the regulatory and legislative process - not so. The intent of this legislation is to establish a process to ensure better and more efficient regulation. The process this legislation establishes does not pass judgement on whether a bill or regulation is good or bad but simply gives Congress and the Executive Branch the information it needs.
One example of this is regulations issued pursuant to the Resource Conservation and Recovery Act which are in many cases unnecessarily expensive to comply with. The most celebrated example of this is the cost to comply with the rules concerning wood preserving chemicals. OMB has estimated these regulations cost $5.7 trillion for each premature death averted. If that information had been available to agency decision- makers early in the promulgation process, the final regulations on wood preserving chemicals may have taken a more efficient form.
While there are many seemingly "good ideas" out there in the form of new legislation, our economy and our states and local governments simply cannot absorb every "good idea" coming down the pike. We must send the American people a positive signal by showing them we will only support "good ideas" that make sense to the economy and employment
219
GAO
United Stale*
General Accounting Office
V>a.shinRlon. D.C. 20548
Human Resources Division
B-243721
May 22, 1991
The Honorable Tom Harkin Chairman, Subcommittee on Labor,
Health and Human Services, Education.
and Related Agencies Committee on Appropriations United States Senate
Dear Mr. Chairman:
This fact sheet responds to your request thai we identify and present information on federal financial assistance programs (grants and direct payments) for which state and local governments are eligible applicants. It presents information on 606 federal programs, with estimated obliga- tions of $165.3 billion, available to such governments in fiscal year 1990. The fact sheet includes the Catalog of Federal Domestic Assis- tance (cfda) number identifying the federal funding agency, program name, types of financial assistance, eligibility, budget function, and esti- mated funds obligated.
The cfda was the source for the state and local government financial assistance programs identified. The cfda is a governmentwide compen- dium of federal programs, projects, sen-ices, and activities that provide assistance or benefits to the American public The update to the 1 990 cfda. issued in December 1990, contains 1 .183 assistance programs administered by 52 federal agencies. Benefits and services are provided through seven financial and eight nonfinancial types of assistance. We included in our list of financial assistance programs four of the seven financial types — formula grants, project (discretionary) grants, direct payments for specified use, and direct payments with unrestricted use We excluded direct loans, guaranteed /insured loans, and insurance because these are not commonly considered grants-in-aid.
We provide information on financial obligations rather than outlays for each program. Obligations represent the funds committed by the federal funding agency, while outlays represent the funds expended.
In appendix I, we rank the programs by fiscal year 199(1 estimated funding, from highest to lowest. Obligations to state and local govern- ments for fiscal year 1990 totaled S155.3 billion for the 606 programs. Twenty-four programs, each with obligations over $1 billion, had com- bined obligations of $121.5 billion and accounted for 78 percent of fiscal
Page 1 GAO/HRD-91-93FS Federal Aid to Stat* and Local Government*
220
year 1990 total obligations. In contrast, 70 programs, each with obliga- tions under $ 1 .5 million, had combined obligations of $50.4 million and accounted for .03 percent of total obligations. Appendix 1 also shows for each program, the type of financial assistance, eligibility, and budget function.
We prepared four additional appendixes to facilitate your analysis:
Appendix II shows eligibility for programs and their funding by type of
government.
Appendix 111 shows the number of programs and amounts obligated by
type of financial assistance.
Appendix IV shows the number of programs and amounts obligated by
each federal agency providing financial assistance.
Appendix V shows the number of programs and amounts obligated by
budget function.
Copies of this fact sheet are being sent to interested parties and made available to others on request. If you have any questions about this fact sheet, please call me on (202) 275-1655. Other major contributors are listed in appendix VI.
Sincerelv vours,
Linda G. Morra
Director, Human Services Policy and Management Issues
Page 2 GAO/HRD-91 -93FS Federal Aid to State and Local Governments
221
1994 APPROPRIATIONS ACTION SUMMARY GRANTS-IN-AID: MAJOR DISCRETIONARY AND MANDATORY PROGRAMS
i leden fiscal yean, dollan in millions)
10.76/9?
MAJOR DISCRETIONARY |
FY 1993 ENACTED |
FY !9<M |
I9W4 PRES BUD vs 1993 ENACTED |
I9<M CONF v> 1993 ENACTED |
|||||
PRES BUDGET |
HOUSE ACTION |
SENATE ACTION |
CONF ACTION |
||||||
1 |
I |
S |
% |
||||||
DEPARTMENT OF AGRICULTURE |
|||||||||
EMERGENCY FOOD ASST (TEFAPl ADMIN |
$45 |
S46 |
M0 |
$43 |
S40 |
$1 |
2.7* |
$5 |
-111* |
WOMEN INFANTS* CHILDREN fWIO 1/ |
2.860 |
3.287 |
3.210 |
37.14 |
3.210 |
427 |
14.9* |
350 |
12.2* |
RURAL WATER * WASTE DISPOSAL CRTS |
39P |
541 |
450 |
536 |
500 |
151 |
386* |
110 |
28.2* |
d^arTmTnT OF commerce |
|||||||||
ECONOMIC DEVELOPMENT ASSISTANCE 3 |
217 |
223 |
0 |
32? |
323 |
6 |
28* |
106 |
48 7* |
DEPARTMENT OF EDUCATION |
|||||||||
COMPENSATORY EDUCATION |
6.709 |
7.110 |
6.871 |
6.972 |
6.924 |
401 |
6.0* |
216 |
3.2* |
EDUCATION REFORM INITIATIVE 4/ |
0 |
585 |
134 |
166 |
155 |
585 |
n/a |
155 |
n/a |
IMPACT AID MAINT AND OPERATIONS |
73* |
686 |
801 |
736 |
786 |
•52 |
-7.1* |
48 |
6.5* |
CHAPTER 2 EDUCATION BLOCK GRANT |
435 |
415 |
370 |
370 |
370 |
■20 |
-4.6* |
-66 |
-15.2* |
DRUG FREE SCHOOLS * COMMUNITIES |
499 |
499 |
370 |
370 |
370 |
0 |
0.0* |
•129 |
-25.9* |
SPECIAL EDUCATION |
|||||||||
BASIC STATE GRANTS |
2.053 |
2.164 |
2.108 |
2.164 |
2.150 |
111 |
54* |
97 |
4 7* |
PRESCHOOL. INFANT. 4 TODDLERS GRTS |
539 |
600 |
570 |
600 |
592 |
61 |
11.3* |
53 |
9.9* |
CHAPTER 1 HANDICAPPED PROGRAM |
126 |
114 |
114 |
120 |
117 |
-13 |
-10.0* |
-10 |
-7.5* |
SCIENCE * MATH EDUCATION |
246 |
253 |
2*6 |
253 |
251 |
7 |
2.7* |
5 |
2.0* |
VOCATIONAL* ADULT EDUCATION |
1.474 |
1.448 |
1.474 |
1.483 |
1.481 |
-27 |
-1.8* |
7 |
0.5* |
HEALTH AND HUMAN SERVICES |
|||||||||
ADMINISTRATION ON AGING-STATE GRANTS |
765 |
765 |
766 |
801 |
792 |
0 |
0.0* |
27 |
3.6* |
SUBSTANCE ABUSE BLOCK GRANT 5 |
1.131 |
1.131 |
1.097 |
1.201 |
1.177 |
0 |
0.0* |
47 |
4.1* |
MENTAL HEALTH BLOCK GRANT |
278 |
278 |
268 |
278 |
278 |
0 |
0.0* |
0 |
0.0* |
CHILD WELFARE SERVICES |
295 |
295 |
295 |
295 |
295 |
0 |
00* |
0 |
0.0* |
COMMUNITY SERVICES BLOCK GRANT |
372 |
372 |
372 |
390 |
386 |
0 |
0.0* |
14 |
3.6* |
FAMILY PLANNING |
173 |
206 |
173 |
183 |
181 |
35 |
20.2* |
8 |
4.3* |
IMMUNIZATION GRANTS |
288 |
554 |
377 |
482 |
456 |
266 |
924* |
168 |
58.3* |
RYAN WHrTE AIDS GRANTS |
348 |
658 |
572 |
582 |
579 |
310 |
89.1* |
231 |
66.5* |
HEAD START |
2.776 |
4.150 |
3.276 |
3.376 |
3.326 |
1.374 |
49.5* |
550 |
19.8* |
CHILD CARE * DEV BLOCK GRANTS |
893 |
933 |
893 |
893 |
893 |
40 |
4.5* |
0 |
0.0* |
LOW INCOME HOME ENERGY ASSISTANCE 6/ |
1.346 |
1.507 |
1.437 |
1.437 |
1.437 |
161 |
120* |
91 |
6.8* |
MATERNAL * CHILD HEALTH BLOCK GRANT |
665 |
705 |
665 |
695 |
687 |
40 |
6.0* |
23 |
3.4* |
COMMUNITY HEALTH CENTERS 1/ |
559 |
617 |
585 |
610 |
604 |
59 |
10.5* |
45 |
80* |
HEALTHY START INITIATIVE |
79 |
100 |
90 |
100 |
98 |
21 |
26.5* |
18 |
23.0* |
PREVENTIVE HEALTH BLOCK GRANT |
149 |
149 |
149 |
160 |
157 |
0 |
0.0% |
8 |
5.7* |
REFUGEE ASSISTANCE |
381 |
420 |
400 |
400 |
400 |
39 |
10 1* |
19 |
4.8* |
UNDOCUMENTED ALIENS IMPACT GRTS 7' |
0 |
400 |
0 |
0 |
0 |
400 |
ii |
0 |
n/a |
STATE LEGALIZATION ASS1S GRANTS I |
311 |
812 |
812 |
812 |
812 |
501 |
161 1* |
501 |
161 1* |
HUD ANT) LNTJEPENTJENT AGENCIES |
|||||||||
COMMUNITY DEVELOPMENT BLOCK GRANTS 9' |
4.240 |
4.224 |
4.274 |
4.400 |
4.400 |
-16 |
-04* |
160 |
3.8* |
EPA WASTEWATER STATE REV FUND 10/ |
1.928 |
1.797 |
1.817 |
1.830 |
1.817 |
-131 |
•68* |
• 111 |
-5.7* |
EPA WASTEWATER CONSTRUCTION GRTS 11/ |
623 |
330 |
660 |
670 |
660 |
-293 |
-47.0* |
38 |
60* |
HOPE GRANTS 9/ |
271 |
109 |
119 |
109 |
109 |
-162 |
-59.7* |
-162 |
-597* |
HOME INVESTMENT PARTNERSHIP PROGRAM 9/ |
1.173 |
1.600 |
1.325 |
1.275 |
1.275 |
428 |
36.5* |
103 |
8.7* |
OPERATION OF LOW-INCOME HOUSING |
2.28: |
2.521 |
2.621 |
: 6:i |
2.621 |
238 |
104* |
338 |
14.8* |
DEPARTMENT OF THE LNTERJOR |
|||||||||
ABANDONED MINE REC FUND |
134 |
135 |
135 |
135 |
135 |
1 |
0 9* |
1 |
09* |
DEPARTMENT OF JUSTICE |
|||||||||
DRUG CONTROL * SYSTEM IMPROV GRTS |
47? |
481 |
371 |
431 |
420 |
8 |
1.7* |
-53 |
-II.2S |
JUVENILE JUSTICE * DELINQUENCY PRE* |
77 |
77 |
123 |
95 |
107 |
0 |
0 01 |
30 |
39 0* |
DEPARTMENT OF LABOR |
|||||||||
DISLOCATED WORKERS 9/ |
621 |
1.921 |
1.118 |
1.118 |
1.116 |
1.300 |
209.2* |
497 |
80.0* |
ADULT * YOUTH TRAINING GRANTS 9/ |
1.692 |
1.717 |
1.647 |
1.647 |
1.647 |
25 |
1.5* |
-45 |
-27* |
SUMMER YOUTH TRAINING GRANTS 9/ |
841 |
1.689 |
989 |
834 |
888 |
648 |
1009* |
48 |
5.7* |
EMPLOYMENT SERVICE STATE ADMIN |
811 |
833 |
833 |
833 |
833 |
22 |
2.7* |
it |
2.7* |
UNEMPLOYMENT COMP STATE ADMIN |
2.371 |
2.491 |
2 491 |
2.491 |
2.491 |
120 |
5 1* |
120 |
S 1* |
DEPARTMENT OF TRANSPORTATION |
|||||||||
AIRPORT OBLIGATION CEILING |
1.800 |
1.879 |
1.500 |
1.800 |
1.690 |
79 |
44* |
-110 |
-6.1* |
HIGHWAY OBLIGATION CEILING |
15.327 |
18.398 |
17.483 |
18.020 |
17.590 |
3.071 |
20 0* |
2.263 |
14.8* |
HIGHWAY EXEMPT FROM CEILING 12/ |
2.342 |
2.117 |
2.117 |
2.117 |
2.117 |
-225 |
•9 6* |
-225 |
-9.6* |
MASS TRANSIT |
|||||||||
FORMULA GRANTS |
1.700 |
2.455 |
2.405 |
2.336 |
2.415 |
755 |
444* |
715 |
42.1* |
INTERSTATE TRANSFER GRANTS |
75 |
45 |
45 |
45 |
45 |
-30 |
-40.0* |
-30 |
-400* |
URBAN DISCRETIONARY GRANTS |
1.725 |
1.772 |
1.707 |
1.785 |
1.785 |
47 |
2.7* |
60 |
3.5* |
SUBTOTAL: DISCRETIONARY |
5*7.643 |
$78,613 |
$72,761 |
$74,652 |
S73.9M |
$10,970 |
16.2* |
$6,345 |
9.4* |
Copyrifhl (c) 1993 FF1S Federal Funds Information for States. All Rifbu Referred.
222
1016/93
MANDATORY/ENTmJEMEVT PROGRAMS |
FY 1993 ENACTED |
FY 199. |
199a PRES Bllb.l 1993 ENACTED |
1994 CONf vs |
|||||
PRES BUDGET |
HOUSE ACTION |
SENATE ACTION |
CONF ACTION |
199? ENACTED |
|||||
S |
% |
J 1 * |
|||||||
child nutrition |
$6,827 |
$7,559 |
J1.497 |
ft .497 |
S1.497 |
$732 |
107* |
$671 |
9.B* |
TEFAP. COMMODmr PURCHASES |
12(1 |
163 |
80 |
108 |
80 |
43 |
36.0* |
-40 |
-33.3* |
FOOD STAMPS 13' |
28.115 |
31.221 |
28.137 |
28.137 |
28.137 |
3.105 |
11.0* |
21 |
0.1* |
SOCIAL SERVICES BLOCK GRANT 2 14/ |
2.800 |
2.800 |
2.800 |
3.800 |
3.800 |
0 |
0.0* |
1.000 |
35.7* |
FAMILY SUPPORT WELFARE PAYMENTS |
14.832 |
15.076 |
15.108 |
15.108 |
15.108 |
243 |
1.6* |
275 |
1.9* |
AFDCIOBS 2/ |
1.000 |
1.100 |
1.100 |
1.100 |
1.100 |
100 |
10.0* |
100 |
10.0* |
CHILD SUPPORT ENFORCEMENT |
778 |
896 |
896 |
896 |
896 |
118 |
15.2* |
118 |
15.2* |
FOSTER CARE. ADOPTION ASSISTANCE. AND |
|||||||||
INDEPENDENT LIVING |
2.924 |
2.993 |
2.993 |
2.993 |
2.993 |
69 |
2.4* |
69 |
2.4* |
FAMILY SUPPORT AND PRESERVATION 15; |
0 |
60 |
0 |
60 |
60 |
60 |
n/i |
60 |
n/i |
MEDICAID 16/ |
82.596 |
88.792 |
89.077 |
89.077 |
89.077 |
6.197 |
7.5* |
6.481 |
7.8* |
VOCATIONAL REHAB STATE GRANTS |
1.880 |
1.940 |
1.940 |
1.990 |
1.974 |
60 |
3.2* |
94 |
5.0* |
Subtotal MANDAtbRYteNTn lime^i |
$141,872 |
$152,690 |
$149,628 |
$150,765 |
$159,722 |
$10,728 |
7.6* |
$8,850 |
6.2* |
1209.515 1 tmgi3 1 $222389 | $225.417 |$224,710| 55 I 10.4% |$1S,1»S| 7.3%
[TOTAL: SELECTED GRANTS-IN-AID
FOOTNOTES
II Unlike all other discretionary programs in this section. WIC and Community Health Center spending u currmth ticmpt from sequestration
21 Unlike alt other mandatory programs in this section, spending for these programs is wrrentty subtext to sequestration
3/ Conference 1994 funding level includes $80 million for defense economic adjustment
41 The Preside* 'J Budget included funding for Goals 2000. scmooUo-moe* transition, an urban-rural mutative ; and teacher pro) 'essweiol development
The conference prowled $1 OS million for Coals 2000 and ISO million for the educoiwn ponu* of tdwol^wor* transitu* The comference agreement also provided $20 million - not included kert - for a nr* .-soft schools imitative The Administration Had requested SIS million for this purpose 5/ The 1994 conference funding level includes SI0 million transferred from the Office of National Drug Control Policy i special forfeiture ftmd 6/ The 1994 Budget request includes SI .4)7 million appropnated in 199) for use <tunng the perusd 10/1/93 through 6/30/94 and $70 million
fo< use after 7/1/94 The conference does not provide the $70 million, but includes a SI .47$ million advance approprumon for tat after October 1 , 1994. 7/ imrAdmitustrmumreamtssedfunYJit^ Congress did not
provide the requested funding 8/ The 1994 funding level reflects SSI 2 million in funding delayed from 1993
9/ The 1 99) funding level for this program has been modified to reflect supplemental appropnw&w enacted since the release of the 1994 Budget 10/ The 1994 Budget proposed replacing the current wastewater S*F with $1,198 million for a new clean mater SMF and $399 milium for a dnnkwg water SKF
The conference bill provides $1 $17 for state revolving funds of »nich SS99 million is to be reserved until o dnnJang mater revolving fund is outhomed 11/ CH thr total appropriated for EPA construction grams m 1994. $SO0 milhon is not availabir until Mas 3 1. 1994 W Includes funding for minimum allocation provuums. special prafeess. otuf emergency rtbef Under the conference agreement. SI. $34 nullum of the 1994
funds would not be available until January I. 1994 13/ 1993 and 1994 estimates include funding for food stamp benefits, state odrntn, contingent funds and nutniion assistance for Puerto Kiev 14! The conference funding level for 1994 includes $1 billion for empowerment tones and enterprise communities
15/ This *wa capped entitlement program would provide funds to states for family suppon and prtserveuum ier^es as aulhonzed ut OBMA 1993 16' The 1994 Budget 1994 funding level assumes S28S million in medicaid savings including the elimination of enharuxd administrative matching rates.
Estimates for 1994 assume die medicaid program *tU have $3 7 billion in unobtifoied balances m 1993 that will be applied to 1994 obligations
NGA Contact Jim Mamn C202I 624-S3IS mS Contact Chns Nolan O02l 624.5382
Coprrisrbt «:> 1W> FFIS Ft*r*l Fta* Information for Sum. A3 Ufbu Rocrrtd.
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NATIONAL
GOVERNORS
ASSOCIATION
Hall of the Son 444 North Capitol Street Wathington. DC 20001-U72 Telephone Q01) 624-^00
Office of Public Affairs
October 18, 1993(117-93)
Contact: Rae Young Bond, 202/624-5898
UNFUNDED FEDERAL MANDATES: THE COST FOR STATES
"FEDERAL RULES REQUIRE 3 CENT-PER-GALLON GAS TAX HIKE. "
"FEDERAL ACTION TODAY DELAYS EDUCATION REFORM ..."
"OMB CIRCULAR FORCES EARLY CLOSURE OF LOCAL LIBRARY..."
Although headlines such as these are seldom seen, the fact is that unfunded federal mandates regularly force state and local tax increases and service cutbacks State and local voters and elected officials are being denied the right to determine state and local priorities and the level of state and local taxes. Unfunded federal mandates allow the federal government to avoid responsibility for both setting priorities and increasing revenue They are the twentieth century version of taxation without representation.
WHAT ARE THE COSTS OF MANDATES?
Unfunded mandates have two costs.
First, there is a financial cost. Unfunded mandates require other levels of government to spend money. They are, in effect, a federal tax on states and localities.
How much is that tax? It is indicative of the problem that the federal government simply does not know. There is no official estimate of the collective cost of existing mandates and there is little effort devoted to identifying the costs of new unfunded mandates as they are proposed.
However, some federal and state studies suggest the dimension of this cost. The Congressional Budget Office has estimated that the cumulative cost of new regulations imposed on state and local governments between 1983 and 1990 is between $8 9 billion and $12.7 billion. (This estimate does not include additional costly requirements that must be implemented in future years.) Among the most costly or intrusive regulations for some governments are the Safe Drinking Water Act Amendments of 1986, the Asbestos Hazard Emergency Response Act of 1986, and requirements that allow longer and heavier trucks on their highways and raise the minimum drinking age.
States have raised concerns about the health cost mandate repeatedly for the last five years. Costs for Medicaid alone have risen from S17 billion to $88 billion from fiscal 1981 to fiscal 1993, with states required to match, on average, about 43 percent of the federal funds or $71 billion in fiscal 1994
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Mandates are intended to achieve worthy goals, but have a significant fiscal impact nonetheless. A recent example is the National Voter Registration Act of 1993, which is supposed to make it easier for states to register voters by linking voter registration to drivers' license applications. The well-intended "motor voter" bill authorizes virtually no federal funds to offset the more than $100 million in state and local implementation costs over the next five years. Congress has also reduced funding for state revolving loan funds in the Clean Water Act from $5 billion in fiscal 1980 to SI 2 billion for fiscal 1994 This is the lowest level of funding in the history of the clean water program.
Second, there is a social cost. Accountability is fundamental to our democratic system. By separating spending decisions from revenue decisions, unfunded mandates undercut that accountability and the public trust in the decisionmaking process itself. Moreover, if federal decisionmakers do not have to bear the full cost of their decisions, they become less responsive to local concerns and priorities.
The number of mandates imposed upon states by the federal government has increased alarmingly in recent years. According to the Advisory Commission on Intergovernmental Relations, "Between 1981 and 1990, the Congress enacted twenty-seven major statutes that imposed new regulations on states and localities, or significantly expanded existing programs. This compares to twenty-two such statutes enacted in the 1970s, twelve in the 1960s, zero in the 1950s and 1940s, and only two in the 1930s."
During the 1970s and the 1980s, the relationship between the federal government and state and local governments underwent drastic changes. The year 1978 was the peak of federal government aid to states. After 1978, the federal government began to focus more attention on the regulatory dimension of federalism. This transformation of intergovernmental relations took place as the federal government was struggling to reconcile new spending demands and record fiscal deficits and as states were enjoying strong revenue growth.
Congress learned quickly that it could approve legislation and pass the cost of this legislation down to states. Unfortunately for states, Congress saw these mandates as a solution rather than a problem. Because states are now confronting the same budget problems as the federal government, these mandates are having an even greater fiscal effect. As fiscal conditions tighten, mandates force states to redirect their spending priorities. States are sometimes unable to meet their existing priorities because these mandates specify where state money must go.
Federal regulatory relief efforts initiated in the 1990s, though helpful, failed to make major reductions in existing requirements or to significantly restrict new regulations and very often they were counterbalanced by new conditions on existing programs.
WHAT ARE FEDERAL MANDATES?
In the simplest terms, a mandate is a federal law or regulation that requires state and local governments to do something based on the power of the purse or the force of law. Mandates come in many forms.
• Direct Orders - These are imposed by the federal government and are enforced by civil or criminal penalties (e.g., Davis-Bacon prevailing wage rates, the Fair Labor Standards Act, which sets the minimum wage; the Americans with Disabilities Act, and the Equal Employment Opportunity Act, which bans job discrimination).
• Partial Preemption - These set minimum national standards for certain programs. Administrative and enforcement responsibilities for these programs rest with the state (e.g., the Clean Air Act requires states to monitor emission levels and keep them under the federally set guidelines)
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• Crosscutting Requirements - These apply to all programs receiving federal funds and are used to advance some kind of national social or economic goal (eg., the Civil Rights Act, the National Environmental Policy Act, and drug-free workplace legislation).
• Crossover Sanctions - These are statutes that not only impose new requirements and costs, but also threaten the loss of funds to existing programs as a penalty for noncompliance (e.g., states could lose highway funds if they do not enforce the maximum allowable speed limit, revoke drivers' licenses of drug offenders, raise the drinking age, regulate billboards, effectively control roadside junkyards, and meet the detailed requirements of the Clean Air Act).
States now face nineteen different financial penalties under which they can lose from 5 percent to 100 percent of their highway funds for failure to comply with federal requirements. The Wisconsin Department of Transportation has calculated that it could theoretically lose 494 percent of its federal highway funding due to sanctions if the state didn't comply with federal requirements. Under a 1990 provision states must enact a law requiring that the driver's license of any citizen convicted on drug violations be revoked, or the Governor and the state legislature must opt out of enactment of the law. States out of compliance will potentially lose 10 percent of federal funds for highway construction
The Family Support Act of 1988 requires that states increase dramatically their efforts to place two- parent welfare families in subsidized work or community work experience. The legislation includes only extremely limited work activities in the calculation of the 40 percent required participation rate, ignoring job search, job readiness, job training activities, or even paid employment. Failure to meet this rate could cost Michigan $12.5 million in federal welfare funds.
• Grant Conditions - States and local governments often need federal help to address critical domestic problems. In many cases this assistance is provided through federal matching grants. Most of these grants require states and localities to offer specific services and to cover defined groups of individuals. For example, the cost of providing health care to poor families is too great for any single level of government to bear alone. Federal aid through the matching provisions of the Medicaid program is critical. However, over time, the conditions that states must meet to qualify for those matching funds have multiplied and the costs of meeting those conditions badly strain state resources Because states and localities are unable either to reduce the level of service or to bear the costs of going it alone, these grant conditions become, in effect, a major form of unfunded mandates. Medicaid alone in fiscal 1994 will comprise 40 percent of all federal assistance to all state and local governments for all purposes. States must match all Medicaid funds at a national average of 43 percent.
WHAT IS THE PROBLEM WITH MANDATES?
There are many problems associated with intergovernmental regulation — inefficiency, intrusiveness, and excessive complexity. Yet federally mandated expenditures represent the most visible dimension of the mandate problem for state and local governments, especially during tough fiscal times.
Ohio will spend 5308 million in fiscal 1993 to comply with federal requirements that are not funded by Washington In the period between 1992 and 1995, Ohio will have to pay $1.7 billion for such unfunded decrees. In Tennessee, the full annual recurring cost of federal mandates imposed since fiscal 1986-1987 has grown from $12 million to $154 million in the current year Annual state costs will rise to $182 million next fiscal year and to $195 million by 1994-1995 By fiscal 2001, when phased-in Medicaid mandates in current law will be fully implemented, the recurring state cost will be $242 million annually. This is just for laws on the books before 1993 - and does not include the costs of inflation or of mandates in bills being
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passed by the current Congress. Nor does this include the cost of further declines in federal match rates after 1993.
The continuing imposition of unfunded mandates places states in the precarious position of either attempting to fund the federal requirements from very limited revenue growth or transfers from other priority areas such as education, or jeopardizing eligibility for certain federal funds. Moreover, the decisionmaking process is flawed. As long as requirements can be imposed without raising the needed revenue, there is little federal incentive to set priorities or to weigh costs against benefits.
Hardly anyone will argue that all mandates are bad. There are numerous areas where there is a broad consensus for action and a sense that it is appropriate for the federal government to compel change. The protection of civil rights, food safety, and basic environmental protections are in this area. However, there are other areas where special interest groups are able to secure federal action absent a strong sense of national need. Even where mandates may seem appropriate, there is often disagreement on the appropriate response or what level of government should bear the cost, and great disagreement over relative risks and costs versus benefits.
Some mandates are unnecessary - they require states and localities to duplicate procedures and requirements that already exist and work effectively at the state and local level.
Some mandates are inefficient - they require states and localities to implement procedures that are not the least costly method of accomplishing an agreed upon objective. For example, federal law requires states to begin using rubberized asphalt derived from discarded tires in annually increasing increments of 5 percent of their federally funded highway projects, despite evidence that such asphalt costs three times as much and will have a shorter life span than normal asphalt. By 1997, when the mandated percentage will increase to its highest penalty rate of 20 percent, Ohio taxpayers will pay an estimated $50 million more a year for highways that may not last as long.
Some mandates reflect bad policy - they represent the wrong choice relative to the cost and benefit of a required action or expenditure. For example, the federal requirement to clean up all Superfund sites to a "pristine" condition, regardless of how that site will be used in the future, imposes significantly higher costs than an alternative approach that would leave a small amount of contamination in place and restrict the future use of the site to ensure that the environment and public health are protected.
Some mandates are outdated - they may have outlived their usefulness. Michigan spent almost $2 million in 1987-1988 for postsecondary prisoner tuition offsets. However, these offsets were eliminated the following year. Now a new federal maintenance-of-effort requirement may require the expenditure of nearly $2 million in state funds because of a "baseline" established six years ago and discontinued five years ago.
All mandates are preemptive to some degree. They substitute the judgment and priorities of the federal government for those of state and local officials and they deny the citizens of a state or locality the right to determine how their own tax resources will be used. The "cookie cutter" or "one-size-fits-all" approach to national regulation is not appropriate for most domestic activities.
However, even "good" mandates can have bad consequences.
Unfunded mandates threaten the ability of state and local governments to continue to meet their primary responsibilities and maintain a reasonable rate of taxation. Increasingly, unfunded mandates force state and local expenditures on lower priority activities. As the federal government expands its scope, of necessity it
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preempts funding for more pressing local issues. For example, as access to medical services for more people is mandated, other priorities are underfunded and reduced.
At the same time, demographic and social changes are increasing the costs of providing primary services at the state and local level. The result is that states and localities are having to devote scarce resources to lower priority federal demands while being forced to raise taxes or cut back their commitment to critical basic services. By analogy, a poor household is forced to divert its limited resources from the purchase of food to pay for the increased costs of a lower child/caretaker ratio in a day care center. Although admittedly these are both critical areas, the family must make the hard choice between good nutrition and quality child care.
WHAT ARE SOME BENEFITS OF MANDATES?
Some problems require national action and it may be appropriate to compel a state and local role in addressing those challenges. However, they should only be enacted after consultation and agreement with representatives of state and local government.
Most mandates address important problems such as civil rights, relocation assistance, rights of prisoners, clean air, clean water, and health care. The problems come from the "unfunded" portion. The Clean Water Act was funded at $5 billion in 1980 and broadened with new mandates in 1987. This program, with its expanded agenda, will be funded at $1 .2 billion in fiscal 1994, the lowest level of funding in the history of the program. The goals and objectives of most mandates are generally supported by the public. The time has come to begin prioritizing mandates with the most benefit at the least cost and to give state and local governments broad flexibility to meet the goals and objectives upon which we all agree.
ENVIRONMENTAL MANDA TES AND REGULA TIONS
Responding to concerns about threats to human health and the environment caused by pollution, Congress in 1970 adopted the first in a series of significant laws that fundamentally changed the way Americans live — and also fundamentally changed the balance of state-federal roles and responsibilities for environmental protection.
Many of the requirements enacted in landmark environmental laws, such as the Clean Air Act, the Clean Water Act, the Safe Drinking Water Act, and the Resource Conservation and Recovery Act, are meritorious and should be fully implemented — if unlimited resources were available.
Although most federal environmental requirements fall on businesses, state and local governments are increasingly affected. According to EPA estimates, state and local governments will spend more than 30 percent of their revenues on environmental activities by the year 2000. In nearly every state the costs can be staggering, and every dollar spent on an unfunded environmental mandate is one that cannot be spent on other pressing needs such as education and public safety.
There are several specific problems with many current environmental mandates.
First, many of them are very expensive. Under the Clean Water Act, for example, all cities with more than 100,000 people are required to obtain permits for all storm sewers that discharge rain water This requirement is expected to cost billions nationwide In addition, the estimated capital cost to ensure safe drinking water exceeds SI 37 billion according to EPA.
Second, some of them don't make sense. Under the Safe Drinking Water Act, for example, every water
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system in the nation is required to monitor for the herbicide used on pineapples, which are grown only in Hawaii, unless a specific waiver is attained. The waiver is expensive and difficult for the water system, and expensive again for the state, which has to judge the merits of the waiver application and tailor its program accordingly.
Third, many mandates are rigid and unthinking. Consider the rain water requirement noted above. Although some storm sewers discharge water that has picked up contaminants from city streets and poses some level of threat to the receiving stream, many storm sewers pose very little or no threat. The requirement doesn't allow states or local governments to differentiate based upon an assessment of risk. All storm sewers are subject to the requirement.
Fourth, there is little opportunity for states and localities to set priorities. For example, states are required to devote a certain number of employees to each environmental program, regardless of the environmental priorities in a given state or community. Federal support to states is equally rigid. By formula, a state is entitled to a certain allocation of funds to support sewage treatment plants, for example, but if the state believes that drinking water facilities are a higher priority, there will be no flexibility under current proposals to redirect those funds accordingly.
Fifth, the federal government doesn't set priorities, either. By establishing a mandate, the federal government says to states and local governments, in effect, "This is more important than other things you might do with your money." However, the federal government rarely if ever prioritizes its own requirements. Within the drinking water act, for example, all regulated contaminants are considered equally important, though some have the power to immediately and catastrophically affect large populations and others pose only the remotest risk of disease after an entire lifetime of exposure. By placing literally scores of environmental mandates upon states and local governments without setting priorities, the federal government has created an overload. Given limited resources, not everything can be done in the time required, yet the federal government has yet to remove a single mandate in order to make room for another it judges to be of higher importance. It simply adds the new one to the long list of old ones.
There need not be a debate about the merits of many environmental mandates. Although some of them are clearly unwarranted • such as the requirement for all water systems to monitor for pineapple herbicides - many others are worthy and have accomplished much good. But there does need to be a debate about priorities, and who will set them, and about flexibility to tailor requirements to specific local situations. As a general principle, state and local officials must resist the imposition of any new environmental mandates unless the federal government either substantially pays for their cost, or removes existing mandates of equal cost but lesser importance.
DRUG, CRIMINAL JUSTICE, AND JUDICIAL MANDATES
The federal government has markedly increased its aid in substance abuse programs. However, mandates in the form of setasides and earmarks for certain antidrug and anticrime programs reduce state flexibility to establish needed programs by requiring that federal funds be channeled into specific problem areas. There is an implicit assumption that crime and drug problems are essentially the same in every state, and that all states need to address specific problems in specific ways.
Governors argue that this assumption is wrong and that mandates actually serve to reduce funds available to meet critical needs. For example, 35 percent of the money allocated to substance abuse must be spent on alcohol abuse services and 35 percent must be spent on drug abuse services. But, of the 35 percent spent on drug programs, at least half must be spent on programs for intravenous drug users. States that do not have
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a large problem with intravenous drug use are still forced to spend the money on these programs or face the loss of all federal aid. Oklahoma reports that, "As with most rural states, alcoholism is much more prevalent than IV drug use. The percentage requirement exceeds demand for services."
A number of states report that the block grant as currently construed presents major administrative and fiscal problems. New Hampshire reports that, "The biggest problem arising from the block grant lies in the fact that it has become overwhelmingly a series of categorical programs and setasides designed to meet the lowest common denominator of state needs. This concept of funding is unrealistic and does not take into account large differences in the demographics and resources of individual states."
Likewise, the Edward Byrne Memorial State and Local Law Enforcement Assistance grant program imposes significant unfunded burdens on states, which are required to:
• test convicted sex offenders for the human immunodeficiency virus (HIV) that causes AIDS,
• improve their criminal history recordkeeping; and
• report alien convictions to the Immigration and Naturalization Service (INS).
The HTV testing mandate requires states not only to administer the test, but also to provide the victim with counseling and referral to health care and support services If a state fails to comply, it will lose 10 percent of its block grant.
In addition to the HTV testing mandate, the Crime Control Act of 1990 earmarks funds for the improvement of criminal history records. Under the provision, each state must allocate not less than 5 percent of its drug control block grant funds to fully automate its criminal justice histories and fingerprint records, including the final disposition of all felony arrests. States also must improve the quality of these records and increase the frequency of their reporting to the FBI.
The Immigration Act of 1990 requires states to establish a plan under which they will notify the INS of aliens convicted of violating the state's criminal laws This mandate says that any state refusing to report the conviction of an alien within thirty days of the conviction will forfeit 100 percent of its drug control block grant.
The Anti-Drug Abuse Act has a provision for states to set up drug-free school zones. States are required to establish the boundaries of the drug-free zone and post the drug-free school zone signs. State and local governments are also charged with designing effective programs and training personnel to promote and run the program. A final obligation of state and local governments is informing the community about what they are doing All of these things cost money, however The federal government partially funds some activities, but the difference between the aid given by the federal government and the actual costs of the program is the states' responsibility. This costs the states millions of dollars each year.
All reviews of federal mandates mention the heavy role of the courts. During the last two decades, the courts have severely weakened the Tenth Amendment. They have said that federalism is a congressional issue when a major conflict arises over personnel and some tax issues. This happened in Garcia v. San Antonio Metropolitan Transit Authority, which dealt with wage standards for local employees, and South Carolina v. Baker, which dealt with registration requirements of state and local tax-exempt bonds.
The Advisory Commission on Intergovernmental Relations said in 1992 that the court's scope of authority routinely covers legislative and executive decisions in "restructuring school districts, revamping prisons and
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jails, relocating housing, reforming mental health, and detailing union compensation and practices." These decisions have cost billions in court-mandated changes.
In 1979 Congress enacted the "Rights of the Institutionalized Persons" bill, which granted authority to the Department of Justice Civil Rights Division to bring suits on behalf of persons in institutions, including prisons and mental hospitals. This legislation allows federal officials to mandate changes in state institutions, from staffing ratios to room size. States can be taken into federal courts and demanded to make changes in the institutions or face contempt charges Although the Department of Justice has been restrained in the use of this authority, advocacy groups have been much more aggressive.
In January 1993, forty-two states and territories plus the District of Columbia were under a court order or consent decree to limit population and/or improve conditions in either the entire state corrections system or its major facilities. Thirty-two states and territories are under a court order covering their entire system. States have responded to court orders by expanding capacity and implementing early release programs and intermediate sanctions.
During 1991, forty-two new institutions were opened for a total of 21,129 additional beds The average construction cost per bed was $44,193. Some 17,386 beds were added through additions and renovation at a total cost of $359.7 million. In addition to the money spent on construction and renovation, states spend more than $18 billion a year to operate the prison system Between 1990 and 1991, state spending on corrections increased by 11.4 percent.
MEDICAID MANDA TES
In many cases, states have requested flexibility to extend coverage voluntarily States led the effort to extend Medicaid coverage to poor pregnant women and infants regardless of their eligibility for other welfare programs. Although states may initially receive this flexibility, Congress has frequently come back to mandate that all states provide the same coverage, regardless of state needs or fiscal resources.
The greatest increase in state spending has come in Medicaid payments. For example, Colorado spends $1 billion annually on Medicaid. With expanded mandated coverage, the state's Medicaid budget will double by the end of the decade.
It is estimated that by the year 1995, states will be spending $81 billion on Medicaid One reason for the drastic increase in state health care spending is that federal mandates broaden coverage of new populations, requiring states to raise still more matching funds. For example:
• In 1988 Congress passed Medicare catastrophic cost legislation that expanded Medicare services and would have reduced state Medicaid costs. In return it mandated states to pay Medicare requirements for all eligible adults below the poverty level, mandated new rules prohibiting spousal impoverishment as a condition of nursing home entry, and mandated state coverage of infants and pregnant women to 100 percent of poverty. Later, Congress repealed the benefit expansion in the catastrophic legislation, but left the state mandates in place.
• In 1988 the Family Support Act, which the National Governors' Association supported, mandated that states extend twelve months of Medicaid coverage to people leaving the Aid to Families with Dependent Children program for increased earnings. Although federal aid increased, states also had to pay a significant share of the new costs.
• In 1989 Congress mandated Medicaid coverage for children up to age six and pregnant women whose
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incomes were at or below 133 percent of poverty, with states receiving no increase in federal funding States had asked for the flexibility to extend benefits to these groups, at their option. Congress later turned that option into a mandate.
• In 1990 the mandates were extended to cover children through the age of eighteen at or below 100 percent of poverty, again with states paying a large share of the new costs.
As the cost of Medicaid continues to escalate, states are having a hard time raising money for their health care programs. The federal government does match states' contributions to Medicaid, but in order to offset some of the cost of these high health care costs, states have levied taxes and accepted donations for their Medicaid payments. By law, the federal government is required to match a state's contribution However, as of January 1, 1992, the federal government limited the use of funds for matching purposes.
FAMIL YAND EDUCA TION MANDA TES
As more emphasis by the federal government is being placed on the family, more legislation is being considered and approved dealing with specific family issues. The Family Support Act of 1988 is one example of family-oriented legislation Among other provisions it requires states to increase efforts to establish paternity and places a large emphasis on collecting child support payments. The state is required to review its child support guidelines, review existing child support orders, have mandatory wage withholding, and gather monthly notices of amounts collected for recipients of Aid to Families with Dependent Children (AFDC) The most important feature, however, is that the federal government has not authorized sufficient funding to assist in the administration and enforcement of these new mandates.
The Family Support Act also mandates that states provide education, training, and other employment- related services, including child care and transportation, to AFDC recipients. New federal funding is available to supplement these programs, but there are requirements that make it difficult for states to receive the aid. In order for states to receive these federal funds, they must continue present levels of spending on programs that encourage self-reliance, provide a cash match of between 17 percent and 40 percent of total JOBS spending, and meet established participation rates. Only eleven states could provide the necessary state match in fiscal 1990 and, consequently, got all the federal funding they were entitled to receive. The Congressional Budget Office estimates that this was also true for fiscal 1991.
Beyond the mandates required of all public facilities, the federal government has also imposed special mandates on schools. Such unfunded mandates require states and localities to provide schools with additional and often substantial resources that may divert funds from other education-related activities.
There are seventy-seven federal programs for elementary and secondary education, with little authority for states to coordinate or integrate them with substantially more state funds. This creates waste through duplication, excess bureaucracy, and lack of focus.
A September 1993 study for the Department of Education by the Advisory Commission on Intergovernmental Relations found widespread impediments to the development of academically effective K-12 public schools due to federal mandates. Conclusions about education mandates include the following
• Many view mandates that are promulgated by federal policymakers as having little or no
positive impact on schools' ability to provide an academically effective education. Many also note adverse impacts.
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• Many see federal madates as promoting more equitable access to school resources and programs, but not guaranteeing that resources are used effectively or that instructional programs are academically effective.
• Although the general goals of equity-focused mandates typically are accepted by educators, and although some mandates help educators protect programs of academic value, the number and scope of mandates are viewed as having gotten out of hand.
• Federal mandates often encourage state officials, out of concern for compliance, to promulgate more complex, stringent and burdensome mandates.
Federal policies are sometimes counterproductive. Precious resources are being spent on work that does not necessarily benefit students, and some mandates divert funds that otherwise might be spent on education.
There is at least one program that signals a step in the right direction A new mandate requires states to provide oversight of all postsecondary education institutions in the state for purposes of receiving federal student aid. However, the state is not required to provide the oversight if Congress does not fund the oversight program. It is not clear whether these funds will be forthcoming.
In recent years, state governments and school districts have faced major costs for the mandated removal of asbestos. CBO analyzed the costs of implementing the Asbestos Hazard Emergency Response Act and initially estimated that the cleanup would cost state and local governments between $10 million and $15 million. Between 1984 and 1992, the federal government has provided about $340 million, though state and local governments still have borne the lion's share of the clean-up cost. For example, Nassau County and Suffolk County, New York, have spent $11.5 million to clean up the asbestos from all of their public schools - $11.5 million is more than CBO predicted the entire operation would cost. Recent estimates by the Environmental Protection Agency suggest that the cleanup will probably cost closer to $3 billion.
Perhaps the most disturbing part about this story is that recent studies have suggested that the requirement to remove the asbestos may have been hastily imposed without adequate risk assessment or cost-benefit analysis. The fiscal 1994 EPA appropriations bill highlights some of these problems in the agency. It says EPA must make "fundamental changes." In particular, the agency must adopt a risk-based approach to mandates on state and local governments and businesses. It also must "repeal" current mandates that are not based on risk assessments.
SOLUTIONS
There are a few indications that at least some members of Congress recognize the danger of unfunded mandates and are prepared to help states alleviate the problems they are having with mandates. The new Unfunded Mandate Caucus has almost 100 members There are now twenty-three bills in Congress for mandate relief, such as:
• a new law that says a mandate is void if not funded;
• a point of order that a lawmaker could raise during a floor debate to block any bill that imposed more than $50 million to $200 million in annual costs on state and local government, nationwide;
• a requirement for a supermajority vote to enact a new mandate;
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a requirement for the federal government to compensate states for all mandates carrying potential price tags of at least $50 million to S200 million;
a constitutional amendment to prevent unfunded mandates;
authority for a line-item veto, which would allow the President to veto a specific mandate without vetoing the entire bill;
a cost-benefit analysis for federal mandates and requirements; and
a prioritizing and risk assessment for regulations.
Unfortunately, none of these bills are moving. As Senator David Durenberger put it, "There's no money As long as there's a deficit, and as long as there's a perception that there's a capacity in many states and cities to pay the costs, you're not going to see a bill pass."
State and local governments are now demanding that Congress change its attitudes and actions with regard to mandates. Simultaneously, state and local officials are calling for new procedures to deal with the current overload of unfunded mandates in the present system. These include risk assessments, cost-benefit analyses, fiscal notes, prior consultation with state and local organizations on the impact of proposed measures, paperwork reduction, agency waiver authority, enhanced state and local waiver authority, and grant coordination. Vice President Gore's report on reinventing government has some of these recommendations and some have already been implemented by the President through executive orders. Congress needs to back this up with statutory changes.
Another recommendation is that CBO develop better means and timing in estimating the potential costs of mandates. Only the incremental costs and savings to the total budget are estimated in relation to the costs or savings in the absence of federal legislation. That is, no revenue or economic impacts are considered when completing estimates, nor are the day-to-day administrative activities, such as increased paperwork, included. Yet, these costs are often substantial. There is no tracking of the cumulative impact of mandates except by a few state and local governments.
WHAT SHOULD BE DONE?
Clearly, the "mandate madness" cannot continue and mandates must be used with care. There are at least three dimensions of the solution:
• reduce the reliance on unfunded mandates;
• improve cost estimation; and
• strengthen the partnership between and among the various levels of government.
First, the federal government must recognize that it is responsible for reducing lower priority expenditures or raising the revenue needed to fund new mandates. The federal government must stop funding national programs with state and local taxes.
At a minimum, it is critical that federal decisionmakers understand and respect the true costs of federal mandates and their impact on the ability of state and local governments to meet the primary needs of their
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citizens. It is also important that the federal government be prepared to pay for those actions they determine to be national priorities.
Although unfunded federal mandates may reflect well-intentioned policy goals, they often impose substantial cost and regulatory burdens on states. Federal action increasingly relies more on states to fund national policy initiatives, thereby robbing states of their right and responsibility to set priorities and develop policies that best meet local needs.
Second, both Congress and the public need to know the total cost of new mandates. Congress could immediately pass legislation to require the Congressional Budget Office to report on the immediate and
cumulative costs of mandates prior to congressional committee action, with a point of order on the floor against any bill that lacks this information.
Congress could direct the General Accounting Office (GAO) to conduct a study examining legislation and implementing regulations enacted in the 101st, 102nd, and 103rd Congresses that contain unfunded mandates. The report should include the estimated costs to states, counties, and cities in implementing each of the mandates. GAO also should develop a methodology and system for tracking the costs on a cumulative basis, beginning with health and environmental legislation and court-ordered services.
Congress could oppose, and the President could veto, legislation that imposes mandates without also providing adequate funding to cover the costs of implementation.
Finally, the federal government needs to recognize states and localities as partners in the solution of domestic problems.
The recently issued Report of the National Performance Review recommends that the "President should issue a directive limiting the use of unfunded mandates by the administration." This recommendation recognizes a growing concern with the impact of federal mandates on state and local government and the need to consult with states and localities. The National Governors' Association, along with the other organizations representing state and local elected officials, looks forward to working closely with the administration as it develops this directive.
CONCLUSION
The elected leaders of state and local governments have no option but to strongly oppose unfunded federal mandates The impact of unfunded mandates is just too great to allow business as usual The executive branch has heard the message and has issued significant executive orders for regulatory reviews and elimination, program coordination, and positive customer service.
The focus is now turning toward Congress, where a new attitude and response to state and local government is absolutely necessary for progress m federalism. State and local government officials, employees, and representative organizations can no longer be treated as just another special interest group with campaign funds, mass mailings, and contract lobbyists. The inordinate power and influence of special interest groups must give way to the general interest of the public and taxpayer. These general interests are represented by state and local government officials and their organizations.
In short, unfunded mandates and "credit-card federalism" must be replaced with a new partnership between and among all levels and branches of government in order to better serve the American people.
12
235
Figun I Tie Growth of Regulator? Federalism: Enactment* Added per Decade, 1931-1990
(includes new programs and major amendments)
30
25
20
15
10
^j Direct Orders
I Crossover Sanctieas
I Partial Preempti—s
[SS Crosscutting Regulatiosa
S^
1931-1940 1941-1950 1951-1960
Source ACTA, Regulator/ Federalism, Appendix Table L
1961-1970
1971-1980
1981-1990
Table 3
Summary of Changes in Mandated Borden on State
and Local Governments
(18 Programs, 1981-1986)
Mandate Burden Increased (11)
L Clean Air Act
2. Endangered Species Act
3. Fur Labor Standards Act (FLSA)
4. Handicapped Education (1975)
5. Historic Preservation Act
6. Ocean Dumping
7. Occupational Safety and Health Act (OSHA)
8. Pesticides (FIFRA)
9. Rehabilitation Act of 1973 (Section 504) 10. Safe Drinking water Act
1L Wholesome Meat Act
Mandate Burden Stable (2)
1. Hatch Act
2. Title VI Qvfl Rights
Mandate Borden Reduced (5)
L Age Discrimination in Employment Act 1 Davis-Bacon Act
3. Flood Disaster Protection Act
4. National Environmental Policy Act (NEPA)
5. Uniform Relocation Act
Since 1983, CBO has attempted to estimate the intergovernmental fiscal effects of proposed federal legislation. During the 1980s, the office produced state and local cost estimates on more than 3,500 bills and amendments, including 457 estimates for bills that were enacted into law. An analysis of these data indicates that
■ New regulations adopted between 1983 and 1990 imposed cumulative estimated costs of between $8.9 billion and $12.7 billion on states and localities, depending on the definition of man- dates that is used;
■ On an annual basis, such regulations imposed estimated costs of between $2.2 billion and $3.6 billion in FY 1991;
■ Federally mandated costs have risen rapidly since 1986, growing at a pace faster than overall federal aid; and
■ Additional costly requirements— which are not mrhirtwi in the above estimates— have been en- acted and are scheduled to take effect in the years ahead (see Table 2 on the next page).
.iHoHSJWiiiiiSat PejssSSKSVtrTwl 19B2 9
Source: Unpublished OAO case studies.
13
236
Table l Major New EaactmcaU and Statutory Amendments Regulating Stata and Local Governments, 1981 1990
Title Public Law Regulatory Type*
Age Duerimination in Employment Act Amendment! of 1986
Americans with Disabilities Act of 1990
Asbestos Hazard Emergency Response Act of 1986
Cash Management Improvement Act of 1990
Child Abuse Amendments of 1984
Civil Rights Restoration Act of 1987
Clean Air Act Amendments of 1990
Commercial Motor Vehicle Safety Act of 1986
Consolidated Omnibus Budget Reconciliation Act of 198S
Drag-Free Workplace Act of 1988
Education of the Handicapped Act Amendments of 1986
Education of the Handicapped Act Amendments of 1990
Emergency Planning and Community Right-to-Know Act of 1986
Fair Housing Act Amendments of 1988
Hazardous and Solid Waste Amendments of 1984
Handicapped Children's Protection Act of 1986
Highway Safely Amendments of 1984
Lead Contamination Control Act of 1988
Ocean Dumping Ban Act (1988)
Older Workers Benefit Protection Act of 1990
Safe Drinking Water Act Amendments of 1986
Sodal Security Amendments of 1983
Social Security: Fiscal 1991 Budget Reconciliation Act
Suites Iranspoftation Assistance Act of 1982
Voting Accessibility for the Elderly and Handicapped Act (1984)
Voting Rights Act Amendments of 1982
Water Quality Act of 1987
99-592
101-327
99-519
101-453
98-457
100-259
101-549
99-570
99-272
100-690
99-457
101-476
99-499
100-430
98-616
99-372
98-363
100-572
100-688
101-433
99-339
98-21
101-508
97-424
98-435
97-205
100-4
•KEY
CC— Crasscuttinj Requirement CO— Crcaeover Sanction DO— Direct Order PP-Partial Preemption (PP>
8 InluWQO^rWfvnsnlari Pn iptsc BVaj.'rigi 19BS
DO CCDO DO CC CO CC PP CO DO CC CO CO PP DO PP CO CO DO DO DO PP/DO DO DO CO DO DO PP/CC/DO
Selected
TabU2 Regulations: Estimated Costa
Title
Asbestos Hazard Emergency Response Act Leaking Underground Storage Tank Requirements
Wastewater Treatment
Americans with Disabilities Act Clean Air Act Amendments of 1990 i in 1990 budget
'EM. 'EM. 'CBOcost
52 (October 1987> 41845. Sector Study, pp. B-40,41 Study, table DM.
13 145 billion over 30 yean1
$428 million capital costs;
S128 million annually for operations and i
$lZ3btlUon capital costs;
15 18 million annually for opereoons and maintenance^
Less than $1.0 billion'
$250-300 million annuauy'
$870 million o*er 5 )
10
14
237
Figure 4-4
Federal Mandates Enacted Per Session of Congress, 1981-1990
■■ Uwl B«> llU'Ofi
SOLPCE Tatte 4-1 and AC1R Rtgulltory Federalism «coendii Table i
■ Ciniitlm leiti
Figure 2: State and local spending for Medicaid per $100 of personal income, 1976 to 1992.
i
s
r'
it>*
Focal Ye
Notes Spends^ pud far by bW aid a excluded. Medicaid spending far each teal par is divided by personal income m the calendar yaar that ended dunng «.
Source* For Medicaid fpendma, US. Haahh Care Rnuiong Adiiuiuaaraoon. unpubeahed data provided March 18. 1993 (1992 (pending a projected). For personal income. US DepeHuwMi d Gunauaiie.
lorEoonocmc Anatyae, unpubkihrd di a provided September 2. 1992.
IS
238
Actual and Projected
Total Medicaid Spending
(in billions)
1970
-Total Medicaid spending will rise from $72 billion in 1990 to $189 billion in 1995. 'Total Medicaid spending will more than double between 1990 & 1995.
Source: Compiled by the National Association of State Budget Officers, January, 1993 based upon estimates developed by HCFA and included in President Bush's 1994 Budget.
Actual and Projected
State Medicaid Spending
(in billions)
1970
1975
1980
1985
1990
1995
•State Medicaid spending wOl rise from $31 billion in 1990 to $81 billion in 1995. •State Medicaid spending wOl more than double between 1990 & 1995
Sourer. Compiled by the National Association of State Budget Officer], January, 1993 based upon estimates developed by HCFA and included in President Bush's 1994 Budget.
16
239
Actual and Projected Medicaid Spending as a Percent of State Budgets
25
1970
1975
19S0
1985
1990
1995
Note: State expenditure base excludes local funds contributed to the medicaid program.
Source: Compiled by the National Association of State Budget Officers, January, 1993 based upon estimates devebped by HCFA and included in President Bush's 1994 Budget.
17
240
Tabic A-20
Medicaid Expenditures As a Porta
of Total State Expendtores
torn |
Fbemi |
Fhcai |
|
SMt/JttflM |
itn |
mi |
1992 |
NEW ENGLAND |
|||
11.4 % |
13.5 * |
14.1 * |
|
Mia |
14.9 |
17.6 |
21.6 |
NfUjjrhUMOl |
1S.2 |
13.6 |
13.1 |
N#)W HaUBptfalT* |
15.0 |
21.1 |
34.4 |
Rhode IiUad |
I9J |
20.9 |
27.5 |
Vuiiiuflf |
11.9 |
15.4 |
17.1 |
MIDEAST |
|||
Mmn Maryland |
5.9 99 |
0 0 10.1 |
7.3 15.6 |
N«w Jansy |
15.3 |
16.9 |
20.2 |
NcwYoft |
ISO |
19.3 |
22.6 |
PtOflaTjrrvm> |
12.2 |
173 |
21 J |
GREAT LAKES |
|||
miwrt^g |
11.9 |
12.1 |
17.5 |
liMiiamdi |
16.0 |
17.6 |
203 |
Michigan |
14.7 |
11.7 |
19.4 |
Ohio |
133 |
14.2 |
15.9 |
Wiacooam |
12.9 |
20.9 |
21.6 |
rLAlNS |
|||
low. |
1.9 |
I0J |
I0J |
Kuiu |
1.6 |
9.6 |
10.1 |
Mnmaaota |
14.2 |
14.6 |
15.9 |
Miaaouri |
11.2 |
14.4 |
21.0 |
Nabnaka |
11 J |
11 J |
11.6 |
North Dakota |
11.5 |
12.0 |
13.2 |
Sou* Dakott |
13.1 |
15.5 |
16.1 |
SOUTHEAST |
|||
Alabama |
11 J |
13^ |
163 |
Atfcnaaa |
13.2 |
14.4 |
14.7 |
Florida |
10.6 |
I1J |
143 |
Oaotfia |
12.7 |
163 |
11.5 |
Kaatocky |
12.9 |
16.5 |
173 |
Lomaiaaa |
15.5 |
17.1 |
23.2 |
Miauappi No Data |
|||
North Carolina |
11.5 |
14.0 |
15.4 |
South Carolina |
9.1 |
14.1 |
14.5 |
Taaaaaaa* |
11.0 |
20.6 |
23.6 |
VnyBBM |
7.9 |
9.6 |
11.2 |
JjgVWah |
123 |
11.1 |
IS3 |
SOUTHWEST |
|||
Arizona |
10.7 |
10.9 |
12.4 |
rtirr thih ii |
7.3 |
9.6 |
11.6 |
OkUhoaa |
11.7 |
123 |
13.7 |
Tom |
13.0 |
15.6 |
21.2 |
■OCEV MOUNT AW |
|||
Colorado |
11.0 |
13.5 |
163 |
Idaho |
1.2 |
103 |
9.7 |
Ifaattaa |
10.1 |
10.0 |
10.4 |
Utah |
1.4 |
93 |
10.7 |
WwJBj |
43 |
6.9 |
13 |
TAX WEST |
|||
Akaka |
4.2 |
43 |
43 |
Caufomia |
10.1 |
12.0 |
163 |
Hawaii |
5.5 |
53 |
6.6 |
Navada -No Data |
|||
Ongoa |
7.5 |
73 |
9.1 |
Waahiaaaoa |
10.7 |
103 |
12.0 |
TOTAL |
12 S % |
14.1 * |
173 * |
Pate 76
18
1992 State Expenditure Report
241
News Release
For TmiTMH^t.. Releaie Contact: Bob Adler
Tuesday, October 26, 1993 Erik Oboo
Sarah Silver 202-783-7800
ADDITIONAL FEDERAL SUPPORT, CREATIVE FUNDING INITIATIVES
NEEDED TO HELP CITIES IMPLEMENT KEY ENVTJRO LAWS, SAYS NRDC
Rollback of Environmental and Health Protections Unacceptable
The unfunded federal mandate* csgnpajga unveiled today by municipal and state government groups mutt not be used to dismantle key national environmental and public health lows, the Natural Resources Defense Council warned today*
"This campaign will be a success if it generates additional federal funds for local governments but it will be a dismal failure if it is used to dismantle the Clean Air Act, the Clean Water Act, the Safe Drinking Water Act or other environmental laws," said Bob Adler, an attorney and head of NRDCs water program.
"We need greenbacks, not rollbacks; dollars, not dismantlement," Adler added. "The federal government needs to contribute a fairer share of the cost of implementing these laws. And policy makers need to devise more inventive funding options to help pay for these programs."
Erik Olson, a public health attorney with NRDC noted that, "Same local officials will argue that these environmental and public health laws are too inflexible, too cumbersome, and that costs far outweigh the benefits.
"Nothing could be further from the truth," Olson stated. The environmental and public health laws targeted in the mandates campaign ensure equal and adequate protections for an Americans. We still have a far way to go before Americans receive the full benefit of these laws." For example,
** In 1991 and 1992, more than 100 million Americans got their drinking water from systems that violated either federal health standards or monitoring and reporting standards of the federal Safe Drinking Water Act Full implementation of the SDWA is needed to help protect Americans from contaminants ranging from fecal material to arsenic to pesticides.
•• Water pollution from industrial sources, inadequately treated sewage, and urban and agricultural runoff prevents the harvesting of shellfish from many ocean beds, limits the catch of many commercial and industrial fish, caused more than 2000 beach closures during the summer of 1992, and threatens the viability of innumerable fish, bird, and animal species through the
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242
page 2
destruction of habitat. A monger dean Water Act te required to bring our waterway* up to meet their full human and animal use*.
** Over 70 million Americans live in areas that violate US. EPA public health standards for air pollution, putting these Americans at risk of heart disease, lung disease and cancer. Implementation of the Clean Air Act will protect Americans from these threats.
In its many proposals to protect public health and the environment, NRDC has called for additional federal funds to help cities and promoted innovative funding initiatives.
NRDCs recent Ml*-* nf TH"* B«fo"» ?<"> Drink, a study of Safe Drinking Water Act implementation throughout the nation, called on the federal government to provide an additional $2 billion to help local drinking water systems comply with the law. In its new book. The Clean Water Act: 20 Years Later. NRDC urged the federal government to fund state water quality programs.
As part of its overall support for the "pouuterpays" principle, NRDC also promotes the development of innovative funding initiatives. NRDC called on Congress to establish a permit fee program to cover the cost of permitting, compliance and enforcement programs required under the Clean Water Act In addition, the non-profit group proposed the application of a small user fee for drinking water that would help states pay for their drinking water program.
In another innovative program, NRDC has promoted the establishment of an Environmental and Recycling Block Grant Trust Fund, to help cities meet their recycling needs. This fund would be financed through a sliding fee charged to manufacturers of consumer goods packaging and paper products, based on the percentage of the product made from virgin resources.
"Our plan can raise up to $16 billion for the development of urban recycling programs while putting the onus on industry to cut back an the source of the waste problem,11 said Allen Hershkowitz, an NRDC urban program scientist
NRDC is a national, non-profit environmental advocacy group with more than 170,000 members nationwide.
## ## ##
243
Natural Resources Defense Courted
KEY QUESTIONS TO ASK ^TSfJSj^ J*W
Pi«mlntnu the Real Parti frf bilOim-sm
Federal Mandates to Local Mimldneliriei
Doc* the dty-by-dty data itand up to scnttmy? The sources of many of these figures are vague, calling into question the validity of the data. WhOe It fcj difficult to accurately attest this data, there are key questions to ask in trying to understand its validity, value and Implications.
One look at the actual document (attached) city managers were to fill out to cstmuue the costs of federal mandates reveals bow simplistic these estimates actually are. Below is a list of questions that suggest the complexity of questions a planner would have to ask while devising a formula to calculate the true cost associated with these mandates Our research reveals many opportunities for cities to pad their numbers.
Exaggeration of the actual costs may discourage Members of Congress from seeking a fianeM solution to the "■»«<■»* problem while encouraging efforts to weaken
these laws under the gvdse of fiscal restraint
1) DO ESTIMATES EXAGGERATE ACTUAL STAFF COSTS OF IMPLEMENTING REQUIREMENTS?
a) How were estimates obtained?
b) How were the calmlationi of employee hours made?
c) How were these converted to staff costs?
d) How were indirect coats calculated?
c) Which indirect cost* were included? Did estimate include costs of state tax,
local tax, social security, health costs, OSHA requirements, and other state or local
costs that are required for every employee of the city?
f) Do these estimates reflect the sharing of employee time and benefits between
programs?
2) ARE PLANNERS OVERESTIMATING FEDERAL REQUIREMENTS?
a) Are planners counting costs for services they would have to provide any way such as basic sewer service?
a) How did analysts determine the coats of each program?
b) Which technologies did analysts assume would be used?
c) Did analysts only include the most expensive technology options in their estimates or did they consider less-expensrve, equally viable technologies?
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page 2
d) Did analysts distinguish the casts associated with state and local laws from those associated with federal laws or did they lump together federal, state and local mandates?
e) Do these estimates reflect the sharing of capital costs between various programs?
f) Do the estimates draw the distinction between money spent to meet existing regulation! and money spent to meet new federal regulations?
g) Did analysts incorporate unrelated programs into their mandates estimate? Does the estimate include OSHA, Social Security, etc as a cost associated with the actual mandate?
3) ARE THE ESTIMATES IN CONTEXT?
a) Are the cose quoted by city officials real dollars or nominal (inflationary) dollars?
b) Are the estimates in the form of a lump sum that will actually be spread out over many years?
d) What percentage of your city's annual budget will actually be spent on these mandates? Is it significant compared to other expenditures?
c) Do these figures reflect likely changes in the city's budgets? Have planners taken into account potential revenue growth and the impact on the funding for these mandates.
4) DO THE ESTIMATES TAKE INTO ACCOUNT THE REVENUE SIDE OF THESE MANDATES?
a) Did analysts incorporate the decreased disposal fees that would be associated with a recycling program?
b) Have cities analyzed the impact on employment required to upgrade Infrastructure (for air and water programs)?
c) Do these estimates count as a cost those funds being provided by federal and state contributions?
d) Have increases in state funds offset decreases in federal funds?
e) Do these estimates incorporate those mechanisms that exists to help pay for these federal mandates? Are municipalities able to issue debt to meet the costs of the mandates? Will money spent to clean up hazardous waste sites be paid back by the responsible parties? Will industrial polluters pay for a share of the costs of water treatment?
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page3
5) DO THE ESTIMATES INCORPORATE THE POSITIVE VALUE ASSOCIATED WITH FULL IMPLEMENTATION OF THESE MANDATES?
1.
a) Have analysts considered the number of Jobs created by or protected by Implementing these mandates?
b) Have analysts considered the revenue generated by tourism and recreation in their dty and area as a result of taplementatlon of those prognum to dean up air, water and drinking water?
e) Does estimate include fiscal Impact of chronic air pollution or
drinking water contamination of unlmplemented mandates on a city's image and
ha ability to attract new businesses and residents? Will implementation of
mandates encourage growth of dry?
d) Did the dty estimate Incorporate the added revenues raised by state and local
income tax generated from employment of workers in upgrading of infrastructure
as result of mandates.
*-«8X
246
The Need for a New Federalism:
Federal Mandates and Their Impact on
the State of Ohio
Prepared by
The State of Ohio Washington Office
Washington, D.C.
August 1993
247
TABLE OF CONTENTS
Acknowledgments ii.
Executive Summary iii.
Preface vi.
Introduction by Governor George V. Voinovkh 1
Chapter One - Human Services 3
I. Medicaid 3
n. Education 14
m. Americans With Disabilities Act IS
IV. Block Grants 17
V. Nutrition Labeling and Food Safety 19
VI. Cost Summary 20
Chapter Two - The Environment 22
I. Clean Water Act 23
n. Safe Drinking Water Act 27
m. Resource Conservation and Recovery Act 29
IV. Clean Air Act 33
V. Federal Insecticide, Fungicide and Rodenticide Act 36
VI. Conclusion 37
VII. Cost Summary 40
Chapter Three - Transportation and Infrastructure 41
I. Intermodal Surface Transportation Efficiency Act 42
n. Commercial Drivers' License 48
m. Hazardous Material Routing 48
IV. Rail Inspection Activity 49
V. Gas Pipeline Safety SO
VI. National Energy Policy SI VII. Cost Summary S3
Chapter Four - The Challenges to Local Government 54
I. Progress to Report 54
n. Looking to the Future 57
Chapter Five - Toward a New Federalism 59
I. New Mandates 59
D. Congressional Relief 61
m. President Clinton and the Governors 64
IV. Federalism 66
248
ACKNOWLEDGMENTS
Governor George V. Voinovich, Lt. Governor Mike DeWine, and the Ohio Washington Office wish to thank the following state agencies for their time and assistance in the preparation of this report:
Department of Administrative Services
Department of Aging
Department of Agriculture
Department of Alcohol and Drug Addiction Services
Office of Budget and Management
Department of Education
Environmental Protection Agency
Department of Health
Department of Highway Safety
Department of Human Services
Department of Mental Health
Department of Mental Retardation and Developmental Disabilites
Department of Natural Resources
Department of Public Safety
Public Utilities Commission of Ohio
Ohio Board of Regents
Department of Transportation
In addition, the following organizations provided considerable direction and technical assistance to this study:
Council of State Governments
National Association of Counties
National Association of State Budget Officers
National Conference of State Legislatures
National Governors' Association
National League of Cities
Ohio Public Expenditure Council
Ohio State and Local Government Commission
U.S. Conference of Mayors
249 EXECUTIVE SUMMARY
/. Total Costs
* This study identifies the cost impact of unfunded federal mandates on the State of Ohio for the following years:
1992 - $260.1 million
1993 - $307.9 million
1994 - $355.6 million
1995 - $389.2 million
+ Note: These cost figures do not include an additional $430 million in
total Americans with Disabilities Act compliance costs, which will be incurred by Ohio over several years.
* The bulk of these mandate costs are found in the human services area, particularly in the Medicaid program. Human services mandates impose the following costs on the State of Ohio:
1992 - $234.1 million
1993 - $282.6 million
1994 - $310.8 million
1995 - $331.2 million
* Environmental mandate costs rise from $16.6 million in 1992 to $26.7 million in 1993.
* Transportation mandate costs increase from $4.9 million in 1992 to nearly $56 million in 1997.
*
Unfunded federal mandates identified in this survey will impose costs of over $1.74 billion on the State of Ohio from 1992 through 1995.
ui
250
//. Findings
* Mandates often reflect well-intentioned policy goals of the Congress and executive branch agencies, such as the Medicaid program, the Safe Drinking Water Act, and ADA.
* Unfunded mandates, nonetheless, impose costly burdens on state and local governments. For example, nine Ohio cities report 10-year costs of $2.8 billion to comply with various environmental mandates.
* Unfunded mandates have proliferated over the last two decades as the federal budget deficit has grown. For example, 20 new mandates were approved by the 101st Congress (costing states $15 billion); over 200 new mandate bills were introduced in the 102nd Congress, and 15 were approved; and over 100 new mandate bills already have been introduced in the 103rd Congress.
* There is little understanding by members of Congress about the financial impact of mandates, partly because information about the costs of mandates is scarce, both before and after legislation is enacted.
* Mandates preempt important state initiatives and reduce state and local flexibility and innovation. For example, passage of the Family Support Act of 1988, the Boren Amendment, and the Resource Conservation and Recovery Act all preempted Ohio programs.
* Unfunded mandates have a significant impact on state budgets and can force the reordering of state priorities. For example, increasing Medicaid costs have deprived governors of needed resources for education programs and reform.
*
Some unfunded mandates stem from a failed federal-state partnership, where states assumed new regulatory roles in return for promises of federal financial assistance, which since have been abandoned. Mandated rail inspection is one example of such broken promises.
IV
251
///. Recommendations
* Congress should pass legislation immediately that requires the Congressional Budget Office to report on the costs of mandates prior to congressional action. This approach would force Congress to address the fact that real costs are associated with legislative measures even if they do not appear on the federal ledger.
* Congress should direct the General Accounting Office to conduct a study examining legislation and implementing regulations enacted in the 101st, 102nd, and 103rd Congresses that contain unfunded mandates. The report should include the estimated costs to states, counties, and cities in implementing each of the mandates.
* Congress and federal agencies should provide the maximum possible flexibility for states and local governments to meet federal legislative and regulatory mandates. Mechanisms to waive mandate requirements if states are meeting broad policy guidelines should be adopted.
* Congress should oppose, and the President should veto, legislation that imposes further mandates without also providing adequate funding to cover the costs of implementation.
252
PREFACE
Unfunded federal mandates have been a constant problem for the nation's governors and state legislators for many years. Yet no state ever has conducted a comprehensive, quanitative examination of the burdens caused by these mandates, or generated recommendations to address this problem.
While we have attempted to be as thorough as possible, it simply was not feasible to identify every single cost incurred by every single unfunded federal mandate without imposing an altogether new burden on Ohio's state agencies. The centerpiece of this report is data collected from 17 State agencies on the most burdensome and egregious mandates. Mandate costs are reported for 1992 or the first year the data are available. Future costs are reported where available. When future costs are not listed, the first year figure is assumed as an annual cost, except where otherwise noted.
This study is divided into several sections. Chapters 1-3 detail cost data for unfunded federal mandates for three broad areas: Human Services; the Environment; and Transportation and Infrastructure. Chapter 4 explores the impact of mandates at the local level, noting the scope of the problem and reporting on significant progress in State-local cooperation in Ohio. Chapter 5 envisions a "New Federalism," characterized by a reform-minded Congress and a responsible Executive that work with states and local governments in a partnership based on mutual respect.
The State of Ohio recognizes, of course, that federal financial assistance to State operations is substantial. According to the Ohio Public Expenditure Council, Ohio received over $5.8 billion in federal funding in 1992. While this figure may exceed the mandate costs contained in this report, it does not alter the fact that mandates continue to pose a significant cost and regulatory burden on states. By casting the mandate problem in this light, this study should help to awaken and inform public opinion and action on this important issue.
VI
253
INTRODUCTION By Governor George V. Voinovich
The art of governance may be defined as the practice of balancing that which is desirable against that which is affordable, of setting priorities and making choices. This truth is relevant to all levels of American government — federal, state, local and municipal.
The recent explosion of unfunded federal mandates — 174 since the mid-1970s - tells us of a troubling dynamic that distorts governmental accountability. The guardians of the federal government have grown adept at a sort of budgetary sleight of hand that allows Washington to exert greater influence over other government subdivisions without providing corresponding federal support. More and more, Washington is forcing the states to expand their missions, yet states are forced to finance this federal encroachment through their own resources. Needless to say, this situation has crippled state budgets from Maine to California, forcing states to reorder their own state budget priorities.
The intellectual foundation of most mandates is the idea that the federal government must ensure that certain programs are implemented. This idea presumably carries with it the implication that federal mandates ought to be a last resort. Yet the sheer number of mandates detailed in this report suggests that many in Congress no longer look upon the idea of imposing unfunded, national policy on state governments as a last resort. Rather, the design of much federal legislation suggests that the federal government insists that state governments do things Washington cannot, because of the persistent federal budget deficit.
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Federal mandates can be useful in easing the difficulty state and local governments sometimes face in providing needed services. In addition, a federal mandate can, in some cases, permit states to bypass the considerable effort associated with setting technical standards in such areas as air and water quality. Finally, mandates that impose uniform rules across the country may be helpful to business, by limiting the inconvenience varying state laws and policies might impose on interstate commerce.
Activism in government is not always a bad thing, provided that those who advocate such activism are prepared to accept responsibility for its costs. What burdens state governments is activism on the cheap, and what outrages state governments is Congress' insistence that new federal policy initiatives be paid for out of state budgets.
Too often, federal mandates on the states interfere with one of the most fundamental tasks of government - the setting of priorities. State officials entrusted by the voters with the responsibility to set a course for state government, provide services, and plan for the future find their ability to do these things constrained by federal directives that take legal or statutory precedence.
Perhaps the most glaring example of this is the forced trade-off between Medicaid and education funding. In the past five years, elementary, secondary and higher education declined as a share of state spending at a time when nearly everyone acknowledges that improving our schools is one of government's highest priorities. Many states cannot spend a greater share of tax dollars on education because mandated Medicaid spending is consuming more and more state resources.
Many of the arguments against unfunded mandates contained in this study will strike a familiar chord with elected officials in cities, counties, and states across the country. This study represents a compelling argument for eliminating this pervasive phenomenon. It also makes the case that it is long past time to restore the balance in state-federal relations that our Founding Fathers envisioned.
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CHAPTER ONE HUMAN SERVICES
I. MEDICAID
The Medicaid program was created over a quarter-century ago with the goal of assuring health care to the poor. Five years after its inception, in 1970, it cost about five billion dollars. A decade later, Medicaid accounted for nine percent of state budgets. Today Medicaid represents about 17 percent of all state spending, or about $43 billion.1 According to the National Association of State Budget Officers, Medicaid will be a $200 billion program by 1995, consuming over 25 percent of state budgets if it continues to grow at its current rate.
A new report from the Kaiser Commission maintains that during the 1980s, as other federal funds to the states dried up, Medicaid became the "bank" for financing social welfare spending.2 In the past decade, to be sure, Congress has enacted new, costly Medicaid mandates without the necessary resources to fund them. While states like Ohio recognize and embrace the important responsibility of providing medical and other services to needy Ohioans, it increasingly has been forced to reorder its spending priorities in the face of federal mandates.
'This $43.1 billion figure is only for state expenditure. The federal government's share is over $100
billion.
2*The Medicaid Cost Explosion: Causes and Consequences,* State Legislatures. July 1993.
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The Growth of Medicaid Spending
Source: National Association of State Budget Officers
The ability of Congress to appropriate increasingly higher funding levels in the Medicaid program is due largely to the structure of the program itself. Medicaid is an entitlement exempt from federal budgetary ceilings, thereby allowing the Congress to mandate countless requirements (many of them new) that the states must help fund. Therefore, as congressional spending in this area continues to grow, seemingly unbounded, state spending often is forced to increase at comparable levels. Perhaps not surprisingly, these new increases often are buried — and therefore hidden from state legislatures and governors — in the form of arcane budget documents that may run thousands of pages.
While the following section does not include earlier Medicaid mandate examples (Deficit Reduction Act of 1984, Consolidated Omnibus Budget Reconciliation Act of 1985, and Omnibus Budget Reconciliation Act of 1986), it should not be assumed that these mandates are insignificant. However, it can be rightly claimed that the mandate explosion in the
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Medicaid program commenced in earnest in 1987, with most of the mandates affecting the states in subsequent years. The following graph represents total mandated Medicaid costs to the State of Ohio from 1992-95.
Ohio Medicaid Spending
(in millions of dollar*)
2B2.7
Omnibus Budget Reconciliation Act of 1987
One of the first significant Medicaid mandates came in the form of the Omnibus Budget Reconciliation Act of 1987, which implemented the Federal Nursing Home Reform Act. The Act required far-reaching changes in nursing facility services including pre-admission screening and annual resident review (PASSARR), alternative disposition plans, certification and enforcement of facilities, nurse aide training, and residents' rights.
The Ohio Department of Human Services (ODHS), which has principal responsibility for administering the State's Medicaid program, maintains that this is one of the costliest programs for the State to implement. Specifically, the legislation had the fairly typical effect on Ohio
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and other states of driving up personnel costs in order to implement the mandates.3
The total federal commitment to this program for fiscal years 1990-95 is nearly $300 million. Approximate costs to Ohio of implementing OBRA '87 is about $200 million for those same years and $37.4 million in 1992.
In addition to the unreimbursed costs associated with OBRA '87, this legislation is another example of Washington's "one size fits all" mentality. The Health Care Financing Administration required that the legislation be implemented in all states without any attempt to assess the institutional long- term care delivery system that existed in a given state at the time. One might reasonably ask why the federal government mandated that such an expensive program be implemented in each and every state without first undertaking an assessment of whether the legislation was necessary and then proceed to implement it without regard to the situations that exist in each state. Further, the mandated provisions involving extensive new quality assurance measures for the nursing home program restricts state flexibility and effectively places Congress in the position of micro-managing the entire program.
Medicare Catastrophic Coverage Act
The Medicare Catastrophic program symbolized the federal government's practice of enacting new programs, but shifting the costs to the states. Because the program had funding difficulties from its inception, large portions of the Act were repealed by Congress, leaving only the Medicaid provisions in place. Two of these provisions have had serious consequences for states.
The first provision forced states to reimburse Medicare cost-sharing expenses (i.e., Medicare premiums, deductibles and co-insurance) for many elderly poor not already covered by Medicaid.4 The State has estimated that
3 According to the February 1991 edition of State Health Notes, California officials concluded that in order to comply with federal requirements mandated by the federal Nursing Home Reform Law of 1987, that state would have to increase Medicaid spending by between $400 million and $800 million. 4This population is referred to as Qualified Medicare Beneficiaries (QMB's).
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between fiscal years 1992-95 this provision will cost Ohio an additional $34 million, with 1992 costs of $6.2 million.
The other provision would extend greater protection of income and assets for spouses of Medicaid recipients in nursing homes. This change permits the spouse to retain half of the couple's income and assets, thereby allowing the institutionalized spouse to "spend down" and become eligible for Medicaid sooner, which forces states to pay for a longer length of stay. The cost impact of the provision is difficult to estimate, though ODHS recognizes that the Medicaid utilization rate for nursing home bed days increased from a long-standing average of 63 percent to 66.3 percent after the mandate became effective.
Approximate costs to the federal government for 1991-95 will be about $257 million. Costs to Ohio for State fiscal years 1991-95 are roughly as follows:
State Fiscal Year |
Cost to Ohio |
1991 |
$26.6 million |
1992 |
$30.7 |
1993 |
$32.4 |
1994 |
$37.2 |
1995 |
$40^2 |
Total |
$167.8 million |
Family Support Act of 1988
The Family Support Act, signed in the fall of 1988 and billed as welfare reform, made significant changes in the administration of the Aid to Families with Dependent Children program. These changes also contained two mandates on states.
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The Act first provided a mandatory extension of Medicaid services for 12 months to ADC families that become ineligible for Medicaid due to an increase in employment income. Second, it required Medicaid coverage to be continued for two-parent families with one unemployed parent.5
Welfare reform is another area where the State intended to implement a similar program prior to the mandate being imposed by Congress. In fact, the State's 1990-91 budget included funding to implement a welfare reform proposal that required federal waivers but that exceeded the requirements of the Family Support Act. When the Act becatae law, however, the State instead implemented the provisions of the federal mandate since it offered, among other things, a more favorable federal reimbursement rate.
Despite the State's embrace of the Family Support Act, the simple fact is that the Congress mandated that all states accomplish certain welfare reform objectives. In the case of the State of Ohio, this mandate is expected to cost approximately $51.1 million in 1992 and $233.1 million between State fiscal years 1992-95.
Omnibus Budget Reconciliation Act of 1989
The Omnibus Budget Reconciliation Act of 1989 was another culprit that forced increased Medicaid spending on the states. The following mandates, which were imposed by that Act, provide excellent examples of just how intrusive Washington has become in redesigning the Medicaid program:
* Requires states to provide Medicaid coverage for pregnant women and children up to age six in families with incomes up to 133 percent of the poverty line;
* requires states to reimburse providers of obstetric and pediatric care at levels to ensure services to Medicaid recipients;
JCash welfare payments could be limited to six months out of twelve, but Medicaid must continue.
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* set requirements for state coverage of early screening, diagnostic and treatment services;
* requires states to treat any problem found in such screening if treatment was allowed by Medicaid, regardless of whether treatment was included in a state's basic package;
* requires states to notify Medicaid recipients who are eligible for programs such as Women, Infants, and Children; and
* requires states to pay Medicare Part A (hospital) for working disabled people under certain conditions.
This was the most costly Medicaid legislation to implement; the State projects its cost to reach $59.8 million in 1992 and $367 million between State fiscal years 1990-95. The federal contribution also is significant — more than $564 over the same years.
Omnibus Budget Reconciliation Act of 1990
Five congressionally-imposed mandates were the end result of the Budget Reconciliation Act of 1990, which essentially amended and expanded OBRA '87.
First, beginning in 1992, states were required to phase-in Medicaid coverage for all children between ages 6-19 over a ten-year period in households with incomes below 100 percent of the poverty level. Second, states must provide continuous coverage to infants during their first year in households below 133 percent of poverty, as well as provide continuous coverage for women through a 60-day postpartum period. Third, states are prohibited from imposing time limits on inpatient hospital care for Medicaid eligible children under age six. Fourth, states were required to pay group health premiums for working Medicaid recipients under circumstances where it is cost effective to do so. Lastly, and perhaps most important from
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Ohio's perspective, the requirement that states expand coverage for Qualified Medicare Beneficiaries (QMB's).
The provisions of OBRA '90 became effective on January 1, 1993, and the fiscal impact to the State between 1993-95 is expected to be approximately $11.5 million.
The Ohio Department of Human Services was not the only state agency to be affected by the budget reconciliation legislation of 1987 and 1990. These bills contained provisions that required the Ohio Department of Mental Retardation (MRDD) to both conduct reviews and provide necessary services* of all residents with mental retardation or related conditions who live in Medicaid certified nursing facilities, irrespective of the person's Medicaid eligibility. There are about 2,800 residents who are reviewed each year and approximately 2,000 nursing facility residents who receive specialized services. Costs to MRDD which are not reimbursed by the federal government total about $5.6 million per year.
Lastly, as referenced earlier, budget reconciliation bills are largely "catch-all" mechanisms that cover a wide range of policy and programs. And OBRA '90 is a good example. In this legislation, there contained a mandate that social security coverage be provided for all employees excluded from state retirement systems such as students and intermittent employees. In response to this mandate, the Ohio General Assembly approved H.B. 382, which provides coverage for these employees under the Public Employees Retirement System at a cost of $4-5 million in 1992.
The Boren Amendment
All of the aforementioned legislation and their problems for states are exacerbated by federal legislation and regulations that limit states' ability to manage the cost of the most expensive Medicaid services — inpatient hospital and long-term care.
*Tbe services include medication, training and various other health services in order to help patients acquire the behavior skills necessary to live independently. The cervices are also designed to prevent, where possible, the regression or loss of certain physical functions.
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Until the 1980s, states were required to reimburse these institutions on the basis of retrospective cost principles. After several years of double- digit expenditures resulting from the inflationary incentives of cost reimbursement, federal law was changed to allow states more flexibility in instituting payment systems designed to control cost growth. Although Congress, on the one hand, freed states to begin to control costs, this congressionally-imposed amendment for the past dozen years has become almost as problematic as retrospective cost reimbursement.
The Boren Amendment requires states to reimburse the costs "which must be incurred by efficiently and economically operated facilities." Unfortunately, consensus has never been achieved — in regulation or in practice — over what portion of costs must be incurred and what constitutes an efficiently and economically operated hospital or nursing home. In practice, most states, including Ohio, hinge their compliance with the Boren Amendment on demonstrating that they are meeting the costs incurred by a large number of facilities. Clearly, if the costs of these industries as a whole continue to rise (which they have), these relative comparisons become fairly meaningless in defining what truly are efficiently operated facilities.
The utter subjectivity of the Boren Amendment has made for fertile ground in Ohio and elsewhere for litigation,7 which naturally has led to generous payment systems. The irony of this development is that the federal government operates a much larger Medicare program with no such constraints. In the end, states increasingly are concerned that Medicare losses are being absorbed by Medicaid payment levels that continue to grow due to the ever-present threat of litigation. And this open invitation to endless litigation has effectively given to the judiciary responsibility for making policy decisions that properly belong to the states.
The Boren Amendment clearly heightens the institutional bias in the Medicaid program. Hospital and nursing home payments erode state budgets, and the unfortunate consequence is that states keep physician and
The Stale of Ohio has lost two Boren Amendment suits that resulted in legal costs of $23 million. A third suit is pending.
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other non-institutional payment rates very low to compensate. Recognizing that this causes access problems, Congress added yet another requirement regarding state payment levels for pediatric and obstetrical services. Again, this is typical of the federal theme of failing to address the cause of institutional bias while, at the same time, requiring states to finance fee increases from Medicaid budgets that are already stretched to their limits.
Returning to a True Partnership
In light of the explosive increase in the cost of the Medicaid program over the past decade, it is simply irresponsible to continue to expand the scope of the program without the necessary federal resources. From a public policy perspective, there is little merit in Congress making changes to the program that already is unfair to the states. Yet, the Congress seems destined to do both of these things, and the legislative perpetrator this time is the Omnibus Budget Reconciliation Act of 1993.
As this study was going to publication, members of the House and Senate were conferring over, among other things, several provisions in the Medicaid program. One provision would cost states up to $7 billion by limiting Medicaid payments to hospitals with a disproportionate share of low-income patients. In another section of this legislation, lawmakers were debating certain "Technical Corrections" in the Medicaid program. For instance, the House decided to add language that would limit states' ability to establish innovative programs through certain federal waivers. Additionally, a provision was added making it more difficult for states to contract with HMO's to participate in Medicaid managed care programs. Obviously neither one of these two provisions (and there are more) can be considered mere "technical corrections." They are substantive policy changes to the Medicaid program that reduce the states' own ability to serve their respective populations.
While some progress has been made between the states and the federal government over the contours of the Medicaid program, much work remains. In that context, the following are just a few principles that could
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guide federal policymakers in the future concerning this traditional federal- state partnership.
* President Clinton should make a commitment to veto any legislation containing new Medicaid mandates.
* The Administration should support repeal of the Boren Amendment.
* The Congress and the executive branch should immediately eliminate the requirement for states to submit waivers for enhancing and restructuring their Medicaid programs for services or reimbursement systems that have proven their worth. For example, in 1991 the Dayton Area Health Plan faced elimination due to a federal requirement that HMO's limit their Medicaid enrollment to no more than 75 percent of their total clientele. It actually required special congressional authorization to allow this program to continue serving approximately 40,000 Medicaid recipients in Southwest Ohio.
* Budget pressures in the Medicaid program have prompted many states, including Ohio, to initiate their own reforms of the program. States must be granted the flexibility in both administering and redesigning their individual Medicaid programs.
As the policy of the National Governors' Association makes abundantly clear, these changes clearly will not resolve overnight the nation's long-term struggle to restructure the Medicaid program. However, they would provide immediate and sensible relief in challenging economic times. They would also mark the beginning of a new and real partnership between the federal government and state governments over the design and implementation of this vitally important program.
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n. EDUCATION
Federal education mandates primarily are directed at local school districts, not the states. Yet Congress increasingly is mandating education policy prescriptions, taking this authority away from state and local officials. Although the federal government is assuming a larger policymaking role, the federal government only provides five to six percent of the funding for primary and secondary education in the United States. Governors agree that nationwide education standards are important, but continue to believe that states must retain the necessary flexibility to reform and improve their own education systems.
Preschool Children With Disabilities
For years, federal law has required that school-aged disabled children have access to an appropriate public education. The Education of the Handicapped Act Amendments of 1986 mandates that preschool children (ages three to five) with disabilities have the right to a free appropriate public education in the least restrictive environment. Appropriate education includes any number of related services such as speech therapy, occupational and physical therapy, adapted physical education, counseling, aide attendant, audiological, guide interpreter, and reader services. School districts are required to locate, identify and serve all children with disabilities. Ohio appropriated nearly $35 million in 1992 to help local school districts provide these mandated services, though local districts throughout the State were required to spend substantially more to meet this mandate.
Vocational Education
The Carl D. Perkins Vocational and Applied Technology Education Act of 1990 dramatically changed the rules for state operations of their vocational education programs. This legislation reduced funding available to the State from 20 percent of the grant total to 13.5 percent, a $2.8 million
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reduction in Ohio's funding in 1992. At the same time, the Act mandates that the State carry out costly new administrative activities to emphasize accountability. For instance, the Act requires states to design and implement programs to assess program effectiveness and student progress. The cost to the State of Ohio for implementing these new mandates is $3.38 million in 1992 and $15.07 million over four years.
Data Collection Measures
There is no question that data collection is extremely important to improving our education system. The states' experience with the six National Education Goals demonstrates the need for better, more relevant information to assess our children's progress toward the achievement of these goals. At the same time, however, our schools are over-regulated and over-burdened with data collection demands, which divert important resources from teaching — the essential mission of our schools.
A recent study of Ohio schools by the Legislative Office of Education found that a school or local district might have to submit as many as 170 federal reports totaling more than 700 pages during a single year. More than half of the paperwork that Ohio schools must submit is mandated by a wide range of uncoordinated federal regulatory and legislative mandates. In return for this enormous paperwork burden, the federal government supplies only five to six percent of the funding for our schools. The Ohio Department of Education is required to assist in data collection and coordination. Overall, these data collection mandates cost the State approximately $400,000 a year.
HI. THE AMERICANS WITH DISABILITIES ACT
No one can reasonably dispute the worthy goals of the Americans With Disabilities Act (ADA). Yet while this landmark legislation undoubtedly makes our nation more compassionate to the needs of the disabled, ADA imposes numerous and extremely costly unfunded mandates on state and local governments in order to achieve its objectives. A survey of State-owned facilities, Ohio's public schools and universities, senior
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citizen centers, and Ohio's transit systems demonstrates the enormous costs associated with the mandates contained in this Act.
* According to the State's Architect and the Ohio Building Authority, bringing the 4,000 State-owned buildings and five office towers into compliance with ADA is conservatively estimated to cost Ohio $311.5 million.
* A 1990 survey of Ohio schools by the Ohio Department of Education found that local school districts would need to spend more than $153 million to construct or repair school facilities (ramps, elevators or chair lifts, doorways, parking areas, toilets and drinking fountains) to make them accessible to students using wheelchairs.
* The Ohio Department of Aging estimates costs of $8 million to bring Ohio's 200 independently operated, multi-purpose senior centers into compliance with ADA requirements.
* An analysis prepared by the Ohio Department of Transportation anticipates that the State's public transit systems will be forced to spend $148.3 million to expand the accessibility of transit vehicles in order to meet the requirements of ADA.
* According to the Ohio Board of Regents, ADA compliance activities will cost Ohio's public universities and technical colleges $119.2 million.
This survey identified $740 million in mandated costs to Ohio citizens for compliance with ADA mandates. The costs to the State of Ohio alone exceed $430 million. The survey still does not include compliance costs for a wide variety of other categories such as mandates on many county, city and township facilities, let alone compliance costs for the private sector (e.g., apartment buildings, businesses and stores, non-profit institutions and organizations, private educational institutions).
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IV. FEDERAL BLOCK GRANT PROGRAMS
Mental Health
Last year, the Congress reauthorized block grant funding for the delivery of states' substance abuse and mental health services. This legislation naturally had an impact on the Ohio Department of Mental Health, which administers Ohio's federal grant funds for this program.
First of all, the portion of Ohio's block grant that is devoted to supporting community mental health services was decreased by more than one-third, from over $18 million to less than $12 million for each of State fiscal years 1993 and 1994.
Additionally, in direct contrast to the original intent of this program, which had served states well for over a decade, Ohio's authority relating to administrative decisions within the block grant was usurped by the Congress. The reauthorization requires that each state "expend not less than 10 percent of the grant to increase (relative to 1992) funds for children's mental health."
Ohio traditionally has dedicated a substantial portion of block grant funds to children's services, and recently even has increased the general revenue funding committed to children in the face of across-the-board budget reductions. If the goal is to establish a national standard, future discussions about the reauthorization of the block grant must examine alternative mechanisms for insuring adequate state and federal funding for children's mental health services, as well as giving appropriate recognition to the State's existing (and past) levels of commitment.
Substance Abuse
The Substance Abuse Block Grant is the other Ohio program that has been subjected to congressionally-imposed restrictions. In a general sense, Congress has steadily eroded the State's ability to distribute block grant funds based on specific needs by imposing requirements that often are
17
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unnecessary. The following examples are indicative of the difficulties faced by the Ohio Department of Alcohol and Drug Addiction Services (ODADAS) in administering this program:
* The federal government has mandated that at least five percent in 1993 (and 10 percent in the following year) of Ohio's block grant funds (about $5 million) be earmarked specifically for expanded treatment services of pregnant women and women with dependent children over the next two fiscal years.
* ODADAS must spend about $6.6 million for child care and prenatal care to all women receiving treatment services.
The State will be forced to expend more than $2 million to fulfill the federal requirement that states carry out activities that encourage intravenous drug users to undergo treatment. ODADAS must also spend approximately $2.2 million for tuberculosis services, including counseling, testing, and treatment to individuals in drug and alcohol treatment programs.
The Congress mandated the creation of a system that would annually conduct random, unannounced inspections to ensure compliance with the unlawful sale of tobacco products to minors. The findings of this inspection system, which would cost over $2.5 million, must be reported annually to the federal government.
* Finally, as a result of changes in the definition of AIDS cases, ODADAS has learned that it may be forced to begin setting aside part of its block grant funding for "early intervention services for HIV disease." This change will cost the State between $1 million and $2.5 million in 1994.
These examples typify Congress' steady erosion of block grants, which were intended to enhance states' flexibility in developing programs to best suit their own needs. While Ohio receives $45.2 million in federal assistance for this program in 1993, 40 percent of that funding comes with
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strings attached. As a result, the difference between block grants and categorical grants are becoming less clear as Congress turns increasingly to earmarks and mandates to prescribe policy.
V. NUTRITION LABELING AND FOOD SAFETY
The Nutritional Labeling Education Act of 1990 (NLEA) mandates that packaged foods be sold with a standardized nutrition food label by May 1994. According to the Food and Drug Administration (FDA), this requirement applies to some 260,000 labeled products from 17,000 manufacturers.
While the primary cost of complying with NLEA, estimated at $600 million by the FDA, falls on private industry, the Act requires states to review applications for approval of Nutritional Fact Panels, conduct testing to ensure their accuracy, and conduct consumer education programs on the meaning and use of product nutritional information provided under NLEA.
The Ohio Department of Agriculture estimates first year costs for enforcing NLEA at $284,000 for equipping and staffing a laboratory to test food products for verification of labeled nutritional claims and $89,000 a year thereafter. In addition, the agency expects to spend at least $85,000 per year to review food product labels and provide education to consumers and small businesses.
An additional, albeit less costly, federal requirement in a related area adds an additional cost to the State. The U. S. Department of Agriculture's Food Safety and Inspection Service requires the use of a procedure to test the protein content of meat (pursuant to the Meat Inspection Act) that involves the use of mercury catalyst, a highly toxic heavy metal. Samples subjected to this procedure must be disposed of as a hazardous waste, at an estimated cost to the State of $28,000-30,000 per year.
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HUMAN SERVICES MANDATE COSTS
Mandate |
Cost |
Year |
OBRA '87 |
$37.4 million |
1992 |
$37.7 million |
1993 |
|
$41.9 million |
1994 |
|
$45.8 million |
1995 |
|
Medicare Catastrophic |
||
Coverage |
||
a. QMB Cost Sharing |
$6.2 million |
1992 |
$8.2 million |
1993 |
|
$9.5 million |
1994 |
|
$10.6 million |
1995 |
|
b. Nursing Home Care |
$30.7 million |
1992 |
$32.4 million |
1993 |
|
$37.2 million |
1994 |
|
$41 million |
1995 |
|
Family Support Act |
$51.1 million |
1992 |
$54.5 million |
1993 |
|
$63.1 million |
1994 |
|
$64.4 million |
1995 |
|
OBRA '89 |
$59.8 million |
1992 |
$79.6 million |
1993 |
|
$86.8 million |
1994 |
|
$94.7 million |
1995 |
|
OBRA '90 |
||
a. Medicaid |
$1.8 million |
1993 |
$3.5 million |
1994 |
|
$6.2 million |
1995 |
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b. Mental Retardation |
$5.6 million |
1993 |
|
c. Employee Retirement |
$4.5 million |
1992 |
|
Preschool Disabled |
$36 million |
1992 |
|
Vocational Education |
$3.4 million |
1992 |
|
$4 million |
1993 |
||
$4 million |
1994 |
||
$3.7 million |
1995 |
||
ADA |
$430 million |
* |
|
Data Collection |
$400,000 |
1992 |
|
Substance Abuse |
$18.3 million 1993 |
||
TOT AT, HITMAN SERVICES COSTS |
|||
1992 |
$234.1 million |
||
1993 |
$282.6 million |
||
1994 |
$310.8 million |
||
1995 |
$331.2 million |
* Total costs do not include $430 million for ADA compliance, which could not be broken down by year.
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CHAPTER TWO THE ENVIRONMENT
In few areas of public policy is federal direction more prevalent than in environmental regulation. Increasingly, the federal government relies on the states to administer, monitor compliance with, and enforce many provisions of federal environmental law. States also are responsible for distributing most federal funds for wastewater treatment construction projects and nonpoint source pollution projects. Finally, states find it necessary to work extensively with local governments and with the private sector to provide both technical and procedural assistance in order to achieve federal environmental policy goals.
The costs to state government in this area are substantial and increasingly difficult to bear. The costs of environmental regulation to the private sector, of course, are far greater than to any level of government.8 Even within the State of Ohio, compliance with provisions of the Clean Air Act, Clean Water Act and other environmental laws will cost the State and local governments billions of dollars. These costs are passed on to the broader economy in the form of higher production costs and higher consumer prices.
To say that environmental regulation has costs is not to say that it is without benefits. Nor is the estimation of such regulation's cost an exercise without ambiguity. The Clean Water Act (CWA) is a good example.
*Tbe Safe Drinking Water Act is a notable exception.
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I. CLEAN WATER ACT
There are 325 major and 3,650 minor municipal and industrial permitted point source wastewater dischargers in the State of Ohio. Under CWA, the Ohio Environmental Protection Agency (OEPA) is required to regulate all of them to ensure that their discharges do not exceed permit limitations set by the agency under the National Pollutant Discharge Elimination System (NPDES), the national permitting system for wastewater dischargers.
OEPA utilizes a water quality monitoring program that allows permit limitations to be based on precise, accurate data about water quality acquired by actual stream sampling and analysis. This type of permitting program can result in sizable cost savings for dischargers, while at the same time maintaining the environmental quality of Ohio's lakes and streams. Stream sampling and analysis, however, is a labor-intensive activity. A permitting program that relied on statistical modeling to set permit limits would be cheaper for the agency; however, it would cost businesses more, without assuring better water quality.
Permitting, monitoring, and other mandated activities required by the Clean Water Act are estimated to cost Ohio $5.9 million in 1992. New mandates going into effect in 1994 will increase the cost of this program to $10.6 million. Federal grants to the State for Clean Water Act-related purposes total $11.2 million, though not all of these funds are aimed at helping the State comply with mandates.
In addition, the Clean Water Act requires states to implement programs for sludge management, stormwater pollution control, and Combined Sewer Overflows. While each of these programs have merit, there is a large gap between the funding needed to run an effective program and the funding Washington provides the states.
The intent of the sludge management program is to categorize sludges according to their potential to contaminate the environment. Current federal funding will allow some program development and sludge management
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review and approval, though OEPA's capacity to perform field surveillance, sampling or complaint investigation is extremely limited. In terms of the financing of Ohio's sludge management program, the State receives grant funding from U.S. EPA of $100,000, and expects to spend an additional $100,000 in 1994.
The goal of the stormwater program is to reduce or eliminate pollution that results from stormwater runoff from construction sites and industrial facilities. While the State receives $150,000 in federal funding to allow OEPA to issue general permits and create a data base, OEPA expects to spend at least $100,000 in State fiscal year 1994, and significantly more in subsequent years.
Combined Sewer Overflows occur in wastewater systems that use a single sewer line to transport both sewage and stormwater runoff to a wastewater treatment plant. The objective is to control effluents from all existing CSO's in order to meet water quality standards. Currently, the federal government provides $50,000 to help the State to update its CSO strategy, though the State expects to spend an additional $100,000 in 1994. It is also in this area that federal water quality standards have the greatest impact in driving up costs to local government.
In each case, the difference between what is needed to deal with the problems Washington has directed states to solve and what Washington is willing to fund is money for fieldwork, monitoring and assessment of the effectiveness of various pollution control practices. These activities are all labor intensive, and as a result, more expensive to government. The alternative, however, is a set of programs based on government prescription and paperwork — programs that are much less likely to achieve their stated objectives despite the greater costs they impose on the private sector.
Cost to Local Governments
The cost of compliance with the Clean Water Act falls primarily on local governments and the private sector. As with the other environmental
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laws described in this survey, state government's role in the Clean Water Act is that of the regulator rather than the regulated community. Inadequate funding of federal mandates to states under CWA and other environmental laws results in: less effective enforcement of those laws; less assistance to local governments and private businesses; and, ultimately costlier, slower progress toward a cleaner, healthier environment.
To local governments, the costs of compliance with the Clean Water Act loom as an enormous drain on available resources. The 1992 Needs Survey conducted by Ohio EPA documented nearly $6 billion of wastewater treatment/management needs. At the national level, a 1990 needs assessment compiled by the U.S. EPA estimated needs of $110 billion over the next 20 years. For a variety of reasons, this estimate is almost certainly low.
Federally mandated water quality standards and other regulations derived from the Clean Water Act legitimately can be cited as forcing nearly all of the $5.9 billion in water pollution control spending identified in these two surveys. It is true, of course, that much of this spending would be needed anyway. Basic secondary sewage treatment and sewer construction are as essential to local infrastructure as paved roads, and the need for them would still be there even if Washington were not involved. In addition, although the federal government provides assistance for wastewater treatment projects, federal appropriations for this purpose consistently have fallen short of commitments made in the Clean Water Act, which raises an important question. If these services truly are needed by local governments, why must the federal government impose these mandates? State and local officials are even more concerned that Congress is poised to add a series of newer, costlier mandates to this Act.
Wetlands
Clean Water Act regulations established guidelines that should be met before a wetland may be dredged or filled in preparation for development or construction. Although the intent is laudable, these regulations can lead to
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excessively expensive requirements to avoid wetlands or to mitigate them if they are affected.
CWA regulations set up a three-step approach that confronts a variety of private development and public infrastructure construction efforts. First, impact to wetlands must be avoided. Second, where impact cannot be avoided, it must be minimized. Third, after impact is minimized, the remaining effects on wetlands must be mitigated.
It is impossible to determine all costs incurred by the Ohio Department of Transportation (ODOT) in addressing the wetlands issue. However, it costs about $200,000 for wetlands studies for each major highway realignment project, of which the State cost is typically 20 percent (matching an 80 percent federal contribution). Nine such comprehensive wetlands studies were completed in Ohio in 1992 and eight in 1993, totaling $1.8 million and $1.6 million, respectively. Based on the standard 20 percent State participation in these major projects, Ohio's mandated contributions were $360,000 and $320,000, respectively. ODOT does not presently attempt to itemize the wetland cost components in the environmental studies conducted on the dozens of smaller highway projects begun each year. Nonetheless, the following are some examples of costs for minimizing and mitigating wetland impacts for a few of the larger Ohio projects.
On the Cross County Highway in Cincinnati, ODOT impacted 3.7 acres of wetlands. Because the U.S. Army Corps of Engineers and Ohio EPA require mitigation of 1.5 acres for every acre affected, ODOT must recreate 5.5 acres of wetlands. The Corps of Engineers prefer that mitigation occur as close to the original wetland as possible. Following this preference can require ODOT to acquire expensive urban property and then design sophisticated hydrologic plans to create wetlands on sites that are not prime wetlands locations. ODOT would prefer the flexibility of going offsite where land prices are cheaper, where sites require less engineering and where sites could be developed in conjunction with parks or natural areas.
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Per-acre costs for wetlands creation also can run extremely high. The Gallia Route 35 project in 1992 cost $105,715 per acre, for a total cost of $317,000 (the State's cost was $63,400). Wetland recreation activities on several larger ongoing, multi-year projects will be even higher. Costs for creating new wetlands near the Cross County Highway project will be $102,555 per acre, for a total of $562,000. On the New Albany Bypass, ODOT expects to incur costs of about $108,000 per new acre, or a total of $5.1 million. The Buckeye Basin Greenbelt Parkway will cost $200,000 per acre for about 40 acres of mitigation. This $8 million total price includes a $6 million bridge that will avoid taking 12 acres of one marsh. The cost to the State of these three wetland construction projects will total $2.7 million.
This brief account of mandated wetland preservation efforts in Ohio (again, focusing only on major projects) shows 1992 costs of approximately $423,400, and additional projected costs through 1994 of $3.1 million.
H. SAFE DRINKING WATER ACT
Impact on the State
Because the responsibility of paying the cost of environmental regulation falls increasingly on states and local governments, Washington has a bias toward attempting to assure zero risk even in cases where little data about risk exists. The Safe Drinking Water Act (SDWA) provides perhaps the clearest example of this bias.
The Safe Drinking Water Act requires local governments to test drinking water for many chemicals not in common use. It also will require extensive — and expensive — corrective measures to remove from drinking water contaminants not found in quantities demonstrated to be harmful to human health. The 1986 Amendments to the SDWA required that non- community water systems be regulated, and increased the number of regulated contaminants from approximately 20 to 83.
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The first of these changes increased the number of regulated drinking water systems from about 1,600 to almost 10,000, a 525 percent increase. Ohio EPA is responsible for assuring that each of these systems is carrying out proper drinking water treatment and monitoring practices by collecting and tracking monitoring reports compiled by the regulated systems.
Federal grant funding to OEPA to administer the drinking water program was $2.1 million in State fiscal year 1992, up from $1 million in 1986. The State matched this grant with $2.5 million in General Revenue Fund resources in both 1992 and 1993 in order to meet the requirements of the program and will spend $2.6 million in 1994.
The SDWA mandates are forcing Ohio EPA to change its priorities in administering the drinking water program. It has forced the agency to regulate many more systems, but provided no more resources to hire technical staff to assist those systems. The prospect is for progressive degeneration of the program, with staff time absorbed by a tremendous influx of monitoring reports and little time available for follow-up to correct problems that these reports may indicate.
Impact on Local Governments
It is the local governments that operate drinking water systems that will bear by far the greatest burden from SDWA mandates for increased monitoring and treatment. For example, U.S. EPA estimates that those communities that exceed the lead and copper action levels9 prescribed in federal SDWA regulation will have to pay an additional $60 per household per year for large systems, defined as those serving more than one million people. Annual costs for residents of small systems serving between 3,300 and 10,000 people could cost each household an additional $260.
While estimates of the total compliance costs to Ohio communities cannot be made at this time, OEPA estimates the costs to Ohio local
9Wbea action levels for contaminants in drinking water are exceeded, corrective action must be taken. In the case of lead and copper, exceeding the action levels requires a municipality to take a series of actions beginning with a mandated public education program.
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government of testing and monitoring under SDWA for the three-year compliance period between 1993 and 1995 at between $47.5 and $70.5 million. SDWA requires local drinking water systems to test for a total of 83 contaminants. Every 3 years, U.S. EPA is required by the Act to add 25 additional contaminants to those that must be tested. There is a waiver process under which states can excuse water systems from testing for individual contaminants, but it is so cumbersome and slow that many states do not use it. Some examples of contaminants that communities in Ohio must test for include:
a. Toxaphene, an insecticide and herbicide used on cotton (which is not grown in Ohio) and soybeans. Its use has been banned since 1982.
b. Silvex, an herbicide used on rangelands and sugarcane (neither of which exist in Ohio) and golf courses. Its use was banned in 1983.
c. Dibromochloropropane, a soil fumigant on cotton and soybeans. Its use was banned in 1977.
d. Aldicarb, an insecticide used primarily on cotton and potatoes, neither of which are widely grown in Ohio. U.S. EPA has decided that the presence of aldicarb in a drinking water supply is no longer an enforceable violation of the Act, but systems are still required to monitor for it.
ID. RESOURCE CONSERVATION AND RECOVERY ACT
(RCRA)
Subtitle D: Solid Waste
U.S. EPA's Subtitle D rules require minimum standards for municipal solid waste (MSW) landfill siting, design, operation, closure, post-closure care of the landfill, ground water monitoring, corrective action for ground water contamination, and financial assurance (i.e., provision for closure, post-closure care, and if necessary clean-up of the site). The Subtitle D rules
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were promulgated in October 1991; most will become effective in October 1993.
Most states already have their own rules, laws, or policies with respect to MSW landfills. Yet in order for state regulations to take precedence over federal standards, each state must receive formal authorization from U.S. EPA. This involves demonstrating through a lengthy application process that state regulations are at least as stringent as federal standards.
U.S. EPA allows less flexibility in landfill design and siting criteria in states that have not received authorization. Landfill operators in unapproved states, moreover, must comply with both state and federal standards, which sometimes conflict with each other, thereby putting operators out of compliance with either the state or the federal government.
In Ohio's case, OEPA has been informed by U.S. EPA that extensive revisions in Ohio's solid waste rules will be required, in addition to which an extensive application to administer the program must be filed. The revisions will need to be made in most of the 25 Ohio rules for MSW landfills. They will add provisions that are absent from Ohio's rules, and alter the schedule for requiring landfill owners and operators to demonstrate compliance with siting, liner design and operational criteria.
Perhaps most significantly, the federally mandated revisions will add nothing to the protection of public health and the environment already provided for in Ohio's rules. In fact, in some areas the federal rules are weaker than Ohio's. For example, federal rules prohibit siting a new landfill in an earthquake zone but not over an aquifer. Because some areas of Ohio rely on aquifers for drinking water, the State's rules require that landfill liners consist of at least five feet of compacted clay. The federal rules require only two feet, and Ohio EPA reports already having received many requests from local governments to adjust the State's rules to conform to the weaker federal standard. The fact often cited by defenders of national standards that states are free to impose stricter standards if they choose
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ignores the political difficulty involved in competing with a less protective federal standard prepared without regard to local conditions.
Needless to say, the time and effort that Ohio will have to devote to revising its State landfill rules to conform to federal standards will go entirely uncompensated. No federal resources are provided to help states with the costs of:
* Applying for the U.S. EPA authorization;
* revising state rules;
* drafting new policies and guidance to supplement the rules;
* training OEPA and local health department staff about the new rules;
* familiarizing the regulated community about the new rules; or
* enforcing the new rules.
OEPA estimates that this mandate will cost the State $2.58 million in 1994. The Division also administers programs for infectious waste, composting, incineration, solid waste planning, residual waste landfill, construction and demolition waste landfill, and other waste programs.
If Ohio is unable to become an approved state, responsibility for regulating Municipal Solid Waste landfills in the State will revert to U.S. EPA, which has neither the experience nor the staff resources to perform this function. The penalty for failure to conform to this federal mandate ironically becomes turning over a regulatory program from a state agency that can run it effectively to a federal agency that cannot.
At the same time that U.S. EPA is complicating the operation of Ohio's statewide solid waste management plan by imposing its landfill standards on the State, Congress further complicates the situation by refusing to grant states the authority to limit imports of solid waste from other states. In Ohio, large shipments of trash from the East Coast have totaled between 12 and 20 percent of all the waste disposed in Ohio landfills since 1988. This large and unpredictable flow of waste makes planning even more difficult, and congressional inaction in this area is an additional irritant in relations between Ohio and Washington.
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Subtitle C: Hazardous Waste
Ohio has more than 1,300 generators of significant amounts of hazardous waste and more than 3,500 generators of small amounts of hazardous waste. Under RCRA's Subtitle C, Ohio EPA is required to do the following:
* Operate a program that grants permits to hazardous waste generators;
* inspect generators to ensure compliance with permit conditions;
* pursue enforcement against violators; and
* make provisions for closure of hazardous waste disposal sites.
While $2.1 million in State matching funds is the only State spending formally mandated under Subtitle C of RCRA, Ohio EPA was forced to spend an additional $2 million in 1992 and $2.3 million in 1993 to accomplish everything required under the federal program. The agency projects costs for 1994 of approximately $2.7 million in addition to the mandated $2.1 million in State matching funds.
Once again, the shortfall between current federal funding levels and what is needed to run a fully effective regulatory program results in inadequate funding for fieldwork. Ultimately, this funding shortfall imposes costs both to the State and to the regulated community.
Apart from the costs of running the regulatory program under RCRA, Ohio also incurs costs as a regulated entity. The Department of Natural Resources has operated facilities for treating wood for use in State parks and forests. ODNR reports that costs of more than $4.5 million over four years will result from RCRA-mandated clean-up of these facilities. Most of this cost will be incurred due to required excavation and removal of hundreds of tons of dirt contaminated by a chemical (pentachlorophenol) used in treating wood. The dirt must then be transported more than a thousand miles to a landfill in Colorado. This is the only qualifying landfill now willing to
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accept this kind of waste. The benefit in terms of reduced risk to public health of removing soil from remote locations is questionable.
IV. THE CLEAN AIR ACT
Mandates to states under the Clean Air Act (CAA) represent a heavy burden in time and money on the state agencies charged with implementing the Act. In Ohio, this is principally OEPA, with the Public Utilities Commission of Ohio (PUCO) and the Ohio Department of Transportation (ODOT) having secondary roles.
Compliance with the Clean Air Act will be even more expensive to businesses and private individuals. Many businesses will be forced to change their operating procedures and purchase and install costly new pollution control equipment to come into compliance with CAA emission standards. Private individuals will pay more for motor vehicle fuel and automobile inspections in some areas.
U.S. EPA estimates that compliance with the Clean Air Act will cost about $23 billion per year to implement nationwide by 2005. Clean Air Act mandates include the following:
Title I: Nonattainment Areas and Automobile Inspection
Title I establishes a number of new requirements that must be met by areas designated by U.S. EPA as Nonattainment for ozone and carbon monoxide, two major components of smog. Ohio has four Moderate Nonattainment10 areas (Cincinnati, Cleveland-Akron, Dayton-Springfield, and Toledo).
By the end of 1996, Ohio must demonstrate to U.S. EPA that our Moderate Nonattainment areas have achieved minimum ozone standards; will maintain that standard for the next 20 years; must show a 15 percent
10 A Moderate Nonattainment area is one in which the air exceeds the minimum level of concern for ozone.
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reduction in emissions of Volatile Organic Compounds (VOCs);" and must develop a plan to ensure maintenance of that standard. Nonattainment areas that do not comply with these requirements will be subject to more stringent requirements for both industrial and mobile air pollution sources and could also face the loss of highway construction money.
Most of the expenditures of time and money by the Ohio Department of Transportation on the Clean Air Act relate to Title I. The agency estimates its CAA-related costs at about $100,000 per year, primarily in personnel costs arising from the need for urban airshed modeling and liaison with metropolitan planning organizations.
These requirements also will impact on future industrial development. Since air pollutants come from many sources, the plans required under the Clean Air Act must demonstrate that future industrial development, including highway construction, will not lead to violation of CAA air quality standards.
The Automobile Inspection Maintenance (AIM) program is aimed at reducing air pollutants from automobile exhaust. Because 80 percent of those pollutants come from approximately 20 percent of the cars, the testing program is intended to identify that 20 percent and mandate repairs for those vehicles. By applying these controls on automobiles, the burden on industry is reduced.
While automobile emissions testing is the most cost-effective means available to reduce VOC emissions, OEPA estimates that an annual basic tailpipe testing program with a $7 test fee will cost Ohio consumers $308- 440 million over 10 years. These figures do not include costs for vehicles that fail the test.
Should Ohio choose to implement an enhanced auto emissions testing program, there are approximately $160 million in Congestion Management/Air Quality funds available over the next four years through ODOT. These funds would be distributed to the metropolitan planning organizations in the affected areas and could be used for facility test
1 'Hydrocarbons and other chemical compounds released into the atmosphere as the result of incomplete gasoline combustion and certain industrial processes.
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equipment, building construction, repair industry mechanics diagnostic training, and up to two years of program operating expenses.
Tide IV: Acid Rain
Title IV imposes significant costs on the state government. PUCO is required to review each Ohio utility system's plan to comply with the law at a cost of $850,000 to hire technical staff and purchase computer hardware and software to enable it to conduct its reviews.
Title IV requires electric utilities to curtail emissions of sulfur dioxide (S02) and nitrous oxide (NOx), key constituents of acid rain, beginning in 1995. These compounds are a byproduct of fossil fuel combustion, especially of coal. Since Ohio derives about 88 percent of its electricity from coal, and since most of this has a high sulfur content, Title IV imposes significantly greater costs on Ohio than on most other states.
In order to meet sulfur dioxide emission quotas for Phase I (1995-99), utility systems can switch to lower-sulfur fuels or install desulfurization technology (i.e., scrubbers). NOx can be controlled through the installation of NOx burners. In addition, Title IV creates for S02 a complicated permit system, under which utilities can be granted or can acquire from other utilities allowances to emit additional S02 during a transition period.
Estimates on the 'private sector's cost of compliance with Title IV and the other titles of the Clean Air Act vary widely. The U.S. EPA, which estimates that total compliance costs will total about $23 billion annually by the time the 1990 Amendments are fully implemented, also points out that this will not be until 2005. Compliance costs can therefore go up or down, depending on a multitude of variables.
What is clear is that the costs of complying with the Clean Air Act generally will be substantial - and that those costs will fall heavily on Ohio. This is especially true of the acid rain provisions. Compliance costs incurred by electric utilities are passed along to ratepayers, and as with all indirect costs of complying with various federal laws, the costs constitute a hidden tax.
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The following estimates of Title IV compliance costs have been made by Ohio utilities:
* American Electric Power's Ohio Power and Columbus Southern Power subsidiaries estimate that compliance with Title IV will cost a total of $1 .764 billion over twenty years.
* Cincinnati Gas and Electric estimates compliance costs of anywhere between $519 and $581 million, depending in part on the time chosen for capital replacement.
* Ohio Edison reports compliance costs estimates of about $174 million for the period 1995 to 1999.
Title V: Permitting
Title V requires states to advise all industries regulated under the Clean Air Act of all the requirements they must meet in order to receive a permit to operate. Ohio currently receives about $5 million annually in federal grant funds for all air pollution regulatory activities under Section 105 of the Clean Air Act. In addition, the Ohio General Assembly has passed legislation to impose a two-year emission fee of $8 per ton on certain air emissions to help fund implementation of the Clean Air Act until the $25 per ton fee mandated by the Act can be implemented in 1995. Ohio's interim fee will raise about $5.8 million annually, which thus is the cost of the mandate.
V. FEDERAL INSECTICIDE, FUNGICD3E AND RODENTICIDE
ACT (FIFRA)
Since the early 1970s, FIFRA has required that states operate programs to train and certify pesticide applicators. Ohio's program, recognized as one of the nation's finest, cost the State $280,000 to run in fiscal year 1993, with an additional federal contribution (from U.S. EPA) of $105,000, or 27.3 percent of total program cost. This compares with prior commitments from U.S. EPA to pay half the cost of this program.
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A planned revision of the formula that distributes Certification and Training funds to the spates would result in a reduction of the federal contribution to $65,000 for Ohio in fiscal year 1995 (16 percent of projected program costs). The reduction is defended as necessary to permit additional financial assistance to states with less comprehensive programs. The result is that a well-run pesticide application Certification and Training Program is rewarded with a substantial financial penalty.
VI. CONCLUSION
A major problem with federal environmental law is its structure. These laws are media-based. That is, they deal with air, water, drinking water, or solid waste pollution problems individually, more or less without reference to each other. In the early days of environmental regulation this approach was probably the only practical approach, as much less was known about environmental hazards. At the time, the most acute pollution problems were, often correctly, seen to be caused by so-called "bad actors": individuals or businesses that dispensed dangerous pollutants into the air, water or soil in willful disregard of both the environment and public health.
However, as environmental laws have proliferated, and Congress and successive administrations have struggled to keep up with scientific advances, a staggeringly complex body of law and regulation has been created. EPA personnel especially tend to specialize in the pollution problems of one or another medium, to the exclusion of the others.12 State and local governments, however, are expected both to comply with all environmental laws themselves and to supervise the compliance of the private sector.
1 2This is not ■ problem unique to the executive branch. For example, the two major pieces of water pollution legislation - the Clean Water Act and the Safe Drinking Water Act - fall under the jurisdiction of two different committees in the House of Representatives. The Public Works Committee, with jurisdiction over OVA, and the Energy and Commerce Committee, with responsibility for SDWA, do not even have any Members in common. It is small wonder, then, that revisions to these two pieces of legislation, affecting closely related fields, are prepared with scant reference to each other.
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Washington is generally insensitive to this burden on lower levels of government. One consequence is the common, albeit mistaken, assumption that states have ready access to the resources necessary to develop and run new programs that regulate such things as stormwater discharges and sludge management with only a small initial grant of federal money. The relatively few millions of dollars involved doubtless appear as a much smaller expense at the federal level than they do to state officials.
The larger problem, however, is that increased knowledge about pollution, and the very success of much environmental law and regulation, is gradually making the structure of that regulation obsolete. There is a growing understanding that air, water, and other types of pollution problems are frequently related. It is also becoming clear that "bad actors" are a less significant cause of this pollution than they once were, partly because strong environmental regulation has forced many of them to either change the way they operate or go out of business.
Greater knowledge and changed conditions ought to lead to changes in the way government operates, in environmental policy as in any other area. The compartmentalized, enforcement-based, U.S. EPA-centered body of environmental regulation we have now is increasingly inappropriate. It simply is unable to respond to changing needs. These include relating pollution problems in different media to one another, working cooperatively with business to prevent pollution, and basing efforts to protect the environment on accurate assessments of what those threats are.
To recognize this larger problem is not to endorse a comprehensive solution to it, at least not in the short term. The ideal would be a unified, simplified body of federal environmental law and regulation. Our ideal environmental policy would focus on the greatest threats to public health and the environment and allow states ample flexibility to address local environmental problems according to their own priorities. Practically speaking, this ideal can only be attained through a long period of evolution.
For the near future, we should recognize that federal environmental standards in many areas are both appropriate and important. But they need
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to be based on bard science, not best guesses and good intentions, and they need to reflect some recognition that states' resources to meet these mandates are not infinite. Otherwise they will either not be achieved, or achieved only at the cost of other vital public policy objectives that may be viewed by the public as more urgent. More importantly, if states are going to play an ever greater role in environmental regulation and are going to be forced to pay for these activities, more consideration must be given to local needs and to states' concerns about appropriate standards.
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Mandate |
Cost |
Year |
Clean Water Act a. Regulation |
$5.9 million $6.3 million $10.6 million |
1992 1993 1994 |
b. Wetlands |
$423,400 $3.1 million |
1992 1993-94 |
Safe Drinking Water Act |
$2.5 million $2.5 million $2.6 million |
1992 1993 1994 |
RCRA a. Solid Waste |
$185,000 $2.6 million |
1993 1994 |
b. Hazardous Waste |
$3.2 million |
1992 |
Clean Air Act |
$4.4 million $5.7 million $5.9 million |
1992 1993 1994 |
F1FRA |
$280,000 $280,000 $297,000 |
1992 1993 1994 |
TOTAL ENVIRONMENTAL COSTS
1992 1993 1994
$16.6 million $19.6 million $26.7 million
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CHAPTER THREE TRANSPORTATION & INFRASTRUCTURE
Throughout its history, America has benefited from leadership that recognized the relationship between transportation and economic development. Canal-building, transcontinental railways, and the interstate highway system were the stunning achievements of federal policies that encouraged development of interconnected transportation networks that would permit speedy, inexpensive movement of people and goods between state borders while spurring our emergence as the world's leader in international trade. This could not have occurred without a strong federal role in transportation and infrastructure development.
A similarly strong federal role likely is necessary if America is to retain its world leadership in the future. However, as with many other traditional areas of U.S. government involvement, infrastructure planning, building and maintenance has been overlapped by other concerns that recently have entered the public policy debate. The two most prominent examples are public safety and environmental protection.
There is broad consensus that safety and preservation of the environment are desirable, and can and should be factored into the federal- aid transportation policymaking equation. There is also growing recognition — among governors, state transportation agencies, city planners, the freight and commodity hauling industry and others — of the challenges that accompany formulation of present-day transportation policy, and the flood of mandates that have resulted.
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I. INTERMODAL SURFACE TRANSPORTATION EFFICIENCY ACT
The Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) reauthorized federal surface transportation programs for six years. It also included separate Highway Safety, Research and Intermodal sections, and also contained the Motor Carrier Act of 1991. The legislation was revolutionary and sweeping, dramatically changing the way many federal aid transportation programs are structured and administered throughout the states by making the funding formulas more equitable to states like Ohio.
One thing that was not revolutionary about the Act was its heavy reliance on an increasingly prevalent device: the unfunded federal mandate. Indeed, ISTEA contains a full harvest of new mandates for the states. Here are some examples.
Rubberized Asphalt
One of the more curious provisions contained in ISTEA is the mandated use of rubberized asphalt (derived from discarded tires) as a pavement additive. Section 1038 mandates that in 1994, states will use rubberized asphalt in 5 percent of federally funded projects. The percentage increases to 10 percent in 1995, 15 percent in 1996 and 20 percent in 1997. Not a single state transportation department nor their national organization endorsed the rubberized asphalt provision, and neither did the infrastructure industry nor engineering trade associations. At a time when federal appropriations are placing a tight ceiling on the amount of Highway Trust Fund money available to state transportation departments, the states are not enthusiastic about these provisions squandering precious resources.
If rubberized asphalt's use as an alternative pavement owes to some ostensible environmental benefits, those are difficult to identify considering the fumes, mists, vapors, particulates and other emissions that are created when the rubberized asphalt blend is heated prior to application. There is no
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available environmental test data on this procedure, which is surprising since ISTEA placed such emphasis on integrating national infrastructure policy with the mandates of the Clean Air Act and other environmental initiatives. It seems reasonable to conclude that burning of such a complex chemical mixture poses health risks. Furthermore, there was no prior research on how the presence of rubber will impact the recycling of old asphalt for future use, a practice that is now routine for state departments of transportation.
In the face of all this uncertainty about rubberized asphalt, it is worth noting what is known about it: it is both less effective and far more expensive than conventional pavement materials. The following chart lists those projects that the Ohio Department of Transportation (ODOT) has completed using the federally mandated rubberized asphalt, including a listing of the low bids for this asphalt. These prices compare with a cost of $38.05 per cubic yard of conventional asphalt.
Price per cubic yard
Athens 32 |
997 cubic yards |
$128.00 |
Geauga 88 |
1,219 cubic yards |
125.00 |
Franklin 1-270 |
656 cubic yards |
129.04 |
Athens 7 |
5,913 cubic yards |
108.00 |
Vinton 50 |
5,412 cubic yards |
99.00 |
Wayne 23 |
2,144 cubic yards |
60.00 |
Greene 35 |
4,174 cubic yards |
105.94 |
For these projects, the average cost per yard of rubberized asphalt was $107.94, almost three times more expensive than conventional material. In 1992, ODOT purchased eight million cubic yards of asphalt.
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Based on the current cost differential between conventional and rubberized asphalt, the following graph shows the rapid increase in State costs between these years.
ISTEA Requirement: Rubberized Asphalt
(in millions of dollars)
1997
Total costs between 1994-97 will be $126 million. The percentage of rubberized asphalt after 1997 will remain at 20 percent, costing the State $50.4 million annually.
A 1991 ODOT study of 30 other state transportation departments revealed that only one state transportation agency endorsed rubberized asphalt. Four states with effective tire-disposing programs already in place found that disposing of tires in asphalt was the most expensive disposal technique. They reported it regularly cost up to $4 per tire for disposal in rubberized asphalt while it cost $1 or less to convert tires into fuel. This mandate effectively turns highways into landfills while diminishing highway service life and creating higher construction costs.
U.S. Transportation Secretary Federico Pena recently estimated that the cost to the nation of implementing the rubberized asphalt provisions could reach $1 billion by 1997. He notes that the material has not tested
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long enough over a broad enough range of conditions to conclude that it is an acceptable additive to asphalt, adding that his department "will continue to consider other possible uses for scrap tires that are more environmentally sound and enhance our infrastructure. "
International Registration Plan
ISTEA mandated that contiguous states join the International Registration Plan (IRP). IRP is an agreement among states whereby a motor carrier can register vehicle fleets for travel in all IRP jurisdictions by filing vehicle registration paperwork through a home, or base, jurisdiction. Registration fees are paid to the base jurisdiction. The base jurisdiction collects the appropriate fees due to each member jurisdiction, distributes those fees accordingly and issues the IRP credentials. This enables the carrier to travel legally in each of the IRP jurisdictions.
In 1992, IRP administration cost the Ohio Bureau of Motor Vehicles $2.3 million, and the Bureau receives no federal funding to defray these expenses. Similar costs would be expected each year.
Interstate Carrier Registration
ISTEA called for replacement of the multi-state authority registration system for motor carriers. In its place, the Act mandated a new, single-state insurance registration system. The Interstate Commerce Commission has issued final rules dictating procedures under which carriers should file pertinent registration forms that should include proof of insurance. This fee in Ohio will be $5 per vehicle, and ISTEA mandated that the fee be frozen permanently at its present (as of November 15, 1991) level.
These $5 stamps, applied to a class of vehicles whose total numbers vary little from year to year, yield revenues of approximately $2.9 million per year for Ohio. Moreover, the fee to register carrier operating authority (currently $25 for each type of authority filed in Ohio) is eliminated. With
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elimination of the registration fees, Ohio lost a revenue source that had averaged $82,000 in annual receipts in recent years. The Public Utilities Commission of Ohio (PUCO) reported total transportation regulation expenses of $5.2 million in 1992.
Data from PUCO's Transportation Department illustrates the impact on carrier registration activity costs caused by a mandated federal cap on one revenue source and total elimination of another traditional revenue sources. While the revenue cap will perpetually bind PUCO to current fee levels, future operation costs are projected to increase about 3.5 percent per year, which results in the following cost projections:
Year Total Program Costs Additional State Costs
1993 $5.4 million $182,000
1994 5.6 million 372,000 1225. 5.8 million 572.000
Total $17.8 million $1,126,000
While PUCO Transportation Department expenses will increase a total of $1,126,000 over the next three years, federal mandates prevent the Department from recovering costs through increased fees on interstate motor carriers.
Fixed Guideway System Safety
ISTEA mandates that all states and urban areas in which a fixed guideway (rail) transit system operates shall have in place a rail safety program by September 30, 1993. Ohio has only one such system, operated by the Greater Cleveland Regional Transit Authority, yet the State is proceeding with preliminary plans for complying with this requirement to avoid the loss of five percent of transit apportionments.
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States still await proposed rules (not to mention final regulations) on what their rail safety programs should include, even though ISTEA specified that regulations were to be finalized by December 18, 1992. Although it is difficult to know Ohio's compliance costs from this mandate, we believe it will cost $200,000 to establish the required safety program and operate it for the first year. Operation costs in subsequent years would not be quite as great, but would be significant.
Management Systems
ISTEA mandated the creation of six different information systems requiring states to develop, establish and implement a separate system for managing each of the following:
* Highway pavement of federal highways;
* bridges on and off federal aid highways;
* highway safety;
* traffic congestion;
* public transportation facilities and equipment; and
* inter modal transportation facilities and systems.
The Act also mandated that within metropolitan areas, such systems should be developed in cooperation with metropolitan planning organizations. Such regulations may include a compliance schedule for development of each system and minimum standards for each system. In addition, the Act mandated the issuance of guidelines for the State's development of traffic monitoring systems for transportation facilities and equipment ODOT already has devoted considerable staff time toward implementation of ISTEA's management systems provisions. Because final federal regulations are not expected on this provision until at least autumn of this year, cost estimates are not available for this mandate.
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H. COMMERCIAL DRIVERS' LICENSE
The Commercial Motor Vehicle Safety Act (CMVSA) of 1986 prescribed a national system for licensing commercial vehicle operators. The law requires states to meet minimum testing and licensing standards, establish a system of disqualification for traffic convictions, and develop an automated commercial driver information system. The Act required states to enforce these federal provisions in accordance with certain deadlines - failure to substantially comply would result in loss of federal highway funds. The goal of the CMVSA, and its commercial drivers' license provision, was to improve driver quality, remove problem drivers and establish a system to prevent commercial vehicle operators from having more than one license.
These goals have the full support of the Ohio Department of Public Safety. But from enactment to the present, federal contributions (through reimbursement grants) have been nominal, and have not covered the State's operational costs. In 1992 alone, the Department has incurred administrative, printing, and patrol-related expenses of $2.5 million, of which only $81,337 was reimbursable from federal grants. Ohio expects to incur similar unreimbursed costs of about $2.4 million each year.
m. HAZARDOUS MATERIAL ROUTING
The Hazardous Materials Transportation Uniform Safety Act of 1990 mandated that states designate routes for the transporting of hazardous materials through a new formal proceeding. The Act made any prior local or state designated routes subject to preemption unless the state conducted a review to verify that the existing routes complied with federal requirements.
The proposed rule from the Federal Highway Administration (FHwA) imposes on states a complicated, time-consuming set of activities that must be completed within a limited period of time before a routing designation can be established, maintained and enforced. The Act prescribes an expensive, exhaustive public hearing process. These activities were mandated without providing funding to states to complete these tasks,
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thereby creating a heavy administrative burden for the states that establish routing designations.
The Public Utilities Commission of Ohio (PUCO) recommends that FHwA reimburse states for costs incurred. The most logical avenue would be FHwA earmarks to states, beyond their formula funds, through the Motor Carrier Safety Assistance Program. In the absence of some accommodation, PUCO incurs anticipated direct increases in personnel and equipment costs of $184,500 annually.
IV. RAIL INSPECTION ACTIVITY
With passage of the Federal Rail Safety Act in 1970, states were preempted from regulating any aspect of railroad safety. As an alternative, the federal government compelled the establishment of a federal-state program for enforcing uniform rail safety standards. Under the program, the federal government funded state railroad inspection programs, sharing 50 percent of the cost of the inspections. The Federal Rail Administration (FRA) then compiled reports of violations from state inspectors and assessed civil penalties against the railroads. Ohio was one of the first states to be FRA-certified to conduct rail inspections.
In the last decade, however, federal funding for the state rail inspection program has steadily decreased, and was finally eliminated in 1989. The benefit accruing to Ohio is the control over the program in regard to quantity, quality and targeting of inspections. In other words, the State can develop its own expertise in specific safety disciplines, and can also be responsive to localized problems and concerns. The FRA receives the benefit of inspectors not on its payroll, enforcing its regulations according to its guidelines. Further, the federal government retains the proceeds from all enforcement penalties.
A 50 percent reimbursement of the cost of the personnel, equipment, and activities of Ohio's federal rail safety program amounts to $200,000 per year based on current expenditures. The FRA should reinstitute its funding
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of state inspection work or remove the preemptive provisions that prevent a state from operating its own program. Restoration of the federal reimbursement would restore integrity to the federal-state partnership which Congress originally envisioned. That the program works fairly well in Ohio is purely attributable to the State's dedication to safety in spite of federal abandonment of responsibility.
V. GAS PIPELINE SAFETY
The importance of gas pipeline safety has long been recognized in Ohio. A comprehensive statewide program was already in place prior to enactment of federal regulations in 1968.
The Natural Gas Pipeline Safety Act requires each state pipeline safety enforcement agency to maintain adequate staff to discharge inspection duties. The state agency also must pay for expenses related to staff training at a federal training facility out of state. More important, U.S. DOT requires that certain inspection procedures be followed, and also now compels states to broaden their enforcement jurisdiction to include all intrastate pipeline operators (formerly only utilities were inspected; now everyone transporting gas — private individuals and businesses included — are inspected).
Under the statute, states should receive federal reimbursements up to SO percent of their pipeline safety programming costs, subject to congressional appropriations. Unfortunately, while PUCO pipeline safety activities resulted in 1992 costs of $528,000, the Commission received only $215,000 in U.S. DOT funding that year. Thus, the State was left to provide $313,000, or 59 percent of the total amount needed to run the program. Ohio has been notified it will receive only $202,991 in federal funding in 1993, though total program costs are projected at $621,000 (this makes Ohio's cost $418,000, or 67 percent). The federal government's failure to live up to the 50-50, federal-state participation prescribed in the 1968 statute provides a clear example of an unfunded federal mandate. Ohio's shortfall
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in federal reimbursements, amounting to unfunded mandates of $49,000 in 1992 and $107,500 this year, must be offset by PUCO.
The tendency of Congress to let appropriations lag behind previously established levels of federal participation is well known, but it invariably causes difficulty at the state level. In recent years, only very small states have received close to their full 50 percent federal reimbursement. However, states' problems with this law are no longer strictly, or even chiefly, a question of appropriations shortfalls.
Equally important, the federal government continues to move toward a more performance-based reimbursement system, exerting more cost pressures on pipeline inspection operations. The list of federal requirements on states continues to grow, and new performance criteria are issued often. Examples of federally induced expansions of state responsibility (on which states' performances are rated, and their funding in part is based) have included drug testing for operators and one-call "before you dig" damage prevention phone services. Alcohol testing of operators likely will be required shortly.
This conditional federal reimbursement system results in greater workloads for inspectors. Ohio is in the process of adding inspection staff to try to meet existing federal performance review standards while anticipating issuance of other criteria. Additional staff could cost as much as $140,000 in 1993, and perhaps more in future years. Federal action has had the effect of reducing federal funding to Ohio while increasing State inspectors' jurisdiction and responsibilities.
VI. NATIONAL ENERGY POLICY
The National Energy Policy Act of 1992 requires that publicly owned vehicle fleets begin converting to alternative fuels by 1995. The Act mandates that 10 percent of new state fleet purchases in urban areas be alternatively fueled in 1995, with the percentage requirement rising to 90 percent in the year 2000. These mandates were viewed as necessary because
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alternative fuels and the vehicles that can use them are not cost competitive. The "Mandated Demand" theory behind the federal mandate is as follows: If enough public fleets are required to convert, an alternative fuel industry and vehicle manufacturing sector will be spurred to creation to meet the new mandated demand.
The Ohio Department of Transportation has begun a pilot project in the Cleveland district to convert 20 pickup trucks to operate on compressed natural gas. Based on the bids received, it will cost about $4,000 per vehicle ($81,000 in all) to convert these trucks to burn on compressed natural gas. It will cost ODOT another $150,000 to install a refueling garage in Cleveland. Based on the calculations cited above, ODOT will incur the following costs just for vehicle conversions as the requirements of the Act are phased in:
Year. |
Req'd% of Fleet |
Total Vehicles |
Cost |
1995 |
10 |
30 |
$120,000 |
1996 |
15 |
45 |
180,000 |
1997 |
25 |
75 |
300,000 |
1998 |
50 |
150 |
600,000 |
1999 |
75 |
225 |
900,000 |
2000 |
90 |
270 |
1,080,000 |
In addition, ODOT will need to install at least six refueling facilities at a cost of $175,000 each (a total of $1.1 million over six years). Two such facilities likely would be built in each of the first three years after enactment.
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TRANSPORTATION MANDATE COSTS
Mandate
ISTEA
a. Rubberized Asphalt
b. Registration Plan
c. Carrier Registration
Cost
$12.6 million $25.2 million $37.8 million $50.4 million
$2.3 million
$182,000 $372,000 $572,000
d. Guideway System Safety $200,000
Commercial Drivers ' License $2.4 million
Hazardous Materials Routing $184,500
Rail Inspection $200,000
Gas Pipeline Safety $247,000
National Energy Policy $470,000
$410,000 $470,000
Year
1994 1995 1996 1997
1992
1993 1994 1995
1993
1992
1993
1992
1993
1995 1996 1997
1992 1993 1994
TOTAL TRANSPORTATION COSTS
$4.9 million $5.7 million $18.1 million
1995 1996 1997
$31.3 million $43.3 million $55.9 million
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CHAPTER FOUR THE CHALLENGES TO LOCAL GOVERNMENT
It has been noted repeatedly throughout this study that local governments have been forced, either by design or accident, to shoulder the burden of unfunded mandates. Some mandates are sent directly from Washington to locals. Others stem from mandates originally foisted on Governors and state legislatures and passed on, wholly or in part, to local entities. It is also true that some mandates on local government can only be traced to state government action.
The Unfunded Mandates Subcommittee of the Ohio State and Local Government Commission (SLGC) has collaborated on a report studying the origins, impact and necessity of various mandates on localities. The report notes certain trends with regard to mandates, points to some recent successes in curbing the growth of mandates and was very helpful in the preparation of this analysis.
I. PROGRESS TO REPORT
Local governments in Ohio feel the challenge of federal- and state- imposed mandates every day. They impact how local officials set their priorities and make decisions. To this end, the issue of mandates repeatedly has surfaced during a series of 18 statewide outreach meetings sponsored by Ohio Lt. Governor Mike DeWine and attended by more than 2,000 local officials. Local officials cite mandated costs as the fastest-growing portion of many of their budgets, especially those involving jails and environmental services.
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The SLGC's Subcommittee reports that Ohio government, through the leadership of Governor Voinovich, Lt. Governor DeWine and the General Assembly, has gained a clear understanding of the impact mandates have on local governments. In the past two years, some State mandates have been "turned back" - either modified in favor of local government decision- making, or by providing State funding. Local governments have realized savings from these changes in excess of $30 million over two years.
There are several excellent recent examples of State mandates that have been amended or turned back, delivering either cost savings and/or greater authority and flexibility to local governments. These include:
* Local Share of Highway Improvements - The Ohio Department of Transportation has turned back mandated local percentages of the cost of major repairs or construction to State highways through municipalities, saving local governments in Ohio some $14 million annually in each of the past two years;
* Jail Standards - Ohio's jail inspection program was modified to introduce greater local flexibility into the jail standards process. Local governments may now seek reconsideration of State inspection decisions, may propose changes to established State jail standards, and have substantive representation on an inspection advisory board. This has resulted in several hundred thousand dollars in savings for local governments;
* County Personnel Services - Previously, the State of Ohio charged counties a fee for managing their personnel records operations. Changes made in 1991 have permitted Ohio's counties idependently to design and administer their own civil service operations, which are subsidized by the State. Local governments have more flexibility and have saved $1.8 million over two years from these changes; and
* Managed Two- Year Audits - Under newly enacted law, the State auditor was given greater discretion to waive, under certain
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circumstances, a two-year audit requirement on local governments, resulting in savings to locals in excess of $200,000.
The Columbus Experience
The City of Columbus has been a national leader in focusing attention on cities' compliance costs incurred through various unfunded mandates. The city's exhaustive 1991 study documenting specific environmental mandates and their immediate and long range impacts have guided the efforts of a host of other cities nationwide, each now wrestling with similar costs and seeking some redress for their mandate-related problems. In Ohio alone, eight other metropolitan areas have completed environmental mandate studies similar to the Columbus model. These cities have documented expected compliance costs totaling $2.8 billion over the next ten years.
Based on the findings of the study, Columbus prescribed four principles to inform future policymaking and steer federal lawmakers away from passing on further environmental costs to local governments.
• Environmental legislation and resulting regulations should be formulated on well-founded, peer-reviewed science - not speculation, exaggerations or scare tactics.
* Local governments should be able to prioritize their resources to achieve the greatest environmental risk reduction with available funds. One-size- fits-all regulation is counter-productive at the local level because the environment differs from one area to another.
* Because of variable local environmental conditions, flexibility should be incorporated into the federal and state regulatory process.
• Local governments should be afforded the opportunity for fuller participation in the environmental legislative and regulatory process. The costs associated with mandates are so large they can virtually dictate communities' budgets.
The State of Ohio has also maintained several state aid programs that share state revenue with local governments. The two most important aid programs are the Local Government Fund and the Capital Improvement
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Program. The Local Government Fund contained $482 million in 1991 and an identical amount in 1992.
In calendar year 1992, the State's Capital Improvement Program totaled $250 million and has totaled $868 million since its inception. At the same time, the SLGC Mandate Subcommittee notes that the Ohio General Assembly has passed fewer mandates in each succeeding recent session, during which a trend toward more permissive legislative proposals has been discerned.
In April 1993, the County Commissioners Association of Ohio (CCAO) confirmed what other recent profiles had determined - the number of newly passed mandates has declined over the past four years. Increased intergovernmental cooperation, between Ohio's state and local governments, is one apparent welcome result of the recent local effort to spotlight their mandate problems. Additionally, it is significant that a 1992 study prepared for the National League of Cities and the Ohio Municipal League revealed that only 2.5 percent of Ohio cities and villages, compared with 20.5 percent nationally, considered state aid a factor unfavorably influencing their ability to balance their budgets.
II. LOOKING TO THE FUTURE
Local government members of the Unfunded Mandates Subcommittee all agree on two things: Through cooperation with State officials, they have begun to chip away at locals' mandate problem in Ohio; and, they still have a long way to go.
There is a shared understanding among state and local officials that the problem only can be solved partially at the state level. Representatives from both levels will continue to seek solutions and coordinate resources to attack the problem. Already, all levels of government in Ohio continue their coordinated ongoing effort to review all mandates, identify and end outdated ones and, ultimately, turn back new mandates.
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However, the Unfunded Mandates Subcommittee recognizes the limitations of all this cooperation among state and local government officials. All agree that serious progress on the mandates question will require cooperation at the federal level before the problem can be addressed fully.
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CHAPTER FIVE TOWARD A NEW FEDERALISM
I. NEW MANDATES
According to the National Conference of State Legislatures (NCSL), which maintains a formal mandate tracking system, the 101st Congress approved 20 new mandates costing the states in excess of $15 billion. Over 200 bills were introduced in the 102nd Congress that impose unfunded federal mandates, and 15 new mandates were enacted despite the fact that no omnibus budget reconciliation packages, the traditional vehicle for many mandates, were considered during this period.
Regrettably, the pace of new mandates continues unabated. NCSL's tracking system has identified over 100 bills containing unfunded mandates introduced thus far in the 103rd Congress. In fact, the first two major bills enacted during the 103rd Congress - the "Motor Voter" bill and the Family and Medical Leave Act - both contain unfunded mandates, and Congress is poised to begin serious consideration of several more bills that impose mandated costs on state and local governments.
The Motor Voter bill (The National Voter Registration Act) requires each state to establish procedures for voter registration at state motor vehicle offices, by mail, and at all public assistance offices. The Congressional Budget Office estimated that the costs of implementing the program in the 25 states that do not have a motor voter program would be $100 million over the next five years, but this is not a complete estimate. Although Ohio already has its own motor voter program, which was effective in registering over 40,000 voters in 1990, this legislation still
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Judicial Mandates: Adding to the Burden
Congress and federal regulatory agencies are not the only sources of mandates on states. Court decisions also force states to incur costs, change laws, and reorder priorities. These costs are significant. The National Association of State Budget Officers (NASBO) reports that the second-fastest growing category of state spending (after Medicaid) is prison construction, an area strongly influenced by court decisions.
The precise extent to which court decisions impose costs on states is not known. Very little research in this area has been done. This is probably due in part to the fact that court orders directing states to take positive action ~ as opposed to decisions that merely stop states from taking action - are a relatively recent phenomenon. In addition, there are a number of problems involved in trying to pinpoint the impact of judicial mandates.
First, unlike congressional mandates, judicial mandates do not come from just one source. They can originate in state or federal courts at any number of levels, and can be modified at any stage of an appeals process that can take years. In addition, judicial mandates often apply to only one state, and may or may not have consequences in others depending on the subject and the policies being pursued by the other state governments.
Most judicial mandates to states appear to be based on a determination by judges to uphold Constitutional rights. This is true in fields as diverse as voting rights, education funding, and prison construction. Consequently, the costs can reach unlimited proportions.
Finally, it is not always easy to distinguish the costs imposed on states by judicial mandates and those imposed by actions of the state's own legislature. For example, courts in many states have required states to take costly action to relieve prison overcrowding, which in some cases has been aggravated by a trend in state legislatures toward approving longer, often mandatory prison sentences for more types of crime.
The lack of useful data on the cost of judicial mandates places the subject outside the scope of this survey. However, the apparent significance of the costs associated with these mandates, and the importance of the Constitutional issues they frequently involve, suggest that extensive research in this area would be worthwhile.
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imposes new costs and administrative burdens. One-time implementation costs for Ohio's Bureau of Motor Vehicles are estimated at $65,000 with $48,000 in annual costs. Additional expenses will be assumed by the Secretary of State, county boards of elections, and other state agencies.
Similarly, the Family and Medical Leave Act requires all employers to offer employees 12 weeks of unpaid, job-protected leave in the event of birth, adoption, or personal or family illness. Employers also are required to fund continued health insurance during the leave period. Even though Ohio already offers liberal leave benefits, the Ohio Department of Administrative Services estimates that this legislation will impose total annual costs of $250,000 to $475,000.
Unfortunately, numerous bills are pending in Congress that contain mandates for state and local governments, and there are countless public policy questions that may receive federal answers over the next year and beyond. For instance, the debate over health care reform may well be decided at the federal level with dire consequences for states, especially if it restricts state flexibility and innovation.
Also, the most prominent piece of environmental legislation pending in the 103rd Congress is reauthorization of the Clean Water Act. This legislation is replete with new mandates in such areas as water quality standards and monitoring, watershed management, and pollution from "non- point" sources such as construction sites, parking lots and farms.
II. CONGRESSIONAL RELIEF
Fortunately, there is also a bright side as a growing awareness within the Congress is emerging about the impact that mandates have on states and local communities. Increasingly, members of Congress, many of them former state legislators and local officials,11 are recognizing that unfunded mandates cause budgetary havoc outside Washington. This recognition has
13 Almost 70% of the members in the freshmin class of the 103rd Congress are former state legislators or local officials.
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resulted in increased sensitivity to the mandate problem as evidenced by the introduction of numerous bills (see table on the following page) in both houses of Congress that would give states varying degrees of relief from unfunded mandates.
For the most part, anti-mandate legislation introduced in the 103rd Congress falls into two categories. The first category would not compel compliance with future mandates unless federal funds are appropriated to reimburse states and local governments for the costs of implementing the mandate.
The second category Would tighten current budget law. Under current law, the Congressional Budget Office (CBO) is required to analyze and report on the costs federal legislation imposes on states and local governments. Because of a number of loopholes in the law, cost estimates are the exception, not the rule. Loopholes under which CBO does not have to submit a cost analysis include: amendments made after full committee consideration; legislation that is expected to cost state and local governments less than $200 million a year; if the analysis cannot be provided in a timely matter; and finally, if the mandate is included in a reconciliation or appropriations bill.14 Consequently, information is rarely available during congressional debate on the cost of the bill to state and local governments as a whole, yet alone the costs to a member's home state or constituent local governments. The result is many mandates are approved by Congress without any information about the costs. At a minimum, members of Congress should be aware of the fiscal impact legislation has not only on the federal budget, but on state and local budgets as well. After all, the taxpayer is required to foot the bill one way or the other.
Frustrated with Congress' inattention to the mandate problem, some members of Congress have proposed innovative, even drastic solutions to the problem. For example, Congressman Paul Gillmor, the former President of the Ohio Senate, has proposed that a Mandate-o-Meter be placed in each
l4Most mandates, incidentally, are found in reconciliation bills.
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House of Congress, highlighting the costs of all unfunded mandates imposed by the current Congress. Congressman Bob Franks, a former state legislator from New Jersey, has introduced legislation that would amend the
CBO Cost Estimate Required |
|
Nickles |
S. 81 |
Hatch |
S. 490 |
Moseley-Braun |
S.563 |
Gregg |
S. 648 |
Ewing |
H.R. 830 |
Ginger |
H.R. 886 |
Shays |
H.R. 1006 |
Baker (LA) |
H.R. 1088 |
Moran |
H.R. 1295 |
Reimbursement |
Stump H.R. 410
Funding Else Requirements Waived
Gregg |
S. 648 |
Kempthorne |
S. 993 |
Condit |
H.R. 140 |
Snowe |
H.R. 369 |
Hefley |
H.R. 894 |
Dreier |
H. Con. Res. 51 |
Source: National Conference of Sale Legiriatufet
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Constitution to declare that states not be obligated to comply with mandates unless the costs are reimbursed by the federal government.
Several members of Congress also have joined together to form the Task Force on Federal Mandates, chaired by Congressman David Dreier. The task force intends to hold hearings on the impact unfunded mandates have on state and local governments, serve as mandate "watchdogs" and develop a legislative strategy to combat new mandates as well as scale back existing mandates.
While Congress continues to pass on unfunded mandates, there is growing cause for optimism as more and more policymakers come to understand that unfunded mandates cause more problems than they solve. Perhaps the most heartening statement was made by Senate Majority Leader George Mitchell, "I believe we can no longer impose mandates on states and local governments without providing the resources to meet those mandates." Governors unanimously believe it is time for Congress to put all these good intentions to practice and eliminate the practice of unfunded mandates.
m. PRESIDENT CLINTON AND THE GOVERNORS
States had high hopes for better relations with the federal government with the inauguration of a former governor who had promised "a new reality and partnership with state and local government." During the campaign, then-Governor Clinton pledged to local officials, "I'm going to stop handing down mandate after mandate without giving you any money to pay for it. As a governor, I've had to deal with that problem for the last decade, and I know we can do better." Unfortunately, early enactment of two new unfunded mandate bills, the Motor Voter bill and the Family and Medical Leave Act, in the 103rd Congress has been an inauspicious beginning in this new partnership.
During his tenure as Arkansas Governor, Bill Clinton was the chairman of the National Governors' Association and was a long-time member of its Executive Committee. NGA has a long and distinguished
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record of opposing federal preemption and unfunded mandates, which then- Governor Clinton strongly supported.
NGA policy also calls for a reduction in the number of joint federal- state programs and a sorting out of responsibilities between the two levels of government. And, in fact, the governors already have attempted to simplify federal-state programs. In response to a recommendation made by President Bush in 1991 to consolidate block grant programs, NGA and NCSL co- developed a proposal to consolidate a variety of functionally similar federal grant programs, which would enhance the States' flexibility in utilizing this assistance while reducing federal costs for oversight.
Governors of both parties remain hopeful that President Clinton will fulfill his commitment to eliminate mandates in partnership with the states, especially in light of the number of former governors and mayors who serve in his Administration and who have had personal experience dealing with this problem. President Clinton recently reaffirmed his support for this position when he told the nation's mayors, "I have told our administration clearly that I don't want us up there on the Hill supporting bills to load up a bunch of new burdens on the mayors and the governors when they're broke, when we're not increasing funding to the states and the cities as we should."
The Republican Governors Association, which is chaired by Governor Voinovich, also has made fighting unfunded federal mandates a top legislative priority. In the RGA's first-ever legislative agenda, the nation's Republican governors called on members of Congress to oppose and President Clinton to veto any legislation that imposes further mandates without also providing adequate funding necessary for the states to provide these services.
The Republican governors met in February of this year with the Republican congressional leadership to enlist their support in combating mandates. To this end, Congressman John Kasich included a provision in the Republican budget alternative requiring that all mandate costs be reimbursed (the Republican budget package was defeated on the House
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floor). Similar legislation has been introduced in the Senate, but has yet to receive the same consideration as the House bill.
IV. FEDERALISM
Mandates are merely one often overlooked component of a series of larger challenges states face in their relations with the federal government. Unfunded mandates are just one of many areas of state-federal relations that argue convincingly for a redefinition of the roles of federal, state and local governments to make government more responsive to today's challenges.
Several scholars have noted that there have been two periods of great expansion in the scope of the federal government in this century — during the Great Depression and the Great Society programs. During these periods, state governments were viewed as unresponsive to the pressing problems of the day, with neither the will nor the resources to address societal needs — economic recovery in the first case and the war on poverty and racism in the second.
Yet while the situation has changed dramatically since the last period of federal expansion, our system of governing has not. State agency officials are more professional, and states have become the great innovators or the "laboratories of democracy," responding to a broad array of social and economic challenges while maintaining fiscal discipline. The federal government, on the other hand, is too centralized and broke, and is viewed largely as unresponsive to many national concerns.
Unfunded mandates are not just a fiscal issue. Clearly, the costs are great, but even in the absence of federal mandates, states may well have decided to offer many of the services prescribed by the federal government. Mandates reflect the states' diminishing power to develop and implement policies and programs that best meet local concerns by taking policy choices away from governors, state legislatures, and local officials. While mandates often reflect well-intentioned policy goals, some would argue that they are questionable from the standpoint of real effectiveness. Cities, counties, or
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states that have effective programs that meet the broad goals of federal legislation sometimes must scrap them entirely in order to develop newer, more costly programs simply to comply with federal fiat.
"Thirty years ago, a bias for federal action made sense. Today, bias for state and local action makes sense," argues David Osborne in Mandate for Change. Yet this natural bias for state and local action regularly is circumscribed by congressional mandates that preempt effective state and local programs.
For example, Ohio's comprehensive statewide solid waste management plan includes criteria for siting, building and operating solid waste landfills widely recognized as being thoroughly protective of public health. While this has not been the case in every state, that cannot justify requiring Ohio to change most of its landfill rules to conform to federal standards that in some respects are weaker than the state's. Other examples of federal preemption of state authority already discussed in this study include the Family Support Act of 1988, the Boren Amendment, and rail inspection activities.
States are justified in their concern that the unfunded mandate problem will be aggravated by the federal budget deficit unless immediate action is taken. Any serious effort to reduce the budget deficit is likely to produce two phenomona that will increase the states' burden.
First, necessary reductions in federal expenditures will require significant changes in federal grant funding to state governments. Some programs probably will be consolidated, others will be terminated. States almost certainly will receive less assistance from the federal government as domestic discretionary funding is reduced.
Second, recent history has proven that Congress has looked more and more to state and local governments to mandate the provisions of what they believe are necessary services when budget considerations have inhibited the creation of new domestic programs. As David Osborne and Ted Gaebler point out in Reinventing Government, "[A]s the federal deficit widened, Congress increasingly turned to mandates - in essence, categorical
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programs without the funds." The combination of these two phenomena, reduced federal assistance and an increasing number of unfunded mandates, would place states under severe pressure to respond to local problems and create their own initiatives while maintaining balanced budgets, which in the vast majority of cases are required by law.
Yet today the argument for federal micromanagement of state and local affairs is weaker than ever. Collectively, the states have made impressive strides in improving the delivery of needed services and in developing innovative solutions to local problems. The federal government, for its part, still has the will to remain involved in local issues, but no longer has either the resources or the justification for prescribing top-down solutions to national problems. As President Reagan said, "While much of the 20th century saw the rise of the federal government, the 21st century will be the Century of the States."
Although there is a need for less federal intervention in state and local affairs, there are many valid reasons for the federal government to remain involved in matters of local policy. For instance, federal guidance on environmental issues is essential. Naturally, air and water flow across borders. They do not belong solely to one city or state. The national interest clearly is not serviced if one state fails to implement programs that produce measurable results in improving environmental quality and preventing identifiable threats to the public health. But, states also need the flexibility to be able to tailor programs to local concerns and conditions.
Federal initiatives should build on existing state programs, not preempt them. States need the flexibility and resources to enforce environmental laws absent compelling justification for federal involvement. The bottom line is if the federal government is to dictate programmatic efforts to improve the environment, they should pay the bill. Setting standards is the easy part when the Congress does not have to worry about how to fund these new initiatives. As former New York City Mayor Ed Koch said, "My concern is not with the broad policy objectives that such mandates are meant to serve, but rather with what I perceive as the lack of
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comprehension by those who write them as to the cumulative impact on a single city, and even the nation."1*
Proponents of reassigning governmental responsibility such as Osborne and Alice Rivlin argue that this approach would have several beneficial effects. First, clarifying overlapping responsibilities would make the federal government and the states more accountable and help reduce voter alienation. Second, state and local governments would have enhanced flexibility in developing innovative programs to respond more effectively to problems by tailoring policies to best meet local conditions. Third, devolving federal responsibility for certain policy areas would reduce federal expenditures and the deficit. Finally, there would no longer be any reason for Congress or regulatory agencies to impose unfunded mandates.
Such radical reforms at all levels of government would surely meet certain challenges. First, redefining responsibilities and finding new sources of funding for some programs while abandoning others would be extraordinarily difficult to enact. Second, there are numerous vested interests that would oppose any change in the status quo. Single issue interest groups naturally would prefer to continue dealing primarily with the Congress to enact preferred reforms rather than 50 separate legislatures. Third, the states might have to raise revenues significantly to fund programs that currently are shared with the federal government. Lastly, there is a question of equity. Poorer states have fewer resources to pick up new responsibilities effectively, and federal assistance traditionally has been intended to help ameliorate the inequities among the states.
A more effective division of governmental responsibilities is essential. States need more flexibility and have demonstrated conclusively over the past decade that they are capable and ready to handle these new responsibilities. At this time, neither the federal government nor the states have focused sufficiently on the best ways to accomplish this objective. As discussed in a previous section, the states have taken an initial step by suggesting the consolidation of functionally related programs into block grants that provide enhanced flexibility. This is just a beginning. More
"Edwaid I. Koch. The Mandate Millstone/ Be Public Interest. Fall 1980.
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attention is needed from Congress and the Clinton Administration. President Clinton appears to be sympathetic. In a February meeting with the nation's governors he said, "My view is that we ought to give you more elbow room to experiment."
The responsibility of managing state government has become increasingly challenging as budget and revenue decisions have become more difficult each year. Unfunded mandates and other decisions in Washington significantly compound these difficulties.
Success in managing states increasingly depends on an effective partnership with the federal government. Decisions on how states spend scarce dollars should be made by state government officials who are elected by and accountable to state voters. In the final analysis, government would be more effective at all levels if federal and state leaders would work in true partnership.
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