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Full text of "Federal mandates on state and local governments : hearing before the Committee on Governmental Affairs, United States Senate, One Hundred Third Congress, first session, November 3, 1993"

S. Hrg. 103-405 

FEDERAL MANDATES ON STATE AND LOCAL 

GOVERNMENTS 



Y 4. G 74/9: S. HRG. 103-405 



Federal Mandates on State and Local... 

tiHiARING 

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 



?aN K» : ' 



APR 1 9 1994 



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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 




\\V S. Hrg. 103-4 

FEDERAL MANDATES ON STATE AND LOCAL 

GOV ERNMENTS 

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 



IPa?INTawi«»lOFO0CM|U|R Bh 
ncortormov 



APR 1 9 J994 



•nS^sa^sasau 




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: Pa s? 

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 

(1) 



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. 



6 

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. 



11 

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. 



12 

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. 



13 

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 



14 

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 



15 

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. 



16 

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- 



17 

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. 



18 

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. 



19 

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 



20 

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. 



21 

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. 



22 

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. 



23 

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. 



24 

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- 



25 

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. 



26 

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 



27 

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 



28 

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. 



29 

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. 



30 

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 



31 

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? 



32 

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- 



33 

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- 



34 

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? 



35 

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- 



36 

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. 



37 

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. 



38 

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. 



39 

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. 



40 

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. 



41 

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 



42 

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. 



43 

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. 



44 

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. 



45 

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- 



46 

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 



47 

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. 



48 

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 



49 

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. 



50 

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 



51 

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. 



52 

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- 



53 

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.] 



54 

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. 



55 

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- 



56 

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? 



57 

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. 



58 

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- 



59 

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 



60 

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) 



62 



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. 



63 



Sen. Judd Gregg Page 2 

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 



64 



Sen. Judd Gregg Page 3 

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 



65 



Sen. Judd Gregg Page 4 

$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 



66 



Sen. Judd Gregg Page 5 

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 



67 

Sen. Judd Gregg Pa 6e 6 

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. 



68 

Sen. Judd Gregg p *6e 7 

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 



( 69 

Sen. Judd Gregg Pa 6 e 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 



70 i 

Sen. Judd Gregg Pa B e 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. 



71 



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. 



72 



Summary of Gregg Unfunded Mandates Resolutions 
- Amendments to the Senate Rules - 

S. Res. 157 - Rules Amendment nn Commi ttee 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. 

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. 



73 



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 



74 



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 



75 



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 



76 



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 



77 



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 



78 



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 



6 



79 



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. 



80 



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 



81 



Page 2 

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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/ 



Page 3 



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. 



Page 4 

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. 



84 



Page 5 

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. 



85 



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 C OMMI TT EE 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. 



86 



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 



87 



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. 



88 



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 r ep r esents 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. 



89 



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 rela te 
and local government 

Let me suggest four basic principles. 

Principle i: T^< T i«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 govern m ents 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 com m i s s ioner s have no vote on whether 
these mandated spending programs are ap propri a te 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 



90 



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. 

# # # 



91 



EDWARD a. REMDBLL 

MAYOR 

CITT Or PHILADELPHIA 

TBSTIKOHT BEPORE THE 0.8. 3BMATB COMMITTEE 
OH OOVERMMEMTAL APPAIR8 

NOVEMBER 3, 1993 



92 



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. 



93 



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 



0171. DIC 



94 



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 



0171.0LC 



95 



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, 



0171. DLC 



96 



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: 



0171 .DIC 



97 



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 



98 



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 



99 



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 



0171 .DIC 



100 



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. 

12 017: .oic 



104 



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 Ri sk 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 



105 



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 ("ppb M ) 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 



108 



Congress acts now and passes S 993 will it put an end to a 
practice that is figuratively eating cities alive. 



17 



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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." 



115 



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 



116 



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." 



117 



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 



118 



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. 



119 



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 



120 



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 mandates " 

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 O ffice ot Ma nqament arifl P llH ff*' 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 



121 



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 su mmin g 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 





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 



11 



157 



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: 

A-l 



158 



-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) 

A-2 



159 



-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 



A-3 



160 



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. 

A-4 



161 



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 



A-5 



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. 



163 



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: 



164 



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 



165 



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 



166 



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 



167 



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 



168 



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 



169 



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. 



170 




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 



171 



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. 



172 



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 



173 



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- 



174 



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 



175 



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- 



176 



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. 

6 



177 



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. 



178 



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 

8 



179 



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. 



9 



180 



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. 



10 



181 



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 



182 



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. 



183 



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. 



188 

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. W AS 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 O c 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 



- 3 



194 



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. 



195 

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. 



196 



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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Federal Register / Vol. 58. No. 190 / Monday. October 4. 1W3 / Presidential Documents 51737 



(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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51738 Federal Register / Vol. 58. No. 190 / Monday, October 4. 1993 / Presidential Documents 



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- 



201 



51740 Federa! Register ' Vo'. sr,, N tor .' Monday, O- ipbw i 191Q ' I'resiopnlm! l)ornmrr,> 

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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Federal Register / Vo! 56. No. 190 / Mondav. October 4. 1993 / Presidential Documents 51743 



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 



205 



51744 Federal RegiMer / W 58. No 19C / M6ndav.Oc.o-ber 4. 199.'. ? Presidential Oocumcnt* 



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 
th 9 Advisors. The guidelines and time period set f Prt h 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 °' ,""* P T^!°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 



208 



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. 



210 



-2- 

♦ 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. 



211 



-3- 

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 



DO N NICK LES 

— 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 





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/ 





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* 


•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* 


27 


3.6* 


SUBSTANCE ABUSE BLOCK GRANT 5 


1.131 


1.131 


1.097 


1.201 


1.177 





0.0* 


47 


4.1* 


MENTAL HEALTH BLOCK GRANT 


278 


278 


268 


278 


278 





0.0* 





0.0* 


CHILD WELFARE SERVICES 


295 


295 


295 


295 


295 





00* 





0.0* 


COMMUNITY SERVICES BLOCK GRANT 


372 


372 


372 


390 


386 





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* 


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% 


8 


5.7* 


REFUGEE ASSISTANCE 


381 


420 


400 


400 


400 


39 


10 1* 


19 


4.8* 


UNDOCUMENTED ALIENS IMPACT GRTS 7' 





400 











400 


ii 





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 


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 





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* 


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; 





60 





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 co n fe rence 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 c o nfe r ence 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 com munit ies 

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 assu mes S28S million in medicaid savings including the elimination of enharux d 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. 



223 



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 



224 



Mandates are int e n ded 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) 



225 



• 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 



226 



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 



227 



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 

5 



228 



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 



229 



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 



230 



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 

8 



231 



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. 



232 



• 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; 

10 



233 



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 

11 



234 



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 re p rese ntative 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 Pre em pti—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. Occupatio nal Sa fety 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 re quir ements— 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). 

.iHo HSJ Wiiiii Sat Pej ssS S KS Vtr Tw l 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 Prot e ction 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 Req uir eme n ts 

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 yean 1 

$428 million capital costs; 

S128 million annually for ope r atio n s 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 De p e Hu w M i d G u n au ai i e . 

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 




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 man dates 
Our research reveals many opp or tun ities 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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B-99* 10-29-93 04:49PM F007 831 



244 



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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245 



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 g en er ate d 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 Incorpor a te 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. 



254 



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. 



255 



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. 



256 



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 



257 



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 



258 



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 b e twe en $400 million and $800 million. 
4 This population is referred to as Qualified Medicare Beneficiaries (QMB's). 



259 



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. 



260 



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; 



J Cash welfare payments could be limited to six months out of twelve, but Medicaid must continue. 



261 



* 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 



262 



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 



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* 



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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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* 



271 



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. 



22 



275 



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 



23 



276 



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. 



27 



280 



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 levels 9 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 



9 Wbea 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 
Nonattainment 10 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 2 This 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 MANDA TE 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 



l4 Most 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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