Intergovernmental Relations Unfunded Federal Mandates:

Intergovernmental Relations

Unfunded Federal Mandates: Implications for Intergovernmental Relations

What are Unfunded Federal Mandates?

While the relationship between the federal and state governments was created in order to protect the people from tyranny and allow them to be represented by those who know them best, it sometimes backfires. This is especially clear when it comes to the issue of unfunded mandates. Unfunded federal mandates occur when the federal government requires state or local governments to meet certain requirements, institute certain programs, or fulfill certain obligations without providing the state or local governments with the means to satisfy these mandates. Since the 1990s, both presidents and congress have attempted to reduce the number of unfunded mandates given to smaller governments. The Unfunded Mandates Reform Act of 1995 gives the following definition of an unfunded mandate:

any provision in legislation, statute, or regulation that would impose an enforceable duty on state, local, or tribal governments or the private sector, or that would reduce or eliminate the amount of funding authorized to cover the costs of existing mandates (National Conference of State Legislatures, 2008, para. 1).

Unfunded mandates such as these are a problem for state and local governments because the smaller government is left to its own devices in order to determine how it will pay for the mandated action. These mandates often end up costing states billions of dollars, such as the $30 billion that the National Conference of State Legislatures estimated the mandates would cost states in 2006 (McIlroy, 2005, para. 3). Examples of unfunded federal mandates include the following: "the Clean Air Act, the Clean Water Act, the Homeland Security Act, the Individuals with Disabilities Act and the No Child Left Behind Act" (McIlroy, 2005, para. 5). Despite measures such as the Unfunded Mandates Reform Act of 1995, the federal government has continued to pass unfunded mandates. In addition, a great deal of legislation is passed that may not meet the definition of "unfunded mandate," as defined by the congressional committees or the Unfunded Mandates Reform Act of 1995, but those pieces of legislation still require a commitment from the state and local governments.

II. A History of the Issue

Unfunded mandates have occurred for many decades. Thompson and Green (1998) call the Civil Rights Act of 1964 "one of the earliest 'unfunded mandates" (p. 386), while the Texas Association of Counties (n.d.) gives what it calls a "glaring example" of an unfunded mandate from 1985. This mandate, which was "mostly unfunded," required counties and public hospitals to pay the bills of indigent patients with a maximum payout of $30,000. Thus, this suggests that unfunded mandates have a long history of use in the American government, occurring at both the state and federal level. In the 1990s, states began to fight federal mandates through the Unfunded Mandate Reform Act. The act, which was passed in 1995, was "intended to focus more attention on the costs of mandates imposed by the federal government on other levels of government or the private sector" ("History and Evaluation," 2004, para. 1). Thus, the primary goal of this act was to require the federal government to consider the financial consequences for smaller governments before passing bills that left these smaller governments financially responsible. Some evidence suggests that the bill has been relatively successful since the act's implementation. More information has been provided to legislatures regarding the financial consequences of unfunded mandates, and some bills have even been revised to reduce the impact on lower governments' finances before being passed ("History and Evaluation," 2004, para. 37). Still, the act is considered to be far too narrow for some, excluding legislation that can really be considered mandates ("History and Evaluation," 2004, para. 46). Thus, this act has let various mandates slip through the cracks, which suggests that previous congressional attempts to resist unfunded mandates have been unsuccessful. The history of unfunded mandates, then, is a long one that could be filled with many examples. Although States have attempted to rebut unfunded mandates, they are still being passed by congress, despite congressional statements regarding the problems of unfunded mandates.

III. A Description of the Actors Involved

The issue of unfunded federal mandates has two principal actors, which fill the roles of givers and receivers or creators and receptors. The creators are those who draft the legislation and implement it. Generally, this role is filled by the United States federal legislature -- the congress, both members of the Senate and House. In addition, the president is also involved in this role. Certainly, it is important to mention the intergovernmental relationship between a president and congress in this capacity. Many federal mandates, through drafted and finalized by congress before being handed to the President to sign, have been instigated, supported, or slandered by the president since their very inception, as the white house is generally greatly involved in legislation. Perceptions support this point. While the No Child Left Behind Act, which many consider to be a bearer of great federal mandates, was passed by congress, it is generally considered to be President George W. Bush's special project.

On the other side of the table are the receptors, the state and local governments that must implement the actions stated in the unfunded mandates in addition to finding ways to financially support them. This intergovernmental relationship is quite different from many others, where systems of checks and balances allow an interplay of ideas and opinions to fashion legislation and opinions. Instead, state and local governments affected by federal mandates have no real way of appealing the decisions imposed upon them. McIlroy (2005) makes clear the emotions associated with this situation, as she paints a picture of frustrated, struggling local officials who are chafing under the pressure to raise taxes or cut programs in order to make way for the federally mandated programs.

IV. The People Affected By The Policy Issue

Across the country, people in all walks of life are affected by the continued passage of unfunded mandates. Of course, legislators are affected by the frustrations associated with such legislation and the difficulties it creates for them, but the problems have been passed on to the general public, as well. Because of unfunded mandates, the general public must often deal with higher taxes and fewer services (McIlroy, 2005, para. 11). One of the most significant ways that this can affect the general public is through gasoline prices. Obviously, gasoline prices are often a subject of much dispute, as they tend to threaten citizens' ability to work and travel when rising. The Alternative Energy Foundation (2009) has suggested that federal mandates requiring a certain amount of ethanol in gasoline will force gasoline prices to raise, affecting ordinary citizens with the increased cost (para. 2).

According to Thompson and Green (1998), the consequences of the rising number of unfunded mandates on the people can take another, more philosophical turn. Because the only way to divert costs from unfunded mandates is raising taxes or cutting programs, the lower level governments will no longer be able to "achieve the benefits of decentralized policy making" (p. 386). The benefits of decentralized policymaking apply directly to the people, as they are the benefits achieved by legislatures that make policy for they know best. For instance, the theory behind decentralized education suggests that states know what is better for their students than the federal government. With unfunded mandates, states, and eventually students, loose that benefit.

V. How the Issue Will Be Resolved

In order to eliminate the problems associated with unfunded mandates, it will be more necessary to implement further legislation akin to the Unfunded Mandates Reform Act, but with more scrutiny. This time, it will be necessary to make the act broader, covering all possible cases of unfunded mandates, and requiring a deeper process of research regarding each case. The goal of the new act will be similar to the goal of the Unfunded Mandates Reform Act, requiring congress to take a longer period of time to analyze the problems inherent with unfunded mandates before pasting them. This act will consider any bill that requires a smaller government to put a program into place without due compensation to be considered an unfunded mandate. In addition, the bill will contain a prevision that allows representatives from the smaller government affected to meet with congressional representatives in order to come to a better, more financially feasible plan. By doing this, some of the intergovernmental inequality issues will be resolved, allowing the government to act as the founders originally wanted it to act -- in collaberation -- rather than increasing the power of the federal sector.

This being said, it is important to remember that unfunded federal mandates are occasionally required in the state of dire emergency when the federal government must take responsibility for the actions of the states. Thus, barring unfunded mandates is not a feasible solution to this problem. The proposed bill, which encourages collaberation, however, is a better solution because it is aimed at the root of the problem -- the intergovernmental relationship between the state and federal governments. Still, state and local governments must realize that unfunded mandates will still occur, and when that happens, federal resources must be made available to state and local governments in order to help them make responsible financial decisions. Thus, an advisory board should be put into place to assist state and local governments in dealing with unfunded federal mandates as a further bridge in the communication gap between these two sources of government.