D. Dowd Muska


Good Fences Make Good Governments

December 12, 2013

Towns, cities, special taxing districts, counties, states, and Washington suffer from what mental-health professionals call “boundary issues.”

Governments regularly impose mandates and rules on subordinate “public” entities. Lower-rung jurisdictions chafe at the dictates, but recognize the deep pockets of their superiors, and beg for revenue to cover the costs of compliance.

It’s a recipe for endless lobbying, frequent lawsuits, and a byzantine system of subsidies and penalties.

Two new analyses demonstrate the depth of the dysfunctional relationship between state governments and America’s Federal City.

“How States Talk Back to Washington and Strengthen Federalism,” published by the Cato Institute, examines methods to “secure relief from federal directives that impose undue fiscal or administrative burdens on state governments or improper constraints on state policy discretion.” Washington gets backsassed, author John Dinan writes, because it often fails to pay “adequate attention to the capacity of state governments to administer federal policies effectively,” and is prone to crafting commands “without sufficient regard to the diversity of … political cultures or the benefits of … policy experimentation.”

Dinan, a politics and international affairs professor at Wake Forest University, details three resistance strategies. Decriminalization forces D.C. to decide whether to “enforce federal statutes in states with contrary policies.” Nonparticipation, even with the financial penalties it induces, is another option. Finally, there are appeals to the Supreme Court, with the hope that justices “will reconsider and relax” prior rulings or “invalidate or limit the application of federal statutes.”

Marijuana is Exhibit A for a successful decriminalization campaign. Medical Mary Jane is now legal in many states. Previous presidents didn’t care that voters in much of the country boldly cast ballots in defiance of Washington’s blanket pot prohibition. But in 2009, the attorney general for the current occupant of the White House announced that “it will not be a priority” to use federal resources to prosecute patients complying with state medical-marijuana laws. In a similar act of sanity, after last year’s passage of two ballot initiatives that made toking up cool for the non-ill, President Obama declared that it “would not make sense” to target “recreational users in states that have determined that it’s legal.”

Nonparticipation has been used against the Adam Walsh Child Protection and Safety Act and the REAL ID Act. Several states, Dinan writes, disagree with the former’s “requirement that some juvenile offenders remain on a sex-offender registry for life.” The latter sparked a left-right alliance founded on not-unreasonable concerns about the establishment of a de facto national identification card.

Abortion has provided state governments an opportunity to use the judiciary to overcome federal micromanagement. States radically diverge on the issue, of course. Some (California, Connecticut) are quite comfortable with uniform -- and feminist-approved -- protection of abortion “rights.” Others (North Dakota, Nebraska) hew closer to the legislative goals of the pro-life movement. High Court decisions in the 1970s and 1980s, as Dinan puts it, imposed “constraints on state policy regarding abortion.” But greater latitude could soon be granted, with anticipated decisions on recent fetal-heartbeat and fetal-pain laws.

Dinan’s review suggests that more is being done to preserve states’ rights than opponents of D.C.’s bullying realize. But a report released a day earlier offers a depressing reminder of fiscal federalism’s flagging health.

On December 2nd, the Office of the Utah State Auditor issued the 2013 “Single Audit of the State’s expenditures of federal funds.” It found that at $4.5 billion, Washington-redistributed revenue covered 26 percent of Utah’s budget. The Beehive State received an additional $2.2 billion “in loans, endowments and loan guarantees.” (“[L]arge federal programs,” the office’s press release noted, “are extremely complex to administer, with extensive ‘red tape’ and detailed rules and reporting requirements.”)

Auditor John Dougall -- a penny-pinching public servant who refuses to accept the perk of a subsidized vehicle -- warned about relying on spendthrift congresscritters for such a sizable sum: “We know they have serious budget problems. Wake up, folks.”

Utah can consider itself a high-achiever, revenue-wise, compared to many of its brethren. Census Bureau data show that in 2011, 34.7 percent of all state bills were paid by federal dollars. It wasn’t always so. In the early 1950s, the share was less than 15 percent. Before the New Deal, state governments barely saw a buck from D.C.

Surveying the intergovernmental muddle, clear-headed outsiders reach the realization that each level of the public sector should mind its own dang business -- i.e., stick to core functions, and self-fund all “services.” Doing so would foster simpler, smarter, and most importantly, smaller government.

D. Dowd Muska (www.dowdmuska.com) writes about government, economics, and technology. Follow him on Twitter @dowdmuska.

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