Unfunded mandate

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In the United States, unfunded federal mandates are orders that induce "responsibility, action, procedure or anything else that is imposed by constitutional, administrative, executive, or judicial action" for state and local governments and/or the private sector.[1]

An unfunded mandate is a statute or regulation that requires a state or local government to perform certain actions, with no money provided for fulfilling the requirements. Public individuals or organizations can also be required to fulfill public mandates.[2]

As of 1992, there were 172 federal mandates that obligated state or local governments to fund programs to some extent.[3] Beginning with the Civil Rights Act of 1957 and the Civil Rights Act of 1964, as well as the Voting Rights Act of 1965, the United States federal government has designed laws that require spending by state and local governments in order to promote national goals.[4] During the 1970s, the national government promoted education, mental health, and environmental programs by implementing grant projects at a state and local level; the grants were so common that the federal assistance for these programs made up over a quarter of state and local budgets.[5] The rise in federal mandates led to more mandate regulation.[5] During the Reagan Administration, Executive Order 12291 and the State and Local Cost Estimate Act of 1981 were passed, which implemented a careful examination of the true costs of federal unfunded mandates.[6][7] More reform for federal mandates came in 1995 with the Unfunded Mandates Reform Act (UMRA), which promoted a Congressional focus on the costs imposed onto intergovernmental entities and the private sector because of federal mandates.[8][9] Familiar examples of Federal Unfunded Mandates in the United States include the Americans with Disabilities Act and Medicaid.[10]


History and background[edit]

Forms of unfunded mandates[edit]

An "intergovernmental mandate" generally refers to the responsibilities or activities that one level of government imposes on another by constitutional, legislative, executive or judicial action.[11] According to the Unfunded Mandates Reform Act of 1995 (UMRA), an intergovernmental mandate can take various forms:

  • An enforceable duty-this refers to any type of legislation, statute or regulation that either requires or proscribes an action of state or local governments, excluding actions imposed as conditions of receiving federal aid.[12]
  • Certain changes in large entitlement programs-this refers to instances when new conditions or reductions in large entitlement programs, providing $500 million or more annually to state or local governments, are imposed by the federal government.[12]
  • A reduction in federal funding for an existing mandate-this refers to a reduction or elimination of federal funding authorized to cover the costs of an existing mandate.[12]

A study conducted by global professional services firm Price Waterhouse, which was sponsored by the National Association of Counties, determined that counties in the US spent $4.8 billion in fiscal year 1993 for twelve unfunded federal mandates.[13] Medicaid, one of these twelve unfunded mandates, comprises the second largest item in state budgets, which accounted for almost 13 percent of state general revenues in 1993.[14]

Mandates can be applied either vertically or horizontally.[15] Vertically applied mandates refer to mandates directed by a level of government at a single department or program. Conversely, horizontally applied, or "crosscutting," mandates refer to mandates that affect various departments or programs.[16] For example, a mandate requiring county health departments to provide outpatient mental health programs would be considered a vertically-applied mandate, whereas a requirement that all offices in a given jurisdiction to become handicap-accessible would be considered a horizontally-applied mandate.[16]

History[edit]

Mandates that are imposed by the federal government on states or localities can be traced back to the post-World War II years, when the federal government initiated various national programs, including programs in education, mental health, and environmental protection.[17] The primary method for implementing national projects at the state and local level was to involve nonfederal actors, specifically state and local governments, as policy implementers. In the 1970s, the federal government utilized grants as a way to increase state and local participation, which resulted in federal assistance constituting over 25 percent of state and local budgets.[5]

The first wave of major mandates occurred in the 1960s and 1970s, concerning areas including civil rights, education, and the environment.[18] The arrival of the Reagan administration ostensibly undermined various federal mandate efforts, as the executive branch promised to decrease federal regulatory efforts.[18] For example, the passage of Executive Order 12291 required a cost-benefit analysis and an Office of Management and Budget clearance on proposed agency regulations, and the State and Local Cost Estimate Act of 1981 required the Congressional Budget Office to determine the state and local cost effects of proposed federal legislation moving through the Legislative Branch.[6] However, The U.S. Advisory Commission on Intergovernmental Relations (ACIR) reported that, during the 1980s, more major intergovernmental regulatory programs were enacted than during the 1970s.[19]

According to a 1995 Brookings Institution report, in 1980 there were thirty-six laws that qualify as unfunded mandates. Also, despite opposition from the Ronald Reagan and George H. W. Bush Administrations, an additional twenty-seven laws that could be categorized as unfunded mandates went into effect between 1982 and 1991.[20]

The increase of mandates in the 1980s and 1990s incited state and local protest.[21] In October 1993, state and local interest groups sponsored a National Unfunded Mandates Day, which involved press conferences and appeals to congressional delegations about mandate relief.[21] In early 1995, Congress passed unfunded mandate reform legislation.[22]

The U.S. Supreme Court is involved in deciding the federal government's role in the U.S. governmental system based on determined constitutionality.[23] The period between the New Deal era and the mid-1980s witnessed a Court that generally utilized an expansive interpretation of the interstate commerce clause and the 14th Amendment to validate the growth of the federal government's involvement in domestic policymaking.[24] For example, the 1985 Supreme Court case Garcia v. San Antonio Metropolitan Transit Authority affirmed the ability for the federal government to directly regulate the state and local governmental affairs.[25]

However, more recently the Court has determined in various cases that the Constitution provides state and locality protections concerning unfunded mandate enactments.[26] For example, in the 1992 case New York v. United States, the Court struck down a federal law that regulated the disposal of low-level radioactive waste, which utilized the Tenth Amendment to the United States Constitution to require states to dispose of the radioactive material.[26]

Examples[edit]

Unfunded mandates are most commonly utilized in regulation of civil rights, poverty programs and environmental protection.[27]

Clean Air Act[edit]

The Clean Air Act was initially passed in 1963 to support the United States Environmental Protection Agency (EPA) in developing research programs to look into air pollution problems and solutions.[28] Authority was given to EPA to research air quality etc. The 1970 Amendments to the Clean Air Act established National Ambient Air quality Standards and required states to implement plans to adhere to these standards.[29] It increased the federal enforcement authority and authorized requirements for control of motor vehicle emissions. The 1990 Amendments to the Clean Air Act of 1970 expanded and modified qualification for attaining National Ambient Air Quality Standards and expanded and modified enforcement authority.[28] These amendments increased the mandates on states to comply with the federal standards for air quality. States must write up State Implementation Plans and have them approved by the EPA and must also fund the implementation of their plans.[29]

The Americans with Disabilities Act of 1990[edit]

The Americans with Disabilities Act of 1990 prohibits discrimination based on disability, requires existing public facilities to be made accessible, requires new facilities to comply with accessibility expectations under the ADA, and requires that employers provide anything a disabled employee might need, such as a sign language interpreter.[30][31] Tax incentives encourage employers to hire people with disabilities.[32] State institutions and local employers are expected to pay for changes made to existing facilities and are responsible for making sure that new facilities are in compliance with the federal requirements under the ADA.[33] Employers are also responsible for providing any extra services for disabled employees, such as sign language interpreters.[32]

Medicaid[edit]

Medicaid is a health program for low-income families and people with certain medical needs in the United States.[34] It is funded jointly by the federal and state governments, but implemented by states.[35] Federal funding covers about half of Medicaid costs and states are expected to cover the remainder.[35] This means that any federally mandated increase in Medicaid spending forces states to spend more.[36]

The No Child Left Behind Act of 2001[edit]

The No Child Left Behind Act was passed in 2001 in response to widespread concern about the quality of public education in America.[37] The act was meant to decrease the gap between students who were performing very well and students who were performing poorly.[37] The main provisions of the act required schools receiving federal funding to administer state-wide standardized tests to students at the end of each year. If schools did not show improvement from year to year on these tests, they were asked to work to improve the quality of the education they offered by hiring highly qualified teachers and providing tutoring for struggling students.[38] In order to continue receiving Federal grants, states had to develop plans that demonstrated the steps they were taking to improve the quality of education in their schools.[38] The No Child Left Behind Act mandated that states fund the required improvements in their schools as well as providing the appropriate training for less qualified teachers.[39]

Criticism[edit]

Critics argue that unfunded mandates are inefficient and are an unfair imposition of the national government on the smaller governments.[40][41] While many scholars do not object to the goals of the mandates, the way they are enforced and written are criticized for their ineffectiveness.[42][43][44] State and local governments do not always disagree with the spirit of the mandate, however they often object to the high costs they must bear to carry out the objectives.[42]

The debate on unfunded federal mandates is visible in cases such as New York v. United States, mentioned above.[42] In School District of Pontiac, Michigan v. Duncan, the plaintiffs alleged that the school district need not comply with the No Child Left Behind Act of 2011 because the federal government did not provide them sufficient funding; the court concluded that insufficient federal funds were not a valid reason to not comply with a federal mandate.[45]

Unfunded Mandates Reform Act[edit]

Purpose[edit]

The Unfunded Mandates Reform Act (UMRA) was approved by the 104th Congress on March 22, 1995, and became effective October 5, 1995, during the Clinton administration.[46] It is public law 104-4.[46] The official legislation summarizes the bill as being:

An Act: To curb the practice of imposing unfunded Federal mandates on States and local governments; to strengthen the partnership between the Federal Government and State, local and tribal governments; to end the imposition, in the absence of full consideration by Congress, of Federal mandates on State, local, and tribal governments without adequate funding, in a manner that may displace other essential governmental priorities; and to ensure that the Federal Government pays the costs incurred by those governments in complying with certain requirements under Federal statutes and regulations, and for other purposes.[46]

In other words, UMRA was enacted to avoid imposing mandates on state governments, local governments, and tribal governments (SLTGs), or to the private sector, when said mandates do not include federal funding to help the STLG carry out the goals of the mandate.[47] It also allows the Congressional Budget Office to estimate the cost of mandates to SLTGs and to the private sector, and allows federal agencies issuing mandates to estimate the costs of mandates to the entities that said mandates regulate.[48]

Application[edit]

Most provisions of the act apply to proposed and final rules for which a notice of the proposed rule was published, and that include a Federal mandate that could result in the expenditure of funds by SLTGs or the private sector of or in excess of $100 million in any given year.[49] If a mandate meets these conditions, a written statement must be provided that includes the legal authority for the rule, a cost-benefit assessment, a description of the macroeconomic effects that the mandate will likely have, and a summary of concerns from the SLTG and how they were addressed.[50] An agency enforcing the mandate must also choose the least-costly option that still achieves the goals of the mandate, as well as consult with elected officials of the SLTG to allow for their input on the implementation of the mandate and its goals.[51] Section 203 of UMRA is a bit more extensive in that it applies to all regulatory requirements that significantly affect small governments, and requires federal agencies to provide notice of the requirements to the government(s), enable the officials of the government(s) to provide their input on the mandate, and inform and educate the government(s) on the requirements for implementation of the mandate.[52]

UMRA allows the United States Congress to decline unfunded federal mandates within legislation if such mandates are estimated to cost more than the threshold amounts estimated by the Congressional Budget Office.[48] UMRA does not apply to "conditions of federal assistance; duties stemming from participation in voluntary federal programs; rules issued by independent regulatory agencies; rules issued without a general notice of proposed rulemaking; and rules and legislative provisions that cover individual constitutional rights, discrimination, emergency assistance, grant accounting and auditing procedures, national security, treaty obligations, and certain elements of Social Security".[48]

Effectiveness[edit]

There has been some speculation ever since UMRA was proposed over how effective the legislation actually is at limiting the burdens imposed by unfunded mandates on SLTGs, and whether or not unfunded mandates need to be limited so strictly.[48] Proponents of the Act argue that UMRA is needed to limit legislation that imposes obligations on SLTGs and that creates higher costs and less efficiency, while opponents argue that sometimes federal unfunded mandates are necessary in order to achieve a national goal that was not voluntarily being furthered by SLTGs.[48] Opponents also question the effectiveness of the bill due to the aforementioned restrictions.[48]

Notes[edit]

  1. ^ Catherine H. Lovell, Max Neiman, Robert Kneisel, Adam Rose, and Charles Tobin, Federal and State Mandating on Local Governments: Report to the National Science Foundation (Riverside, CA: University of California, June 1979), p.32
  2. ^ "Unfunded mandate". BusinessDictionary.com. Retrieved 2012-06-30. 
  3. ^ Dilger, Robert J., and Richard S. Beth. Unfunded Mandates Reform Act: History, Impact, and Issues. Publication no. 7-5700. Congressional Research Service, 2012. Print.<http://www.fas.org/sgp/crs/misc/R40957.pdf>
  4. ^ "Voting Rights Act." America's Historical Documents. Web. 08 Apr. 2012. <http://www.archives.gov/historical-docs/document.html?doc=18>.
  5. ^ a b c Salamon, Lester M., and Michael S. Lund. Beyond Privatization: The Tools of Government Action. Washington, D.C.: Urban Institute, 1989.
  6. ^ a b Public law 97-108.
  7. ^ United States. Cong. House. House Committee on Rules. Statement. By Alice M. Rivlin. H. Doc. Congressional Budget Office, 1981. Print.
  8. ^ Anderson, Stacy, and Russell Constantine. Unfunded Mandates. Briefing Paper No. 7. Harvard Law School Federal Budget Policy Seminar, 3 May 2005. Web. 8 Apr. 2012. <http://www.law.harvard.edu/faculty/hjackson/UnfundedMandates_7.pdf>
  9. ^ United States. Environmental Protection Agency. Summary of the Unfunded Mandates Reform Act. Print.
  10. ^ Dilger, Robert J., and Richard S. Beth. Unfunded Mandates Reform Act: History, Impact, and Issues. Publication no. 7-5700. Congressional Research Service, 2012. Print.<http://www.fas.org/sgp/crs/misc/R40957.pdf>
  11. ^ Lex, Leo. "Intergovernmental Mandates in Federal Legislation," CBO Economic and Budget Issue Brief, (July: 2009).
  12. ^ a b c Congressional Budget Office. "Identifying Intergovernmental Mandates," Economic and Budget Issue Brief. Jan 2005. 2.
  13. ^ Price Waterhouse letter to the Honorable Barbara Sheen Todd, National Association of Counties, 25 October 1993.
  14. ^ Johnston, Jocelyn. "The Medicaid Mandates of the 1980s: An Intergovernmental Perspective," Public Budgeting and Finance (Spring, 1997), 3-34.
  15. ^ Herzfeld, Daniel. "Accountability and the Nondelegation of Unfunded Mandates: A Public Choice Analysis of the Supreme Court's Tenth Amendment Federalism Jurisprudence," George Mason Law Review. 419. (1998–1999)
  16. ^ a b Lovell, Chatherine and Tobin, Charles. "The Mandate Issue," Public Administration Review, Vol. 41, No. 3 (May–June, 1981). 318-331.
  17. ^ Smith, Tom W. 1990. "Liberal and Conservative Trends in the United States since World War II." Public Opinion Quarterly 54:479-50
  18. ^ a b Presidential Task Force on Regulatory Relief. 1982. Reagan administration achievements in regulatory relief for state and local governments: A progress report. Washington, D.C.
  19. ^ Advisory Commission on Intergovernmental Relations, Federal Regulation of State and Local Governments: The Mixed Record of the 1980s, A-126 (Washington, DC: ACIR, 1993).
  20. ^ Dilulio, John and Don Kettl, Fine Print: The Contract with America, Devolution, and the Administrative Realities of American Federalism (Washington, D.C.: Brookings Institution, 1995), p. 41.
  21. ^ a b Gullo, Theresa A. and Janet M. Kelly, Federal Unfunded Mandate Reform: A First-Year Retrospective, Public Administration Review, Vol. 58, (Sept. 1998). 380.
  22. ^ Public Law 104-4, 109 Stat. 48.
  23. ^ "A Brief Overview of the Supreme Court" (PDF). United States Supreme Court. Retrieved 2009-12-31.
  24. ^ Lawson, Gary. The Rise and Rise of the Administrative State. Harvard Law Review. 1237-41 (1994).
  25. ^ Garcia v. San Antonio Metropolitan Transit Authority, 105 S. Ct. 1005 (1985).
  26. ^ a b New York v. United States, 505 U.S. 144 (1992).
  27. ^ Lowi, Theodore J., Benjamin Ginsberg, Kenneth A. Shepsle, and Stephen Ansolabehere. "Federalism and the Separation of Powers." American Government Power and Purpose. 11th ed. New York: W W Norton & Co, 2010. 59-60.
  28. ^ a b "History| Clean Air Act | US EPA." EPA. Environmental Protection Agency. Web. 17 Apr. 2012. <http://epa.gov/oar/caa/caa_history.html>.
  29. ^ a b Clean Air Act, 42 U.S.C. § 110 (1970).
  30. ^ Americans With Disabilities Act of 1990. Pub. L. 101-336. § 102 (1990).
  31. ^ Americans With Disabilities Act of 1990. Pub. L. 101-336 § 226 (1990).
  32. ^ a b "Tax Incentives for Improving Accessibility." ADA Tax Incentives Packet. Web. 17 Apr. 2012. <http://www.ada.gov/archive/taxpack.htm>.
  33. ^ "Facts About the Americans with Disabilities Act." US EEOC Home Page. 9 Sept. 2008. Web. 5 Mar. 2012.
  34. ^ "Medicaid in New York State." Medicaid. Mar. 2012. Web. 5 Mar. 2012. <http://www.health.ny.gov/health_care/medicaid/>.
  35. ^ a b "Financing & Reimbursement | Medicaid.gov." Medicaid.gov. Web. 5 Mar. 2012. <http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Financing-and-Reimbursement/Financing-and-Reimbursement.html>.
  36. ^ Sack, Kevin, and Robert Pear. "Governors Fear Medicaid Costs in Health Plan." The New York Times. 19 July 2009. Web. 5 Mar. 2012. <http://www.nytimes.com/2009/07/20/health/policy/20health.html>.
  37. ^ a b No Child Left Behind Act, 20 U.S.C. § 1001 (2001).
  38. ^ a b No Child Left Behind Act, 20 U.S.C. § 1111 (2001).
  39. ^ No Child Left Behind Act, 20 U.S.C. § 1003 (2001).
  40. ^ St. George, James R. "Unfunded Mandates: Balancing State and National Needs."Brookings Review Apr. 1995. Questia. Web. 8 Apr. 2012. <http://www.questia.com/googleScholar.qst?docId=5000307872>.
  41. ^ Hacker, Will. "Village to Fight Against Unfunded U.S. Mandates." Chicago Tribune 15 Oct. 1993. Print.
  42. ^ a b c Wellman, Nola. Unfunded Mandates Reduce Efficiency; Local Control Improves Effectiveness. Print.
  43. ^ Cockriel, Thomas. "House Subcommittee Holds Hearing on the Unfunded Mandates Reform Act of 1995 - RegBlog." Penn Law. 25 Feb. 2011. Web. 08 Apr. 2012. <http://www.law.upenn.edu/blogs/regblog/2011/02/house-subcommittee-holds-hearing-on-the-unfunded-mandates-reform-act-of-1995.html>.
  44. ^ "Unfunded Mandates." Citizens' Committee for an Effective Constitution. New Roosevelt Foundation, Inc. Web. 08 Apr. 2012. <http://effectiveny.org/issue-summary/Unfunded-Mandates>.
  45. ^ Talbert, Kent. "No Child Left Behind Act: Not an "Unfunded Mandate"" Court Cases : Education Law Review : Elementary & Secondary School Legislation, Charter Schools & Unfunded Mandate: Kent Talbert & Rober Eitel Lawyer & Attorney. Talbert & Eitel, 21 June 2010. Web. 08 Apr. 2012. <http://www.educationlawreview.com/k-12-education/court-cases/>.
  46. ^ a b c S. 1, 104th Cong., U.S. G.P.O. 25 (1995) (enacted). Print.
  47. ^ "Summary of the Unfunded Mandates Reform Act." EPA. Environmental Protection Agency. Web. 09 Apr. 2012. <http://www.epa.gov/lawsregs/laws/umra.html>.
  48. ^ a b c d e f Dilger, Robert J., and Richard S. Beth. "Unfunded Mandate Reform Act: History, Impact, and Issues." CRS Report for Congress (2011). Web.
  49. ^ S. 1, 104th Cong., U.S. G.P.O. 25 (1995) (enacted). Print. Section 424(b)(1).
  50. ^ S. 1, 104th Cong., U.S. G.P.O. 25 (1995) (enacted). Print. Section 424(a)(2)(C).
  51. ^ S. 1, 104th Cong., U.S. G.P.O. 25 (1995) (enacted). Print. Section 204(a).
  52. ^ S. 1, 104th Cong., U.S. G.P.O. 25 (1995) (enacted). Print. Section 203(a).

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