[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
THE FUTURE OF FEDERALISM IN AMERICA
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HEARING
BEFORE THE
SUBCOMMITTEE ON GOVERNMENT OPERATIONS
OF THE
COMMITTEE ON OVERSIGHT
AND REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
JULY 23, 2019
__________
Serial No. 116-50
__________
Printed for the use of the Committee on Oversight and Reform
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available on: http://www.govinfo.gov
http://www.oversight.house.gov or
http://www.docs.house.gov
___________
U.S. GOVERNMENT PUBLISHING OFFICE
37-934 PDF WASHINGTON : 2019
COMMITTEE ON OVERSIGHT AND REFORM
ELIJAH E. CUMMINGS, Maryland, Chairman
Carolyn B. Maloney, New York Jim Jordan, Ohio, Ranking Minority
Eleanor Holmes Norton, District of Member
Columbia Paul A. Gosar, Arizona
Wm. Lacy Clay, Missouri Virginia Foxx, North Carolina
Stephen F. Lynch, Massachusetts Thomas Massie, Kentucky
Jim Cooper, Tennessee Mark Meadows, North Carolina
Gerald E. Connolly, Virginia Jody B. Hice, Georgia
Raja Krishnamoorthi, Illinois Glenn Grothman, Wisconsin
Jamie Raskin, Maryland James Comer, Kentucky
Harley Rouda, California Michael Cloud, Texas
Katie Hill, California Bob Gibbs, Ohio
Debbie Wasserman Schultz, Florida Ralph Norman, South Carolina
John P. Sarbanes, Maryland Clay Higgins, Louisiana
Peter Welch, Vermont Chip Roy, Texas
Jackie Speier, California Carol D. Miller, West Virginia
Robin L. Kelly, Illinois Mark E. Green, Tennessee
Mark DeSaulnier, California Kelly Armstrong, North Dakota
Brenda L. Lawrence, Michigan W. Gregory Steube, Florida
Stacey E. Plaskett, Virgin Islands Frank Keller, Pennsylvania
Ro Khanna, California
Jimmy Gomez, California
Alexandria Ocasio-Cortez, New York
Ayanna Pressley, Massachusetts
Rashida Tlaib, Michigan
David Rapallo, Staff Director
Wendy Ginsberg, Subcommittee Staff Director
Amy Stratton, Clerk
Christopher Hixon, Minority Staff Director
Contact Number: 202-225-5051
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Subcommittee on Government Operations
Gerald E. Connolly, Virginia, Chairman
Eleanor Holmes Norton, District of Mark Meadows, North Carolina,
Columbia, Ranking Minority Member
John P. Sarbanes, Maryland Thomas Massie, Kentucky
Jackie Speier, California Jody Hice, Georgia
Brenda L. Lawrence, Michigan Glenn Grothman, Wisconsin
Stacey E. Plaskett, Virgin Islands James Comer, Kentucky
Ro Khanna, California Ralph Norman, South Carolina
Stephen F. Lynch, Massachsetts W. Gregory Steube, Florida
Jamie Raskin, Maryland
C O N T E N T S
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Page
Hearing held on July 23, 2019.................................... 1
Witnesses
The Honorable Rob Bishop, Member of Congress, Washington D.C.
Oral Statement................................................... 2
Ms. Teresa Gerton, Executive Director, National Academy of Public
Administration
Oral Statement................................................... 7
Dr. Carl W. Stenberg III, Former Staff Member, U.S. Advisory
Commission on Intergovernmental Relations, James E. Holshouser
Jr. Distinguished Professor of Public Administration and
Government, University of North Carolina
Oral Statement................................................... 8
Mr. Matthew Chase, Executive Director, National Association of
Counties
Oral Statement................................................... 10
Written opening statements and the witnesses' written statements
are available on the U.S. House of Representatives Repository
at: https://docs.house.gov.
Index of Documents
----------
The documents entered into the record during this hearing are
listed below, and are available at: https://docs.house.gov.
* Statement from the Big Seven endorsing the legislation;
submitted by Rep. Connolly.
* Statement from the Western Governors Association endorsing
the legislation; submittedby Rep. Connolly.
* The hearing transcript from May 17, 2018; submitted by Rep.
Connolly.
* Rep. Meadows' Statement for the Record.
* Rep. Connolly's Statement for the Record.
THE FUTURE OF FEDERALISM IN AMERICA
Tuesday, July 23, 2019
House of Representatives
Subcommittee on Government Operations,
Committee on Oversight and Reform
Washington, D.C.
The subcommittee met, pursuant to notice, at 4:09 p.m., in
room 4:09 p.m., 2154 Rayburn House Office Building, Hon. Gerald
E. Connolly (chairman of the subcommittee) presiding.
Present: Representatives Connolly, Khanna, Meadows, Hice,
Norman, and Grothman.
Mr. Connolly. The subcommittee will come to order. Without
objection, the chair is authorized to declare a recess of the
committee at any time. The subcommittee will examine the state
of federalism in the United States, and discuss how Congress
can improve intergovernmental processes, including the
possibility of reestablishing the U.S. Advisory Commission on
Intergovernmental Relations.
To begin our hearing this morning, we want to welcome our
colleague, Rob Bishop. And, Rob, I know you're probably on a
tight schedule, so I'm going to suspend my opening statement
and you as well, Mr. Meadows, to allow our colleague to go
forward.
I do want to just say, Mr. Bishop, at the behest of former
Speaker Paul Ryan, in the last Congress for two years, chaired
a committee we formed, a task force on intergovernmental
affairs. And we had four or five hearings, and we heard from
lots of witnesses, and it was a very thoughtful process, very
bipartisan in its approach. One of the follow-ups to our work
over two years, was to reestablish, but in different form with
different functions and different membership, the commission
that used to exist, and that's the Partnership Act that Mr.
Bishop and I are introducing today. I am very proud of that,
and I'm very proud of the collaboration.
I also want to praise him. He ran the task force on an
almost nonpartisan basis, very fairly, and I think we got a lot
of ground covered. I want to thank him right now for his
leadership in that effort, which kind of looked like a
difficult assignment when it was first proposed.
So we want to welcome you, Mr. Bishop, and we want to
respect your time, and we're happy to hear what you'd like to
share.
STATEMENT OF THE HON. ROB BISHOP, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF UTAH
Mr. Bishop. Well, look, I appreciate those kind words. Most
of them are true, and thank you so very much. Jerry and Mark, I
appreciate you being here and I appreciate you holding these
hearings. Shouldn't you be in my committee right now? Am I in
the wrong spot somehow? All right, fine.
Now, we did have the fortunate opportunity of working with
the Speaker's task force on whatever the rest of the acronym
was. And we heard a lot of different things from a lot of
different ideas. We have some ideas I still think, as the time
goes on, will still be coming through.
But it was important to realize that one of the things we
have to emphasize is the kind of intergovernmental cooperation
is extremely important. This is one element of that, the idea
of consultation, which is in law, but it's not really defined
as to who has to consult with whom and how. Those things are
still ideas that are coming from that task force that I still
want to address, and hopefully will be coming up here again.
But I also am appreciative of the fact that we give a lot
of lip service to the concept of federalism without actually
really thinking about it, or knowing what we are doing. We
spend more time trying to find a solution when some of the
things we ought to be thinking about is who ought to be finding
those solutions.
So, you know, the Bible says that you can't serve two
masters, and the Founders of our Constitution insisted that we
do exactly that, with their concept of dual sovereignty. So we
have an obligation to state governments, and we also have an
obligation to the Federal Government, which could be
problematic except James Wilson said that as long as those two
entities, local government, state governments, and the Federal
Government, stay in their sphere of responsibility, they will
simply circle like the planets in the solar system, all in
harmony and all working together for the betterment of the
human cause. But, if one of those acts like a meteor and then
starts slashing through the solar system, it will produce chaos
in its wake.
I think that's one of the things that we are talking about
here. How do we insist that the Federal Government as well as
state governments stay in their sphere of responsibility for
the betterment of people? That is an extremely important
concept. I think we give short shrift to that, and we need to
spend more time thinking how you actually implement that. That
is the nexus behind, I think, the concept of this bill.
In 1953, President Eisenhower suggested that this committee
be established so there would be a permanent and ongoing
relationship and interaction and conversation as to what level
of government is doing what and how they can work together,
but, more importantly, how they can stay out of each other's
way as we go forward. That is what Mr. Connolly's legislation
is trying to reintroduce.
It lapsed, I think, in the 1990's. It lapsed primarily not
because it was not functioning, but as a means of a cost-
cutting measure at the time. But it is still important, that
kind of conversation. So the Speaker's task force was an effort
to try and reestablish those conversations.
I'm very appreciative of those who will also be testifying
today. Many of them came to the task force, but, more
importantly, they represent local governments and their effort
to try and make sure that that balance between the Federal
Government and local governments has to be there in some
particular way. So I appreciate their efforts with our task
force. I appreciate their efforts being here today.
Mr. Connolly, you and your staff has done a great deal of
work on this issue. You've taken it seriously, and I appreciate
where you're going forward.
Mr. Meadows, you and your staff has also been extremely
helpful with this, and I'm sure that there may be some ways of
actually improving this legislation as we go forward with it.
But, once again, as long as we maintain that concept that
there has to be a permanent, viable medium in which state and
local governments can have permanent conversations with the
Federal Government so that we maintain both of those
functioning in their own spheres of responsibility for the
betterment ultimately of the people. That's what federalism is
all about, and we need to give more credit and credibility to
that concept.
So with that, I don't need to take really a whole lot more
of your time, unless you want me to ramble on for whatever
reasons you want me to. I can do it very well, but I don't need
to.
Mr. Connolly. Thank you so much. I would just add to what
you said. I know it comes as a surprise maybe to some people,
but conservatives and progressives can come together on this
subject, especially if you've had experience in local or state
government.
To be on the receiving end of unfunded mandates, whether
they be Federal or state--I was a local government guy--is not
a pleasant experience. I can remember in Fairfax County across
the river, a huge sum in the hundreds of millions of dollars a
year, was spent simply meeting unfunded mandates, both from the
Federal Government and the state government. So [it is] time to
address that kind of thing.
Also, sometimes unregulated--I mean, the intrusive
regulation. We can disagree about this or that regulation, but
I think we come together in saying, "Well, let's keep to a
minimum the intrusive regulation that just makes things harder
to manage, harder to govern, and without really merit."
I would give as an example both the No Child Left Behind
legislation, well-intended intentions beyond question. But in
the writing of that bill, I don't think the authors, I don't
think any of them ever ran a school district. And some of the
consequences that flowed from that legislation on schools and
on school districts were quite consequential, when there was a
different way of managing it. And, by the way, it was a big fat
unfunded mandate.
My view, and I think yours, Mr. Bishop, is if the Federal
Government, if we in Congress think something is a really good
idea, we ought to pay for it, not impose it on states and
localities and leave it to them to figure out how to fund our
mandate.
So I think there's a lot of common ground. I think we
uncovered that in your effort in chairing this task force for
two years. Again, I thank you so much for the cooperation and
for the opportunity to work with you on these matters.
Mr. Bishop. Mr. Chairman, if I can just follow-up on that.
I think you are absolutely correct. The only thing worse than
an unfunded mandate is probably a funded mandate. The important
element to remember here is federalism and what we are trying
to accomplish is not liberal, it's not conservative, it's not
Republican, it's not Democrat; it's a philosophy of government
of how we organize ourselves. So I appreciate that.
Mr. Meadows. So, Mr. Bishop, I just want to say thank you
for your thoughtfulness. If I had your hair, I could be
somebody. So, I just want to say thank you for coming, thank
you for your testimony, and always for your gracious and kind
and gentle spirit.
I yield back.
Mr. Connolly. Thank you so much, Mr. Bishop, and thank you
for being here and for your leadership on this bill.
As we get ready for our panel, I'm going to go ahead with
my opening statement and then, Mr. Meadows, if you want to do
yours. We'll be expeditious.
Today, the subcommittee will pick up where Mr. Bishop of
Utah, who served as chairman of the Speaker's task force, left
off. Our hearing examines the status of federalism in the
United States, and legislation that Rob Bishop and I have
introduced to help spur dialog and coordinated action on the
greatest challenges facing the intergovernmental system.
As a former member and chairman of the Fairfax County Board
of Supervisors, a county of 1.1 million people, I know how
important it is to balance the roles and responsibilities of
Federal, state, and local governments. I'm also painfully aware
of how local government, the most immediate form of government
and the level of government where services have to be
delivered, can suffer when we fail to strike that right
balance.
The value proposition of functional intergovernmental
relationships is immense. America's federated system demands
that Federal, state, local and Tribal governments work together
and reduce overlap to improve people's lives. The United States
Constitution does not give any one level of government absolute
power, or unlimited jurisdiction over public matters.
Therefore, we rely on collaboration across governments to
ensure the reliable administration of public services and the
protection of the public welfare. A federated system that works
and delivers real results for our constituents is as
fundamental to our system of governance as free and fair
elections. Without either, confidence and trust in our
institutions is inevitably diminished.
While the Constitution formed a strong Federal Government
in the wake of the failure of the Articles of Confederation, it
also included a respect for the sovereignty of states. To honor
the Framers' vision, we must remain vigilant about unfunded
mandates passed down to state and local governments, and push
back on overly intrusive Federal regulation. In dealing with
states such as mine, Virginia, where local governments only had
the authorities explicitly granted to them by the state
government, overreach at the Federal and state level can be
especially onerous, as local governments are often forced to
deal with mandates with their revenue hand tied behind their
back. We can all agree that overreach exists. I mentioned the
No Child Left Behind Act being a great example.
What the intergovernmental relationship needs is a venue
for addressing the overreach in a collaborative manner. Our
legislation, the Restore the Partnership Act, which we
introduced today, would provide such a venue by reconstituting
the U.S. Advisory Commission on Intergovernmental Relations, a
committee that fosters critical conversations and allows for
the sharing of best practices among the leaders of governments
that form our Nation.
We're proud to announce the bipartisan legislation has
received already the endorsement of the so-called Big Seven,
which includes the National Governors Association, The Council
of State Governments, the National Conference of State
Legislatures, the National League of Cities, the United States
Conference of Mayors, the National Association of Counties, and
the International City/County Management Association, all
bipartisan organizations.
Please indulge a short historical aside, which mirrors how
the Restore Partnership legislation came about. As Mr. Bishop
indicated, in 1953, Congress, with the support of then-
President Dwight Eisenhower, authorized the temporary
Commission on Intergovernmental Relations, known as the
Kestenbaum Commission, to conduct a review of intergovernmental
affairs in the United States. After the Commission published
its final report and then sunset, the House Intergovernmental
Relations Subcommittee studied and held hearings on those
recommendations.
Acknowledging the usefulness of the Commission, the
subcommittee subsequently developed legislation to establish a
permanent successor entity that would have broad jurisdiction
over intergovernmental relations. Congress established that
successor entity, the ACIR, in September 1959, when President
Eisenhower signed into law legislation that resulted from the
work of the subcommittee. The ACIR operated until September
1996, and during those 37 years, the committee was tasked with
serving as both a forum for intergovernmental dialog, and a
neutral analytical commission that published reports and
guidance on how to create partnerships across different levels
of government. It operated much like the modern-day
Congressional Budget Office, but remained focused on
intergovernmental relations.
The ACIR also provided a bipartisan venue for finding
solutions to intergovernmental challenges. It brought together
representatives of Federal, state, local and Tribal governments
to promote innovation and collaboration in this space. The ACIR
also provided the expertise and analysis necessary for state
and local governments to share best practices in fiscal
administration and program management.
The Commission, unfortunately, was de-funded in 1996, not
for substantive reasons but simply as a push to cut Federal
agencies wherever we could. In retrospect, the decision to
abandon the ACIR deprived the Federal Government of a useful
venue and platform for input and pushback on the encroachment
of the Federal Government into state and local affairs.
Our legislation seeks to reconstitute an evolved Commission
on Intergovernmental Relations. The bill language includes
several key reforms to the original ACIR, many of which are
recommendations of then-Speaker Ryan's task force chaired by
Rob Bishop, which we received from intergovernmental partners
and other stakeholders.
The reforms to the bill include the addition of town and
Tribal representatives on the Commission, as well as expanded
membership for state legislatures and counties, to reach parity
with state executive representation; new responsibilities that
include examining Supreme Court decisions that impact on the
intergovernmental relationship, actually a very critical thing
by way of addition, because there are a lot of Supreme Court
rulings that have lots of impact at the state and local
government level; a requirement that Congress hold hearings to
examine the Commission's annual report; new authorities that
ensure the Commission receives written responses from agencies
on the recommendations it provides them. These new provisions
generate a new level of accountability and functionality for
the Commission, placing it on a par with the way in which other
agencies currently engage with the Government Accountability
Office, the GAO.
With that, I now recognize my partner on this subcommittee,
the former chairman of the subcommittee and now ranking member,
Mr. Meadows.
Mr. Meadows. Thank you, Mr. Chairman. Thank you for your
leadership on this bill, this important piece of legislation.
In the interest of time, I'm just going to submit my opening
remarks for the record, and I will yield back.
Mr. Connolly. I thank the distinguished ranking member. And
I thank him in advance for his support for collegial effort on
this subcommittee.
We're going to now introduce our panel. We're pleased to
welcome Teresa Gerton, who's the executive director of the
National Academy of Public Administration; Carl Stenberg, III,
former staff member of the U.S. Advisory Commission on
Intergovernmental Relations--he actually served on ACIR--and a
James Holshouser, Jr., distinguished professor of public
administration and government at the University of North
Carolina, very prestigious; and Matthew Chase, the executive
director of the National Association of Counties. In the
interest of disclosure, I headed the Virginia Association of
Counties and I was an active member of NACo until the day I was
sworn into this job.
So welcome all of you. If the three of you would rise and
raise your right hand to be sworn in. It is the custom of our
committee to swear in witnesses.
Do you affirm that the testimony you are about to give is
the truth, the whole truth, and nothing but the truth, so help
you God?
Let the record show that our three witnesses answered in
the affirmative.
We welcome you. We urge each of you to summarize your
testimony in five minutes. Of course, we will submit your full
statement for the record.
Ms. Gerton, why don't we begin with you. Welcome.
STATEMENT OF TERESA GERTON, EXECUTIVE DIRECTOR NATIONAL ACADEMY
OF PUBLIC ADMINISTRATION
Ms. Gerton. Thank you. Mr. Chairman and members of the
committee, I appreciate the opportunity to testify today. I'm a
fellow of the National Academy of Public Administration, and
I've served as its president and chief executive officer since
January 2017. Established in 1967 and chartered by Congress in
1984, the Academy is an independent, nonprofit, and nonpartisan
organization with a proven record of improving the quality,
performance, and accountability of government at all levels,
and expertise in the intergovernmental system is one of our
most enduring characteristics.
Our congressional charter precludes the organization itself
from taking an official position on legislation, and so my
testimony today will reflect the Academy's views of
opportunities for improved intergovernmental relations. Much
has changed from the mid 1990's, when the ACIR stood down.
State and local governments have even more responsibility
for the implementation of Federal domestic programs, both
directly and through partners; but new laws often make the
intergovernmental system more complex, adding confusion,
conflict, and unanticipated consequences. The ballooning costs
of healthcare are squeezing state budgets, and unprecedented
partisan polarization challenges our ability to focus on major
policy problems and develop effective governance. But, against
this background, it is important to remember that our
intergovernmental system retains considerable capacity for
adaptation and flexibility, and it may remain our greatest
strength in addressing these complex governance challenges.
From its founding, the Academy has fostered collaboration
across all levels of government, to deliver better outcomes for
the Nation. I want to focus here on current opportunities for
impact.
The Trump administration's 2018 Presidential management
agenda established 14 cross-agency priority goals. While these
focus on improving performance at the Federal level, success in
many of them will require collaboration and integration with
state, local, and Tribal governments, and will offer prime
opportunities to expand intergovernmental partnerships.
Two of these CAP goals can serve as representative
examples. CAP goal two identifies data accountability and
transparency as one of three drivers of transformation.
Emergency and disaster management policy is just one area in
which tremendous amounts of data are already collected and
analyzed and from which voluminous research is produced.
This public policy area, however, suffers like many others.
Simply put, the massive amount of data and research produced is
impossible to filter down to practical strategies for solving
the problems of any one government, agency, or public function.
We need an institution that can function as a filter through
which data and research flow, with the end result being
relevant, actionable strategies that all governments can use to
prepare for and manage effectively through future disasters.
Creation of such an institution would take modern data
analytics to a new level. The role of this institution would
not be to develop additional primary data, but, rather, to scan
the environment of data already collected, along with extant
research, and assess this collection for convergence on the
state of practice, to inform and advance intergovernmental
relationships and effective management strategies. This could
lead to more proactive and cost-effective approaches to
community resiliency.
The focus of CAP goal eight is on standardizing grant
reporting data and improving data collection. The Federal
Government spends over $600 billion annually on grant programs
administered by state and local governments and their nonprofit
partners, to improve the lives of low-income populations in
their communities.
Yet, the fragmented and complex nature of Federal and state
funding and administrative requirements makes it extremely
difficult for states, localities, and service delivery partners
to coordinate services, increase efficiency, and improve
outcomes for low-income individuals, families, and communities.
No congressional committee, or any Federal agency, is
accountable for helping states and localities strengthen their
capacity to coordinate low-income programs involving multiple
agencies, and to deliver services more effectively and
efficiently. There is a tremendous need for an institution that
can collaborate with major stakeholders to identify promising
opportunities for collective problem-solving, to develop
consensus on high-impact solutions, and co-create feasible
action plans.
By involving key executive and legislative branch decision-
makers in the planning and execution of these efforts, this
institution could help to ensure that its recommendations could
be implemented by relevant agencies, and that gaps requiring
legislative solution would be identified for Congress.
Leveraging data and improving the outcomes of Federal
grants are simply two illustrations of the desperate need today
to improve collaboration between all levels of our government.
I believe that the approaches outlined above can help us ensure
that our national system of government works better for all of
us. The National Academy of Public Administration stands ready
to assist in these efforts.
Mr. Chairman, that concludes my statement, and I would be
pleased to answer any questions you or the committee members
may have.
Mr. Connolly. Thank you very much, Ms. Gerton.
Dr. Stenberg.
STATEMENT OF CARL W. STENBERG III, FORMER STAFF MEMBER U.S.
ADVISORY COMMISSION ON INTERGOVERNMENTAL RELATIONS
Mr. Stenberg. Thank you, Chairman Connolly, Ranking Member
Meadows, members of the subcommittee. I am delighted to be with
you today to share my thoughts on the future of federalism in
America and, in particular, through the Restore the Partnership
Act.
I'd like to offer what I call a ``pracademic'' perspective
on these topics. Before my university affiliations, as the
chairman mentioned, I spent 16 years as a staff member of the
former ACIR, so I have kind of that insider perspective on the
actual work of the Commission and the functioning of the
membership. I followed that with six years as executive
director of The Council of State Governments, one of the key
Big Seven stakeholders of ACIR. I've also been a fellow of the
National Academy of Public Administration since 1984, the year
Congress chartered the Academy.
My remarks today do not represent the School of Government
at UNC, or NAPA, they're personal. But, in my judgment, the
Restore the Partnership Act is a promising point of departure
for rebuilding the Federal Government's capacity to address
current intergovernmental issues and emerging challenges. This
capacity has diminished significantly since the demise of ACIR
in 1996.
As I'll point out, the former ACIR model is a good
beginning point, but it needs to be aligned with some of the
changes in the political and policy environments that have
affected intergovernmental relationships over the past two or
more decades. There are at least five of these changes that
have been impactful: First, the complexity of understanding and
solving problems, both horizontally and vertically, has
increased substantially, with more nongovernmental players
involved. The problems are wicked. They're more
intergovernmental, interdisciplinary, and intersectoral than
ever before.
Second, we've been in a period of coercive federalism, as
we talked with the task force about last May, featuring the
growth of preemptions and under-funded mandates. The potential
for intergovernmental friction has become much more pervasive.
Third, the number of think tanks in Washington has grown
significantly. The intergovernmental policy and advocacy fields
have become more crowded.
Fourth, the influence and impact of the Big Seven
organizations representing states and localities in Washington,
DC. has been partly undermined by special interests, politics,
and campaign finance. Sometimes the Big Seven are treated more
like a special interest group than the representatives of
general-purpose grassroots governments.
And fifth, confidence the American public has in
governments has steadily declined. Some believe that government
is the problem, not the solution.
So I think in this environment, it's fair to ask whether a
commission, like the proposed Commission on Intergovernmental
Relations, could actually make a difference. Establishing a new
partnership is a bold undertaking and an important one, but
it's one of a number of steps that probably could be taken over
the years ahead.
What evidence is there available to show that such an
organization could have an impact? I would look back to the
record of the former ACIR for some examples. The ACIR was
always a respected honest information broker. Again, in this
world of policy think tanks, the need for an honest information
broker is imperative. The Commission issued some 130 policy
reports, some of which were influential or instrumental, in
developing congressional legislation or improving the
administration of Federal grants and aid. Some examples: The
Demonstration Cities and Metropolitan Development Act, block
grant design and implementation, the Intergovernmental
Cooperation Act, the Intergovernmental Personnel Act, the
Uniform Relocation and Real Property Acquisition Act, general
revenue sharing, the Unfunded Mandates Reform Act, the Federal
Financial Assistance Management Improvement Act, the Regulatory
Right-to-Know Act.
More examples are in my statement. From the standpoint of
grants administration improvement, OMB Circular A95 and OMB
Circular A102, again, were areas where ACIR's work saw the
light of day.
The ACIR was also a valued adviser to Presidents,
Governors, state legislators, and local officials. So ACIR was
a thought leader, but also a policy influencer. And the
chairman has already indicated how, in the legislation that has
just been introduced, much of the bill does reflect the
mission, the organization, and functions of the former ACIR;
but a number of important changes have been made that give it
more teeth, more credibility, and a potential for greater
impact.
So, finally, I'd like to just conclude by offering three
lessons that I've learned in terms of kind of more than the
structure of the organization, but the functioning of the
Commission: The Federal members really need to be committed to
and value intergovernmental consultation and engagement; strong
support from the Big Seven is crucial, as five of the
organizations nominate representatives for appointment; and
third, and perhaps a key factor for its success and maybe even
survival, is that the new commission needs to be mindful of the
research agenda, the technical assistance, the convening work
that it convenes. The challenge is to be timely and relevant,
but not too close to the political fray, or not too distant
from the real world.
So, Mr. Chairman, that concludes my formal statement. I'd
be happy to answer any questions that you might have.
Mr. Connolly. Thank you so much, Dr. Stenberg. I just want
to say, it really resonated with me when you said that
increasingly, because of lots of other actors, that the Big
Seven, who represent the people like we do, are treated like
just another special interest. That actually happened to me
once. I remember representing my county and the Virginia
Association of Counties going down to Richmond, and I actually
had a state Senator say to me about counties: We just view you
as another special interest. I was stunned by the statement,
and it told us a lot about need for improvement in
intergovernmental relations.
Mr. Chase.
STATEMENT OF MATTHEW D. CHASE, EXECUTIVE DIRECTOR NATIONAL
ASSOCIATION OF COUNTIES
Mr. Chase. Good afternoon, Chairman Connolly, Ranking
Member Meadows, and members of the subcommittee. Thank you for
the opportunity to discuss the topic of federalism in America.
More specifically, our ideas to strengthen the
intergovernmental partnership of Federal, state, local and
Tribal officials.
My name is Matt Chase. I am the executive director of the
National Association of Counties, which represents the 3,069
counties across America, including over 40,000 elected county
officials. Today, I am also honored to represent the Big Seven
coalition of state and local elected official associations that
was just referenced by the chairman.
Our national associations of state and local officials
support the formation of a new, modern, national commission to
facilitate improved intergovernmental dialog, engagement, and
problem-solving. Our Founding Fathers established a brilliant
form of federalism, with multiple layers of checks and balances
across the three Federal branches, but also between the Federal
Government and state governments.
While there is a clear distinction and separation of powers
and duties among these levels of government, there is also a
deep interconnectedness and interdependence. As we face new
pressing public policy challenges and opportunities, our Nation
will need the collective efforts of our Federal, state, local
and Tribal governments, all working together. These economic,
political, and social issues range from the future of work,
especially with advanced automation and artificial
intelligence, to cyber-security, including with our election
systems, to disaster mitigation and resilience, to
transportation and infrastructure upgrades, to dealing with
multigenerational impacts of our Nation's aging population, our
mounting crisis with substance abuse, often with co-occurring
mental health issues, and our challenges with uneven economic
growth and competitiveness.
We must pursue a more modern, practical approach to forging
intergovernmental partnerships, with an emphasis on solutions.
After all, government works best when we work together. And
this includes with our colleagues in the private, nonprofit,
academic and philanthropic sectors.
We are deeply appreciative of the bipartisan efforts by the
chairman and Representative Rob Bishop to kick-start and
refresh a serious national dialog on intergovernmental
relations, especially through the Restore the Partnership Act.
In recent decades, we have witnessed a significant decline
in a structured intentional dialog of Federal, state, and local
government officials, especially at the broader policy level.
As the chairman just mentioned, we are often viewed as a
special interest group, rather than as a public sector
counterpart.
The Restore the Partnership Act is an essential pillar in
rebuilding and re-balancing our Nation's intergovernmental
system. A new national commission would shine a spotlight on
areas where intergovernmental collaboration, analysis, and
debate is necessary, and even succeeding and would create a
much-needed forum for advancing common priorities and issues.
Two areas of immediate interest to the Big Seven coalition
include creating a new commission on intergovernmental
relations of the United States, and updating the Unfunded
Mandates Reform Act, especially Title 2, with a consistent
early and transparent consultation process for Federal
rulemaking involving state and local governments.
While establishing a new commission by itself may not solve
all of our federalism issues, we are long overdue for a new
infusion of thinking and commitment to improving our Nation's
intergovernmental principles and practice. As our Founding
Fathers demonstrated, we can have intense, rigorous debates and
viewpoints while still fostering a boundary-crossing
institution that can facilitate intergovernmental relations and
effective intergovernmental performance.
Chairman Connolly and Ranking Member Meadows, thank you
again for hosting this hearing today. NACo and our Big Seven
coalition partners stand ready to work with you and your other
Federal colleagues to ensure the health, safety, and well-being
of the American public. Thank you.
Mr. Connolly. Thank you so much, Mr. Chase. Listening to
your testimony, one of the things that struck Mr. Bishop and
myself in putting together the legislation is how much has
changed. I mean, in 1996, when the Commission was dissolved, we
weren't worried about election security. We weren't worried
about cyber hacking and attacks. The internet was embryonic.
You know, technology has just transformed the landscape, and we
have so many different challenges in this whole discussion of
federalism. So, trying to tee up those issues, we've got to
have a vehicle.
The chair would ask unanimous consent to enter into the
record at this point the statement from the Big Seven endorsing
the legislation, statement from the Western Governors
Association endorsing the legislation, and the hearing
transcript from May 17, 2018, of the task force hearing on the
subject of the partnership and the possibility of this
legislation. Without objection, it is so ordered.
Mr. Connolly. The chair now recognizes the distinguished
ranking member--the chair now recognizes Mr. Hice of Georgia.
Mr. Hice. Thank you, Mr. Chairman. I appreciate each of you
being here today. Just kind of a question across the board,
because this is an extremely important topic, as we all know,
but at the same time, there's no question we have seen such a
massive growth in our Federal Government that it dictates all
the way down in ways it was never intended.
So just in your respective opinions, is there a point, or
maybe are we already at that point, where the Federal
Government is so big that the model of federalism is really not
possible or feasible?
Mr. Stenberg. One of the changes that has occurred,
certainly over the last two or three decades, has been the
continued growth of the Federal role in the Federal system,
chiefly, through grants and aid and regulations. At the same
time that we've seen the growth in the dollars and requirements
that are going out to states and localities, we've seen a
decline of intergovernmental institutions to help ensure that
that money is well-spent, those regulations serve the intended
purpose and don't add burdens and costs.
I think a question at this point is, can the rate of growth
be sustained and should it be sustained?
Mr. Hice. Well, that's not my question. That is a question;
that's not my question. My question is, the role of Federal
Government, is there a point where it gets so big that its
dictate--I mean, there's no way we're going to have the state
governments fulfilling their role within the sphere that
they're given in our Constitution.
Please be quick. I want to move forward.
Mr. Stenberg. Four Ds could change things in terms of the
Federal role. Demographics--we're a grain Nation, we're living
longer, we're taking advantage of entitlement programs; defense
commitments, deficits, and debt, raise a question of can this
role be sustained and, if not, who is going to shoulder the
responsibility. Will it be states? Will it be local
governments? And if the answer is perhaps, or yes, how are they
going to do the job? Who's going to kind of sort out
responsibilities and figure out who does what?
Mr. Hice. Let me hear from others. Ms. Gerton.
Ms. Gerton. Yes, sir. Before I was at the National Academy
of Public Administration, I served in the Department of Labor
and ran a grant-making agency. One of the things that surprised
me was how complex the space of grantee--Federal agencies that
were involved in the veterans programs--was, and we didn't even
know which other agency was involved.
So as you speak about the growth of the Federal Government,
I think it doesn't obviate the need for more federalism, it
increases it. But at the same time, we've got to do a better
job at the Federal level in the interagency process of sharing
and collaborating on particular topics, so that we get a
streamlined Federal approach, and then we engage our state and
local partners so that there's a better collaboration to
deliver outcomes.
Mr. Hice. Okay. Mr. Chase, real quickly.
Mr. Chase. I can't speak to the size, but I can also echo
the complexity, that of the Federal investments we get today,
they could be much more efficient. The challenge for counties,
in particular, if you think about our 3,000 counties, 50
percent of the American population lives in 140-plus counties.
The other 50 percent live in 2,900 counties. And the ability
for those rural communities to tap into the Federal Government
is becoming increasingly difficult.
Mr. Hice. Sure. I mean, but even more difficult in all of
this is what the Constitution enumerates. The powers of the
Federal Government is only like 18 areas. Everything else is to
be left to the states and to the people. And we're not seeing
that. We are so far outside our constitutional jurisdiction
here on the Federal level, and we continue to swallow up more
and more and more authority all along the way.
Has there ever been an example where the Federal Government
has taken an authority that they were not supposed to have, and
then they relinquished it back? I'm not aware of that
happening. I mean, so we keep gobbling up more and more and
more authority to where we think that those of us up here in
Congress, we're supposed to take care of everybody's problem in
the entire Nation, all the states' problem, local problems,
individual problems. We've become the daddy figure of everyone.
And my question is, is there a point that we have grown
this thing too big that we can't get back to the constitutional
roles of the states? I fear for that. We've got to get back to
that. It is what makes this country so powerfully unique from
every other country in the world, and yet, we are trampling the
very thing that protects our freedoms and guards us from become
swallowed by Federal Government.
Mr. Chase. Mr. Chairman, I would just say, and Congressman,
one of the biggest issues facing county governments is our
county jails have become hospitals. And one of the issues right
now is you actually lose access to Federal benefits, including
CHIP for juvenile, VA benefits, and Medicaid. Under the Fifth
and 14th Amendments to the Constitution, we would argue you
shouldn't lose those at arrest; you should lose them post
adjudication.
So there are also issues where we think the Federal
Government should help counties with their core
responsibilities under the Constitution. Right now, we are
running programs because people are losing their constitutional
rights at arrest, not through due process. That is costing
counties billions of dollars in healthcare.
Mr. Hice. Thank you. I yield.
Mr. Connolly. I thank my friend. I think he makes the
argument for why we need to have a commission that tees up
those very issues, because they are very much arguable points.
Mr. Grothman.
Mr. Grothman. Sure. It seems to me a little bit of the
underlying problem here is that people are coming to Washington
for money and programs that clearly our forefathers never would
have anticipated would be Federal programs. Of course, you can
be helpful in that, because, of course, some of the people who
come to us for more money are, sadly, local government
officials. You know, you can talk about intergovernmental
commissions or partnerships, but, you know, partnerships or
intergovernmental commissions inevitably mean the Federal
Government is going to tell you what you can do with your
money.
Just so you guys understand, right now, it seems to vary
from month to month. We're borrowing something like 17 or 18
percent of our budget. At least in the state of Wisconsin, we
went into this budget with a big surplus. Do you find, each one
of the three of you, that right now, we're, in general, in
pretty good fiscal health on the states and local governments,
but the Federal Government is broke out of its mind?
Just right across, Ms. Gerton, then Dr. Stenberg, then Mr.
Chase.
Ms. Gerton. I think we're certainly seeing budget squeezes
at the state and local level as the tax bases change, as the
sources of revenue change.
Mr. Grothman. Are you sure? I mean, at least in Wisconsin,
as the economy booms--and state budgets largely operate off
income and sales taxes. Usually, they're getting increases. But
that's not true for you?
Ms. Gerton. Sir, I think we see a general trend that state
budgets are being squeezed by, as Mr. Chase notes, a number of
the local programs that are addressing the needs of the low
income and needy in the community. At the same time, the
Federal Government is challenged with that as well. So, as the
Federal Government asks states and localities to do more, that
fiscal balance gets out of balance.
Mr. Chase. I would just say, from a county perspective,
each county is individual. Some are doing okay. Others are
really struggling, based on their local economy. We are
primarily a property tax-based government, depending on the
state. There are some where it's sales tax. But our funding
through property tax tends to stay a little stable, but we
certainly have counties across the country that are struggling,
and some are prospering.
Mr. Grothman. Okay. I'm going to go through a few of the
things, and it drives me up a wall. I always have people in my
office asking for more for these things. Each one of you can
tell me whether you think the Federal Government should put
more money in these areas.
Education, what do you think about Federal funding of
education? We'll start with Ms. Gerton.
Ms. Gerton. Sir, we certainly think that there should be--
the states and localities are responsible for delivering the
education systems, and so, there needs to be an agreement about
what those roles and responsibilities are, how much they cost,
and who funds them.
Mr. Stenberg. The Federal share of education has been
around six or seven percent for K-12 over the years. One of the
concerns is that the number of Federal regulations is
disproportionate to the amount of the financial contribution.
So the financial contribution will continue.
Mr. Grothman. Would each one of you come out then? I am
inclined to agree there's a lot of mandates that come out with
it. Would each one of you then be in favor of getting--well,
Dr. Stenberg, would you be in favor of getting the Federal
Government out of education?
Mr. Stenberg. I would not. I think K-12 education is
primarily a local-and state-funded activity, but there are
needs that sometimes cannot be met. For example, Federal K-12
education money oftentimes is targeted to poor communities that
do not have the ability to support their schools.
Mr. Grothman. States can't do that?
Mr. Stenberg. States can do that. Whether they do it is
another question.
Mr. Grothman. Okay. How about what we refer to as welfare,
income sort of equalization, do you feel that's a Federal
problem? I'm going to give each one of you the question.
Mr. Chase. I would just say, from a county perspective, we
definitely need a Federal partner. We are just seeing--it's an
interesting phenomenon for us, where we have incredibly strong
GDP, low unemployment, and, yet, our demand for county services
in some areas is through the roof. The opioid epidemic is a
classic case study, where we are seeing with the No. 1 cause of
accidental death now being drug overdose, our foster care
caseloads are at a record high. Our treatment for Hep C, HIV,
and stuff in our jails is through a record high.
Federal policy played a huge role in driving prescription
drugs. So, we would strongly argue that if the Federal
Government incentivized, through Federal policy, the
prescription of these medications and now we have to pay in our
jails----
Mr. Grothman. I'll give you one final question real quick,
and then I'll shut up. Is there anything the Federal Government
pays for right now that, you know, we use the counties or
schools or whatever as a conduit, that you would be in favor of
reduced Federal spending and reduced Federal role?
Ms. Gerton. I don't think that I can name a specific
program, but I would argue that the more we do integrated
conversation about these topics, the better we'll have a
division of labor and cost-sharing between the different levels
of government. I think right now, there's not a lot of
opportunity to collaborate on what states might provide, what
the Federal Government can provide----
Mr. Grothman. No suggestions where we could spend less
money and you'd rather pick up the ball? None? From the three--
--
Mr. Connolly. The gentleman's time has expired, but you may
answer the question.
Mr. Stenberg. The former ACIR tackled that question, sir,
in terms of the "who should do what?" An example, it did
recommend that public education K-12 be shifted to a greater
extent to the state level. At the same time, it recommended
that [for] Medicaid-type health programs, there should be a
greater Federal role played. Kind of a sorting out of
responsibility.
That's one of the jobs of the Commission that is being
proposed, I understand, to kind of identify, in particular,
functional areas. What should the relative roles and
responsibilities be? Who should pay for what? And make the
adjustments accordingly, or at least recommend the adjustments
for your consideration.
Mr. Chase. I would just say for counties, our biggest
challenge with the Federal Government are more rules and
regulations. We're not always here asking for money. In fact,
we're asking for relief. One of our biggest priorities this
year is to restore advance refunding of municipal bonds so we
can--[with] our own borrowing-- that we can refinance our
bonds, which was recently taken away.
So we have many things that aren't Federal dollars. It's
actually more Federal guidelines and regulations --and
handcuffing our ability to be flexible at the local level.
Mr. Connolly. I think the gentleman from Wisconsin's
question, again, makes the case for why we need to revive the
Commission, because there are so many issues like this that
really need to be addressed.
For example, I'd say to my friend from Wisconsin, his
question on education is a really good one, because the Federal
Government is only about a six percent, seven percent,
participant in school budgets, right, at the county level, but
they have all kinds of requirements as conditions for that six
or seven percent.
I can remember, in trying to implement No Child Left Behind
in counties with very diverse and large immigrant populations,
trying to get everyone on a level playing field in terms of the
language so that they are performing like anybody else, in our
county, takes about two years. We sought a waiver to
acknowledge that, allow us a little time, so we could get
everyone on a level playing field.
And the then-Secretary of Education, Mr. Grothman, not only
said no, but she threatened the Federal funding. Although the
Federal funding wasn't a lot of money, at the margin, our
property tax simply wouldn't--the increase required to make up
for it was not doable. So, they held us hostage for bad policy
that didn't take into account diverse counties with big and
growing immigrant populations that didn't speak English as a
first language.
This happens all the time. That's why I say I think there
is potential common ground between Republicans and Democrats,
because those kinds of things need to be addressed.
Mr. Norman.
Mr. Norman. Thank you, Mr. Chairman, and thank each one of
you for coming. You know, as I read kind of why we're having
this hearing, [which] is to hold a hearing to propose and
evaluate ways to improve cooperation among Federal, state, and
local governments. It's my understanding that the last year
that the Commission was in existence was in 1996. The funding
was $600,000.
What do you all--do any of you have an idea what the
funding cost level is going to be for this if this Commission
is put back into place?
Ms. Gerton. I'm sorry, sir. We haven't estimated a
calculation for that.
Mr. Norman. Okay. I guess the other thing, too, that we
would strive to do is to evaluate how state and local groups
can advocate for a return to cooperative federalism to address
Federal and national issues. If each of you had to break down
exactly what you would do to achieve this, what would that be
to justify your existence? Give me a one, two, three order,
each of you, on what you would do to make this happen.
Mr. Stenberg. I would emphasize improved intergovernmental
consultation.
Mr. Norman. Define that.
Mr. Stenberg. Federal agencies, before issuing rules, would
consult with representatives of state and local government
around the impacts of those rules and regulations on the
operations of states and counties, municipalities, towns and
townships and tribal organizations. They would do so in advance
of going public, so that there could be some negotiation, so
the negative impacts could be recognized, and perhaps the
language modified to deal with them. That's one of the voids
now as a result of no ACIR. There is no consultation that's
meaningful.
Mr. Norman. So with 50 states, you would gather who to try
to make--to make that cooperation happen?
Mr. Stenberg. I would rely on the Big Seven
representatives, together with some of the additional members
on the Commission, the Tribal Nation representatives, town and
township representatives.
Mr. Norman. That's a big task, isn't it?
Mr. Stenberg. Yes, it is.
Mr. Norman. I mean, what teeth would this Commission have
other than--and let me tell you, I'm from the private sector.
I'm tired of forming a committee to study a committee when
nobody has any power. I mean, this is noble, but tell me
exactly what you're going to do to justify the funding,
whatever it is?
Mr. Chase. So, Congressman, if I can give you an example,
there is a highly politically charged regulation called Waters
of the United States----
Mr. Norman. Correct.
Mr. Chase [continuing]. that defines Federal versus state
waters. Right now, half of our counties are operating under one
law, and half of our counties are operating under a different
law, because we are now legislating through the courts.
We have used an executive order that the Clinton
Administration actually put in place--it's still there today--
to demand a seat at the table with EPA for our county
engineers, our attorneys, our public works experts, to sit down
with EPA's professionals and say, We're not here as the left or
the right. We are here as level of government that owns 45
percent of the roads, 40 percent of the bridges, and right now,
we can't clean our culverts without a Corps of Engineers or EPA
permit under this regulation.
Mr. Norman. You can't cut a logging road in some parts of
the country without getting silt fences on a logging road on
5,000 acres of land.
Mr. Chase. But through the consultation process, we
filtered out kind of the political rhetoric and said, Let's
look at this regulation as practitioners and how can we protect
the environment, not have just countless studies and permits
that we have to pay for. These 404 permits with the Army Corps
can be incredibly expensive. How can we just look at this
regulation through a practical lens?
Mr. Norman. Where's your teeth other than recommending--I
mean, to get that many people on Waters of the United States,
that my eyes get red on that particular thing. How are you
going to make any kind of impact that could possibly get the
states together as far as--and my time is running out, but I'll
just say, if this thing, if this Commission is put back in, you
need to have some concrete examples.
I don't see the teeth in it. I see just another meeting to
have a meeting to--and I don't see how in the world you're
going to justify your funding on this that really has an effect
other than maybe education on maybe put some common sense back
into it.
Mr. Chase. Well, Congressman, we would always welcome more
teeth. Right now, we don't even have a seat at the table. So,
particularly in the rulemaking process, we are being treated
like the general public rather than intergovernmental partners,
who are operating and own vast majorities of the public
infrastructure in the case I gave you. What we want is early,
continuous, and transparent. We're not looking to meet in a
back room with these agencies. We're fine with public meetings,
but we just don't want to be treated as a special interest
group. We want--counties in our case on the environment, we're
regulators, we're operators, and we have to also comply with
the Federal Government. But we were just being treated just
like the general public.
Mr. Connolly. The gentleman's time is up, but I would say
to him, we don't have a mechanism for teeing up these issues
right now. The issues, since 1996, have gotten far more
complex. Since 1996--I think I'm right here--the only
legislative remedy that has been provided was by this
committee, and that was the unfunded mandate legislation. I
actually testified before this committee when I was the
chairman of my county, representing NACo. This committee was
then chaired by my predecessor, Mr. Davis.
Teeing up issues before they become big issues has merit.
Teeing up issues when there are problems so that we get some
guidance on legislative remedy like the unfunded mandates
legislation is great. That's important. We don't have it right
now. There's so much that can be done, in terms of being more
efficient, avoiding needless regulation, catching unfunded
mandates before they get out of control, flagging for each
other issues that are going to matter. There are just a myriad
of issues that I would suggest to my friend we would benefit
from.
My friend, Rob Bishop, after two years of looking at this,
hardly a liberal Democrat, came to the same conclusion: We've
got to have a mechanism. We changed the old mechanism to make
it more relevant, and we certainly--I take my friend's point,
we could look at other things to shore it up as well. But if we
don't have something that deals with this complex federalism
issue, I think we're asking for trouble as we move forward.
Mr. Norman. Mr. Chairman.
Mr. Connolly. Yes, sir.
Mr. Norman. Can you indulge me for a minute?
Mr. Connolly. Of course.
Mr. Norman. If we do--if this commission is put in order, I
suggest we sunset it, sunset, have some sunset time on it, and
have specifics that we can measure the success after a year, or
two years, because these are noble causes, but I just don't
know--I mean, I've been on the state level. I don't know how
you get people together. Every bureaucrat can justify why this
or that shouldn't be put in place.
An argument? I just don't see the teeth in it. But if it
is, I would ask to sunset it and have some measurable outcomes
that they have to meet. Thank you.
Mr. Connolly. Certainly. I thank the gentleman. A sunset
clause may very well be a wise idea. Let me take my five
minutes.
Mr. Connolly. Let me ask you, Dr. Stenberg and Mr. Chase,
in particular. What we haven't talked about here is--two
things. One is how the states can sometimes be the culprits.
I'll cite my own state of Virginia.
So a game is played in sloughing off responsibility to
localities who have to pay for things, and then we take
enormous pride in being one of the lowest tax-burden states in
the country. Yes, because we don't pay the education bill, even
though we mandate at the state level what has to be done.
So the state mandates what's called standards of learning,
and the state mandates standardized tests called standards of
quality to which you will teach. And your kids have to pass
these tests every year or you have a failing school. But we
don't pay for them. In fact, they're committed to pay 55
percent of those costs and they don't even meet that.
So what happens? The localities are left to their own
devices. And, as Mr. Chase said, well, if you're in a county
with a good, solid commercial tax base, you can bear that
burden. But if you don't have a commercial tax base, even
though you may be an affluent county by income, we don't access
income at the local level, and so it's property tax that has to
make up that difference.
That's a real Sophie's choice for many counties or even
cities: Okay, how high can I raise that tax burden before I
drive people out of the county or, you know, I have a tax
revolt and I end up doing what California did years ago, which
clearly hurt the educational system of California?
So sometimes states are part of the problem--or are the
problem. It's not just the Federal Government that is imposing
unfunded mandates.
I thought you might want to comment.
Mr. Chase. Yes, so I will take off my Big Seven hat
representing state and local governments and just put on my
county hat.
That certainly is a challenge for us at the local level.
Currently, we have over 40 states where the state legislatures
have capped our property tax income and yet the mandates
continue.
Where we see coming back to this commission are issues like
elections, for example, where counties pay the vast majority of
the election equipment, and it is costing us tens of millions
of dollars. It's something the Federal Government historically
has not paid us for. In some cases, the states may or may not.
So we think the commission would be a great forum to talk
about these issues, like elections, that have a Federal-state-
local intersection and have a good dialog. We aren't asking for
the Federal and state governments just to bail us out, but
oftentimes those mandates are imposed and we do have to carry
those out and often in very quick time-frames where you can't
adjust your tax base.
So we certainly agree with your perspective from your----
Mr. Connolly. Yes. It's a good example you're mentioning,
elections, because in most cases it's absolutely the
responsibility of the local jurisdiction----
Mr. Chase. Right.
Mr. Connolly [continuing]. not a state responsibility, even
though the state will set standards that you have to meet, but
you're on your own in terms of paying for voting machines,
paying for election judges, training those election judges,
trying to make sure you meet with state standards, and then
making sure there's an accurate count. Those are all local
burdens usually not helped by state compensation.
Did you want to comment, Dr. Stenberg?
Mr. Stenberg. Yes, Mr. Chairman.
I think you're absolutely right that the states can do a
pretty good job at preempting and imposing requirements and not
living up to financial obligations that are associated with
them.
It varies from state to state and area to area, but
research surveys that the National League of Cities conducted
last year and the year before have shown a steady increase in
state preemptive activity in a wide range of areas, from
environmental standards to health, to minimum wage, broadband,
ride-sharing. The list goes on.
The issue here is, what is a state-wide problem or issue as
opposed to a local problem or issue? That's a tough question to
answer just in the examples I've given. And here, again, is
where a commission, such as the one that's been proposed, can
in a thoughtful way begin to answer those questions and advise
policymakers in terms of: Is this something that warrants a
state-wide, uniform approach, whether it's for business
conditions or safety or some other thing? And is this an area
where we should urge new local innovation and creativity? And
what is the cost burden or financial responsibility that goes
along with those decisions?
Mr. Connolly. You know, one of the things we talked about
on the task force which had not been a topic originally
assigned to it, but because of my local government background,
you know, I think we have to discuss in America the Dillon rule
versus home rule. Because the Dillon rule in a modern, 21st-
century environment, frankly, does not make sense. It just puts
local governments, who have the primary burden of delivery of
services, in a straitjacket. You know, somebody once described
it as a ``Mother May I?'' approach to government.
I can remember, in my county, you know, the state statute,
for example, required all school buses to be painted yellow. We
discovered that by painting the roof white it made the buses
more efficient, more fuel-efficient, and warmer in the winter
and cooler in the warm months for the kids riding the buses.
And so it was an energy, you know, move. We had to go to
Richmond and get legislation passed to get an exemption from
the state code. We could not do it on our own.
Then there are other states where the opposite rule is the
case; you have broad authority to govern unless we say you may
not. So long as local governments are seen as nothing more than
a creature of a state, a creation of the state, no real
sovereign standing on their own--which is kind of a myth about
government.
But those are real issues. And I can tell you, at a local
level--sometimes we have debates up here about ``let's just
take this big Federal grant program and make it a block
grant.'' Well, if you are from where I'm from, you know, that
sends terror up and down your spine, because funding formulas
coming out of the state capitol are never fair to big, urban
counties like mine in our state. So we know we lose if that
happens. We'd rather have, frankly, a direct--a formula from
the Federal agency that issues the grants, Ms. Gerton, than
have it go through the state.
But up here, we almost never have that conversation.
Everyone just assumes that would be a good thing; states would
like that. Well, they might, but localities might not like it,
because there are problems with funding formulas at the state
level that discriminate against certain parts of the state
sometimes.
Let me ask one final question, which I think is also why we
need to have the commission we've been talking about. We don't
often have conversations about impacts of Supreme Court
rulings. Dr. Stenberg, you'll have to help me remember the name
of it, but there was a famous case that affected local
governments' ability to control solid waste. I'm having a
senior moment about the name. It would've happened in the
1990's.
It was an extraordinary case that said, even though solid
waste is generated in your jurisdiction, you can't make haulers
bring their waste to your incinerator or your dump. They're
free to take it, under interstate commerce, anywhere they want.
So, because of that ruling, on the East Coast, we had a
plethora of trash trucks going up and down to places that were
preferable to them, bypassing established treatment plants, for
example, and really wreaking havoc on local economies, because
many of the facilities that had been developed were financed by
municipal bonds, and now you were jeopardizing the bonds
because you weren't able to meet the input required to keep
that, you know, facility going.
It was--have we got the name? Oh, Carbone. It might have
been Carbone.
Anyway, it was an extraordinary decision, I thought
immensely wrong-headed, by the Supreme Court, not one of whom
had ever served in a local government and understood the
ramifications. But it's the kind of thing that has never been
the subject, really, of our conversation, like, ``Well, what
does that do to you?''
I just wondered if you wanted to comment on the impacts of
the Supreme Court's decisions on this topic we're talking
about, and then I'll be quiet.
Mr. Chase. Mr. Chairman, actually, the Big Seven coalition,
along with some other groups, actually funds what's called the
state and Local Legal Center. We work together to actually
participate in Supreme Court cases through amicus briefs----
Mr. Connolly. We think the name of the case I'm trying to
remember is Carbone.
Mr. Chase. Carbone.
Mr. Connolly. Yes.
Mr. Chase. Yes.
Well, going back to your commission, recycling is a huge
issue at the local level, and local governments, particularly
counties, spend a lot of money on recycling. But because of
Federal trade negotiations right now, our recycling markets
have actually crashed. In county governments across the Nation,
it went from a revenue source, where you might get paid to sell
some of your recycled goods, to today counties are actually
having to absorb that cost.
I think that's another great issue that the commission
could talk about, the intersection of global trade policy and
how it actually filters down to the local level.
But on the Supreme Court, because we don't really have a
functioning intergovernmental commission, more and more groups
are now using the courts to legislate. I think that's important
for the congressional branch to really think about, where
you're giving power, actually, to the courts.
The Marketplace Fairness Act was a great example where we
tried, as a coalition, for years to get through this online
sales tax issue. Finally, we worked a bill through the South
Dakota legislature that made its way to the courts, and,
ultimately, the Supreme Court ruled in our favor. But we
would've much preferred to go through Congress to work on a
bipartisan, sustainable solution to something that was an
existing tax. It wasn't even a new tax.
Mr. Connolly. Again, from a local government point of view,
you know, what else do we not control? So we don't control
solid waste. We don't control cable franchises, or there are,
you know, real circumscribing measures on that. You know, we
don't control water rights. We don't--you know, on and on and
on. Well, at what point does local government become nonviable,
then, if we don't control our own destinies?
I mean, some things, obviously, can't only be addressed at
a local level; they have regional or broad geographic impact.
But there are lots of other things where control over our own
destiny is a fundamental democratic principle.
Dr. Stenberg?
Mr. Stenberg. In my days with the Council of State
Governments, I can recall Governors and legislators talking
about federalism from the standpoint of the Supreme Court
decisions that made the 10th Amendment a hollow shell. It's
meaningless. Their concern was that Congress pretty much had a
green light to go into any area it chose in terms of domestic
affairs.
That's why I think the provision in the bill which
authorizes the commission to monitor the decisions of the U.S.
Supreme Court that have federalism impacts and kind of be a
canary in the coal mine, if you will, in terms of calling
attention to some of the impacts that the State and Local Legal
Center, the Big Seven and others, and advocates in the Congress
could address.
So, to me, that's maybe not teeth, but that's a new role
and an important role given the changes that have occurred.
I think the monitoring function of the commission is really
important, looking at not just trends but behaviors. You know,
we have good language in, for example, Executive Order 13132,
really good language. If it were implemented, we probably
wouldn't be saying we need more consultation. We would know
what consultation means and when it occurs and who's consulted.
Those questions haven't been addressed.
And so that, together with the Federal offices of
intergovernmental affairs, again, looking at them from the
standpoint of this commission that doesn't have an axe to grind
other than for the improvement of intergovernmental relations,
I think could raise some important issues, questions, and
provide some insights that would be beneficial to, again, the
other stakeholders.
Mr. Connolly. Yes. To me, that's almost self-evident
because--to this enormous question--but we haven't had a seat
at the table. We haven't even been talking to each other except
on an ad hoc basis.
When I first got to Congress, for example, you know, I'd
been chairman of my county until the day I was sworn in. We
were in the midst of the recession, and one of the things that
happened was the catastrophic collapse of the municipal bond
market. Well, what happens when municipal bonds are no longer
financed on Wall Street? You don't build schools, you don't
build community centers, you don't build police stations or
fire stations or anything else.
By the way, the dollar amounts were so enormous, when you
add up the impact of local governments and state governments,
for that matter, when you dry up the municipal bond market, it
was offsetting the stimulus. The drag was offsetting the
stimulus.
I could not get colleagues to focus on it. Like, we had to
provide some relief here. But we can. We could back it up and--
you know--those issues weren't even considered as part of the
stimulus. Nobody looked at it. A couple of committees might
have had some hearings, but there was no legislative relief.
Had we had a commission that, you know, a red light going
off, flashing, ``This is a big deal,'' we could've at least had
the opportunity to have a significant hearing on that issue and
the consequences that could flow and how it was offsetting the
good work we were trying to do on the stimulus. But----
Mr. Chase. Mr.----
Mr. Connolly [continuing]. we never got that opportunity.
Yes, Mr. Chase.
Mr. Chase. And that's the point I was making earlier, was
on the--when we lost, in the tax bill, the advanced refunding,
now when we take out the debt through the municipal bond
market, we are stuck with that interest rate. We lost the
ability, because of a Federal action, to refinance. That's like
telling a homeowner, ``You can buy a house, but you can never
refinance your interest rate. You are stuck with it for the
next 30 years.''
Mr. Connolly. Yep.
Mr. Chase. Most of our bonds are locally voter approved or
the elected officials have to vote to approve it. It is on our
balance sheet. And we have lost that flexibility to build those
schools, public hospitals, airports, and other critical
infrastructure.
Mr. Connolly. I will end with this anecdote.
Oh, I didn't see you. I'm so sorry.
Mr. Khanna has joined us. Let me just end--I'll end my time
with this anecdote and then call on Mr. Khanna.
When we were doing the stimulus bill in 2009, we had money
in there to help local governments do school construction. We
felt they'd be shovel-ready. Everybody has a CIP and a waiting
list for new construction and renovation. An injection of
Federal money would help soften the municipal bond problem and
get projects right underway and hire locally. And there'd be
the, you know, return on the investment of a new facility.
There were three critical Members in the Senate who were
controlling everything that went in or came out of the stimulus
bill for their votes. They said it was unprecedented to have
the Federal Government involved in school construction, it had
never happened before, and it was a bad road to go down.
I can remember going to our caucus meeting, as a freshman,
fresh from local government, and I heard that. I mean, it was
accepted as gospel truth, and no one challenged it.
So, as a freshman, I got up and I said, well, you know, if
you think the Federal Government has never been involved in
school construction, I'll be glad to take you to Mount Vernon
High School in Mount Vernon District near Mount Vernon, where
George Washington is buried and where he had his plantation,
and that high school was built with Federal money.
I said, but just to be sure that's not unique, I checked,
and there are at least 2,700 schools all around America built
by Federal money. So, other than that, you're right, it's a
unique idea, unprecedented.
But a policy decision to cut that money and not allow any
of the stimulus money to go to school construction occurred
because of ignorance. People just accepted an assertion that
was factually untrue because they didn't know the history of
the relationship between Federal funds and school construction
at the local level.
Bad things can happen if we're not having a regular dialog
and a mechanism to have that. That's what this act--I mean,
we're not going to solve everything, but it gets us back and
gives us a mechanism, hopefully, we can update and use to our
advantage.
Mr. Khanna, I'm so sorry.
Mr. Khanna. No, I appreciate it.
Mr. Connolly. I was filling time until you got here. We're
glad to have you.
Mr. Khanna from California.
Mr. Khanna. Well, thank you, Mr. Chairman. I'm here largely
to say how much I support this legislation, your legislation,
on the Restore the Partnership Act and how necessary it is.
And, yet again, another piece of legislation from you that
seems commonsense and that's bipartisan and that can actually
help improve things.
I want to share very briefly an anecdote from my time in
the Commerce administration that leads me to believe why this
is important and have Dr. Stenberg and the panel comment.
When I was at the Commerce Department, the President,
President Obama, said, ``We need to have a SelectUSA program,''
which made total sense, that we want to make sure companies are
staying in the United States instead of going to China or
Brazil or elsewhere. And we had all these reports that these
other countries would roll out the red carpet for companies,
whereas, in the United States, often we didn't even know if a
company was leaving.
So we started to implement it, and it turns out that the
biggest obstacle was that none of the states wanted the Federal
Government to intervene on behalf of one state over the other.
Now, that's a legitimate issue, but I thought: Someone has got
to resolve this. While China is competing and has a coordinated
response in how to attract business, we're stifled because our
Federal Government can't get its act together with state and
local governments to make sure companies stay in America
instead of go overseas.
I think your act would exactly address this issue, and
that's something I'd like to see the commission address. How do
we have an American competitiveness strategy? I mean, I think,
you know, I want all the businesses to go to California, but
I'd rather they even be in Texas than in China. Somehow we've
got to make sure that we can do that.
Dr. Stenberg and Mr. Chase, Ms. Gerton, could you comment
on that and what this act may do to help that?
Ms. Gerton. Sir, I think that the opportunity to use this
commission to address critical national development strategies
is a key one. We think the infrastructure is right along those
lines, economic development strategies and understanding, then,
the national objectives and the state and local impacts of
those, as we've been discussing throughout, is a critical
function of the commission.
So understanding what the incentives are, the
disincentives, and the opportunities to collaborate so that we
get the best outcome for the Nation but also for each of the
communities that's involved is critical, and it's a great
example what this commission could do.
Mr. Stenberg. I would agree that that's a great example of
an opportunity.
I think a commission like this can add value in a number of
different ways. It can provide insights and information to
Federal policymakers that will help them make better decisions
in terms of the impacts as well as the outcomes that are being
sought.
Right now, those views aren't really being solicited. In
fact, state and local representatives often aren't even in the
room when it's decided. So it's not surprising that there's
sometimes a misalignment between what the Federal goal or
policy is and the state and local outcomes.
So, kind of, better aligning those, I think, would be
something the commission could do, again, using that convening
authority that the bill grants to it, but also knowing who
should be at the table. That's something that I think is going
to be just as important as the process that's used. And, again,
this commission, I think, can be helpful in that respect.
Mr. Chase. Congressman, I personally worked with SelectUSA
in my previous role and actually was engaged in a lot of those
conversations and actually went to Hanover, Germany, to one of
the big trade shows, and the American booth was not the
highlight of the show. I can promise you the Federal Government
was not overspending on that booth.
But we agree with you where there are appropriate Federal,
state, and local roles, particularly in economic development.
But when we look at the future of work and how the supply chain
works nowadays, we think it's really important that Federal,
state, and local policymakers, including in the private sector,
have a table for those discussions.
We are seeing that every day with companies approaching us
wanting--we just launched a new partnership with Walmart, for
example, about the future of work and how they are becoming a
technology company, not a retail company. What is that going to
do to county governments who have put out municipal bonds for
water and sewer for transportation interchanges? What is going
to happen to the disability community if they're going to move
to a technology platform rather than storefront, with workers,
on Main Street? And those are really complex issues.
We're a property-tax-base government, so it's also going to
have a dramatic impact on our revenue sources. We're not asking
for the Federal Government to bail us out. We're just asking
for a thoughtful conversation about: What is the future of work
going to look like? What's the future of commerce? How should
we build our transportation networks? And those are Federal,
state, local policymakers coming together with a vision for the
country.
We think the tensions between government are healthy, but
what we really applaud the Congressman for and the chairman is,
we just need a table to have grownup conversations about what
should American policy look like and to really deal with what
Dr. Stenberg called these wicked problems.
Mr. Khanna. Thank you. Thank you, Mr. Chairman.
Mr. Connolly. Thank you, Mr. Khanna. And I want to thank
all three of you for being here.
We may want to submit some written questions to you. And
let me invite one right now. I'd love your reaction on the
changes we've made to the commission to try to make it more
flexible, updated, and hopefully useful. Also, any thoughts you
may have on, well, let's just start listing all of the new
issues that we confront that did not exist in 1996.
Ms. Gerton. Mr. Chairman, I would mention two particular
provisions in the bill that I think are important. One is
adding the new state and local memberships and Tribal
membership to the committee so that its majority is actually
now not Federal.
Mr. Connolly. Right.
Ms. Gerton. I think that sends an important signal about
the value of those opinions and input into the commission's
decision.
I think the second point is that it does have more teeth
than it did before, that it requires Federal agencies to comply
with commission requests for information and to address
commission report recommendations, and it requires Congress to
have hearings within 90 days of commission reports. So that,
again, conveys to stakeholders that this is a commission that
people are going to pay attention to.
Mr. Connolly. I believe it also requires that agencies must
provide written responses to the commission's recommendations.
Ms. Gerton. Yes. So I think those are both really important
signaling features, and they will be important to the
effectiveness of the commission.
In terms of listing possible agenda topics, there's no end
to them. But you mentioned something in your opening statement
that I think is important, and that is the use of technology,
the changes in technology.
We really have no system of technology sharing and
management in the intergovernmental space. And as we look to
the future, as Mr. Chase has just addressed the future of work,
really understanding how to use technology and use data to
streamline program administration, to streamline reporting, to
really simplify the cost of delivering programs in the
intergovernmental space could reap tremendous benefits. The
grant and aid programs underlie many of the issues that we
would put on an agenda topic.
So I think using the commission to kind of fundamentally
understand capacity as it relates to technology and data would
be one of the first orders of priority.
Mr. Connolly. Well said. And I'll give you one more, the
Census.
Ms. Gerton. Yes. Absolutely.
Mr. Connolly. I mean, if there's a place where we have the
intersection between the Federal Government and state and local
governments, it's the Census.
I had a roundtable yesterday, and it became so clear to me
how the Census Bureau is completely dependent on the networks
that exist in local governments--the faith community,
immigration advocates, the organizations, and the local
governments.
For example, we were talking about, well, how are we going
to translate the Census into all of the many languages? My
community has well over 100 languages that are spoken. Our
school district sends notices home in at least six or eight
official languages, including Urdu and Farsi as well as Korean
and Vietnamese and Spanish. And it seemed to us that the Census
Bureau was not yet up to snuff on how to do that.
Well, it turns out that both of the counties I represent
have the technological capacity to very quickly take something
and translate it into the targeted languages. I think we had
the capability of 59. This was news to the Census Bureau.
Instead of reinventing the wheel, you could partner with
your local governments that have that capability
technologically and save a lot of time, trouble, and money and
get that Census where it needs to be gotten. So there are
practical benefits from being able to have this dialog.
Anyway, my hope is we will get this bill on a bipartisan
basis so that we can get back to work and expand the dialog and
make sure that our state and local governments are no longer
seen as special interests.
Thank you so much for being here today.
The hearing is adjourned.
[Whereupon, at 5:36 p.m., the subcommittee was adjourned.]
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