Hill Moves to Pay for Mandates

HOW clean should the air be in Los Angeles or Denver; how safe the drinking water in Milwaukee or Boston; how accessible to the disabled the Albuquerque City Hall or the Fulton County courthouse in Atlanta?

On all these questions and many more the federal government determines the standards, but local governments pay to meet them.

Increasingly, city, county, and state governments have come to see these ``unfunded mandates'' as Congress's way of enacting programs while forcing officials at other levels of government to raise taxes or find budget cuts to pay the tab. In 1993 the accounting firm Price Waterhouse surveyed 314 cities and 128 counties and found that they spent an average of 12 percent of local revenue to meet the 10 to 12 most expensive mandates levied by Congress.

Enough congressmen agree with local officials that a couple of popular bills now in Congress are aimed at making it more difficult for federal mandates to become law without funding. The first such bill was passed by a Senate committee unanimously last week. It would force Congress to add up the cost of new bills to state and local governments as well as to private businesses, and approve them only with an on-the-record, roll-call vote.

Concern over unfunded mandates began to emerge in the early 1980s. In the past year or so, it has become a central rallying cry for mayors and governors as the burdens pile up. The principle at the heart of their complaint has been fundamental to American fiscal practice for 200 years, says John Shannon, a senior fellow at the Urban Institute: ``The pleasure of expenditure should not be divorced from the pain of taxation.''

In other words, the politicians who offer the benefit of, say, wheelchair-accessible polling places, should also be the ones to raise taxes or make offsetting budget cuts to pay for them.

It was, however, the mayors and governors who began violating that principle, first in the 1970s, as they pleaded for more federal money through revenue-sharing. Under revenue-sharing, Congress raised tax dollars for the cities to spend. But when President Carter and then President Reagan began cutting revenue-sharing, state and local budgets began to strain under the burden of federal mandates.

With the federal budget in straits of its own in recent years, Congress has found that one way to carry on activist government is to set the standards and let other levels of government meet them. Politically, local governments have found it easier to raise taxes, while the federal government has more leverage in setting rules.

Fairness varies

``State and local officials can beard the middle-class taxpayer a lot easier than the federal government,'' Mr. Shannon says. ``But the national government clearly has the advantage on the regulatory side.''

The lack of fairness of unfunded mandates varies according to the mandate. The Clean Water Act, which requires local governments to clean up what they dump into rivers that will flow on to other cities and states, forms a good case for federal standards. But the Safe Drinking Water Act, which tells cities how clean their own water should be and leaves them to pay for it, carries a narrower rationale. For that reason, the requirements of the latter act were loosened up last month in Congress.

The strongest support for unfunded mandates comes from environmentalists, public employee unions, and other public-interest organizations that favor strong federal regulation. The basic concern is that some local or state governments would abandon the standards if the federal government did not mandate them, says Gary Bass of the liberal group OMB Watch. ``Isn't that the reason you have a Congress, so that you have evenness'' of regulation? His answer to the fairness problem is more funding from the federal budget, not fewer mandates.

Sen. Dirk Kempthorne (R) of Idaho reached an agreement with US Government Affairs Committee chairman John Glenn (D) of Ohio last week on a bill that the committee passed unanimously. It would allow the Senate president to rule a bill that bears an unfunded mandate out of order unless Congress finds a way to pay for it - or the Senate overrules its president with an on-the-record, roll-call vote.

Cost analysis required

The Glenn-Kempthorne bill would not apply to civil rights laws, including the Americans with Disabilities Act. It would require the Congressional Budget Office to estimate the cost to state and local governments of proposed new laws. It would also require CBO analysis of the cost to the private sector.

Senator Kempthorne's original bill, co-sponsored in the House by Rep. Gary Condit (D) of California, would make federal mandates strictly voluntary unless Congress also supplied the money required to meet them.

Both legislators are former mayors, not incidentally, and both bills have a majority in their respective houses signed on as cosponsors. Mr. Condit's version has been bottled up in the House by the opposition of Government Operations Committee chairman John Conyers (D) of Michigan.

Still another bill, introduced by Rep. Jim Moran (D) of Virginia in the House and Sens. Byron Dorgan (D) of North Dakota and Pete Domenici (R) of New Mexico, would require the Congressional Budget Office to estimate the cost of proposed new laws to private businesses as well as state and local governments.

Doing away with unfunded mandates presents some practical problems. Jim St. George of the Center for Budget and Policy Priorities notes that forecasting how much a mandate will cost other governments is difficult and guessing the cost to the private sector is nearly impossible. He warns that any law seriously limiting unfunded mandates would also be subject to gamesmanship by state and local officials seeking to shift costs to the federal government.