[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
UNFUNDED MANDATES: EXAMINING FEDERALLY IMPOSED BURDENS ON STATE AND
LOCAL GOVERNMENT
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HEARING
BEFORE THE
SUBCOMMITTEE ON
INTERGOVERNMENTAL AFFAIRS
OF THE
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
APRIL 26, 2017
__________
Serial No. 115-24
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Printed for the use of the Committee on Oversight and Government Reform
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.fdsys.gov
http://oversight.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
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Committee on Oversight and Government Reform
Jason Chaffetz, Utah, Chairman
John J. Duncan, Jr., Tennessee Elijah E. Cummings, Maryland,
Darrell E. Issa, California Ranking Minority Member
Jim Jordan, Ohio Carolyn B. Maloney, New York
Mark Sanford, South Carolina Eleanor Holmes Norton, District of
Justin Amash, Michigan Columbia
Paul A. Gosar, Arizona Wm. Lacy Clay, Missouri
Scott DesJarlais, Tennessee Stephen F. Lynch, Massachusetts
Trey Gowdy, South Carolina Jim Cooper, Tennessee
Blake Farenthold, Texas Gerald E. Connolly, Virginia
Virginia Foxx, North Carolina Robin L. Kelly, Illinois
Thomas Massie, Kentucky Brenda L. Lawrence, Michigan
Mark Meadows, North Carolina Bonnie Watson Coleman, New Jersey
Ron DeSantis, Florida Stacey E. Plaskett, Virgin Islands
Dennis A. Ross, Florida Val Butler Demings, Florida
Mark Walker, North Carolina Raja Krishnamoorthi, Illinois
Rod Blum, Iowa Jamie Raskin, Maryland
Jody B. Hice, Georgia Peter Welch, Vermont
Steve Russell, Oklahoma Matthew Cartwright, Pennsylvania
Glenn Grothman, Wisconsin Mark DeSaulnier, California
Will Hurd, Texas John Sarbanes, Maryland
Gary J. Palmer, Alabama
James Comer, Kentucky
Paul Mitchell, Michigan
Jonathan Skladany, Staff Director
Rebecca Edgar, Deputy Staff Director
Katy Rother, Senior Counsel
William McKenna General Counsel
Kiley Bidelman, Clerk
David Rapallo, Minority Staff Director
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Subcommittee on Intergovernmental Affairs
Gary Palmer, Alabama Chairman
Glenn Grothman, Wisconsin, Vice Val Butler Demings, Florida,
Chair Ranking Minority Member
John J. Duncan, Jr., Tennessee Mark DeSaulnier, California
Trey Gowdy, South Carolina (Vacancy)
Virginia Foxx, North Carolina (Vacancy)
Thomas Massie, Kentucky
Mark Walker, North Carolina
C O N T E N T S
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Page
Hearing held on April 26, 2017................................... 1
WITNESSES
The Hon. Wayne Niederhauser, President, Utah State Senate
Oral Statement............................................... 6
Written Statement............................................ 9
The Hon. Jim Davis, Senator, North Carolina State Senate
Oral Statement............................................... 13
Written Statement............................................ 15
The Hon. Gary Moore, Judge/Executive, Boone County, Kentucky
Oral Statement............................................... 18
Full Statement of the Hon. Gary Moore can be found at: http://
docs.house.gov/meetings/GO/GO04/20170426/105942/hhrg-115-GO04-
Wstate-MooreG-20170426.pdf
The Hon. Jermaine Reed, Councilman, City of Kansas City, Missouri
Oral Statement............................................... 19
Written Statement............................................ 21
The Hon. Jeff McKay, Supervisor, Fairfax County Board of
Supervisors, Alexandria, Virginia
Oral Statement............................................... 29
Written Statement............................................ 31
APPENDIX
Opening Statement of Subcommittee Chairman Gary Palmer........... 52
UNFUNDED MANDATES: EXAMINING FEDERALLY IMPOSED BURDENS ON STATE AND
LOCAL GOVERNMENT
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Wednesday, April 26, 2017
House of Representatives,
Subcommittee on Intergovernmental Affairs,
Committee on Oversight and Government Reform,
Washington, D.C.
The subcommittee met, pursuant to call, at 10:06 a.m., in
Room 2154, Rayburn House Office Building, Hon. Gary J. Palmer
[chairman of the subcommittee] presiding.
Present: Representatives Palmer, Grothman, Foxx, Walker,
Demings, and DeSaulnier.
Also Present: Representatives Meadows, Comer, and Connolly.
Mr. Palmer. The Subcommittee on Intergovernmental Affairs
of the Committee on Oversight and Government Reform will come
to order.
Without objection, the chair is authorized to declare a
recess at any time.
Today, we are examining Federal unfunded mandates and their
impact on State and local governments. The issue of unfunded
mandates is central to this subcommittee, which is charged with
oversight of the relationship between the Federal Government
and State and local government partners. In December, the
chairman sent a letter to Governors, State legislators, and
county and local government officials soliciting feedback on
the most burdensome or impactful Federal unfunded mandates.
Respondents cited over 645 individual Federal laws and
regulations that have taken away the ability of local
governments to decide how best to serve their constituencies.
Almost a quarter of those laws represented Federal
environmental requirements.
Governor Eddie Calvo of Guam reported that the compliance
costs for the EPA's enforcement of the Clean Air Act, Clean
Water Act, and Safe Drinking Water Act alone equates to almost
$10,000 per man, woman, and child, and makes the basic cost of
utilities for the median household unsustainable.
Unfunded mandates reported to the committee covered a
variety of topics, from labor to housing to transportation to
prison administration. This issue does not discriminate. Of the
most cited laws, Medicaid was routinely reported to be one of
the most burdensome, imposing billions of dollars on
communities annually for care that is often not reimbursed.
Higher education institutions in the State of Virginia
report spending millions annually on compliance with Federal
education laws. The University of Virginia, for example, spends
an estimated $20 million a year just to comply with unfunded
mandates.
Respondents cited mandates imposing significant
administrative costs with no identifiable benefits, mandates
requiring standards inconsistent with the needs of the State,
and mandates that are simply impossible to achieve. In certain
cases, such as implementation of the new National Ambient Air
Quality Standards, unfunded mandates reportedly resulted in
direct loss of jobs. The corresponding costs of these mandates
are directly borne by the taxpayer.
Merely looking at cost, however, is not sufficient. The
time and resources that States and local governments take to
comply with these mandates demonstrate that current law does
not adequately capture the extent of the burden of unfunded
mandates. As an example, Speaker Mac McCutcheon from my home
State of Alabama shared an unworkable Department of
Transportation mandate that requires the State to outline a
financial plan for certain projects for up to 30 years without
knowing the source of funding that far into the future, making
the annual exercise just that, an exercise. What we heard from
nearly all the respondents is that the attempt to provide a
one-size-fits-all solution effectively strips officials of the
flexibility necessary to govern at the State and local level.
Every dollar a State or local government uses to comply
with Federal law is a dollar they can't direct to specific
needs at their own levels of government. The committee learned
that a Federal Aviation Administration policy change resulted
in the use of State and local infrastructure funds to pay for
flight inspections in Oklahoma. A small rural county in Nevada
had to consider closing its sole library, which was its
residents' key source of internet access, after the Department
of Labor implemented its overtime rule. These tradeoffs are
made every day by State and local officials.
I would like to thank each of the witnesses today for
taking valuable time out of their schedules to appear here
today to testify. You are uniquely situated to provide insight
into this issue and where we should go from here.
I now recognize the gentlelady from Virginia, Congresswoman
Virginia Foxx, for the remainder of my time.
Ms. Foxx. I thank the chairman for yielding.
Like some of you, I served as an elected official in State
and local government, and can testify to the difficulty of
balancing a State budget when there are dozens of complicated
unfunded Federal mandates that must be taken into account. In
1995, in a model of bipartisanship, Congress passed and
President Clinton signed the Unfunded Mandates Reform Act, or
UMRA. UMRA was designed to force the Federal Government to
estimate and report how much its mandates would cost local and
State governments, which was previously not the case. UMRA was
not intended to prevent the government from regulating or
legislating, but, rather, to ensure that decisionmakers have
the best information possible when crafting new policies.
I have always admired the purpose and spirit of UMRA, but
weaknesses in the law have been exploited in the intervening
decades, and they need to be addressed. For instance, most
independent agencies, like the FCC and the SEC, are not subject
to UMRA's requirements for their proposed regulations. Costly
changes in conditions of grant aid don't fall within the
definition of a mandate, and agencies can skip UMRA cost
analyses if they begin rulemaking with a mechanism other than a
formal notice of proposed rulemaking. Finally, UMRA measures
only direct costs of compliance with mandates, and the law
contains no enforcement or accountability mechanisms which
allow State and local governments recourse if the process is
not followed. It is my hope that this hearing will be a first
step toward an improved and more transparent regulatory process
that eases the burdens passed onto State and local governments.
To that end, since 2007, I have worked on a bill known as the
Unfunded Mandates Information and Transparency Act, or UMITA,
which seeks to address some of UMRA's shortcomings and will
help the law meet its unfulfilled potential. UMITA will ensure
public and bureaucratic awareness about the cost that Federal
regulations impose on the economy and local governments. It
will also make our regulatory apparatus more efficient,
effective, and transparent. UMITA has bipartisan DNA, and its
purpose is purely about good government, that of openness and
honesty about the cost of regulations.
These principles do not belong to either party. That is why
my Democratic colleague Henry Cuellar joined me in introducing
the bill, and it is why it has passed the House in previous
Congresses with overwhelming support from both parties.
Republicans and Democrats can agree that every unfunded mandate
the Federal Government imposes should be both deliberative and
economically defensible.
Thank you for your time, and thank you, Mr. Chairman, for
yielding.
Mr. Palmer. The chair notes the presence of our colleagues
Congressman Meadows of North Carolina, Congressman Connolly of
Virginia, and Congressman Comer of Kentucky. We appreciate your
interest in this topic and welcome your participation today.
And the chair recognizes the gentleman from North Carolina,
Mr. Meadows.
Mr. Meadows. Thank you, Mr. Chairman.
I want to thank my colleague Ms. Foxx for her leadership on
this particular issue, for your leadership in bringing forward
this hearing.
But I am here today to thank the fine senator from North
Carolina, Senator Jim Davis, who is probably the best qualified
person to speak on this topic, because when I didn't know what
unfunded mandates were, Senator, you as a county commissioner
were telling me what it was. You knew all too well those
Federal mandates that came down, and we required you to have to
pay for it at the county level. You have been an advocate on
this, not only as a county commissioner, but now as my State
senator and someone I enjoy calling my friend. Thank you for
making the special effort. Thank you for your expert testimony.
And, Mr. Chairman, I yield back.
Mr. Palmer. I thank the gentleman.
The chair now recognizes the gentlewoman from Florida, the
ranking member, Mrs. Demings.
Mrs. Demings. Thank you so much, Mr. Chairman.
Good morning, everyone.
Let me start by saying I am very pleased, Mr. Chairman, to
join you as ranking member of this subcommittee. We have had
one joint subcommittee hearing, but this is our first hearing
of just the Intergovernmental Subcommittee. I look forward to
working with you in a bipartisan manner to conduct rigorous,
yet effective, oversight.
I am glad we are having this hearing to examine the impact
of unfunded mandates on State and local governments by the
Federal Government. As a former chief of police for the city of
Orlando, Florida, I am keenly aware of the challenges State and
local governments face in managing their local budget and
implementing Federal mandates. Right now, I believe the single
biggest threat to State and local funding is President Trump's
proposed budget. It slashes hundreds of billions of dollars
from programs that American families rely on. And if these
Draconian cuts go through, the burden will fall on cities,
counties, and States.
Here is a brief list of the programs set for elimination.
The administration's budget would eliminate funding for the
Community Development Block Grant. It would eliminate funding
for the HOME Investments Partnership Program. It would
eliminate Community Services Block Grants. And it would even
eliminate the Low Income Home Energy Assistance Program. The
president of the National League of Cities said President
Trump's proposed budget, and I quote, ``threatens the safety
and prosperity of cities around the country.'' I could not
agree more.
What does it all mean? Well, it means low-income American
families may go without heat in the winter and air conditioning
in the summer. It means that the elderly, children, and people
with disabilities will not receive funding that is critical to
these vulnerable populations. It means funding for afterschool
programs will disappear. And it means that counties and cities
will have to divert funds as they are forced to do more with
less. It will negatively impact public health and safety across
the country, and it will negatively impact budgets nationwide.
Regardless of whether you live in rural areas or urban cities,
you will be hurt by this budget.
When these cuts to vital programs are proposed, they are
packaged as cost-saving efforts. This isn't true. This is cost
shifting to someone else, and the, quote, ``someone else'' is
the most vulnerable families in our communities and States and
local governments. I look forward to hearing about unfunded
mandates facing local governments, but as part of this
conversation, we must reject the President's massive budget
cuts and the burden they impose on local and State governments.
I understand as well as anyone how Federal mandates can
pass costs down to State and local governments that impact the
outlook for their budgets. We must distinguish between mandates
that assure basic rights and protections and mandates that
impose burdens. For example, there are mandates that ensure
clean water. All we have to do is look at the crisis in Flint,
Michigan, to understand what would happen if these protections
were eliminated. As this committee found, the problem in Flint
was not Federal overreach. It was that the Federal Government
did not step in sooner to protect the citizens of Flint. And
now an entire generation of children will be paying the price
as they deal with the consequences of lead poisoning. The
solution there is not just to eliminate the mandate; it's to
provide adequate funding to comply with it.
Then there are examples of mandates that burden State
governments. It's no secret President Trump wants local
governments to help with immigration enforcement. At the same
time, however, his proposed budget looks to eliminate the State
Criminal Alien Assistance Program, which provides
reimbursements to State and local governments for incarcerating
undocumented immigrants. This is a prime example of States
being asked to do the Federal Government's job at their own
expense. We cannot lose sight of why we are concerned about the
burdens of State and local governments in the first place. It's
about doing what is best for Americans everywhere. The funds at
this level and the services provided are crucial to Americans
across this country. We cannot tolerate irresponsible cuts to
these needed programs.
Again, thank you so much.
And, Mr. Chairman, I yield back.
Mr. Palmer. I thank the gentlewoman.
And I also look forward to working with you. And I think we
have a lot of opportunities, a lot of good work to do on this
committee.
The committee will hold the record open for 5 legislative
days for any members who would like to submit a written
statement.
We will now recognize our panel of witnesses. First of all,
the Honorable Wayne Niederhauser, president of the Utah State
Senate, who represents the ninth State senate district in the
great State of Utah. The Honorable Gary Moore, judge and
executive of Boone County, Kentucky. Mr. Moore chairs the
National Association of Counties' Committee on Environment,
Energy & Land Use, and is the former chairman of the Opioid
Epidemic Task Force.
I got out of order, Mr. Davis. I would also like to
recognize Senator Jim Davis of North Carolina's 50th district.
Welcome today.
The Honorable Jermaine Reed, councilman of the city of
Kansas City, Missouri.
And I am now pleased to recognize Congressman Connolly from
the great State of Virginia to recognize our last witness.
Mr. Connolly. I thank my friend, and I thank the chair and
the ranking member for holding this very important hearing.
In fact, when I was chairman of Fairfax County, from which
Mr. McKay comes, I actually testified before this committee,
when Tom Davis was chairman and Henry Waxman was ranking
member, on unfunded mandates.
Unfunded mandates particularly affect local government. In
fact, local governments are on the receiving end not only from
the Federal Government but from State governments. I notice we
have two State senators, one of whom at least was in local
government. But it is all too often the practice at the State
level to, frankly, slough off burdens onto localities. I know
that goes on in my home State of Virginia, and I know Mr. McKay
is on the receiving end of that as a supervisor from Lee
district in Fairfax County.
Mr. McKay is a long-time friend of mine for over two
decades. We worked together in a myriad of enterprises in
transportation, in human services, on the Legislative Affairs
Committee, which he now chairs, which I also used to chair. And
I know he understands intimately the impact on the budget
because he now chairs the Budget Committee for the Fairfax
County Board of Supervisors, a county bigger than eight States.
So, you know, he is dealing with really large issues, and it's
a full enterprise government. So it's everything from human
services to a bus fleet. And they know the impact of unfunded
mandates, Mr. Chairman.
And I have always said, as a local government official and
now up here, if Congress thinks an idea is really worth doing,
we should pay for it. It should never be a burden put on
somebody else. No Child Left Behind is a great example. You
know, maybe good intentions, but it was an unfunded mandate.
And that was always my problem.
So I welcome Mr. McKay being here representing a wonderful
place, Fairfax County, and I thank him for being willing to
spend his time and bring his expertise to this committee.
Mr. Palmer. Welcome to you all.
Pursuant to committee rules, all witnesses will be sworn in
before they testify. Please rise and raise your right hand.
Do you solemnly swear or affirm that the testimony you are
about to give will be the truth, the whole truth, and nothing
but the truth so help you God? Thank you. Please be seated.
Let the record reflect that the witnesses answered in the
affirmative.
In order to allow time for discussion, please limit your
testimony to 5 minutes. Your entire written statement will be
made part of the record.
The chair now recognizes Mr. Niederhauser for his
testimony.
WITNESS STATEMENTS
STATEMENT OF THE HONORABLE WAYNE NIEDERHAUSER
Mr. Niederhauser. Thank you, Chairman Palmer, Ranking
Member Demings, and committee members for this opportunity to
speak to you today. I am Wayne Niederhauser, senate president
of Utah. I represent Sandy, Utah, gateway to Snowbird and Alta
ski resorts. It was snowing when I left home yesterday morning.
I also have the privilege of working closely with the Council
of State Governments, CSG, and I am here in that capacity
today.
On behalf of CSG and our leaders throughout the country, I
want to thank you for convening this important hearing and for
your leadership in exploring ways to improve relationships
between the States and the Federal Government. Founded in
1993--1933, excuse me, the Council of State Governments is the
Nation's only organization serving all three branches of
government. CSG is a region-based, nonprofit, nonpartisan
organization that fosters an exchange of ideas that helps
States shape public policy. Our new administration, the Vice
President and President, have both voiced their strong support
for strengthening relationships with State and local
governments. The administration has issued several executive
actions. While these executive orders are important steps
towards keeping faith with the established principles of
federalism, CSG believes Congress should follow suit and
consider legislative action to codify processes that ensure
adequate State input.
We applaud Congresswoman Virginia Foxx for introducing H.R.
50, the Unfunded Mandates Information and Transparency Act,
which addresses UMRA's narrow coverage, exemptions, and
loopholes. The committee understands the constitutional and
foundational role the States play in our Federal system as
outlined in the 10th Amendment, which laid the foundation for
States to develop innovative ideas and policies to fulfill
their roles as laboratories of democracy.
The Utah legislature in this last session passed a
resolution outlining several dozen areas of State
responsibility that have been assumed by the Federal
Government. That resolution will be attached to my testimony.
State-based innovation is being stifled by a growing web of
Federal policies and regulations, which come in the form of
unfunded mandates. Unfunded mandates limit State and local
flexibility to address more pressing local problems like crime
and education. States are often forced to find money to pay
these bills. In addition, these mandates may come in a one-
size-fits-all box that can shut down innovative efforts to
address problems that involve unique local considerations.
Among the most costly mandates are those involved in
environmental compliance. The EPA and the Army Corps of
Engineers' infamous rule to establish an expansive definition
of the Waters of the United States is a prime example of which
this committee is well aware. A smaller example is the
groundwater rule that requires us to manage a new violation,
including site inspections, which forces us to hire new
employees that cost us $240,000 a year.
The Perkins Program from the Department of Education is my
final illustration. Utah receives a grant of approximately $12
million to support State and administrative costs, professional
development. In return for this $12 million, we are locked into
a maintenance of effort agreement that now costs the State $241
million. It is not a complete loss of money. Some of those
things we would have done regardless. But the lack of
flexibility comes at a cost. I am attaching a summary of our
Perkins analysis. Goals behind Federal mandates are often
admirable, but local governments have admirable goals also,
more important to citizens, more likely to be effective, and
less expensive. Along with the cost of financing these new
mandates, the majority of Federal regulations have been enacted
with limited or no input or consultation from local
governments. This is what led CSG to start a multiyear
initiative focused on improving the role of States in the
Federal system. I have included the full list of principles in
my testimony.
One size does not fit all. Local governments should be
encouraged to provide unique local solutions. Stronger
coordination and communication will help reduce conflicts,
which far too often end up in court and come with enormous
economic and opportunity costs. Cooperative federalism requires
the Federal Government to work in good faith with the States as
equal partners. The broken system demands Congress to implement
changes to the process.
Navigating this relationship between the Federal Government
and the States and local government--I believe, with your
leadership--will improve. Again, I thank you for this
opportunity to appear before you today and look forward to your
questions.
[Prepared statement of Mr. Niederhauser follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Palmer. I thank the gentleman for his testimony.
The chair recognizes Senator Davis from North Carolina.
STATEMENT OF THE HONORABLE JIM DAVIS
Mr. Davis. Good morning. Thank you, Chairman Palmer and
Ranking Member Demings and members of the subcommittee. I am
delighted to be here today. And I appreciate the opportunity to
share the impact of unfunded mandates, or what I call federally
imposed burdens, on North Carolina's State and local
governments. I am here to provide examples of compliance
challenges and their associated costs from such mandates.
I serve North Carolina's district 50, which covers the
seven westernmost counties in the State. Collectively, these
counties contain almost 900,000 acres of Federal land, large
tracts removed from development opportunities and the property
tax base. As a result, these counties face significant
challenges in their ability to provide critical services to
their citizens. The added costs of compliance with unfunded
mandates exponentially stress these already struggling local
governments. On the opposite side of my State, the U.S. Army
Corps of Engineers dredges Federal channels and disposes of
dredged materials in Federal waters offshore. Coastal counties
seeking resources to renourish beaches and to repair from
coastal storms often have need of dredged sand. But before any
restoration can begin, managers of renourishment and repair
projects must navigate the federally imposed bureaucracies of
two separate agencies. First, they must secure Federal lease
from the Bureau of Ocean Energy Management. Then they must work
through the National Environmental Protection Act sediment
sampling process for approval to extract sand from Federal
waters and place it back on the beach. Delays in these
processes are the norm and force local governments to create
funding by increasing sales and property taxes on our citizens.
Our North Carolina workforce, and in particular our
citizens with disabilities, along with our North Carolina
Division of Vocational Rehabilitation and its contracted
providers, are being directly and deleteriously impacted by
numerous Federal unfunded mandates associated with rules and
regulations promulgated in section 4 of the Workforce
Innovation and Opportunity Act. These mandates include
extension of service obligations. DVR programs are now
responsible for services to youth with the most significant
disabilities starting at age 14 for up to 4 years, with no
additional funding and no previous responsibility. Funding must
come from either North Carolina taxpayers or reduction or
elimination of services for other citizens.
New mandated allocation of States' DVR Federal grant.
Fifteen percent of the total DVR Federal grant money is now
mandated for a new responsibility to provide preemployment
transitional services to youth starting at age 14. The 15-
percent requirement was not graduated for infrastructure ramp
up, causing States to forfeit Federal funds. With forfeiture of
funds, no additional funding, and no previous responsibility,
the money must come from North Carolina taxpayers or a
reduction or elimination of services.
While the legislative intent of the Workforce Innovation
and Opportunity Act was intended to benefit our workforce and
citizens with disabilities, it was in effect a regulatory
overreach, an attempt to legislate through rulemaking, which
resulted in noble intentions becoming unfunded mandates,
ungrounded in reality. The North Carolina Department of
Transportation is rife with examples of the burdens of unfunded
Federal mandates. NCDOT is responsible for all modes of
transportation in my State. The NCDOT also oversees and helps
expand economic opportunities through the North Carolina ports
and North Carolina Global TransPark. Federal unfunded mandates
impact States that support passenger train services delivered
by providers other than Amtrak. There is no Federal funding to
support the additional costs associated with this designation.
And the total financial impact to North Carolina is over a
million and a half dollars per year. Due to a change in the
Federal definition of ``passenger ferry,'' base appropriations
for North Carolina's ferry system went from 22 million in 2007
to over 31 million in 2008.
And I could list many other Federal mandates that caused
our State to either increase taxes or reduce services. But I
would like to conclude my testimony with this compelling
example from a business owner in my district. His experience is
at best a sobering commentary on compliance challenges and
associated costs from unfunded Federal mandates. He was told by
a compliance officer charged with enforcing EPA guidelines that
his boiler system was compliant with current emissions of
arsenic; however, he would be required to reduce the emissions
from 12 parts per million to 4 parts per million. After
spending over $200,000 on consultants, lawyers, and other
experts, this business owner learned two things. One, the
technology didn't exist to reduce it to 4, and secondly,
arsenic occurs naturally in our air at 12 parts per million.
Rather than invest $200,000 on needed equipment, employee
raises, or profit, the business owner spent his money on
efforts to comply with the impossible. Where I come from,
$200,000 is real money.
I commend my testimony to you and welcome your questions.
Thank you.
[Prepared statement of Mr. Davis follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Palmer. The chair recognizes the gentleman from
Kentucky, Mr. Moore, for his testimony.
STATEMENT OF THE HONORABLE GARY MOORE
Judge Moore. Chairman Palmer, Ranking Member Demings, and
distinguished members of the committee and subcommittee, thank
you for holding today's hearings on unfunded mandates.
I would also like to say hello to Kentucky Representative
Comer and, if he is able to join us later, my Congressman
Massie, Thomas Massie.
My name is Gary Moore, and I am the elected county judge
executive in Boone County, Kentucky, and I am honored to
provide testimony today on behalf of the National Association
of Counties to share how we can strengthen the
intergovernmental consultation process. This issue is so
important to counties nationwide as we work to balance our
budgets and provide critical services to our constituents,
including public safety, health services, fire and rescue,
infrastructure development, and much more.
As this committee examines the impacts of unfunded
mandates, I would briefly like to share a few points for your
consideration. First, the regulatory consultation process
between Federal agencies and State and local governments needs
to be strengthened. In 1995, Unfunded Mandates Reform Act,
UMRA, was instrumental in reducing unfunded mandates in Federal
legislation for State and local governments. In fact, CBO
periodically and proactively brings together NACo and other
State and local organizations to discuss proposed legislation
that could result in unfunded mandates. However, the framework
it established for the regulatory consultation process has been
less effective. It tasked each agency with developing their own
internal process, which we found to be inconsistent across and
within agencies. We often find that the agencies just want to
check a box instead of having meaningful discussion with us as
intergovernmental partners before and throughout the rulemaking
cycle.
We are encouraged that Congress has been working on
legislation to strengthen this process and hopefully curb the
number of unfunded mandates. For example, H.R. 50, UMITA, would
increase transparency about the cost of unfunded Federal
mandates to State and local governments. Similarly, H.R. 1009,
the OIRA Insight, Reform, and Accountability Act, would
increase levels of consultation and collaboration between
agencies and State and local governments.
Time and time again, we see major Federal regulations like
Waters of the U.S., the ozone rule, and the Department of
Labor's overtime rule finalized with little or no consultation
with State and local governments, even though these regulations
have major practical and financial implications for counties.
Second, counties face mounting fiscal stress from unfunded
mandates. Counties must operate balanced budgets. We often do
not have the flexibility in our budgets to pay for new Federal
requirements. In fact, 45 States already impose limitation on
counties' ability to raise additional revenue. In my home State
of Kentucky, the burden of an ever-growing list of Federal and
State mandates has resulted in reduced funding for county
jails, inmate health care, infrastructure maintenance, while
other funding limitations are affecting our county-run 911
system. Federal policies and programs developed with only the
impact on the Federal Treasury in mind put the ability of local
governments to fulfill our responsibilities at risk.
Finally, our system of federalism requires a strong
Federal, State, and local partnership to achieve our shared
goals. Unfortunately, our intergovernmental partnership is
often out of balance as Federal agencies impose one-size-fits-
all approaches, taking away local decisionmaking. When the
Federal agencies do engage in meaningful consultation, they are
better able to develop practical rules that accomplish our
shared goals.
Mr. Chairman, thank you again for the opportunity to
discuss these issues and the major impact of federally imposed
burdens on State and local governments. In short, we hope
Congress will implement a consultation process across the
Federal Government that includes working with State and local
partners early and often. I am happy to answer your questions.
Thank you.
Mr. Palmer. I thank the gentleman for his testimony.
The chair recognizes Mr. Reed for his testimony.
STATEMENT OF THE HONORABLE JERMAINE REED
Mr. Reed. Thank you. And good morning to you, Mr. Chairman,
and the ranking members and the members of this committee.
I am Jermaine Reed, a member of the city council from
Kansas City, Missouri. And it's an honor to be able to join you
on behalf of National League of Cities, the oldest and largest
organization representing American cities and towns. City
leaders, as you have indicated, are on the front lines of
almost every issue. From education, health care, environment,
cities and towns are making major strides in these areas
because we are in the business of finding solutions to the
challenges that face our communities.
But one of the biggest barriers to our progress is the
burden of unfunded mandates. All city leaders face tough budget
choices in what services we are able to provide, but often the
added burden of unfunded mandates is the last straw for
straining local budgets. We at the National League of Cities
are opposed to unfunded mandates. As has been indicated, with
the release of the President's budget proposal, the concerns on
whether the Federal Government can reduce or can be eliminated
without shifting the costs to local governments has never been
greater: the across-the-board proposed cuts to critical funding
for programs and services in cities, the new unfunded mandates
it would create. And we urge Congress to reject these cuts. Our
constituents depend on the success of our Federal-local
partnership to ensure that government services are affordable,
reliable, and also high quality. To achieve that, I urge the
committee to work to eliminate unfunded mandates and other
regulatory burdens, support local flexibility and control to
avoid taking a one-size-fits-all regulatory approach. The
partnership between local, State, and Federal Government works
best when our unique powers and responsibilities are clearly
defined and respected. Local governments' biggest duty is to
provide services, solve day-to-day problems, and respond
directly to the needs of our citizens.
As our research at the National League of Cities shows,
city budgets are still recovering from the Great Recession. The
country's municipal workforce is still at 58,000 jobs below the
peak in the mid-2000s, and we are still meeting the needs of
our citizens, but there certainly is a very little to--margin
of error. In my hometown of Kansas City, we treat every budget
approval process as an opportunity to reexamine with our
constituents what their needs are to provide. When we are faced
with unfunded mandates, my colleagues and I are forced to
disregard the will of our voters and divert local tax dollars
to meet the standards imposed by Congress.
As explained in my written testimony, the unfunded mandates
that we are facing include regulations from the Clean Water
Act, the Clean Air Act, and the Americans with Disabilities
Act. And right now, I would like to focus on the Clean Water
Act and what it takes for cities our size to comply with
unfunded mandates it's proposed. In 2009, in order to meet the
requirements under the Clean Water Act, Kansas City developed a
25-year plan called the Smart Sewers Program. The program
includes 101 separate projects and comes at a cost of nearly $5
billion, financed entirely by wastewater fees. In order to fund
these improvements, the city was forced to impose double-digit
increases on our residents each year for the past 7 years. The
average monthly bill has more than doubled, from $48 in 2009 to
nearly $101 today, with major burdens on our elderly and low-
income citizens. In addition to the Smart Sewers Program, the
city has been mandated to invest in over $800 million in
wastewater systems upgrades to meet the population discharge
and regulation by the year of 2035.
Now let me be clear that these programs are important and
include many benefits to our community. But without the
adequate funding and no input from local elected officials,
they leave our city helpless to meet the Federal needs and to
balance our local budgets. Cities need to have a seat at the
table during the rulemaking process to ensure that local
consideration and consequences are taken into account.
As I stated in my written testimony, I would like to
commend EPA for the significant improved consultation process
with State and local governments. And I urge all Federal
agencies to learn from their progress. More importantly, on
behalf of the National League of Cities, I urge this committee
to improve the Federal-local consultation process in a way that
local government input and consideration in rulemaking is made.
This can be achieved through the consistent consultation
guidelines across Federal agencies and the low consultation
thresholds, as the EPA example has shown. With more
opportunities for local officials to participate in the
rulemaking process, we can eliminate unfunded mandates at an
early stage and give local governments the flexibility to
balance their budget, provide high-quality services, and
respond to our constituents' needs.
On behalf of the National League of Cities and the City of
Kansas City, Missouri, thank you for the opportunity to submit
this testimony on this critical issue, and I look forward to
your questions.
[Prepared statement of Mr. Reed follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Palmer. Thank you for your testimony.
The chair now recognizes Mr. McKay for his testimony.
STATEMENT OF THE HONORABLE JEFF MCKAY
Mr. McKay. Good morning. Thank you, Chairman Palmer,
Ranking Member Demings, Representative Connolly, members of
this subcommittee. Thank you for the opportunity to testify
today.
My name is Jeff McKay, and I serve as chairman of both the
Budget and Legislative Committees on the Fairfax County Board
of Supervisors. I also serve on the Board of Directors of the
Virginia Association of Counties. Many of you are probably
familiar with Fairfax County, from Tysons Corner mall to the
Springfield Town Center to Wolf Trap to Mount Vernon, we have
transformed from a rural farming community into the largest
jurisdiction in the Washington, D.C., area and the largest
jurisdiction in the Commonwealth of Virginia with a highly
diverse population of over 1.1 million people. We hold a
coveted AAA bond rating and among the most highly educated
populations in the Nation.
We have a strong partnership with the Federal Government,
with 54.7 billion in total defense spending in fiscal year
2014. Nearly 30,000 defense personnel are located in Fairfax
County, Virginia, in addition to many other Federal employees.
We value the close relationship we have with the Federal
Government and are even seeking to expand it with the potential
relocation of the FBI headquarters in Springfield, Virginia. We
very much are your partners, and we are proud of that
relationship.
Though Fairfax is often described as a wealthy community,
we have many individuals and families who are struggling,
including approximately 70,000 people living in poverty. Nearly
51,000 students in our public school system qualify for free
and reduced-price lunch. Only five school divisions in Virginia
have more total students than we have on just free and reduced-
price lunch in Fairfax County.
As has often been said, local government is the level of
government that is closest to the people. We are where the
rubber hits the road. Unfortunately, we are also the level of
government with the fewest revenue options, making it even more
difficult to address an increasing list of Federal and State
mandates. In Fairfax County, we estimate the county spent
approximately $1.4 billion on Federal and State mandates in
fiscal year 2016, with a net fiscal impact of $834 million.
Of course, we often support the policy goals the mandates
seek to achieve, but mandates often prescribe not only we must
do, but how we must do it, though they rarely include
sufficient funding to carry out those requirements. In
Virginia, localities are even more limited than in many other
States, as Virginia has a strict adherence to something called
Dillon rule, a doctrine of limited authority for local
governments. As a result, we have very limited revenue
authority, leading to an overreliance on property taxes.
Virginia also provides less funding to localities than many
States, ranking 38th nationally in State per-pupil funding for
K-through-12 education.
The challenges we face would be exacerbated if the recent
budget proposal by the Trump administration were enacted.
Dramatic reductions in Federal operations could lead to
dramatic consequences for us. A recent study by George Mason
University illustrates them. A decrease of 20,000 to 24,600
Federal jobs in the D.C. region, removing 2.3 billion to 2.7
billion in Federal salaries from our economy. A decrease in 800
million to 1.2 billion in Federal procurement spending in our
region.
The Trump budget proposal also raises concerns about
critical programs and services we provide with Federal funding,
eliminating the Community Development Block Grant and HOME
Program, funding restoration for the Chesapeake Bay, and
funding for Impact Aid in our schools, which partially offsets
the costs of federally connected children in our school system.
That program is already significantly underfunded in Virginia.
Consideration of such massive cuts is alarming. As we point to
many successes where Federal contributions were integral, our
transportation proposed to be reduced by 13 percent, some
excellent projects that have happened in Fairfax County could
not happen under this budget proposal.
As I mentioned earlier, most mandates come with
insufficient funding, but they are also overly prescriptive. If
such mandates were eliminated, we in Fairfax County might
address the same issues but in a totally, completely different
way. We would still need appropriate contributions from our
Federal and State partners. We also need to be empowered with
the tools to diversify our revenues and strike the appropriate
balance for our communities.
Conversely, some requirements must be maintained, and it is
correctly the Federal Government's role to set priorities for
overarching issues of national importance. Localities are
struggling to meet increasing needs with decreasing revenues.
In Fairfax County, we continue to try to find creative
solutions to problems, to leverage the funds that we have, but
demands are beginning to outstrip our means. We already do more
than is required in areas the State does not provide essential
funding and services. We cannot also step into the Federal
Government's shoes and backfill the substantial loss of Federal
funds. Keep in mind that, unlike the Federal Government, we are
required by Virginia law to annually balance our budget, a task
made more difficult by Federal underfunding and unfunded
mandates from both the State and Federal level.
Thank you again for the opportunity to testify on behalf of
Fairfax County, Virginia, today, and I look forward to your
questions.
[Prepared statement of Mr. McKay follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Palmer. I thank the gentleman for his testimony.
I will now recognize myself for 5 minutes for questions.
Senator Niederhauser, I think it has been consistent in
what we have heard is the lack of coordination between the
Federal Government and State and local government in regard to
these unfunded mandates. What kind of assurances do the States
and local governments need that the Federal Government will
seriously consider their input?
Mr. Niederhauser. I think that improving the Unfunded
Mandates Reform Act would be a great place to--I think that's
one area that could be worked on. The idea that there is
noncompliance with that in the administration I think is a
problem. Reaching out to organizations like the Council of
State Governments, National Council of State Legislatures.
There's other organizations like ALEC. These are all
legislative organizations that will give some really good input
and State view on issues.
And then I think that there ought to be a question asked
before you go down the road on any mandate whether that is
something the Federal Government ought to be addressing or the
State Government. Let me just give you an example. It was
probably about 2008-2009; I was chair of the Health System
Reform Task Force in Utah. And we were going down the path of
health reform. We were one of the first States to create an
exchange. Utah, a red State, we created an exchange, a health
exchange. We were already on this path, and then we felt like
we were preempted by the ACA, the Affordable Care Act. And then
we were playing defensive, trying to figure out what that meant
for us. And so I think there ought to be that question asked
before you even begin the discussion of some laws and
especially regulations, because I think what happens is these--
the regulators kind of lose--take laws beyond what they were
ever intended to address. And Congress, I believe, needs to be
more involved in making those decisions rather than an
administration so that we have some more consistency and we
have the voice of the people involved.
Mr. Palmer. I want to come back to that. But just, in
general--and each one of you can answer yes or no, or you can
elaborate a little bit if you would like--but based on your
experiences, do you believe the unfunded mandate regulatory
act's requirement for consultation between State and local
governments is effective in its current form? I think you have
already answered that, that it needs to be reformed. Mr. Davis?
Mr. Davis. I agree that it does need to be reformed. But I
think a lot of it has to do with the cost associated with it
and rather than the product. I think it is very important that,
when we look at these mandates from the Federal Government,
that we are looking for a goal, and we are not just
concentrating on how much it costs us to get this goal.
Mr. Palmer. Mr. Moore?
Judge Moore. Mr. Chairman, I believe that UMRA has worked
well on the legislative side. Where it has not worked well is
on the regulatory side. We, as local and State officials,
elected officials, if we are involved in the process on the
regulatory side, we can improve the process. We can often I
believe avoid some of the pitfalls we see with some of the
bureaucracy that we see from the Federal Government. So I would
suggest that the successes from the legislative side be more
strictly applied to the regulatory side.
Mr. Palmer. Mr. Reed?
Mr. Reed. Mr. Chairman, I echo the comments of my fellow
witnesses. You know, we are asking that, if you have a seat at
the table in the beginning, then it will really help eliminate
some of the costs that we are finding with our citizens, who
are bearing the burden of a lot of the mandates that we have to
pay.
As I indicated in my testimony, you know, from 2009 and the
water bills that continue to be increased, you know, if there
was a way that we could actually figure out ways to pay for
these items before we actually have to increase the budget, it
would help eliminate a lot of the burden that many of our
citizens are experiencing.
Mr. Palmer. Mr. McKay?
Mr. McKay. Thank you. I associate myself with the comments
of Mr. Moore as well. I think local government's seat at the
table is critical. We are closest to the people. And in terms
of interaction with the Feds and State, you know, it's very
easy for the States to take Federal unfunded mandates and just
push them right down to the county level. And so that's
certainly the process that takes place in Virginia. And, you
know, there doesn't seem to be the consultation at all with
local governments in terms of what impact that has; just a
simple legislative act by the States to push down to the lowest
level.
Mr. Palmer. There is something that is consistent in all of
your testimony and I think evident in your answers to that
question. That is, is that the process would work much better
if we left the implementation of the regulations in the hands
of State and local government, even to the degree of perhaps
sending the funding down with the regulations. For instance,
the EPA mandates. They are writing the regulations, but
they're--I think in Mr. Niederhauser's testimony--I think it
was your testimony. You said 96.5 percent of the environmental
regulations are implemented or administrated at the State
level. So it seems to me it would make more sense not only to
have this collaborative process where they are getting input
from you, but if you are going to do--if the mandates, the
regulations need to be implemented, that they allow you the
flexibility to implement them. Does that make more sense to
you?
Nodding is appropriate, but for the record, that indicates
an affirmative to the question.
I want to come back to some of this and some other areas as
well. But at this point, the chair recognizes the ranking
member from Florida, Mrs. Demings, for 5 minutes.
Mrs. Demings. Thank you so much, Mr. Chairman.
And, again, to our witnesses, thank you so much for being
with us today as we discuss this very important topic.
Mr. McKay, Fairfax County, like many other counties across
the country, relies on Federal funding for its residents. In
your testimony, you did express concern, though, about
President Trump's budget. How would his proposed cuts impact
Fairfax County? If you could just elaborate a little more on
how you would be directly impacted.
Mr. McKay. Sure. I appreciate the question. First, there's
impacts to actual programs that I mentioned in my testimony,
significant impacts. As I mentioned, there are 70,000 people in
Fairfax County living in poverty. So obviously reductions in
the HOME Investment Partnerships, CDBG funding are significant.
In terms of our school budget, the reductions in Impact Aid,
which is already grossly underperforming what is actually
needed to educate our students in Virginia, would be a huge hit
for us. And funding for the restoration of the Chesapeake Bay
is in jeopardy.
I think, though, fundamental to your question, what
concerns us the most is what's happening with our Federal
workforce. So there are a lot of Federal programs that would
affect Fairfax if they are not funded, but as I mentioned, we
are home to a significant Federal employee population. And some
of the things that are happening under the Trump administration
with regard to Federal employee freezes and things of that
nature have a significant economic effect on the residents of
Fairfax County, Virginia. So we are one of the jurisdictions
that has to watch this from multiple levels, not just the cuts
to programmatic things and things that our residents rely on,
but also cuts to, you know, the Federal workforce and the
economic impacts of those.
We also are very concerned about some of the impacts to
transportation. We are sitting here in the Nation's Capital,
many of your staffs rely on Metro to get to and from work. And
without Federal support of Metro, we remain very concerned
about the funding that's going to be necessary to sustain the
Metro system. So we're watching this from many different
angles, not just programmatic, but also in terms of the impact
to the finances of the very people that live in our county.
Mrs. Demings. If the budget cuts did move forward, how do
you believe State and local governments would be able to make
up the difference?
Mr. McKay. I don't believe that we could, to tell you the
truth. We in Fairfax long have a history, unfortunately, of
having to make up where the State and Federal Governments do
not adequately fund programs. But we cannot sustain that. As I
mentioned in my testimony, we do not have the revenue sources
at the county level to be able to expand. We are left with
property taxes, which is a very regressive tax on people in a
very high-income but high-cost-of-living area. And so I don't
believe that we can sustain the type of Federal cuts that are
in this budget, and I don't think that local governments will
be able to make that amount up.
Mrs. Demings. Thank you. Judge Moore, your organization,
the National Association of Counties, supports the Low Income
Home Energy Assistance Program. Is that correct?
Judge Moore. The association, I believe, does, yes.
Mrs. Demings. President Trump's proposed budget calls for
the elimination of that program. Is that correct?
Judge Moore. I am not familiar with that component.
Mrs. Demings. So you believe the association does, but you
do not have any direct knowledge that the association that you
are a part of supports that program?
Judge Moore. The association supports the program. I am not
familiar with the budget cut.
Mrs. Demings. Okay.
Judge Moore. What I am here to talk about really is the
unfunded mandate process.
Mrs. Demings. What I am here to talk about, since we are
talking about unfunded mandates, are the proposed cuts by the
Trump administration also is taking money away from local and
State and county governments. Are you familiar with the Low
Income Home Energy Assistance Program?
Judge Moore. I am.
Mrs. Demings. Okay. So let's say that that program was
eliminated. Your association, I believe you said your
particular county has seen tremendous growth. Is that correct?
Tripled over the last 30 years. How do you feel a cut to that
program will directly impact members that you represent as a
part of the association?
Judge Moore. If I answered this as my county and the people
that I am elected to represent, I believe that, in that
particular case, we would be called upon as local government to
either find a way to fund the program or the program would go
away.
What we do object to is a mandate that says we have to
continue the program without funding.
Ms. Demings. What would be some alternatives for you to
find a way to fund that particular program?
Judge Moore. As my colleagues have testified today, local
governments are very limited in how we can raise revenue. So it
would be very difficult.
Mrs. Demings. Thank you.
I am out of time. Thank you, Mr. Chairman.
Mr. Palmer. The chair now recognizes the gentleman from
Kentucky, Mr. Comer, for 5 minutes.
Mr. Comer. Thank you, Mr. Chairman.
And I want to recognize Judge Moore. It is good to see you
here, Judge. He represents and has been the leader in Boone
County for a long time. And there are 120 counties in Kentucky,
and Boone County consistently is one of the fastest growing
counties in the State. And you have done a great job there
overseeing tremendous growth. And Boone County, as I have said
many times, is a real economic development success story in
Kentucky.
Judge Moore, you discussed in your testimony the importance
of early consultation with local governments in the Federal
rulemaking process and note that in fact the EPA outright
refused to consult counties prior to the proposed Waters of the
U.S. rule's publication despite repeated requests to do so. My
first question, did the EPA and Army Corps provide a reason as
to why they did not consult with counties on this rule?
Judge Moore. No, they did not give us any reasons.
Mr. Comer. Would this rule have imposed a significant cost
on counties and local stakeholders?
Judge Moore. Absolutely. Probably the best example of that
is that we also are under a consent decree, as some others have
testified, with combined sewer overflows, sanitary sewer
overflows. And we are continuing to raise our sanitary sewer
and storm water fees substantially to be able to meet those
requirements. We are nearing the affordability threshold of the
amount of increase that we can put upon our ratepayers. So, if
we were at the table consulting with the Corps and with Federal
agencies during this process, we would have some potential
solutions on how to deal with that in a more efficient way.
Mr. Comer. Good. You mentioned the new administration has
started a State and local consultation process on this rule.
Have you been able to provide feedback to the EPA and Corps
through this process?
Judge Moore. I did meet with our State secretary of the
environment and energy cabinet who has a regular dialogue with
the Federal agencies. And we have talked about some potential
solutions. One example would be that we have a payment-in-lieu
program when we are developing new property if we impact a
wetland or a stream. Those funds are not used efficiently. And
environmentalists as well as others would agree that there is a
better use for those funds to use those to help eliminate
combined sewer overflows and sanitary sewer overflows rather
than the projects that are being done now. We are hopeful that
our State secretary of environment, working with the Federal
agencies, will be able to help us in that situation.
Mr. Comer. All right. Have the agencies indicated what they
intend do with the feedback that they are supposed to be
getting?
Judge Moore. Not that I am aware of.
Mr. Comer. All right. Next question, Judge Moore, you also
shared that the Department of Labor did not adequately consult
with State and local governments to assess the impact of its
recent overtime rule. Did the agency provide any justification
for its failure to cooperatively consult with counties on this
rulemaking?
Judge Moore. No, not that I am aware of.
Mr. Comer. Do you believe it's a good use of your time as
an official of local government to have to make repeated
requests for meaningful consultation every time the Federal
Government decides to act?
Judge Moore. I have a lot of other things I would prefer to
do. And it would be refreshing to see elected officials
involved in that process rather than non-elected.
Mr. Comer. Right. Well, hopefully, help is on the way. I
believe this new administration has a more commonsense approach
to doing business, and hopefully, we can address the unfunded
mandate issue that you are always faced with and the Federal
Government. And I know that there are a lot of issues that each
of you that testified have, and hopefully, we can work together
to try to bring some relief for the great jobs you are doing in
each of your States.
Thank you. I yield back.
Mr. Palmer. The chair now recognizes the gentleman from
Virginia, Mr. Connolly.
Mr. Connolly. I thank the chair, and I thank your courtesy.
Just for another point of view, I don't know that, at least
where I come from, we think help is on the way coming from this
new administration. Maybe that's a welcome message in Kentucky.
It's not a welcome message in Virginia. Because we are looking
at the Trump budget, as Mrs. Demings pointed out, and it looks
to me like it is a road map for a whole bunch of additional
unfunded mandates.
So, for example, Mr. McKay, if we completely defund the
Chesapeake Bay Commission, do the requirements to clean up the
bay go away?
Mr. McKay. They do not.
Mr. Connolly. And isn't it true that already the
overwhelming financial burden on the cleanup is on the local
and State governments?
Mr. McKay. It is.
Mr. Connolly. So the little piece the Feds provide
financially is that commission. So, if it goes away, we lose
that guidance; we lose that assistance. But the burden remains
on all of the States in the Chesapeake Bay estuary. Is that
correct?
Mr. McKay. Absolutely correct.
Mr. Connolly. That's a pretty expensive mandate to try to
clean up the Chesapeake Bay. And, of course, we face the same
thing on the Great Lakes and Puget Sound. Their respective
commissions are also zeroed out in this budget--that apparently
is--help is on the way. I don't know what help that would be in
that regard.
But CDBG, Community Development Block Grants, to local
governments. Mr. Reed, are they helpful at all, CDBG?
Mr. Reed. They are extremely helpful. And I will tell you
that a number of our community organizations depend on them. If
you are thinking about Meals on Wheels or you are thinking
about senior citizen homes or what have you, they are dependent
on CDBG. And we have seen significant decreases in CDBG in the
past several years. And it is one of those Federal funds that
many of those organizations who continue to come to us every
year as we are looking for appropriations for that, asking for
more, and they are doing more with less.
Mr. Connolly. So, again, you have got both State and
Federal mandates in terms of the provision of mental health,
disabilities, senior citizen needs and the like. They don't go
away----
Mr. Reed. No.
Mr. Connolly. --even if the Federal funding does. Is that
correct?
Mr. Reed. Correct.
Mr. Connolly. Mr. McKay, I noticed Kentucky, of course, did
expand Medicaid pursuant to the Affordable Care Act. Virginia
did not. And so we have got sort of a healthcare mandate
offering funding, but the State chose not to accept the
funding. So it is in some ways the State of Virginia choosing
politically to undertake an unfunded mandate, isn't it?
Mr. McKay. That is correct. And Fairfax County has strongly
supported the expansion of Medicaid for the very fundamental
financial reasons that you mentioned. It would be a significant
influx of funding to the Commonwealth of Virginia to provide
health care for people who need it but also to relieve the
burdens that local governments face to provide some of that
same health care without any reimbursement today.
Mr. Connolly. Transportation. So the Federal Government, as
you pointed out, has a big stake in the future of Metro since a
third of the Federal workforce uses Metro to get to work every
day. And I guess 40 percent of the total ridership every day is
Federal employees. And if Metro shuts down, so does the Federal
Government. There are four members to the compact, three of
which provide operating subsidies. Is that correct?
Mr. McKay. That is correct.
Mr. Connolly. So the fourth one, who is that that does not
provide any operating subsidies?
Mr. McKay. The Federal Government.
Mr. Connolly. And does the Federal Government nonetheless
provide oversight and mandates to Metro in terms of how it
operates, safety, things like that?
Mr. McKay. They do all of the above. And they even have
seats on the Metro Board of Directors.
Mr. Connolly. And, in fact, recently, this administration,
help-on-the-way administration, actually withheld Department of
Transportation funding for lots of other unrelated transit
projects throughout the Commonwealth of Virginia because of an
unrelated issue having to do with Metro and the oversight,
safety oversight trilateral commission. Is that correct?
Mr. McKay. That is correct.
Mr. Connolly. That's interesting. So, at the end of the
day--one final thing, a lot of us talk loosely up here about
State and local like they are the same. And, of course, we know
they are quite different. And a lot of us talk loosely,
especially those of us who have no experience in local
government, about ``let's just block-grant everything, send it
to the State, and their tender mercies will see to it that
localities do well.'' What's the problem with that thinking
from your perspective vis--vis Richmond?
Mr. McKay. There are significant problems with that, some
of which I mentioned in my testimony. As the Dillon rule
states, the hands of the counties are tied in terms of how they
can generate revenue to pay for some of these things. Richmond
has a very different political philosophy than Northern
Virginia in terms of our Federal partners and how these
programs trickle down at the local level. Richmond is very good
at just transferring the authority and the requirement to do
certain things to local governments but not sending the funding
attached to it.
More importantly, these things are very prescriptive. And
so, in many cases, they are laudable goals; there are things we
would certainly do at the county level, and we would do them a
whole different way than the prescriptive way. The way we are
told how to do these things is particularly concerning. But our
relationship with the State in Virginia is unique. As a Dillon
rule State, our hands are tied in terms of raising additional
revenue. And the State politically and philosophically
disagrees with us in many cases. And the one you gave with
Medicaid expansion is probably the most egregious one. We are
losing, as a county, millions of dollars in Federal support
because of the State's inability to support the expansion of
Medicaid. So they essentially have our counties in financial
shackles.
Mr. Connolly. Thank you.
And, Mr. Chairman, thank you for your courtesy.
Mr. Palmer. I thank the gentleman. It's interesting the
direction that the hearing has gone. We've gone into
federalism. We've gone into the budget, and now we've gotten
into State constitutions and home rule and the Dillon rule. So
certainly an interesting conversation.
The chairman will now recognize the vice chairman of the
subcommittee, Mr. Grothman of Wisconsin, for 5 minutes.
Mr. Grothman. Thank you.
We anticipate a big infusion in infrastructure later this
year, and I assume a lot of that will be sent to the States and
local units of government. It's been my experience that
frequently highways or other infrastructure projects become
much more expensive once Federal money is involved. I'm not
going to ask you to deal with Davis-Bacon, because we've all
heard about Davis-Bacon. But could any of you comment on
perhaps anecdotal evidence or other examples in which you feel
you've had to spend more for roads or other projects once
Federal money is involved?
Judge Moore. Mr. Vice Chair, I could address a portion of
that. In Kentucky, recently, prevailing wage was repealed. I
know that the Federal level did not--has not----
Mr. Grothman. Just don't deal with Davis-Bacon.
Judge Moore. Okay. I won't deal with that.
Where we could see improvement is in the NEPA process. Time
is money. And in a growing community like ours, getting a
project to completion is very important. We have to wait,
usually, a season in the fall for the leaves to leave the trees
so that we can do an assessment for the Indiana bat, for
instance. That delays us a full season in many cases.
I do believe there are items within the NEPA process where,
if local governments were involved with the regulatory process,
as we're speaking today, through UMRA and other acts, it would
improve the process. It could bring projects to completion
sooner and less costly.
Mr. Grothman. Okay. Any of the others.
Do you have a comment on that, Mr. Reed?
Mr. Reed. Thank you. I will mention, as I indicated in my
written testimony to the committee, is that, recently, in
Kansas City, Missouri, we had an $800 million general
obligation bond, which we put forward to our voters, that would
deal with three items: one would be transportation; two being
flood control; and three being the ADA and also public
facilities.
The reason why we had that is because of the very question
that you were asking in terms of how can we backfill many of
the items that we have to get done. And so we asked our voters
to be able to help us with that to help fill those backfills
that we have.
And it was passed overwhelmingly. But I can tell you it's
something that will be a real burden to our citizens over a
period of 20 years as we have it.
Mr. Grothman. Thank you.
Another question I have for you--and I don't need to call
this a mandate, but I can think of examples in Wisconsin where
maintenance of effort resulted in people doing things they
wouldn't do at all otherwise or were stuck--I'll let you go
with that, though. Any of the four of you have any comments on
maintenance of effort in which you maybe feel you are forced to
do things you wouldn't do otherwise or think is outright a
complete waste of money?
Mr. Niederhauser. I mentioned the Perkins Program, the
Perkins grant with education. And I think that's a perfect
example: $12 million mandating $241 million of State funding.
While we would do some of that already, the flexibility and
efficiencies of crafting those things on our own--we're there
on the ground. We're where the rubber meets the road, maybe not
quite as much as the local governments. But I know that we can
get the outcomes, because I think that's what we're missing
here, is focusing on what the outcomes are. And let's not have
regulation that's making us do something that is not getting
the outcomes. I can--we have a list of those things--and focus
on clean air, clean water, getting our children educated. But
we waste and we burn money with regulation that really doesn't
have an impact on the bottom line.
Mr. Grothman. I think of TANF funds. For both of the guys
on the State level, do you ever feel that you're getting money
that you don't need?
Mr. Niederhauser. Yes. We have unspent TANF money in Utah.
Mr. Grothman. Right. So you're in a position--maybe you can
give us an example--in which you maybe have to make up
something to do just to sop up the Federal money.
Mr. Niederhauser. I think that that happens. No question.
Mr. Grothman. Can you give an example of what you do in
Utah when you have a bunch of money sitting around that you
really don't want to use, but the Federal Government says you
got to use it.
Mr. Niederhauser. I think that's obvious. You start to
create programs and spend it where it's really not necessary.
Mr. Grothman. I don't want to embarrass any programs, but
do you find the same thing in North Carolina, Mr. Davis.
Mr. Davis. Yes, sir, we do. And I'm--this session, I'm the
new chair of Transportation Policy and Appropriations. And
I've--2 weeks ago, I spent my spring vacation visiting the
Outer Banks and looking at the issues that they have to deal
with out there. And I haven't seen any money in transportation
that we couldn't use yet, but I sure have seen a lot of
unfunded mandates. And particularly what we're working with is
environmental assessments when we have a transportation project
to deal with these environmental regulations that delay the
completion of these projects and add exponentially to the cost.
Mr. Grothman. Okay. Can I just still get one comment from
Mr. Niederhauser? I would like if you could get something
together because we have an Appropriations Committee that I
hope I can trust--but we don't know yet--who might be under the
impression we have to keep TANF at the current level. If you
could give us something in writing that we could forward to
these guys so they can realize--I know Wisconsin also does
things that we--just throwing away money because we have a
maintenance of effort on this stuff. But thank you.
Mr. Niederhauser. Thank you.
Mr. Palmer. I thank the gentlemen.
The chair recognizes the ranking member, Mrs. Demings, for
additional questions.
Mrs. Demings. Thank you so much, Mr. Chair.
Councilman Reed, the administration's proposed budget would
cut 482 million from the EPA's categorical grant programs that
aid State and local governments in protecting human health and
the environment. Your testimony indicates that cutting
categorical grant programs that serve State and local
governments is a step in the wrong direction. Is that correct?
And why do you feel that way?
Mr. Reed. Well, we feel it's a cut--as I believe I even
mentioned earlier--is that these would be, unfortunately, ways
that we would have to try to figure out, where do we get
funding from? And so we feel that it would be a step in the
wrong direction.
Mrs. Demings. According to the National League of Cities,
another quote is, ``Measures requiring cities to use local law
enforcement resources to enforce Federal immigration laws are
unfunded mandates that impose additional disproportionate
responsibilities on local law enforcement, increase financial
liability on local governments, and ultimately move us further
from our fundamental principles of federalism,'' which Mr.
Niederhauser spoke so eloquently about in his opening
statement.
Mr. McKay, do you share the concerns of the National League
of Cities that measures requiring local law enforcement to
enforce Federal immigration laws are unfunded mandates?
Mr. McKay. I do. I think they're the mother of all unfunded
mandates. Not only would they cost us money, but they would
permanently damage the relationship that law enforcement in
Fairfax County has with our community and further endanger our
citizens. Bottom line is our police prevent crime and solve
crimes. And without a robust conversation with a community that
feels comfortable talking to law enforcement, we think it would
have a significant impact on our ability to solve crimes,
protect victims, and seek proper prosecution.
We do cooperate with ICE when we have an opportunity to.
But asking local governments to take on a massive Federal
responsibility, such as immigration enforcement, we think is
damaging not only as a mandate but also damaging to the fabric
of our community.
Mrs. Demings. At the same time, the administration's budget
proposal cuts the State Criminal Alien Assistance Program, a
grant program to reimburse States and local governments for
incarcerating undocumented immigrants, which would appear that
counties would then--or local governments would then incur
millions of dollars in unreimbursed expenses each year in
housing undocumented individuals that violate State and local
laws.
Do you believe that cutting programs such as this leaves
local government then holding the bag?
Mr. McKay. It absolutely would leave us holding the bag.
Mrs. Demings. Thank you so much.
Mr. Chair, I yield back.
Mr. Palmer. Thank you.
I have a few additional questions.
Senator Niederhauser, you mentioned in your testimony that
State-based innovation is being stifled because of Federal
mandates. I've been involved in this area for a number of
years, going all the way back to the passage of the Unfunded
Mandates Relief Act. The thing that I've seen is that,
particularly with the EPA and other Federal agencies, they've
gotten outside of what the original intent was. Originally, it
was designed to operate within a framework of what we called
cooperative federalism where the--let's just use the EPA as an
example. They would write the regulations. Congress would pass
the law. The EPA would write the regulations. But it would be
up to the States--they were given broad latitude and
flexibility to implement the regulations as long as they met
the objectives. In your experience in the State of Utah, is
that intent still being complied with?
Mr. Niederhauser. Well, we want clean water, and we want
clean air. Those are good outcomes. But we feel like we're
tripping over a bunch of regulation that's costing us a lot of
money, creating inefficiencies and burning State tax.
Mr. Palmer. Let me ask it this way. Does the State of Utah
have the ability to effectively partner with the Federal
Government, whether it is the EPA or another Federal agency, to
implement Federal regulations.
Mr. Niederhauser. No. It's a top-down approach to
government.
Mr. Palmer. But do you think you have the ability within
the State of Utah to implement these guidelines if given the
flexibility and the latitude to do so.
Mr. Niederhauser. Yes. Absolutely.
Utah has shown through a number of different policies that
we can innovate, that we can do things and have outcomes and
save tax dollars.
Mr. Palmer. Do you believe that you can do it in a more
cost-effective manner and accomplish the same objectives than
within the current framework that you're having to operate
under.
Mr. Niederhauser. Absolutely. No question.
Mr. Palmer. Senator Davis.
Mr. Davis. Thank you, Mr. Chairman.
I'd love to speak to this issue. I think that the
presumption that all wisdom and knowledge emanates from our
Nation's Capital or our State's capital is an erroneous one.
Some of the most creative and innovative ideas that I've ever
seen are from local government. As a matter of fact, I use them
as a resource. Unfortunately, many of them tell me that
``nobody from the State has ever asked me how to accomplish
this.'' And for that reason, I strongly support block-granting
a lot of things to the State and to the local government. Hold
them accountable. Tell them what the goal is and what the end
product that you want. But get rid of a lot of needless
regulations. Those people on the ground, they know what they
are. Just release them.
Mr. Palmer. To your point, I'd like to point out that if
you look at the data--and it's government data--improvements in
air quality, water quality, and land use, that sort of thing,
most--and, obviously, it was the low-hanging fruit--but most of
the improvements, the biggest improvements, occurred when we
operated under the concept of cooperative federalism.
Judge Moore, does Boone County have the ability to carry
out these mandates without it being a top-down, inflexible
approach?
Judge Moore. No. We need to be at the table during the
process.
Mr. Palmer. You don't think you can, or do you agree that
you could carry this out if you're a partner in this?
Judge Moore. If we're a partner and we have a voice in the
process, many times, I think we can. There may be some
situations we cannot.
An example, with the Clean Water Act and with the payment-
in-lieu fees for impacts to streams and wetlands, I mentioned
we have combined sewer overflows and sanitary sewer overflows.
We're not allowed to use these mitigation fees to clean up our
streams in the same watershed. Instead, those revenues are
pulled to another watershed, usually in another county, and we
never see the revenue again.
We do agree with the environmentalists in our area, a
better use of those funds would be to use them in the same
watershed to eliminate SSOs and CSOs. That would be a perfect
example of not spending more money at the Federal level but
receiving a better outcome if we're part of the process.
Mr. Palmer. Mr. Reed--and I realize that there's certain
programs, particularly at the local level, that would be
outside your expertise. But you mentioned health care and the
burdens of Medicaid that are being imposed on you. If given the
ability to have more flexibility in the administration of these
programs, do you think you could do that effectively and
efficiently.
Mr. Reed. Well, I didn't in my testimony mention--I believe
it was one of my other partners here on the dais who mentioned
the health care. But I think I share, of course, the same
example, is that if we have to carry these out, we, of course,
as a community, will. But the relief that we need is, of
course, having the opportunity to address these items in the
beginning, and having a seat at the table to talk about ways
that we can actually pay for it is most important to us.
Mr. Palmer. Mr. McKay, you've been nodding your head.
Mr. McKay. Yeah. I agree entirely with what's been said.
The flexibility in so many of these things is important at the
local level. One size does not fit all. And many times, Federal
regulations don't recognize the local environments under which
they're being applied. And the only way to realize that is to
have local officials at the table and a good, cooperative
relationship.
So, while I agree with many of the Federal requirements,
certainly of the EPA, and want clean air and clean water, we
would like to see more flexibility in how those are applied; a
recognition, particularly, of local governments' ability to pay
and absorb these regulations; and, frankly, more flexible
timelines, less punitive actions and more cooperation,
especially with the jurisdictions who are making attempts to do
the right thing. There doesn't ever seem to be a recognition of
that when the Federal Government is looking at these.
And so one size does not fit all in the ground-level
application of these regulations. We need that flexibility.
Mr. Palmer. Well, I ask these questions in the spirit of--I
believe it was another Virginian who had this observation that
the government that governs best governs closest to the people.
And I think you have more transparency. You have more
accountability. But you also have the ability to innovate.
One size does not fit all. That's particularly important, I
think, in the area, for instance, of Medicaid and giving the
States the flexibility to innovate, and I think it eliminates a
lot of the problems we have with improper payments of Medicaid.
We sent out $36.3 billion last year in improper payments on
Medicaid.
Same thing is true of going back to the original intent of
the EPA and cooperating with State and local government and
allowing State and local government to implement Federal
regulations with broad latitude as long as you meet the
standard, because the objective, as Senator Niederhauser has
mentioned several times, is we want clean air, clean water. We
want wise land use. We want to preserve the environment for the
future. But those are not inconsistent with allowing the States
more latitude in carrying out these regulations. And I think
the situation that we find ourselves in right now with these
unfunded mandates makes that extremely difficult for you and
extremely costly and diverts resources away from other programs
that really need the money and makes it--and particularly at
the local level because you've got so little ability to
generate revenues to meet some of these mandates.
I now recognize the vice chairman, Mr. Grothman of
Wisconsin, for 5 minutes.
Mr. Grothman. I just want to give you guys one more chance,
because I can think of so many ways that--constantly,
constantly ran into situations where States are doing something
that is sometimes a complete waste of money and sometimes even
counterproductive to meet Federal mandates.
Particularly for the State guys, Mr. Niederhauser and Mr.
Davis, do you have any experience on problems with education
because of Federal mandates, things where your schools are
maybe doing something they wouldn't have to do otherwise?
Mr. Niederhauser. Well, there's a lot of examples. One was
just--it's been several years ago--how school lunches changed,
mandated by--well, that was an administration issue. They were
working fine in Utah, but the new requirements--actually, my
wife works at the elementary school across the street. She
found that children were eating less. Even though some of those
were intended to--some of those mandates were intended to help
nutrition, the outcomes were not there. In fact, it was the
opposite. So that's just one. There's----
Mr. Grothman. Could you give us some others?
Mr. Niederhauser. Yeah. For example, I mentioned the
Perkins Program in my testimony. But just the thing that really
we struggle with in Utah is--education is a big deal.
Mr. Grothman. Uh-huh.
Mr. Niederhauser. And 91 percent of the money comes from
State assessments, taxes. But yet 9 percent of the money coming
from here in Washington is driving the ship. And the outcomes
that we could accomplish without those regulatory burdens and
the desire we have for every dollar that--those are all
precious dollars. So we don't want to give up any of them, and,
consequently, we allow Washington to dictate a lot of what we
do.
Mr. Grothman. Right.
Okay. Mr. Reed, it looks like you've had problems--we've
had problems too. Nobody argues with the idea that we should
help people with disabilities. But sometimes when you hear
about the Federal mandates, they require things that you wonder
who they're really helping, other than the construction
companies. You had some problems with the Americans with
Disabilities Act. Do you care on elaborating about that?
Mr. Reed. Thank you.
I appreciate the opportunity to elaborate a little further.
You know, I think one of the things is the time constraints
for our resources in directing how much work has to be done and
when it has to be done. We want to make sure that we're meeting
the terms and the agreements as part of our settlement. But a
longer timeframe and also additional flexibility for priority
of the projects also benefit our city and our citizens,
allowing a more efficient plan of how we think the resources
should be used.
As I mentioned earlier, too, about our general obligation
bond, which we passed, I mean, we want to make sure we're
compliant. We want to make sure we're providing places where
many of our citizens are able to get in and out of facilities
and have the access that they need and deserve. But we also
need to do it within a good timeframe that allows for us to do
it in a way that the resources are actually there.
Mr. Grothman. Do you ever find you're being asked to do
things that cost more money that you look at and you wonder,
who are you even benefiting.
Mr. Reed. Sure. I mean--yeah.
Mr. Grothman. It's horribly designed. The Federal
Government ought not be involved in this stuff or should be
much less involved. I'll put it that way.
The Clean Air Act, I guess, is a problem for Kansas City,
right? The Ozone Standard?
Mr. Reed. Correct. Yes.
Mr. Grothman. And this is something, I take it, the Federal
Government may make it much more expensive to operate
manufacturing facilities in Kansas City. Is that right.
Mr. Reed. Yeah, it is. You know, it's one of the things
that I mentioned even in my testimony earlier and also in my
written testimony, that it is a problem. I mean, it's 70 parts
per billion that we continue to see. And our State, local
government, and also our Mid-America Regional Council has been
working to kind of find ways to--forward. And we've got to
figure out how to fix it.
Mr. Grothman. You lived in Kansas City a long time.
Mr. Reed. Born and raised.
Mr. Grothman. Wow. Did you feel unhealthy living in Kansas
City 30 years ago.
Mr. Reed. Say that again.
Mr. Grothman. Did you feel unhealthy living in Kansas City
30 years ago.
Mr. Reed. Well, I wouldn't recall 30 years ago.
Mr. Grothman. Okay. We have an ozone problem in the
Wisconsin area. I felt quite healthy growing up, and now
they've got a lot stricter things.
But as we fight for jobs for our cities, there are--and I
know there are people who--you know, I don't know how they
expect big cities to thrive without manufacturing jobs, but
apparently people do. But you do feel that you're putting
manufacturers in Kansas City at a competitive disadvantage with
other areas around the country as well as other countries? Do
you feel that way?
Mr. Reed. Yeah, we do. And it's how do we provide that
relief is what's most important as well.
Mr. Grothman. Well, I hope you let everybody in Kansas City
know it's the Federal Government who is making it more
difficult to get these manufacturing jobs, and we'll see what
we can do about making that part of Mr. Trump's Drain the Swamp
initiative.
Thank you very much.
Mr. Palmer. I would like to thank the witnesses for taking
the time to appear before us today.
Mr. Niederhauser, I think there was a request for
additional information on your TANF program in Utah, which if
you provide that, appreciate if you provide it to the
subcommittee, and we will provide that to Vice Chairman
Grothman.
Mr. Palmer. If there are no objections, with that, the
subcommittee stands adjourned.
[Whereupon, at 11:37 a.m., the subcommittee was adjourned.]
APPENDIX
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