[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]


                  THE FUTURE OF FEDERALISM IN AMERICA

=======================================================================

                                HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON GOVERNMENT OPERATIONS

                                 OF THE

                         COMMITTEE ON OVERSIGHT
                               AND REFORM

                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION
                               __________

                             JULY 23, 2019
                               __________

                           Serial No. 116-50
                               __________

      Printed for the use of the Committee on Oversight and Reform
      
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                  Available on: http://www.govinfo.gov
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                              ___________

                    U.S. GOVERNMENT PUBLISHING OFFICE
                    
37-934 PDF                 WASHINGTON : 2019                        
                        
                        
                        
                        
                   COMMITTEE ON OVERSIGHT AND REFORM

                 ELIJAH E. CUMMINGS, Maryland, Chairman

Carolyn B. Maloney, New York         Jim Jordan, Ohio, Ranking Minority 
Eleanor Holmes Norton, District of       Member
    Columbia                         Paul A. Gosar, Arizona
Wm. Lacy Clay, Missouri              Virginia Foxx, North Carolina
Stephen F. Lynch, Massachusetts      Thomas Massie, Kentucky
Jim Cooper, Tennessee                Mark Meadows, North Carolina
Gerald E. Connolly, Virginia         Jody B. Hice, Georgia
Raja Krishnamoorthi, Illinois        Glenn Grothman, Wisconsin
Jamie Raskin, Maryland               James Comer, Kentucky
Harley Rouda, California             Michael Cloud, Texas
Katie Hill, California               Bob Gibbs, Ohio
Debbie Wasserman Schultz, Florida    Ralph Norman, South Carolina
John P. Sarbanes, Maryland           Clay Higgins, Louisiana
Peter Welch, Vermont                 Chip Roy, Texas
Jackie Speier, California            Carol D. Miller, West Virginia
Robin L. Kelly, Illinois             Mark E. Green, Tennessee
Mark DeSaulnier, California          Kelly Armstrong, North Dakota
Brenda L. Lawrence, Michigan         W. Gregory Steube, Florida
Stacey E. Plaskett, Virgin Islands   Frank Keller, Pennsylvania
Ro Khanna, California
Jimmy Gomez, California
Alexandria Ocasio-Cortez, New York
Ayanna Pressley, Massachusetts
Rashida Tlaib, Michigan

                     David Rapallo, Staff Director
              Wendy Ginsberg, Subcommittee Staff Director
                          Amy Stratton, Clerk

               Christopher Hixon, Minority Staff Director


                      Contact Number: 202-225-5051
                                 ------                                

                 Subcommittee on Government Operations

                 Gerald E. Connolly, Virginia, Chairman
Eleanor Holmes Norton, District of   Mark Meadows, North Carolina, 
    Columbia,                            Ranking Minority Member
John P. Sarbanes, Maryland           Thomas Massie, Kentucky
Jackie Speier, California            Jody Hice, Georgia
Brenda L. Lawrence, Michigan         Glenn Grothman, Wisconsin
Stacey E. Plaskett, Virgin Islands   James Comer, Kentucky
Ro Khanna, California                Ralph Norman, South Carolina
Stephen F. Lynch, Massachsetts       W. Gregory Steube, Florida
Jamie Raskin, Maryland


                         C  O  N  T  E  N  T  S

                              ----------                              
                                                                   Page
Hearing held on July 23, 2019....................................     1

                               Witnesses

The Honorable Rob Bishop, Member of Congress, Washington D.C.
Oral Statement...................................................     2
Ms. Teresa Gerton, Executive Director, National Academy of Public 
  Administration
Oral Statement...................................................     7
Dr. Carl W. Stenberg III, Former Staff Member, U.S. Advisory 
  Commission on Intergovernmental Relations, James E. Holshouser 
  Jr. Distinguished Professor of Public Administration and 
  Government, University of North Carolina
Oral Statement...................................................     8
Mr. Matthew Chase, Executive Director, National Association of 
  Counties
Oral Statement...................................................    10

Written opening statements and the witnesses' written statements 
  are available on the U.S. House of Representatives Repository 
  at: https://docs.house.gov.

                           Index of Documents

                              ----------                              

The documents entered into the record during this hearing are 
  listed below, and are available at: https://docs.house.gov.

  * Statement from the Big Seven endorsing the legislation; 
  submitted by Rep. Connolly.

  * Statement from the Western Governors Association endorsing 
  the legislation; submittedby Rep. Connolly.

  * The hearing transcript from May 17, 2018; submitted by Rep. 
  Connolly.

  * Rep. Meadows' Statement for the Record.

  * Rep. Connolly's Statement for the Record.


 
                 THE FUTURE OF FEDERALISM IN AMERICA

                         Tuesday, July 23, 2019

                   House of Representatives
             Subcommittee on Government Operations,
                          Committee on Oversight and Reform
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 4:09 p.m., in 
room 4:09 p.m., 2154 Rayburn House Office Building, Hon. Gerald 
E. Connolly (chairman of the subcommittee) presiding.
    Present: Representatives Connolly, Khanna, Meadows, Hice, 
Norman, and Grothman.
    Mr. Connolly. The subcommittee will come to order. Without 
objection, the chair is authorized to declare a recess of the 
committee at any time. The subcommittee will examine the state 
of federalism in the United States, and discuss how Congress 
can improve intergovernmental processes, including the 
possibility of reestablishing the U.S. Advisory Commission on 
Intergovernmental Relations.
    To begin our hearing this morning, we want to welcome our 
colleague, Rob Bishop. And, Rob, I know you're probably on a 
tight schedule, so I'm going to suspend my opening statement 
and you as well, Mr. Meadows, to allow our colleague to go 
forward.
    I do want to just say, Mr. Bishop, at the behest of former 
Speaker Paul Ryan, in the last Congress for two years, chaired 
a committee we formed, a task force on intergovernmental 
affairs. And we had four or five hearings, and we heard from 
lots of witnesses, and it was a very thoughtful process, very 
bipartisan in its approach. One of the follow-ups to our work 
over two years, was to reestablish, but in different form with 
different functions and different membership, the commission 
that used to exist, and that's the Partnership Act that Mr. 
Bishop and I are introducing today. I am very proud of that, 
and I'm very proud of the collaboration.
    I also want to praise him. He ran the task force on an 
almost nonpartisan basis, very fairly, and I think we got a lot 
of ground covered. I want to thank him right now for his 
leadership in that effort, which kind of looked like a 
difficult assignment when it was first proposed.
    So we want to welcome you, Mr. Bishop, and we want to 
respect your time, and we're happy to hear what you'd like to 
share.

STATEMENT OF THE HON. ROB BISHOP, A REPRESENTATIVE IN CONGRESS 
                     FROM THE STATE OF UTAH

    Mr. Bishop. Well, look, I appreciate those kind words. Most 
of them are true, and thank you so very much. Jerry and Mark, I 
appreciate you being here and I appreciate you holding these 
hearings. Shouldn't you be in my committee right now? Am I in 
the wrong spot somehow? All right, fine.
    Now, we did have the fortunate opportunity of working with 
the Speaker's task force on whatever the rest of the acronym 
was. And we heard a lot of different things from a lot of 
different ideas. We have some ideas I still think, as the time 
goes on, will still be coming through.
    But it was important to realize that one of the things we 
have to emphasize is the kind of intergovernmental cooperation 
is extremely important. This is one element of that, the idea 
of consultation, which is in law, but it's not really defined 
as to who has to consult with whom and how. Those things are 
still ideas that are coming from that task force that I still 
want to address, and hopefully will be coming up here again.
    But I also am appreciative of the fact that we give a lot 
of lip service to the concept of federalism without actually 
really thinking about it, or knowing what we are doing. We 
spend more time trying to find a solution when some of the 
things we ought to be thinking about is who ought to be finding 
those solutions.
    So, you know, the Bible says that you can't serve two 
masters, and the Founders of our Constitution insisted that we 
do exactly that, with their concept of dual sovereignty. So we 
have an obligation to state governments, and we also have an 
obligation to the Federal Government, which could be 
problematic except James Wilson said that as long as those two 
entities, local government, state governments, and the Federal 
Government, stay in their sphere of responsibility, they will 
simply circle like the planets in the solar system, all in 
harmony and all working together for the betterment of the 
human cause. But, if one of those acts like a meteor and then 
starts slashing through the solar system, it will produce chaos 
in its wake.
    I think that's one of the things that we are talking about 
here. How do we insist that the Federal Government as well as 
state governments stay in their sphere of responsibility for 
the betterment of people? That is an extremely important 
concept. I think we give short shrift to that, and we need to 
spend more time thinking how you actually implement that. That 
is the nexus behind, I think, the concept of this bill.
    In 1953, President Eisenhower suggested that this committee 
be established so there would be a permanent and ongoing 
relationship and interaction and conversation as to what level 
of government is doing what and how they can work together, 
but, more importantly, how they can stay out of each other's 
way as we go forward. That is what Mr. Connolly's legislation 
is trying to reintroduce.
    It lapsed, I think, in the 1990's. It lapsed primarily not 
because it was not functioning, but as a means of a cost-
cutting measure at the time. But it is still important, that 
kind of conversation. So the Speaker's task force was an effort 
to try and reestablish those conversations.
    I'm very appreciative of those who will also be testifying 
today. Many of them came to the task force, but, more 
importantly, they represent local governments and their effort 
to try and make sure that that balance between the Federal 
Government and local governments has to be there in some 
particular way. So I appreciate their efforts with our task 
force. I appreciate their efforts being here today.
    Mr. Connolly, you and your staff has done a great deal of 
work on this issue. You've taken it seriously, and I appreciate 
where you're going forward.
    Mr. Meadows, you and your staff has also been extremely 
helpful with this, and I'm sure that there may be some ways of 
actually improving this legislation as we go forward with it.
    But, once again, as long as we maintain that concept that 
there has to be a permanent, viable medium in which state and 
local governments can have permanent conversations with the 
Federal Government so that we maintain both of those 
functioning in their own spheres of responsibility for the 
betterment ultimately of the people. That's what federalism is 
all about, and we need to give more credit and credibility to 
that concept.
    So with that, I don't need to take really a whole lot more 
of your time, unless you want me to ramble on for whatever 
reasons you want me to. I can do it very well, but I don't need 
to.
    Mr. Connolly. Thank you so much. I would just add to what 
you said. I know it comes as a surprise maybe to some people, 
but conservatives and progressives can come together on this 
subject, especially if you've had experience in local or state 
government.
    To be on the receiving end of unfunded mandates, whether 
they be Federal or state--I was a local government guy--is not 
a pleasant experience. I can remember in Fairfax County across 
the river, a huge sum in the hundreds of millions of dollars a 
year, was spent simply meeting unfunded mandates, both from the 
Federal Government and the state government. So [it is] time to 
address that kind of thing.
    Also, sometimes unregulated--I mean, the intrusive 
regulation. We can disagree about this or that regulation, but 
I think we come together in saying, "Well, let's keep to a 
minimum the intrusive regulation that just makes things harder 
to manage, harder to govern, and without really merit."
    I would give as an example both the No Child Left Behind 
legislation, well-intended intentions beyond question. But in 
the writing of that bill, I don't think the authors, I don't 
think any of them ever ran a school district. And some of the 
consequences that flowed from that legislation on schools and 
on school districts were quite consequential, when there was a 
different way of managing it. And, by the way, it was a big fat 
unfunded mandate.
    My view, and I think yours, Mr. Bishop, is if the Federal 
Government, if we in Congress think something is a really good 
idea, we ought to pay for it, not impose it on states and 
localities and leave it to them to figure out how to fund our 
mandate.
    So I think there's a lot of common ground. I think we 
uncovered that in your effort in chairing this task force for 
two years. Again, I thank you so much for the cooperation and 
for the opportunity to work with you on these matters.
    Mr. Bishop. Mr. Chairman, if I can just follow-up on that. 
I think you are absolutely correct. The only thing worse than 
an unfunded mandate is probably a funded mandate. The important 
element to remember here is federalism and what we are trying 
to accomplish is not liberal, it's not conservative, it's not 
Republican, it's not Democrat; it's a philosophy of government 
of how we organize ourselves. So I appreciate that.
    Mr. Meadows. So, Mr. Bishop, I just want to say thank you 
for your thoughtfulness. If I had your hair, I could be 
somebody. So, I just want to say thank you for coming, thank 
you for your testimony, and always for your gracious and kind 
and gentle spirit.
    I yield back.
    Mr. Connolly. Thank you so much, Mr. Bishop, and thank you 
for being here and for your leadership on this bill.
    As we get ready for our panel, I'm going to go ahead with 
my opening statement and then, Mr. Meadows, if you want to do 
yours. We'll be expeditious.
    Today, the subcommittee will pick up where Mr. Bishop of 
Utah, who served as chairman of the Speaker's task force, left 
off. Our hearing examines the status of federalism in the 
United States, and legislation that Rob Bishop and I have 
introduced to help spur dialog and coordinated action on the 
greatest challenges facing the intergovernmental system.
    As a former member and chairman of the Fairfax County Board 
of Supervisors, a county of 1.1 million people, I know how 
important it is to balance the roles and responsibilities of 
Federal, state, and local governments. I'm also painfully aware 
of how local government, the most immediate form of government 
and the level of government where services have to be 
delivered, can suffer when we fail to strike that right 
balance.
    The value proposition of functional intergovernmental 
relationships is immense. America's federated system demands 
that Federal, state, local and Tribal governments work together 
and reduce overlap to improve people's lives. The United States 
Constitution does not give any one level of government absolute 
power, or unlimited jurisdiction over public matters. 
Therefore, we rely on collaboration across governments to 
ensure the reliable administration of public services and the 
protection of the public welfare. A federated system that works 
and delivers real results for our constituents is as 
fundamental to our system of governance as free and fair 
elections. Without either, confidence and trust in our 
institutions is inevitably diminished.
    While the Constitution formed a strong Federal Government 
in the wake of the failure of the Articles of Confederation, it 
also included a respect for the sovereignty of states. To honor 
the Framers' vision, we must remain vigilant about unfunded 
mandates passed down to state and local governments, and push 
back on overly intrusive Federal regulation. In dealing with 
states such as mine, Virginia, where local governments only had 
the authorities explicitly granted to them by the state 
government, overreach at the Federal and state level can be 
especially onerous, as local governments are often forced to 
deal with mandates with their revenue hand tied behind their 
back. We can all agree that overreach exists. I mentioned the 
No Child Left Behind Act being a great example.
    What the intergovernmental relationship needs is a venue 
for addressing the overreach in a collaborative manner. Our 
legislation, the Restore the Partnership Act, which we 
introduced today, would provide such a venue by reconstituting 
the U.S. Advisory Commission on Intergovernmental Relations, a 
committee that fosters critical conversations and allows for 
the sharing of best practices among the leaders of governments 
that form our Nation.
    We're proud to announce the bipartisan legislation has 
received already the endorsement of the so-called Big Seven, 
which includes the National Governors Association, The Council 
of State Governments, the National Conference of State 
Legislatures, the National League of Cities, the United States 
Conference of Mayors, the National Association of Counties, and 
the International City/County Management Association, all 
bipartisan organizations.
    Please indulge a short historical aside, which mirrors how 
the Restore Partnership legislation came about. As Mr. Bishop 
indicated, in 1953, Congress, with the support of then-
President Dwight Eisenhower, authorized the temporary 
Commission on Intergovernmental Relations, known as the 
Kestenbaum Commission, to conduct a review of intergovernmental 
affairs in the United States. After the Commission published 
its final report and then sunset, the House Intergovernmental 
Relations Subcommittee studied and held hearings on those 
recommendations.
    Acknowledging the usefulness of the Commission, the 
subcommittee subsequently developed legislation to establish a 
permanent successor entity that would have broad jurisdiction 
over intergovernmental relations. Congress established that 
successor entity, the ACIR, in September 1959, when President 
Eisenhower signed into law legislation that resulted from the 
work of the subcommittee. The ACIR operated until September 
1996, and during those 37 years, the committee was tasked with 
serving as both a forum for intergovernmental dialog, and a 
neutral analytical commission that published reports and 
guidance on how to create partnerships across different levels 
of government. It operated much like the modern-day 
Congressional Budget Office, but remained focused on 
intergovernmental relations.
    The ACIR also provided a bipartisan venue for finding 
solutions to intergovernmental challenges. It brought together 
representatives of Federal, state, local and Tribal governments 
to promote innovation and collaboration in this space. The ACIR 
also provided the expertise and analysis necessary for state 
and local governments to share best practices in fiscal 
administration and program management.
    The Commission, unfortunately, was de-funded in 1996, not 
for substantive reasons but simply as a push to cut Federal 
agencies wherever we could. In retrospect, the decision to 
abandon the ACIR deprived the Federal Government of a useful 
venue and platform for input and pushback on the encroachment 
of the Federal Government into state and local affairs.
    Our legislation seeks to reconstitute an evolved Commission 
on Intergovernmental Relations. The bill language includes 
several key reforms to the original ACIR, many of which are 
recommendations of then-Speaker Ryan's task force chaired by 
Rob Bishop, which we received from intergovernmental partners 
and other stakeholders.
    The reforms to the bill include the addition of town and 
Tribal representatives on the Commission, as well as expanded 
membership for state legislatures and counties, to reach parity 
with state executive representation; new responsibilities that 
include examining Supreme Court decisions that impact on the 
intergovernmental relationship, actually a very critical thing 
by way of addition, because there are a lot of Supreme Court 
rulings that have lots of impact at the state and local 
government level; a requirement that Congress hold hearings to 
examine the Commission's annual report; new authorities that 
ensure the Commission receives written responses from agencies 
on the recommendations it provides them. These new provisions 
generate a new level of accountability and functionality for 
the Commission, placing it on a par with the way in which other 
agencies currently engage with the Government Accountability 
Office, the GAO.
    With that, I now recognize my partner on this subcommittee, 
the former chairman of the subcommittee and now ranking member, 
Mr. Meadows.
    Mr. Meadows. Thank you, Mr. Chairman. Thank you for your 
leadership on this bill, this important piece of legislation. 
In the interest of time, I'm just going to submit my opening 
remarks for the record, and I will yield back.
    Mr. Connolly. I thank the distinguished ranking member. And 
I thank him in advance for his support for collegial effort on 
this subcommittee.
    We're going to now introduce our panel. We're pleased to 
welcome Teresa Gerton, who's the executive director of the 
National Academy of Public Administration; Carl Stenberg, III, 
former staff member of the U.S. Advisory Commission on 
Intergovernmental Relations--he actually served on ACIR--and a 
James Holshouser, Jr., distinguished professor of public 
administration and government at the University of North 
Carolina, very prestigious; and Matthew Chase, the executive 
director of the National Association of Counties. In the 
interest of disclosure, I headed the Virginia Association of 
Counties and I was an active member of NACo until the day I was 
sworn into this job.
    So welcome all of you. If the three of you would rise and 
raise your right hand to be sworn in. It is the custom of our 
committee to swear in witnesses.
    Do you affirm that the testimony you are about to give is 
the truth, the whole truth, and nothing but the truth, so help 
you God?
    Let the record show that our three witnesses answered in 
the affirmative.
    We welcome you. We urge each of you to summarize your 
testimony in five minutes. Of course, we will submit your full 
statement for the record.
    Ms. Gerton, why don't we begin with you. Welcome.

STATEMENT OF TERESA GERTON, EXECUTIVE DIRECTOR NATIONAL ACADEMY 
                    OF PUBLIC ADMINISTRATION

    Ms. Gerton. Thank you. Mr. Chairman and members of the 
committee, I appreciate the opportunity to testify today. I'm a 
fellow of the National Academy of Public Administration, and 
I've served as its president and chief executive officer since 
January 2017. Established in 1967 and chartered by Congress in 
1984, the Academy is an independent, nonprofit, and nonpartisan 
organization with a proven record of improving the quality, 
performance, and accountability of government at all levels, 
and expertise in the intergovernmental system is one of our 
most enduring characteristics.
    Our congressional charter precludes the organization itself 
from taking an official position on legislation, and so my 
testimony today will reflect the Academy's views of 
opportunities for improved intergovernmental relations. Much 
has changed from the mid 1990's, when the ACIR stood down.
    State and local governments have even more responsibility 
for the implementation of Federal domestic programs, both 
directly and through partners; but new laws often make the 
intergovernmental system more complex, adding confusion, 
conflict, and unanticipated consequences. The ballooning costs 
of healthcare are squeezing state budgets, and unprecedented 
partisan polarization challenges our ability to focus on major 
policy problems and develop effective governance. But, against 
this background, it is important to remember that our 
intergovernmental system retains considerable capacity for 
adaptation and flexibility, and it may remain our greatest 
strength in addressing these complex governance challenges.
    From its founding, the Academy has fostered collaboration 
across all levels of government, to deliver better outcomes for 
the Nation. I want to focus here on current opportunities for 
impact.
    The Trump administration's 2018 Presidential management 
agenda established 14 cross-agency priority goals. While these 
focus on improving performance at the Federal level, success in 
many of them will require collaboration and integration with 
state, local, and Tribal governments, and will offer prime 
opportunities to expand intergovernmental partnerships.
    Two of these CAP goals can serve as representative 
examples. CAP goal two identifies data accountability and 
transparency as one of three drivers of transformation. 
Emergency and disaster management policy is just one area in 
which tremendous amounts of data are already collected and 
analyzed and from which voluminous research is produced.
    This public policy area, however, suffers like many others. 
Simply put, the massive amount of data and research produced is 
impossible to filter down to practical strategies for solving 
the problems of any one government, agency, or public function. 
We need an institution that can function as a filter through 
which data and research flow, with the end result being 
relevant, actionable strategies that all governments can use to 
prepare for and manage effectively through future disasters.
    Creation of such an institution would take modern data 
analytics to a new level. The role of this institution would 
not be to develop additional primary data, but, rather, to scan 
the environment of data already collected, along with extant 
research, and assess this collection for convergence on the 
state of practice, to inform and advance intergovernmental 
relationships and effective management strategies. This could 
lead to more proactive and cost-effective approaches to 
community resiliency.
    The focus of CAP goal eight is on standardizing grant 
reporting data and improving data collection. The Federal 
Government spends over $600 billion annually on grant programs 
administered by state and local governments and their nonprofit 
partners, to improve the lives of low-income populations in 
their communities.
    Yet, the fragmented and complex nature of Federal and state 
funding and administrative requirements makes it extremely 
difficult for states, localities, and service delivery partners 
to coordinate services, increase efficiency, and improve 
outcomes for low-income individuals, families, and communities. 
No congressional committee, or any Federal agency, is 
accountable for helping states and localities strengthen their 
capacity to coordinate low-income programs involving multiple 
agencies, and to deliver services more effectively and 
efficiently. There is a tremendous need for an institution that 
can collaborate with major stakeholders to identify promising 
opportunities for collective problem-solving, to develop 
consensus on high-impact solutions, and co-create feasible 
action plans.
    By involving key executive and legislative branch decision-
makers in the planning and execution of these efforts, this 
institution could help to ensure that its recommendations could 
be implemented by relevant agencies, and that gaps requiring 
legislative solution would be identified for Congress.
    Leveraging data and improving the outcomes of Federal 
grants are simply two illustrations of the desperate need today 
to improve collaboration between all levels of our government. 
I believe that the approaches outlined above can help us ensure 
that our national system of government works better for all of 
us. The National Academy of Public Administration stands ready 
to assist in these efforts.
    Mr. Chairman, that concludes my statement, and I would be 
pleased to answer any questions you or the committee members 
may have.
    Mr. Connolly. Thank you very much, Ms. Gerton.
    Dr. Stenberg.

  STATEMENT OF CARL W. STENBERG III, FORMER STAFF MEMBER U.S. 
       ADVISORY COMMISSION ON INTERGOVERNMENTAL RELATIONS

    Mr. Stenberg. Thank you, Chairman Connolly, Ranking Member 
Meadows, members of the subcommittee. I am delighted to be with 
you today to share my thoughts on the future of federalism in 
America and, in particular, through the Restore the Partnership 
Act.
    I'd like to offer what I call a ``pracademic'' perspective 
on these topics. Before my university affiliations, as the 
chairman mentioned, I spent 16 years as a staff member of the 
former ACIR, so I have kind of that insider perspective on the 
actual work of the Commission and the functioning of the 
membership. I followed that with six years as executive 
director of The Council of State Governments, one of the key 
Big Seven stakeholders of ACIR. I've also been a fellow of the 
National Academy of Public Administration since 1984, the year 
Congress chartered the Academy.
    My remarks today do not represent the School of Government 
at UNC, or NAPA, they're personal. But, in my judgment, the 
Restore the Partnership Act is a promising point of departure 
for rebuilding the Federal Government's capacity to address 
current intergovernmental issues and emerging challenges. This 
capacity has diminished significantly since the demise of ACIR 
in 1996.
    As I'll point out, the former ACIR model is a good 
beginning point, but it needs to be aligned with some of the 
changes in the political and policy environments that have 
affected intergovernmental relationships over the past two or 
more decades. There are at least five of these changes that 
have been impactful: First, the complexity of understanding and 
solving problems, both horizontally and vertically, has 
increased substantially, with more nongovernmental players 
involved. The problems are wicked. They're more 
intergovernmental, interdisciplinary, and intersectoral than 
ever before.
    Second, we've been in a period of coercive federalism, as 
we talked with the task force about last May, featuring the 
growth of preemptions and under-funded mandates. The potential 
for intergovernmental friction has become much more pervasive.
    Third, the number of think tanks in Washington has grown 
significantly. The intergovernmental policy and advocacy fields 
have become more crowded.
    Fourth, the influence and impact of the Big Seven 
organizations representing states and localities in Washington, 
DC. has been partly undermined by special interests, politics, 
and campaign finance. Sometimes the Big Seven are treated more 
like a special interest group than the representatives of 
general-purpose grassroots governments.
    And fifth, confidence the American public has in 
governments has steadily declined. Some believe that government 
is the problem, not the solution.
    So I think in this environment, it's fair to ask whether a 
commission, like the proposed Commission on Intergovernmental 
Relations, could actually make a difference. Establishing a new 
partnership is a bold undertaking and an important one, but 
it's one of a number of steps that probably could be taken over 
the years ahead.
    What evidence is there available to show that such an 
organization could have an impact? I would look back to the 
record of the former ACIR for some examples. The ACIR was 
always a respected honest information broker. Again, in this 
world of policy think tanks, the need for an honest information 
broker is imperative. The Commission issued some 130 policy 
reports, some of which were influential or instrumental, in 
developing congressional legislation or improving the 
administration of Federal grants and aid. Some examples: The 
Demonstration Cities and Metropolitan Development Act, block 
grant design and implementation, the Intergovernmental 
Cooperation Act, the Intergovernmental Personnel Act, the 
Uniform Relocation and Real Property Acquisition Act, general 
revenue sharing, the Unfunded Mandates Reform Act, the Federal 
Financial Assistance Management Improvement Act, the Regulatory 
Right-to-Know Act.
    More examples are in my statement. From the standpoint of 
grants administration improvement, OMB Circular A95 and OMB 
Circular A102, again, were areas where ACIR's work saw the 
light of day.
    The ACIR was also a valued adviser to Presidents, 
Governors, state legislators, and local officials. So ACIR was 
a thought leader, but also a policy influencer. And the 
chairman has already indicated how, in the legislation that has 
just been introduced, much of the bill does reflect the 
mission, the organization, and functions of the former ACIR; 
but a number of important changes have been made that give it 
more teeth, more credibility, and a potential for greater 
impact.
    So, finally, I'd like to just conclude by offering three 
lessons that I've learned in terms of kind of more than the 
structure of the organization, but the functioning of the 
Commission: The Federal members really need to be committed to 
and value intergovernmental consultation and engagement; strong 
support from the Big Seven is crucial, as five of the 
organizations nominate representatives for appointment; and 
third, and perhaps a key factor for its success and maybe even 
survival, is that the new commission needs to be mindful of the 
research agenda, the technical assistance, the convening work 
that it convenes. The challenge is to be timely and relevant, 
but not too close to the political fray, or not too distant 
from the real world.
    So, Mr. Chairman, that concludes my formal statement. I'd 
be happy to answer any questions that you might have.
    Mr. Connolly. Thank you so much, Dr. Stenberg. I just want 
to say, it really resonated with me when you said that 
increasingly, because of lots of other actors, that the Big 
Seven, who represent the people like we do, are treated like 
just another special interest. That actually happened to me 
once. I remember representing my county and the Virginia 
Association of Counties going down to Richmond, and I actually 
had a state Senator say to me about counties: We just view you 
as another special interest. I was stunned by the statement, 
and it told us a lot about need for improvement in 
intergovernmental relations.
    Mr. Chase.

  STATEMENT OF MATTHEW D. CHASE, EXECUTIVE DIRECTOR NATIONAL 
                    ASSOCIATION OF COUNTIES

    Mr. Chase. Good afternoon, Chairman Connolly, Ranking 
Member Meadows, and members of the subcommittee. Thank you for 
the opportunity to discuss the topic of federalism in America. 
More specifically, our ideas to strengthen the 
intergovernmental partnership of Federal, state, local and 
Tribal officials.
    My name is Matt Chase. I am the executive director of the 
National Association of Counties, which represents the 3,069 
counties across America, including over 40,000 elected county 
officials. Today, I am also honored to represent the Big Seven 
coalition of state and local elected official associations that 
was just referenced by the chairman.
    Our national associations of state and local officials 
support the formation of a new, modern, national commission to 
facilitate improved intergovernmental dialog, engagement, and 
problem-solving. Our Founding Fathers established a brilliant 
form of federalism, with multiple layers of checks and balances 
across the three Federal branches, but also between the Federal 
Government and state governments.
    While there is a clear distinction and separation of powers 
and duties among these levels of government, there is also a 
deep interconnectedness and interdependence. As we face new 
pressing public policy challenges and opportunities, our Nation 
will need the collective efforts of our Federal, state, local 
and Tribal governments, all working together. These economic, 
political, and social issues range from the future of work, 
especially with advanced automation and artificial 
intelligence, to cyber-security, including with our election 
systems, to disaster mitigation and resilience, to 
transportation and infrastructure upgrades, to dealing with 
multigenerational impacts of our Nation's aging population, our 
mounting crisis with substance abuse, often with co-occurring 
mental health issues, and our challenges with uneven economic 
growth and competitiveness.
    We must pursue a more modern, practical approach to forging 
intergovernmental partnerships, with an emphasis on solutions. 
After all, government works best when we work together. And 
this includes with our colleagues in the private, nonprofit, 
academic and philanthropic sectors.
    We are deeply appreciative of the bipartisan efforts by the 
chairman and Representative Rob Bishop to kick-start and 
refresh a serious national dialog on intergovernmental 
relations, especially through the Restore the Partnership Act.
    In recent decades, we have witnessed a significant decline 
in a structured intentional dialog of Federal, state, and local 
government officials, especially at the broader policy level. 
As the chairman just mentioned, we are often viewed as a 
special interest group, rather than as a public sector 
counterpart.
    The Restore the Partnership Act is an essential pillar in 
rebuilding and re-balancing our Nation's intergovernmental 
system. A new national commission would shine a spotlight on 
areas where intergovernmental collaboration, analysis, and 
debate is necessary, and even succeeding and would create a 
much-needed forum for advancing common priorities and issues.
    Two areas of immediate interest to the Big Seven coalition 
include creating a new commission on intergovernmental 
relations of the United States, and updating the Unfunded 
Mandates Reform Act, especially Title 2, with a consistent 
early and transparent consultation process for Federal 
rulemaking involving state and local governments.
    While establishing a new commission by itself may not solve 
all of our federalism issues, we are long overdue for a new 
infusion of thinking and commitment to improving our Nation's 
intergovernmental principles and practice. As our Founding 
Fathers demonstrated, we can have intense, rigorous debates and 
viewpoints while still fostering a boundary-crossing 
institution that can facilitate intergovernmental relations and 
effective intergovernmental performance.
    Chairman Connolly and Ranking Member Meadows, thank you 
again for hosting this hearing today. NACo and our Big Seven 
coalition partners stand ready to work with you and your other 
Federal colleagues to ensure the health, safety, and well-being 
of the American public. Thank you.
    Mr. Connolly. Thank you so much, Mr. Chase. Listening to 
your testimony, one of the things that struck Mr. Bishop and 
myself in putting together the legislation is how much has 
changed. I mean, in 1996, when the Commission was dissolved, we 
weren't worried about election security. We weren't worried 
about cyber hacking and attacks. The internet was embryonic. 
You know, technology has just transformed the landscape, and we 
have so many different challenges in this whole discussion of 
federalism. So, trying to tee up those issues, we've got to 
have a vehicle.
    The chair would ask unanimous consent to enter into the 
record at this point the statement from the Big Seven endorsing 
the legislation, statement from the Western Governors 
Association endorsing the legislation, and the hearing 
transcript from May 17, 2018, of the task force hearing on the 
subject of the partnership and the possibility of this 
legislation. Without objection, it is so ordered.
    Mr. Connolly. The chair now recognizes the distinguished 
ranking member--the chair now recognizes Mr. Hice of Georgia.
    Mr. Hice. Thank you, Mr. Chairman. I appreciate each of you 
being here today. Just kind of a question across the board, 
because this is an extremely important topic, as we all know, 
but at the same time, there's no question we have seen such a 
massive growth in our Federal Government that it dictates all 
the way down in ways it was never intended.
    So just in your respective opinions, is there a point, or 
maybe are we already at that point, where the Federal 
Government is so big that the model of federalism is really not 
possible or feasible?
    Mr. Stenberg. One of the changes that has occurred, 
certainly over the last two or three decades, has been the 
continued growth of the Federal role in the Federal system, 
chiefly, through grants and aid and regulations. At the same 
time that we've seen the growth in the dollars and requirements 
that are going out to states and localities, we've seen a 
decline of intergovernmental institutions to help ensure that 
that money is well-spent, those regulations serve the intended 
purpose and don't add burdens and costs.
    I think a question at this point is, can the rate of growth 
be sustained and should it be sustained?
    Mr. Hice. Well, that's not my question. That is a question; 
that's not my question. My question is, the role of Federal 
Government, is there a point where it gets so big that its 
dictate--I mean, there's no way we're going to have the state 
governments fulfilling their role within the sphere that 
they're given in our Constitution.
    Please be quick. I want to move forward.
    Mr. Stenberg. Four Ds could change things in terms of the 
Federal role. Demographics--we're a grain Nation, we're living 
longer, we're taking advantage of entitlement programs; defense 
commitments, deficits, and debt, raise a question of can this 
role be sustained and, if not, who is going to shoulder the 
responsibility. Will it be states? Will it be local 
governments? And if the answer is perhaps, or yes, how are they 
going to do the job? Who's going to kind of sort out 
responsibilities and figure out who does what?
    Mr. Hice. Let me hear from others. Ms. Gerton.
    Ms. Gerton. Yes, sir. Before I was at the National Academy 
of Public Administration, I served in the Department of Labor 
and ran a grant-making agency. One of the things that surprised 
me was how complex the space of grantee--Federal agencies that 
were involved in the veterans programs--was, and we didn't even 
know which other agency was involved.
    So as you speak about the growth of the Federal Government, 
I think it doesn't obviate the need for more federalism, it 
increases it. But at the same time, we've got to do a better 
job at the Federal level in the interagency process of sharing 
and collaborating on particular topics, so that we get a 
streamlined Federal approach, and then we engage our state and 
local partners so that there's a better collaboration to 
deliver outcomes.
    Mr. Hice. Okay. Mr. Chase, real quickly.
    Mr. Chase. I can't speak to the size, but I can also echo 
the complexity, that of the Federal investments we get today, 
they could be much more efficient. The challenge for counties, 
in particular, if you think about our 3,000 counties, 50 
percent of the American population lives in 140-plus counties. 
The other 50 percent live in 2,900 counties. And the ability 
for those rural communities to tap into the Federal Government 
is becoming increasingly difficult.
    Mr. Hice. Sure. I mean, but even more difficult in all of 
this is what the Constitution enumerates. The powers of the 
Federal Government is only like 18 areas. Everything else is to 
be left to the states and to the people. And we're not seeing 
that. We are so far outside our constitutional jurisdiction 
here on the Federal level, and we continue to swallow up more 
and more and more authority all along the way.
    Has there ever been an example where the Federal Government 
has taken an authority that they were not supposed to have, and 
then they relinquished it back? I'm not aware of that 
happening. I mean, so we keep gobbling up more and more and 
more authority to where we think that those of us up here in 
Congress, we're supposed to take care of everybody's problem in 
the entire Nation, all the states' problem, local problems, 
individual problems. We've become the daddy figure of everyone.
    And my question is, is there a point that we have grown 
this thing too big that we can't get back to the constitutional 
roles of the states? I fear for that. We've got to get back to 
that. It is what makes this country so powerfully unique from 
every other country in the world, and yet, we are trampling the 
very thing that protects our freedoms and guards us from become 
swallowed by Federal Government.
    Mr. Chase. Mr. Chairman, I would just say, and Congressman, 
one of the biggest issues facing county governments is our 
county jails have become hospitals. And one of the issues right 
now is you actually lose access to Federal benefits, including 
CHIP for juvenile, VA benefits, and Medicaid. Under the Fifth 
and 14th Amendments to the Constitution, we would argue you 
shouldn't lose those at arrest; you should lose them post 
adjudication.
    So there are also issues where we think the Federal 
Government should help counties with their core 
responsibilities under the Constitution. Right now, we are 
running programs because people are losing their constitutional 
rights at arrest, not through due process. That is costing 
counties billions of dollars in healthcare.
    Mr. Hice. Thank you. I yield.
    Mr. Connolly. I thank my friend. I think he makes the 
argument for why we need to have a commission that tees up 
those very issues, because they are very much arguable points.
    Mr. Grothman.
    Mr. Grothman. Sure. It seems to me a little bit of the 
underlying problem here is that people are coming to Washington 
for money and programs that clearly our forefathers never would 
have anticipated would be Federal programs. Of course, you can 
be helpful in that, because, of course, some of the people who 
come to us for more money are, sadly, local government 
officials. You know, you can talk about intergovernmental 
commissions or partnerships, but, you know, partnerships or 
intergovernmental commissions inevitably mean the Federal 
Government is going to tell you what you can do with your 
money.
    Just so you guys understand, right now, it seems to vary 
from month to month. We're borrowing something like 17 or 18 
percent of our budget. At least in the state of Wisconsin, we 
went into this budget with a big surplus. Do you find, each one 
of the three of you, that right now, we're, in general, in 
pretty good fiscal health on the states and local governments, 
but the Federal Government is broke out of its mind?
    Just right across, Ms. Gerton, then Dr. Stenberg, then Mr. 
Chase.
    Ms. Gerton. I think we're certainly seeing budget squeezes 
at the state and local level as the tax bases change, as the 
sources of revenue change.
    Mr. Grothman. Are you sure? I mean, at least in Wisconsin, 
as the economy booms--and state budgets largely operate off 
income and sales taxes. Usually, they're getting increases. But 
that's not true for you?
    Ms. Gerton. Sir, I think we see a general trend that state 
budgets are being squeezed by, as Mr. Chase notes, a number of 
the local programs that are addressing the needs of the low 
income and needy in the community. At the same time, the 
Federal Government is challenged with that as well. So, as the 
Federal Government asks states and localities to do more, that 
fiscal balance gets out of balance.
    Mr. Chase. I would just say, from a county perspective, 
each county is individual. Some are doing okay. Others are 
really struggling, based on their local economy. We are 
primarily a property tax-based government, depending on the 
state. There are some where it's sales tax. But our funding 
through property tax tends to stay a little stable, but we 
certainly have counties across the country that are struggling, 
and some are prospering.
    Mr. Grothman. Okay. I'm going to go through a few of the 
things, and it drives me up a wall. I always have people in my 
office asking for more for these things. Each one of you can 
tell me whether you think the Federal Government should put 
more money in these areas.
    Education, what do you think about Federal funding of 
education? We'll start with Ms. Gerton.
    Ms. Gerton. Sir, we certainly think that there should be--
the states and localities are responsible for delivering the 
education systems, and so, there needs to be an agreement about 
what those roles and responsibilities are, how much they cost, 
and who funds them.
    Mr. Stenberg. The Federal share of education has been 
around six or seven percent for K-12 over the years. One of the 
concerns is that the number of Federal regulations is 
disproportionate to the amount of the financial contribution. 
So the financial contribution will continue.
    Mr. Grothman. Would each one of you come out then? I am 
inclined to agree there's a lot of mandates that come out with 
it. Would each one of you then be in favor of getting--well, 
Dr. Stenberg, would you be in favor of getting the Federal 
Government out of education?
    Mr. Stenberg. I would not. I think K-12 education is 
primarily a local-and state-funded activity, but there are 
needs that sometimes cannot be met. For example, Federal K-12 
education money oftentimes is targeted to poor communities that 
do not have the ability to support their schools.
    Mr. Grothman. States can't do that?
    Mr. Stenberg. States can do that. Whether they do it is 
another question.
    Mr. Grothman. Okay. How about what we refer to as welfare, 
income sort of equalization, do you feel that's a Federal 
problem? I'm going to give each one of you the question.
    Mr. Chase. I would just say, from a county perspective, we 
definitely need a Federal partner. We are just seeing--it's an 
interesting phenomenon for us, where we have incredibly strong 
GDP, low unemployment, and, yet, our demand for county services 
in some areas is through the roof. The opioid epidemic is a 
classic case study, where we are seeing with the No. 1 cause of 
accidental death now being drug overdose, our foster care 
caseloads are at a record high. Our treatment for Hep C, HIV, 
and stuff in our jails is through a record high.
    Federal policy played a huge role in driving prescription 
drugs. So, we would strongly argue that if the Federal 
Government incentivized, through Federal policy, the 
prescription of these medications and now we have to pay in our 
jails----
    Mr. Grothman. I'll give you one final question real quick, 
and then I'll shut up. Is there anything the Federal Government 
pays for right now that, you know, we use the counties or 
schools or whatever as a conduit, that you would be in favor of 
reduced Federal spending and reduced Federal role?
    Ms. Gerton. I don't think that I can name a specific 
program, but I would argue that the more we do integrated 
conversation about these topics, the better we'll have a 
division of labor and cost-sharing between the different levels 
of government. I think right now, there's not a lot of 
opportunity to collaborate on what states might provide, what 
the Federal Government can provide----
    Mr. Grothman. No suggestions where we could spend less 
money and you'd rather pick up the ball? None? From the three--
--
    Mr. Connolly. The gentleman's time has expired, but you may 
answer the question.
    Mr. Stenberg. The former ACIR tackled that question, sir, 
in terms of the "who should do what?" An example, it did 
recommend that public education K-12 be shifted to a greater 
extent to the state level. At the same time, it recommended 
that [for] Medicaid-type health programs, there should be a 
greater Federal role played. Kind of a sorting out of 
responsibility.
    That's one of the jobs of the Commission that is being 
proposed, I understand, to kind of identify, in particular, 
functional areas. What should the relative roles and 
responsibilities be? Who should pay for what? And make the 
adjustments accordingly, or at least recommend the adjustments 
for your consideration.
    Mr. Chase. I would just say for counties, our biggest 
challenge with the Federal Government are more rules and 
regulations. We're not always here asking for money. In fact, 
we're asking for relief. One of our biggest priorities this 
year is to restore advance refunding of municipal bonds so we 
can--[with] our own borrowing-- that we can refinance our 
bonds, which was recently taken away.
    So we have many things that aren't Federal dollars. It's 
actually more Federal guidelines and regulations --and 
handcuffing our ability to be flexible at the local level.
    Mr. Connolly. I think the gentleman from Wisconsin's 
question, again, makes the case for why we need to revive the 
Commission, because there are so many issues like this that 
really need to be addressed.
    For example, I'd say to my friend from Wisconsin, his 
question on education is a really good one, because the Federal 
Government is only about a six percent, seven percent, 
participant in school budgets, right, at the county level, but 
they have all kinds of requirements as conditions for that six 
or seven percent.
    I can remember, in trying to implement No Child Left Behind 
in counties with very diverse and large immigrant populations, 
trying to get everyone on a level playing field in terms of the 
language so that they are performing like anybody else, in our 
county, takes about two years. We sought a waiver to 
acknowledge that, allow us a little time, so we could get 
everyone on a level playing field.
    And the then-Secretary of Education, Mr. Grothman, not only 
said no, but she threatened the Federal funding. Although the 
Federal funding wasn't a lot of money, at the margin, our 
property tax simply wouldn't--the increase required to make up 
for it was not doable. So, they held us hostage for bad policy 
that didn't take into account diverse counties with big and 
growing immigrant populations that didn't speak English as a 
first language.
    This happens all the time. That's why I say I think there 
is potential common ground between Republicans and Democrats, 
because those kinds of things need to be addressed.
    Mr. Norman.
    Mr. Norman. Thank you, Mr. Chairman, and thank each one of 
you for coming. You know, as I read kind of why we're having 
this hearing, [which] is to hold a hearing to propose and 
evaluate ways to improve cooperation among Federal, state, and 
local governments. It's my understanding that the last year 
that the Commission was in existence was in 1996. The funding 
was $600,000.
    What do you all--do any of you have an idea what the 
funding cost level is going to be for this if this Commission 
is put back into place?
    Ms. Gerton. I'm sorry, sir. We haven't estimated a 
calculation for that.
    Mr. Norman. Okay. I guess the other thing, too, that we 
would strive to do is to evaluate how state and local groups 
can advocate for a return to cooperative federalism to address 
Federal and national issues. If each of you had to break down 
exactly what you would do to achieve this, what would that be 
to justify your existence? Give me a one, two, three order, 
each of you, on what you would do to make this happen.
    Mr. Stenberg. I would emphasize improved intergovernmental 
consultation.
    Mr. Norman. Define that.
    Mr. Stenberg. Federal agencies, before issuing rules, would 
consult with representatives of state and local government 
around the impacts of those rules and regulations on the 
operations of states and counties, municipalities, towns and 
townships and tribal organizations. They would do so in advance 
of going public, so that there could be some negotiation, so 
the negative impacts could be recognized, and perhaps the 
language modified to deal with them. That's one of the voids 
now as a result of no ACIR. There is no consultation that's 
meaningful.
    Mr. Norman. So with 50 states, you would gather who to try 
to make--to make that cooperation happen?
    Mr. Stenberg. I would rely on the Big Seven 
representatives, together with some of the additional members 
on the Commission, the Tribal Nation representatives, town and 
township representatives.
    Mr. Norman. That's a big task, isn't it?
    Mr. Stenberg. Yes, it is.
    Mr. Norman. I mean, what teeth would this Commission have 
other than--and let me tell you, I'm from the private sector. 
I'm tired of forming a committee to study a committee when 
nobody has any power. I mean, this is noble, but tell me 
exactly what you're going to do to justify the funding, 
whatever it is?
    Mr. Chase. So, Congressman, if I can give you an example, 
there is a highly politically charged regulation called Waters 
of the United States----
    Mr. Norman. Correct.
    Mr. Chase [continuing]. that defines Federal versus state 
waters. Right now, half of our counties are operating under one 
law, and half of our counties are operating under a different 
law, because we are now legislating through the courts.
    We have used an executive order that the Clinton 
Administration actually put in place--it's still there today--
to demand a seat at the table with EPA for our county 
engineers, our attorneys, our public works experts, to sit down 
with EPA's professionals and say, We're not here as the left or 
the right. We are here as level of government that owns 45 
percent of the roads, 40 percent of the bridges, and right now, 
we can't clean our culverts without a Corps of Engineers or EPA 
permit under this regulation.
    Mr. Norman. You can't cut a logging road in some parts of 
the country without getting silt fences on a logging road on 
5,000 acres of land.
    Mr. Chase. But through the consultation process, we 
filtered out kind of the political rhetoric and said, Let's 
look at this regulation as practitioners and how can we protect 
the environment, not have just countless studies and permits 
that we have to pay for. These 404 permits with the Army Corps 
can be incredibly expensive. How can we just look at this 
regulation through a practical lens?
    Mr. Norman. Where's your teeth other than recommending--I 
mean, to get that many people on Waters of the United States, 
that my eyes get red on that particular thing. How are you 
going to make any kind of impact that could possibly get the 
states together as far as--and my time is running out, but I'll 
just say, if this thing, if this Commission is put back in, you 
need to have some concrete examples.
    I don't see the teeth in it. I see just another meeting to 
have a meeting to--and I don't see how in the world you're 
going to justify your funding on this that really has an effect 
other than maybe education on maybe put some common sense back 
into it.
    Mr. Chase. Well, Congressman, we would always welcome more 
teeth. Right now, we don't even have a seat at the table. So, 
particularly in the rulemaking process, we are being treated 
like the general public rather than intergovernmental partners, 
who are operating and own vast majorities of the public 
infrastructure in the case I gave you. What we want is early, 
continuous, and transparent. We're not looking to meet in a 
back room with these agencies. We're fine with public meetings, 
but we just don't want to be treated as a special interest 
group. We want--counties in our case on the environment, we're 
regulators, we're operators, and we have to also comply with 
the Federal Government. But we were just being treated just 
like the general public.
    Mr. Connolly. The gentleman's time is up, but I would say 
to him, we don't have a mechanism for teeing up these issues 
right now. The issues, since 1996, have gotten far more 
complex. Since 1996--I think I'm right here--the only 
legislative remedy that has been provided was by this 
committee, and that was the unfunded mandate legislation. I 
actually testified before this committee when I was the 
chairman of my county, representing NACo. This committee was 
then chaired by my predecessor, Mr. Davis.
    Teeing up issues before they become big issues has merit. 
Teeing up issues when there are problems so that we get some 
guidance on legislative remedy like the unfunded mandates 
legislation is great. That's important. We don't have it right 
now. There's so much that can be done, in terms of being more 
efficient, avoiding needless regulation, catching unfunded 
mandates before they get out of control, flagging for each 
other issues that are going to matter. There are just a myriad 
of issues that I would suggest to my friend we would benefit 
from.
    My friend, Rob Bishop, after two years of looking at this, 
hardly a liberal Democrat, came to the same conclusion: We've 
got to have a mechanism. We changed the old mechanism to make 
it more relevant, and we certainly--I take my friend's point, 
we could look at other things to shore it up as well. But if we 
don't have something that deals with this complex federalism 
issue, I think we're asking for trouble as we move forward.
    Mr. Norman. Mr. Chairman.
    Mr. Connolly. Yes, sir.
    Mr. Norman. Can you indulge me for a minute?
    Mr. Connolly. Of course.
    Mr. Norman. If we do--if this commission is put in order, I 
suggest we sunset it, sunset, have some sunset time on it, and 
have specifics that we can measure the success after a year, or 
two years, because these are noble causes, but I just don't 
know--I mean, I've been on the state level. I don't know how 
you get people together. Every bureaucrat can justify why this 
or that shouldn't be put in place.
    An argument? I just don't see the teeth in it. But if it 
is, I would ask to sunset it and have some measurable outcomes 
that they have to meet. Thank you.
    Mr. Connolly. Certainly. I thank the gentleman. A sunset 
clause may very well be a wise idea. Let me take my five 
minutes.
    Mr. Connolly. Let me ask you, Dr. Stenberg and Mr. Chase, 
in particular. What we haven't talked about here is--two 
things. One is how the states can sometimes be the culprits. 
I'll cite my own state of Virginia.
    So a game is played in sloughing off responsibility to 
localities who have to pay for things, and then we take 
enormous pride in being one of the lowest tax-burden states in 
the country. Yes, because we don't pay the education bill, even 
though we mandate at the state level what has to be done.
    So the state mandates what's called standards of learning, 
and the state mandates standardized tests called standards of 
quality to which you will teach. And your kids have to pass 
these tests every year or you have a failing school. But we 
don't pay for them. In fact, they're committed to pay 55 
percent of those costs and they don't even meet that.
    So what happens? The localities are left to their own 
devices. And, as Mr. Chase said, well, if you're in a county 
with a good, solid commercial tax base, you can bear that 
burden. But if you don't have a commercial tax base, even 
though you may be an affluent county by income, we don't access 
income at the local level, and so it's property tax that has to 
make up that difference.
    That's a real Sophie's choice for many counties or even 
cities: Okay, how high can I raise that tax burden before I 
drive people out of the county or, you know, I have a tax 
revolt and I end up doing what California did years ago, which 
clearly hurt the educational system of California?
    So sometimes states are part of the problem--or are the 
problem. It's not just the Federal Government that is imposing 
unfunded mandates.
    I thought you might want to comment.
    Mr. Chase. Yes, so I will take off my Big Seven hat 
representing state and local governments and just put on my 
county hat.
    That certainly is a challenge for us at the local level. 
Currently, we have over 40 states where the state legislatures 
have capped our property tax income and yet the mandates 
continue.
    Where we see coming back to this commission are issues like 
elections, for example, where counties pay the vast majority of 
the election equipment, and it is costing us tens of millions 
of dollars. It's something the Federal Government historically 
has not paid us for. In some cases, the states may or may not.
    So we think the commission would be a great forum to talk 
about these issues, like elections, that have a Federal-state-
local intersection and have a good dialog. We aren't asking for 
the Federal and state governments just to bail us out, but 
oftentimes those mandates are imposed and we do have to carry 
those out and often in very quick time-frames where you can't 
adjust your tax base.
    So we certainly agree with your perspective from your----
    Mr. Connolly. Yes. It's a good example you're mentioning, 
elections, because in most cases it's absolutely the 
responsibility of the local jurisdiction----
    Mr. Chase. Right.
    Mr. Connolly [continuing]. not a state responsibility, even 
though the state will set standards that you have to meet, but 
you're on your own in terms of paying for voting machines, 
paying for election judges, training those election judges, 
trying to make sure you meet with state standards, and then 
making sure there's an accurate count. Those are all local 
burdens usually not helped by state compensation.
    Did you want to comment, Dr. Stenberg?
    Mr. Stenberg. Yes, Mr. Chairman.
    I think you're absolutely right that the states can do a 
pretty good job at preempting and imposing requirements and not 
living up to financial obligations that are associated with 
them.
    It varies from state to state and area to area, but 
research surveys that the National League of Cities conducted 
last year and the year before have shown a steady increase in 
state preemptive activity in a wide range of areas, from 
environmental standards to health, to minimum wage, broadband, 
ride-sharing. The list goes on.
    The issue here is, what is a state-wide problem or issue as 
opposed to a local problem or issue? That's a tough question to 
answer just in the examples I've given. And here, again, is 
where a commission, such as the one that's been proposed, can 
in a thoughtful way begin to answer those questions and advise 
policymakers in terms of: Is this something that warrants a 
state-wide, uniform approach, whether it's for business 
conditions or safety or some other thing? And is this an area 
where we should urge new local innovation and creativity? And 
what is the cost burden or financial responsibility that goes 
along with those decisions?
    Mr. Connolly. You know, one of the things we talked about 
on the task force which had not been a topic originally 
assigned to it, but because of my local government background, 
you know, I think we have to discuss in America the Dillon rule 
versus home rule. Because the Dillon rule in a modern, 21st-
century environment, frankly, does not make sense. It just puts 
local governments, who have the primary burden of delivery of 
services, in a straitjacket. You know, somebody once described 
it as a ``Mother May I?'' approach to government.
    I can remember, in my county, you know, the state statute, 
for example, required all school buses to be painted yellow. We 
discovered that by painting the roof white it made the buses 
more efficient, more fuel-efficient, and warmer in the winter 
and cooler in the warm months for the kids riding the buses. 
And so it was an energy, you know, move. We had to go to 
Richmond and get legislation passed to get an exemption from 
the state code. We could not do it on our own.
    Then there are other states where the opposite rule is the 
case; you have broad authority to govern unless we say you may 
not. So long as local governments are seen as nothing more than 
a creature of a state, a creation of the state, no real 
sovereign standing on their own--which is kind of a myth about 
government.
    But those are real issues. And I can tell you, at a local 
level--sometimes we have debates up here about ``let's just 
take this big Federal grant program and make it a block 
grant.'' Well, if you are from where I'm from, you know, that 
sends terror up and down your spine, because funding formulas 
coming out of the state capitol are never fair to big, urban 
counties like mine in our state. So we know we lose if that 
happens. We'd rather have, frankly, a direct--a formula from 
the Federal agency that issues the grants, Ms. Gerton, than 
have it go through the state.
    But up here, we almost never have that conversation. 
Everyone just assumes that would be a good thing; states would 
like that. Well, they might, but localities might not like it, 
because there are problems with funding formulas at the state 
level that discriminate against certain parts of the state 
sometimes.
    Let me ask one final question, which I think is also why we 
need to have the commission we've been talking about. We don't 
often have conversations about impacts of Supreme Court 
rulings. Dr. Stenberg, you'll have to help me remember the name 
of it, but there was a famous case that affected local 
governments' ability to control solid waste. I'm having a 
senior moment about the name. It would've happened in the 
1990's.
    It was an extraordinary case that said, even though solid 
waste is generated in your jurisdiction, you can't make haulers 
bring their waste to your incinerator or your dump. They're 
free to take it, under interstate commerce, anywhere they want.
    So, because of that ruling, on the East Coast, we had a 
plethora of trash trucks going up and down to places that were 
preferable to them, bypassing established treatment plants, for 
example, and really wreaking havoc on local economies, because 
many of the facilities that had been developed were financed by 
municipal bonds, and now you were jeopardizing the bonds 
because you weren't able to meet the input required to keep 
that, you know, facility going.
    It was--have we got the name? Oh, Carbone. It might have 
been Carbone.
    Anyway, it was an extraordinary decision, I thought 
immensely wrong-headed, by the Supreme Court, not one of whom 
had ever served in a local government and understood the 
ramifications. But it's the kind of thing that has never been 
the subject, really, of our conversation, like, ``Well, what 
does that do to you?''
    I just wondered if you wanted to comment on the impacts of 
the Supreme Court's decisions on this topic we're talking 
about, and then I'll be quiet.
    Mr. Chase. Mr. Chairman, actually, the Big Seven coalition, 
along with some other groups, actually funds what's called the 
state and Local Legal Center. We work together to actually 
participate in Supreme Court cases through amicus briefs----
    Mr. Connolly. We think the name of the case I'm trying to 
remember is Carbone.
    Mr. Chase. Carbone.
    Mr. Connolly. Yes.
    Mr. Chase. Yes.
    Well, going back to your commission, recycling is a huge 
issue at the local level, and local governments, particularly 
counties, spend a lot of money on recycling. But because of 
Federal trade negotiations right now, our recycling markets 
have actually crashed. In county governments across the Nation, 
it went from a revenue source, where you might get paid to sell 
some of your recycled goods, to today counties are actually 
having to absorb that cost.
    I think that's another great issue that the commission 
could talk about, the intersection of global trade policy and 
how it actually filters down to the local level.
    But on the Supreme Court, because we don't really have a 
functioning intergovernmental commission, more and more groups 
are now using the courts to legislate. I think that's important 
for the congressional branch to really think about, where 
you're giving power, actually, to the courts.
    The Marketplace Fairness Act was a great example where we 
tried, as a coalition, for years to get through this online 
sales tax issue. Finally, we worked a bill through the South 
Dakota legislature that made its way to the courts, and, 
ultimately, the Supreme Court ruled in our favor. But we 
would've much preferred to go through Congress to work on a 
bipartisan, sustainable solution to something that was an 
existing tax. It wasn't even a new tax.
    Mr. Connolly. Again, from a local government point of view, 
you know, what else do we not control? So we don't control 
solid waste. We don't control cable franchises, or there are, 
you know, real circumscribing measures on that. You know, we 
don't control water rights. We don't--you know, on and on and 
on. Well, at what point does local government become nonviable, 
then, if we don't control our own destinies?
    I mean, some things, obviously, can't only be addressed at 
a local level; they have regional or broad geographic impact. 
But there are lots of other things where control over our own 
destiny is a fundamental democratic principle.
    Dr. Stenberg?
    Mr. Stenberg. In my days with the Council of State 
Governments, I can recall Governors and legislators talking 
about federalism from the standpoint of the Supreme Court 
decisions that made the 10th Amendment a hollow shell. It's 
meaningless. Their concern was that Congress pretty much had a 
green light to go into any area it chose in terms of domestic 
affairs.
    That's why I think the provision in the bill which 
authorizes the commission to monitor the decisions of the U.S. 
Supreme Court that have federalism impacts and kind of be a 
canary in the coal mine, if you will, in terms of calling 
attention to some of the impacts that the State and Local Legal 
Center, the Big Seven and others, and advocates in the Congress 
could address.
    So, to me, that's maybe not teeth, but that's a new role 
and an important role given the changes that have occurred.
    I think the monitoring function of the commission is really 
important, looking at not just trends but behaviors. You know, 
we have good language in, for example, Executive Order 13132, 
really good language. If it were implemented, we probably 
wouldn't be saying we need more consultation. We would know 
what consultation means and when it occurs and who's consulted. 
Those questions haven't been addressed.
    And so that, together with the Federal offices of 
intergovernmental affairs, again, looking at them from the 
standpoint of this commission that doesn't have an axe to grind 
other than for the improvement of intergovernmental relations, 
I think could raise some important issues, questions, and 
provide some insights that would be beneficial to, again, the 
other stakeholders.
    Mr. Connolly. Yes. To me, that's almost self-evident 
because--to this enormous question--but we haven't had a seat 
at the table. We haven't even been talking to each other except 
on an ad hoc basis.
    When I first got to Congress, for example, you know, I'd 
been chairman of my county until the day I was sworn in. We 
were in the midst of the recession, and one of the things that 
happened was the catastrophic collapse of the municipal bond 
market. Well, what happens when municipal bonds are no longer 
financed on Wall Street? You don't build schools, you don't 
build community centers, you don't build police stations or 
fire stations or anything else.
    By the way, the dollar amounts were so enormous, when you 
add up the impact of local governments and state governments, 
for that matter, when you dry up the municipal bond market, it 
was offsetting the stimulus. The drag was offsetting the 
stimulus.
    I could not get colleagues to focus on it. Like, we had to 
provide some relief here. But we can. We could back it up and--
you know--those issues weren't even considered as part of the 
stimulus. Nobody looked at it. A couple of committees might 
have had some hearings, but there was no legislative relief.
    Had we had a commission that, you know, a red light going 
off, flashing, ``This is a big deal,'' we could've at least had 
the opportunity to have a significant hearing on that issue and 
the consequences that could flow and how it was offsetting the 
good work we were trying to do on the stimulus. But----
    Mr. Chase. Mr.----
    Mr. Connolly [continuing]. we never got that opportunity.
    Yes, Mr. Chase.
    Mr. Chase. And that's the point I was making earlier, was 
on the--when we lost, in the tax bill, the advanced refunding, 
now when we take out the debt through the municipal bond 
market, we are stuck with that interest rate. We lost the 
ability, because of a Federal action, to refinance. That's like 
telling a homeowner, ``You can buy a house, but you can never 
refinance your interest rate. You are stuck with it for the 
next 30 years.''
    Mr. Connolly. Yep.
    Mr. Chase. Most of our bonds are locally voter approved or 
the elected officials have to vote to approve it. It is on our 
balance sheet. And we have lost that flexibility to build those 
schools, public hospitals, airports, and other critical 
infrastructure.
    Mr. Connolly. I will end with this anecdote.
    Oh, I didn't see you. I'm so sorry.
    Mr. Khanna has joined us. Let me just end--I'll end my time 
with this anecdote and then call on Mr. Khanna.
    When we were doing the stimulus bill in 2009, we had money 
in there to help local governments do school construction. We 
felt they'd be shovel-ready. Everybody has a CIP and a waiting 
list for new construction and renovation. An injection of 
Federal money would help soften the municipal bond problem and 
get projects right underway and hire locally. And there'd be 
the, you know, return on the investment of a new facility.
    There were three critical Members in the Senate who were 
controlling everything that went in or came out of the stimulus 
bill for their votes. They said it was unprecedented to have 
the Federal Government involved in school construction, it had 
never happened before, and it was a bad road to go down.
    I can remember going to our caucus meeting, as a freshman, 
fresh from local government, and I heard that. I mean, it was 
accepted as gospel truth, and no one challenged it.
    So, as a freshman, I got up and I said, well, you know, if 
you think the Federal Government has never been involved in 
school construction, I'll be glad to take you to Mount Vernon 
High School in Mount Vernon District near Mount Vernon, where 
George Washington is buried and where he had his plantation, 
and that high school was built with Federal money.
    I said, but just to be sure that's not unique, I checked, 
and there are at least 2,700 schools all around America built 
by Federal money. So, other than that, you're right, it's a 
unique idea, unprecedented.
    But a policy decision to cut that money and not allow any 
of the stimulus money to go to school construction occurred 
because of ignorance. People just accepted an assertion that 
was factually untrue because they didn't know the history of 
the relationship between Federal funds and school construction 
at the local level.
    Bad things can happen if we're not having a regular dialog 
and a mechanism to have that. That's what this act--I mean, 
we're not going to solve everything, but it gets us back and 
gives us a mechanism, hopefully, we can update and use to our 
advantage.
    Mr. Khanna, I'm so sorry.
    Mr. Khanna. No, I appreciate it.
    Mr. Connolly. I was filling time until you got here. We're 
glad to have you.
    Mr. Khanna from California.
    Mr. Khanna. Well, thank you, Mr. Chairman. I'm here largely 
to say how much I support this legislation, your legislation, 
on the Restore the Partnership Act and how necessary it is. 
And, yet again, another piece of legislation from you that 
seems commonsense and that's bipartisan and that can actually 
help improve things.
    I want to share very briefly an anecdote from my time in 
the Commerce administration that leads me to believe why this 
is important and have Dr. Stenberg and the panel comment.
    When I was at the Commerce Department, the President, 
President Obama, said, ``We need to have a SelectUSA program,'' 
which made total sense, that we want to make sure companies are 
staying in the United States instead of going to China or 
Brazil or elsewhere. And we had all these reports that these 
other countries would roll out the red carpet for companies, 
whereas, in the United States, often we didn't even know if a 
company was leaving.
    So we started to implement it, and it turns out that the 
biggest obstacle was that none of the states wanted the Federal 
Government to intervene on behalf of one state over the other. 
Now, that's a legitimate issue, but I thought: Someone has got 
to resolve this. While China is competing and has a coordinated 
response in how to attract business, we're stifled because our 
Federal Government can't get its act together with state and 
local governments to make sure companies stay in America 
instead of go overseas.
    I think your act would exactly address this issue, and 
that's something I'd like to see the commission address. How do 
we have an American competitiveness strategy? I mean, I think, 
you know, I want all the businesses to go to California, but 
I'd rather they even be in Texas than in China. Somehow we've 
got to make sure that we can do that.
    Dr. Stenberg and Mr. Chase, Ms. Gerton, could you comment 
on that and what this act may do to help that?
    Ms. Gerton. Sir, I think that the opportunity to use this 
commission to address critical national development strategies 
is a key one. We think the infrastructure is right along those 
lines, economic development strategies and understanding, then, 
the national objectives and the state and local impacts of 
those, as we've been discussing throughout, is a critical 
function of the commission.
    So understanding what the incentives are, the 
disincentives, and the opportunities to collaborate so that we 
get the best outcome for the Nation but also for each of the 
communities that's involved is critical, and it's a great 
example what this commission could do.
    Mr. Stenberg. I would agree that that's a great example of 
an opportunity.
    I think a commission like this can add value in a number of 
different ways. It can provide insights and information to 
Federal policymakers that will help them make better decisions 
in terms of the impacts as well as the outcomes that are being 
sought.
    Right now, those views aren't really being solicited. In 
fact, state and local representatives often aren't even in the 
room when it's decided. So it's not surprising that there's 
sometimes a misalignment between what the Federal goal or 
policy is and the state and local outcomes.
    So, kind of, better aligning those, I think, would be 
something the commission could do, again, using that convening 
authority that the bill grants to it, but also knowing who 
should be at the table. That's something that I think is going 
to be just as important as the process that's used. And, again, 
this commission, I think, can be helpful in that respect.
    Mr. Chase. Congressman, I personally worked with SelectUSA 
in my previous role and actually was engaged in a lot of those 
conversations and actually went to Hanover, Germany, to one of 
the big trade shows, and the American booth was not the 
highlight of the show. I can promise you the Federal Government 
was not overspending on that booth.
    But we agree with you where there are appropriate Federal, 
state, and local roles, particularly in economic development. 
But when we look at the future of work and how the supply chain 
works nowadays, we think it's really important that Federal, 
state, and local policymakers, including in the private sector, 
have a table for those discussions.
    We are seeing that every day with companies approaching us 
wanting--we just launched a new partnership with Walmart, for 
example, about the future of work and how they are becoming a 
technology company, not a retail company. What is that going to 
do to county governments who have put out municipal bonds for 
water and sewer for transportation interchanges? What is going 
to happen to the disability community if they're going to move 
to a technology platform rather than storefront, with workers, 
on Main Street? And those are really complex issues.
    We're a property-tax-base government, so it's also going to 
have a dramatic impact on our revenue sources. We're not asking 
for the Federal Government to bail us out. We're just asking 
for a thoughtful conversation about: What is the future of work 
going to look like? What's the future of commerce? How should 
we build our transportation networks? And those are Federal, 
state, local policymakers coming together with a vision for the 
country.
    We think the tensions between government are healthy, but 
what we really applaud the Congressman for and the chairman is, 
we just need a table to have grownup conversations about what 
should American policy look like and to really deal with what 
Dr. Stenberg called these wicked problems.
    Mr. Khanna. Thank you. Thank you, Mr. Chairman.
    Mr. Connolly. Thank you, Mr. Khanna. And I want to thank 
all three of you for being here.
    We may want to submit some written questions to you. And 
let me invite one right now. I'd love your reaction on the 
changes we've made to the commission to try to make it more 
flexible, updated, and hopefully useful. Also, any thoughts you 
may have on, well, let's just start listing all of the new 
issues that we confront that did not exist in 1996.
    Ms. Gerton. Mr. Chairman, I would mention two particular 
provisions in the bill that I think are important. One is 
adding the new state and local memberships and Tribal 
membership to the committee so that its majority is actually 
now not Federal.
    Mr. Connolly. Right.
    Ms. Gerton. I think that sends an important signal about 
the value of those opinions and input into the commission's 
decision.
    I think the second point is that it does have more teeth 
than it did before, that it requires Federal agencies to comply 
with commission requests for information and to address 
commission report recommendations, and it requires Congress to 
have hearings within 90 days of commission reports. So that, 
again, conveys to stakeholders that this is a commission that 
people are going to pay attention to.
    Mr. Connolly. I believe it also requires that agencies must 
provide written responses to the commission's recommendations.
    Ms. Gerton. Yes. So I think those are both really important 
signaling features, and they will be important to the 
effectiveness of the commission.
    In terms of listing possible agenda topics, there's no end 
to them. But you mentioned something in your opening statement 
that I think is important, and that is the use of technology, 
the changes in technology.
    We really have no system of technology sharing and 
management in the intergovernmental space. And as we look to 
the future, as Mr. Chase has just addressed the future of work, 
really understanding how to use technology and use data to 
streamline program administration, to streamline reporting, to 
really simplify the cost of delivering programs in the 
intergovernmental space could reap tremendous benefits. The 
grant and aid programs underlie many of the issues that we 
would put on an agenda topic.
    So I think using the commission to kind of fundamentally 
understand capacity as it relates to technology and data would 
be one of the first orders of priority.
    Mr. Connolly. Well said. And I'll give you one more, the 
Census.
    Ms. Gerton. Yes. Absolutely.
    Mr. Connolly. I mean, if there's a place where we have the 
intersection between the Federal Government and state and local 
governments, it's the Census.
    I had a roundtable yesterday, and it became so clear to me 
how the Census Bureau is completely dependent on the networks 
that exist in local governments--the faith community, 
immigration advocates, the organizations, and the local 
governments.
    For example, we were talking about, well, how are we going 
to translate the Census into all of the many languages? My 
community has well over 100 languages that are spoken. Our 
school district sends notices home in at least six or eight 
official languages, including Urdu and Farsi as well as Korean 
and Vietnamese and Spanish. And it seemed to us that the Census 
Bureau was not yet up to snuff on how to do that.
    Well, it turns out that both of the counties I represent 
have the technological capacity to very quickly take something 
and translate it into the targeted languages. I think we had 
the capability of 59. This was news to the Census Bureau.
    Instead of reinventing the wheel, you could partner with 
your local governments that have that capability 
technologically and save a lot of time, trouble, and money and 
get that Census where it needs to be gotten. So there are 
practical benefits from being able to have this dialog.
    Anyway, my hope is we will get this bill on a bipartisan 
basis so that we can get back to work and expand the dialog and 
make sure that our state and local governments are no longer 
seen as special interests.
    Thank you so much for being here today.
    The hearing is adjourned.
    [Whereupon, at 5:36 p.m., the subcommittee was adjourned.]

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