Unfunded mandates are rules and constraints imposed by legislative, executive, or judicial actions of one level of government on other sectors in the economy. Although mandates can be used to refer to regulations imposed on private profit and nonprofit entities, the term was coined to describe regulations imposed by one government on other governments, whether it be federal mandates applied to state and local governments or state mandates applied to their local jurisdictions. Mandates can consist of either affirmative obligations to take action on a policy problem, such as the treatment of municipal sewage, or a constraint or prohibition against certain policy actions, such as the recent federal preemption of state taxation of Internet access fees.
“Mandates” is a broad term that actually covers several distinct tools used to regulate activities of other levels of government. Mandates are most often viewed as direct orders where one government orders another to comply with policy standards, such as federal clean water standards, with the penalty of civil or criminal sanctions. However, when governments regulate one another, other strategies have been deployed. Grants-in-aid have become a widely used vehicle to project mandates; recipients of funding are bound to follow a wide range of rules as a condition for obtaining the grant. Federal courts have ruled that mandates attached to grants are less coercive and therefore more permissible than direct orders because technically states or localities can choose not to apply for funding, but for major grant programs this is not a practical option. Preemption is another strategy where federal or state governments assert a regulatory policy that prevents other levels of government from pursuing their own regulatory schemes in that area. In some cases, the preemption is complete and prohibitive of any related action by other governments, while in other cases the preemption is partial, and other governments may continue to play a role as long as their standards and policies are consistent with minimum standards.
The federal government has relied more on the use of various forms of mandates since the 1970's. As the federal role in domestic policy expanded, the grant was often the initial instrument used to assert a national presence, but this has been followed by various forms of mandates as national officials and groups became stronger and more insistent on projecting national goals. Mandate advocates argue that state or local governments would not on their own provide sufficient resources or protections for national priorities or vulnerable clientele, whether it be environmental protection or handicapped education. Some suggest that states and localities are engaged in a competition with other jurisdictions for new businesses and higher-income residents that serves to undermine their support for redistributive policies involving commitments to vulnerable groups. More recently, national business interests have joined the chorus supporting certain mandates and preemptions to guarantee uniform regulatory policies across all 50 states.
The growing use of mandates has prompted a debate on their implications for governance. Absent any restraint, unfunded mandates undermine accountability by permitting one government to experience the joy of enacting benefits without also having to realize the pain of paying for those benefits. Costs imposed by mandates can indeed be significant—nearly $28 billion in new costs were estimated to be imposed on states and localities by federal mandates enacted between 1983 and 1990. Such costs can be paid for by higher taxes, but more often than not they force lower state and local governments to distort their priorities by limiting resources for other unique local needs. Mandates carry non-fiscal implications as well. Even when funded fully or partially by federal or state governments, mandates often impose a “one-size-fits-all” set of rules and approaches that undermines our systems’ capacity to respond to diverse needs in flexible ways.
The debate over unfunded mandates has ushered in a wave or reforms. Many states have adopted statutory or constitutional restrictions attempting to rein in the ability of their legislatures to impose unfunded mandates on local governments. Most states attempt to make mandated costs more visible by reporting estimates to the legislature during debates. Some have gone further to require state government to reimburse local jurisdictions for costs associated with state mandates, although legislatures have often continued to pass unfunded mandates when compelling interests are at stake. At the federal level, growing pressures from state and local governments culminated in the passage of the 1995 Unfunded Mandates Reform Act. This act permits mandate opponents to raise a point of order against proposed unfunded mandates in pending legislation under consideration by the Congress. The point of order does not prevent mandates from being enacted since it can be overridden by a majority of each chamber, but it does promote accountability by prompting a separate vote on the issue of mandating itself. This new act did achieve modest success in deterring certain mandates from reaching the floor of Congress and prompting mandate sponsors to modify others to reduce their projected state and local costs. However, important mandates continued to be passed, particularly those exempt from coverage of the reform such as conditions of federal grants, reflecting the continued appeal of mandates as a tool of government to both parties at the national level. Recent mandates passed by the Congress include new rules pertaining to the voting process under the Help America Vote Act and new federal education testing and accountability requirements established under the No Child Left Behind Act. These federal initiatives have been viewed as “underfunded” federal mandates where some federal assistance is provided that falls far short of covering a significant share of the costs.
The Supreme Court has joined the mandate debate at the federal level by ruling in the 1990s against direct federal commandeering of state and local governments to enforce federal regulatory policies. Although these rulings have inserted the Court as a source of restraint, nonetheless Congress retains considerable authority because the Court’s rulings do not yet extend to mandate tools most commonly deployed at the federal level-conditions of grants and federal preemptions of state and local regulatory authority.
Advisory Commission on Intergovernmental Relations, Federally Induced Costs Affecting State and Local Government (Washington, DC: ACIR, 1995); Michael Fix and Daphne A. Kenyon, eds., Coping with Mandates (Washington, DC: Urban Institute Press, 1990); and Paul L. Posner, The Politics of Unfunded Mandates: Whither Federalism? (Washington, DC: Georgetown University Press, 1998).
Last Updated: 2006
SEE ALSO: Coercive Federalism