October 5, 1993
G. Tracy Mehan, H1, an attorney, is Director of the Office of the Great Lakes for the State of Mchigan and a member of Governor John Engler's Cabinet. He also is a member of The Heritage Foundation's Advisory Council on Regulatory Reform He spoke at a meeting of The Heritage Foundation's Advisory Council on Regulatory Reform on September 22, 1993. ISSN 0272-1155. 01993 by The Heritage Foundation.revenue growth, would be consumed by Medicaid mandates, These same mandates were also projected to grow at an annual rate of 49.1 percent through 1995 while Michigan's General Fund lagged behind at 5.5 percent. Recently, EPA published a proposed rule to reduce the discharges of persistent, bioaccumulative toxics to all of the Great Lakes and their tributaries. Eight different states are covered by this regula- tion. Michigan is pretty far along the curve in terms of its own s t rict water quality rules already in place. Despitethe state's progressive regulAtory regime, -the Michigan Municipal League noted the significant costs of the new rule for its 93 largest wastewater treatment facilities with one Million gallons per day cap a city. Taking the proposed regulation as published, the League estimated the potential capital expenditure for those facilities requiring added treatment to be over $265,000,000, with annual operation and maintenance costs over $72,000,000. Again, this is f or only one of eight states in the Great Lakes region, a state which has already absorbed higher costs under a faiily ag- gressive water quality program of its own. Fortunately, EPA has not yet finalized the rule and ap- pears to be considering several co s t-effective changes. The spectacle of state after state, city after city, reeling from the torrent of federal mandates is really quite numbing. While EPA is a convenient whipping boy, the root of the problem is a string of laws, passed independently of on e another, under the auspices of a sprawling congressional com- mittee system, with little regard for the cumulative impact on lower levels of government. "Basical- ly, it's a matter of buck-passing," says Mayor Victor Ashe of Knoxville, Tennessee. The buc k 's passed here-to states, municipalities, towns, and villages who must expend limited political capital on revenue-raising measures (read "taxes") and tough budget cuts to accommodate the federal government's ambitious social agenda. Local governments mus t display the courage of Washington's convictions. There seems to be no priority or hierarchy among the various and sundry mandates emanating from the Congress, the courts, and the federal regulatory agencies. All risks are equal. Resources are deemed to b e infinite. No need to choose, prioritize, or sequence programs. Washington takes a les- son from Nike: "Just do it." Just do the Americans with Disabilities Act. Just do Medicaid. Just do clean air, clean water, safe drinking water, leaking underground st orage tanks, solid and hazardous waste control. And don't forget asbestos! Meanwhile, fire and police protection, hospitals, parks, roads, and everything else usually deemed to be the responsibility of local government, still needs attention. Is it any wo n der that the U.S. Conference of Mayors passed a resolution this June calling on Congress to require risk assessments and cost-benefit analyses in all legislative mandates? The mayors also demanded that Congress and the President oppose any new mandates wi t hout full federal funding. The Conference is confident that over 1,000 cities and counties will participate in "NUM-Day" (for National Un- funded Mandates Day), October 27th. Los Angeles Mayor Richard Riordan, vice chairman of the Conference's Task Force o n Unfunded Mandates, told reporters at an October 4 meeting that "In Los Angeles alone, in this fiscal year we will spend $576 million to comply with federal mandates." He went on to point out that four and one-half million staff hours would be commandeer e d for these mandated projects. He also forecasted that Los Angeles will spend over $6 billion in capital expenditures, over the next five years, to stay in compliance. Is anyone listening? The answer is not clear. Certainly, the mayors, just like the gove r nors before them, are agitated and agitating for change. According to Matthew Rees, writing in the September I 8th issue of The Wall Street Journal, there are twenty bills, sponsored by members of both parties, under consideration in Congress that would l imit unfunded mandates. And Vice President Gore's National Performance Review recommends that President Clinton limit the use of unfunded man-
2dateg by the Administration. Yet, iri the final ainalysis, nothing has change d with regard to thoie fun- d amental, underlying statutes which, ultimately, drive the regulatory agendas for the administrative agencies and guide the federal courts in their decisions. Su pport does appear to be coalescing behind legislation sponsored in the U.S. Senate by Idaho Se n ator Dirk Kempthorne, a Republican, and in the House by California Representative Gary Con- dit, a Democrat. Philadelphia Mayor Edward Rendell, another vice chairman of the Conference Task Force, stated the, intent oLthe legislation in no uncertain -terms : . "If you passthe bill, don't pass the buck to the local government. If you pass the bill, you pay for it yourself." Basically, state and local governments are experiencing a rampage of cost shifting, which has been the fate of business and industry for m any years. It is, however, very discouraging that these governmental entities, which do not carry any of the same political baggage as private enterprise, are faring no better.