Improving lives through federalism
Examples to practical federalism are tangibly felt across the nation. American Habits reached out to several policy leaders within their respective states to find out how solutions are invigorating reforms while expanding freedom.
What examples of practical federalism are you observing in your state that has improved the lives of citizens?
MONTANA
Debates abound in the 2023 Montana legislature about the principles of federalism and the proper role of local governments, with proposals to place sideboards on local government power coming from both Democrats and Republicans alike.
Several proposals target local government’s excessive local zoning regulations, something even local governments themselves admit have spiraled out of control and contributed to Montana’s affordable housing crisis. One bill aims to cap the growth of local government budgets. Other proposals prohibit local governments from banning gasoline-powered cars, restricting the types of energy sources available, or discriminating against cryptocurrency mines.
Meanwhile, local governments are pushing for more control, lobbying for the ability to ban plastic bags and straws, to impose a sales tax, and to ticket cars with red light cameras.
Many state legislators say local governments have become local tyrannies, saddling Montanans with burdensome taxes and regulations that dictate all aspects of our lives. Legislation, they argue, is needed to bring local governments back within their proper bounds. On the other side, local government advocates opposing such legislation argue that decision-making is best done at the local level, where in theory governments will be most innovative and responsive to the unique needs of their communities.
The legislature clearly has the authority to tell local governments what they can and can’t do. Under Montana’s Constitution, the legislature has created local governments with delegated power provided by law. However, the question of when the legislature should override local authority is the debatable federalist proposition at the core of these policy discussions.
Frontier Institute recognizes that the state legislature has created local governments, so the legislature ultimately has a duty to act as a check and balance on local power. The people of Montana have put their trust in the state government, via our Constitution, to protect the inalienable rights of all people from government. We believe that when local governments clearly infringe on people’s Constitutional rights beyond the scope that’s objectively necessary to advance legitimate public health, safety, or welfare objectives, then the legislature has a duty to the people of Montana to draw a bright red line in the sand and say “no.”
Kendall Cotton is the president & CEO of the Frontier Institute.
TENNESSEE
In 2021, Tennessee became the first state in the nation to receive a block grant for its Medicaid program. Under the agreement, the state has more autonomy and more incentive to control costs in the nation’s single-largest welfare program. Historically, Medicaid has been very top-down, with strict parameters placed on states’ ability to retool the behemoth federal program. Republican presidents and governors have for years pursued reforms to give states more flexibility in Medicaid, to no avail. All the while, numerous other welfare programs, such as the federal cash assistance program known as Temporary Assistance for Needy Families, have operated much more efficiently under block grants that give states greater flexibility in the programs’ design and function.
In just the first year of its new Medicaid approach, Tennessee has realized $300 million in shared savings for state and federal taxpayers. Due to the agreement, the state gets to keep half of that amount. In other states’ Medicaid programs, all savings revert to the federal government, leaving states with little incentive to operate more efficiently. As a result of this cost-sharing agreement, Tennessee can reinvest those savings in improved services for those on Medicaid without any new spending. This wouldn’t be possible under the traditional model.
Tennessee’s fiscally-sound strategy is drastically different than the federally-pushed Medicaid expansion that so many states—including red states—have adopted, which has led to much higher costs to taxpayers and many more people dependent on Medicaid coverage than ever before.
This is a great example of how the federal government can and should allow states to be the laboratories of democracy that our Founders intended. Rather than a one-size-fits-all approach driven by Washington bureaucrats, the feds should give states much greater flexibility to implement this and other federal programs. Or even better, the federal government could withdraw entirely from setting policy around certain issue areas, leaving the states to take the lead in serving their residents in the way that works best for that particular state at that particular time.
Justin Owen is the president & CEO of the Beacon Center of Tennessee.
NORTH CAROLINA
North Carolina makes for an interesting case study on “practical federalism” because it’s not a state dominated by single-party rule. Republicans control the legislature. Democrats control the executive branch. A pragmatic consensus-building approach is likely to be successful and the only way to move legislation with the necessary bipartisan support.
Also, a single, large metropolitan area does not dominate the state. Charlotte and Raleigh are the largest cities, and they are as different from each other as Asheville is from Greenville. Of its 100 counties, “80 are considered rural or rural in character,” according to the U.S. government website Rural.gov. “In these communities, more than 70 percent of businesses are considered very small,” meaning less than 10 employees.
Rural residents place their faith in local institutions like churches, schools, and small businesses. Tradition, distance, and the government’s broken promises deepen that faith. A case in point is the government’s inability to administer federal disaster recovery dollars following Hurricanes Matthew in 2016 and Florence in 2018. Those storms serve as haunting examples of the damage wrought when a distant central authority fails to deliver. I know because I live there.
Legislative oversight hearings late last year revealed extensive delays and a burdensome bureaucracy in the Office of Recovery and Resiliency, which Gov. Roy Cooper established in 2019, ironically, to streamline aid distribution. Unfortunately, hundreds of millions of dollars have gone undistributed, leaving recovery projects incomplete as residents have languished in hotel rooms, relatives’ homes, and rental properties.
The problem is that the federal government uses our tax dollars to incentivize gubernatorial disaster declarations and state unpreparedness. The declaration triggers multiple federal agencies’ involvement leading to process paralysis.
While well-intentioned, subsidized development that minimizes personal risk in areas prone to hurricanes leads to more growth. Then when the promised aid fails to materialize due to government inefficiency, the community suffers twice. First from the hurricane and second from believing the government would be there to help. Properties are abandoned and left to deteriorate. We’ve argued that the federal government needs to minimize its role in disaster recovery and return the responsibility to the states and community level, closest to those who need it.
On the flip side, a great example of practical federalism improving North Carolinians’ quality of life is the Republican-controlled legislature’s response to the federal government’s attempt to nationalize energy policy through a Green New Deal. Rather than follow Congress’s lead in incentivizing unreliable energy resources, the General Assembly crafted House Bill 951, Energy Solutions for North Carolina, a plan for net-zero carbon emissions by 2050.
The bill’s original version would have delighted the federal government. It was chock-full of mandates for unreliable industrial wind, solar, and batteries, on which our monopoly utility would profit handsomely. However, North Carolina ratepayers would have been forced to pay more for an inferior product.
At the same time the original version dropped, we published our paper “Energy Crossroads.” We didn’t debate the policy goal of zero carbon. We provided in-depth research that showed prioritizing reliability, the least cost, and advanced technology instead of preferred resources like wind and solar would achieve the same goal, cost less, and stabilize our electric grid. Ultimately that became the final version of a bipartisan bill that Cooper signed into law in October 2021. Our analysis shows that North Carolina’s approach will save ratepayers billions of dollars over the next three decades while providing reliable power – a much different outcome than what the federal government offers.
Federalism matter to freedom and human flourishing. I’ll take state government over the federal government any day of the week, and on any given day, I’ll take North Carolina’s state government over most other states.
Amy O. Cooke is former chief executive officer of the John Locke Foundation and visiting energy fellow at the State Policy Network.
MICHIGAN
Florida or California? New York or Texas? Nashville or Chicago?
A primary reason for any family move is a new job. And a primary reason for any company to move jobs to a new state is the regulatory environment.
Federal labor law governs much of workplace policy and the National Labor Relations Act governs labor-management relations for the private sector. That said, states retain significant control over labor-management conditions within their borders.
Most notably, states can decide whether to adopt right-to-work protections for private- and public-sector employees. In a right-to-work state, a worker cannot be fired for refusing to pay a labor union as a condition of employment.
Additionally, states can exercise even more control over labor relations and conditions in their own state and local public agencies. In the state of Michigan, the following reforms have been adopted within the last 12 years:
· Schools and unions are not permitted to negotiate over teacher evaluations, layoffs, or merit pay.
· Michigan prohibited project labor agreements, thereby reducing public construction costs.
· Teachers unions are not permitted to use the public payroll system to collect union dues.
· Government unions are required to submit an annual financial report with the state-enacted defined benefit retirement plans for public school employees.
· The state prohibited an effort to unionize daycare providers and home help providers, which treated tens of thousands of employees and contractors as public employees in order to extract union dues from them.
· Michigan state employees are annually given an opportunity to opt into union membership, but the burden of recruitment falls to the labor union, rather than burdening the individual member who wishes to leave the union.
· Michigan adopted a right-to-work law in 2012, though the Michigan Legislature is dismantling the law in the 2023-24 legislative session.
These reforms protect workers’ individual rights and give them a choice regarding union membership and representation. Additionally, the reforms serve as a strong signal to current and prospective companies making business development decisions.
Michael J. Reitz is the executive vice president of the Mackinac Center for Public Policy in Midland, Michigan.
ALASKA
Alaska has a unique relationship with the federal government due to its size and remote location. The state has taken steps to resist federal overreach and create more self-governance in land use and other areas. This is due in part to Alaska’s historical and cultural context, as well as its political and economic climate.
One way Alaska has embraced practical federalism is by asserting greater control over its land use. This is due in part to the state’s history of resource development and its reliance on natural resources for economic growth. When Alaska was brought into the union, it was with the promise that this new state would be free to develop its common natural resources. Over time, the federal government has refused to honor this promise.
Alaska has repeatedly sought greater control over its land use by challenging federal regulations and asserting its authority under the Alaska National Interest Lands Conservation Act (ANILCA). This law gives the state the power to manage its own lands and has been used to dispute restrictive federal regulations.
Most recently, the state has undertaken the “Unlocking Alaska” initiative, asserting state management authority over navigable waters and the submerged lands beneath them. One component of this initiative is pursuing remedies through the courts, including a 2019 lawsuit against the federal government challenging the Environmental Protection Agency.
This case is ongoing, but multiple other lawsuits and actions by the state illustrate Alaska’s push for greater self-governance. In one such lawsuit, the state argued that the federal government’s Roadless Rule violated ANILCA, which required the federal government to provide access to resources in the Tongass National Forest. In another example, Alaska sued the federal government over its decision to block construction of a road through the Izembek National Wildlife Refuge to connect the remote community of King Cove to a nearby airport for medical evacuations.
Alaska has a long and continuous history of combatting attempts by the federal government to control the state’s land and other resources. By asserting greater control over its land use policies, the state can better meet the needs of its diverse population. Alaska’s efforts demonstrate the importance of practical federalism where the best government is in the state capital, not Washington, D.C.
Bethany Marcum is the chief executive officer at Alaska Policy Forum.
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