Federal transit grants bypass state lawmakers

The administrative state comes to statehouses with strings

As the deadline for Congress to pass a spending bill gets closer, debates over how much to spend and what to spend it on dominate the news cycle.

Lost in all the buzz is an often-overlooked facet of federal budgets that presents a unique danger to representative democracy and federalism: the federal government’s use of grants to force the adoption of policies in the states without input from state legislatures and governors, not to mention citizens.

To be eligible to receive federal grants, state agencies must comply with federal mandates directing how the money must be spent or requiring specific policy measures to be adopted. That may not appear threatening on paper. But in practice, such inflated and unchecked federal government power upsets the balance of federalism and amplifies the control of unelected bureaucrats over voters.

In their book “Deconstructing the Administrative State,” Emmett McGroarty and Erin Tuttle highlight this phenomenon in the U.S. Department of Transportation’s deployment of mass-transit grants through its Capital Investment Grants program.

CIG grant applications are evaluated on a criterion that includes mobility improvements, environmental benefits, congestion relief, cost-effectiveness, land use and economic development. That has put pressure on state and local governments to change local zoning codes to allow for the creation of high-density, mixed-use developments.

While transportation bureaucrats in Washington, D.C. who crafted these grant requirements may prefer this form of development, it may not necessarily be consistent with the needs and preferences of the people currently living in these communities.

But states can take some action to combat the encroachment of the federal administrative agencies on state legislative powers.

One possibility is an Administrative Procedures Act that requires state agencies to disclose to state lawmakers when a proposed rule is being enacted to comply with the conditions of a federal grant.

The agency also must identify the state statute authorizing the agency to enact the proposed rule. This gives a state’s elected legislatures a fair chance to review these rules and ensure that a rule is consistent with the state’s laws before it is adopted and forced on citizens.

Another option is reforming how federal grants are provided to the states by requiring state agencies to perform a cost-benefit analysis and seek the governor’s approval before making or renewing a federal grant application.

The intent of this reform is to ensure that the state is fully cognizant of the terms and conditions of grants agreements before consenting and that the official providing such consent has the state-level legal authority to serve as the state’s decisionmaker.

Federal grants can be an important tool for helping fund valuable state institutions but using them as a vehicle to force policy mandates infringes on the lawmaking authority of state legislators.

Our system of federalism, as created by the U.S. Constitution, is designed to protect states and citizens from federal overreach and create “laboratories of innovation” where state-specific solutions can be developed and evaluated.

Congress has the authority to set the national budget and make appropriations for grant programs. The federal administrative state doesn’t have the authority to independently establish policy mandates that subvert state sovereignty. The vital divide between state and federal authority should not be lost in the noise over what the next federal budget.


In Depth: Federalism

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