The GAO has now released a study indicating that the decline in the fiscal affairs of the STATES will continue through 2060 if nothing changes concerning current federal policy. Note that the GAO conclusion is premised on the STATES being unable to control their own affairs.
A little history which of course needs more documentation and study and thus should be characterized as IMO. Note that federalism has been discussed before on this blog and any further study is helpful. I label it a crisis even though the existence of the STATES is Constitutionally protected, but as with the use of "consultation" in federal statutes, that undefined term can mean as little as an unanwered phone call.
Anyhow by my estimate in 1940 there were less than 5M STATE and LOCAL workers, including teachers and law enforcement. By the year 2010 my estimate is that almost 40 M were directly or indirectly employed by the STATES and LOCAL governments including their contractor support. In the old days, pre-FEMA, and perhaps an unsung contribution of the former FPA (Federal Preparedness Agency) a subunit of GSA established out of the transferred programs, functions, and activities from the former OEP (Office of Emergency Planning in the Executive Offices of the WH) by Presidential Reorganization Plan No. 1 of 1973 (which also transferred programs, functions, and activities to HUD) FPA published a series of guidance documents called FPC (Federal Preparedness Circulars) and one was FPC-6! This broke down the national governmental system in the US into "resource" entities and "claimant" entities. The STATE and LOCAL governments were considered the latter. Actually to some degree I disagree with this analysis because as far as what I refer to as the PUBLIC SAFETY Community including police, fire service-including both HAZMATs and EMT, and public health the bulk of the trained personnel are with the STATE and LOCAL governments. FEMA reissued a number of FPCs but never reissued FPC-6. But let's look at resource claimancy for a moment.
The only way a governmental entity can increase the resources available to it for any purpose, including crisis management and response and recovery, is through augmented funding and/or procedures and processes that allow it to place demands on the resources of other entities hopefully of course to then reimburse those entities. Mutal Aid agreements are an example and perhaps also EMAC.
But in addition to resources, including crisis management capabilities there is no doubt that STATE and LOCAL governments are in a downward spiral for many reasons. But not just fiscal.
When at FEMA I tried to get the STATE AG association to take more of an interest in model legislation, including clamping down on contractor fraud post disaster. I sent out to many STATE AG's during disasters a model Executive Order they could issue to at least restrain to some degree the "Storm Troopers"! My understanding is this helped in some states including TEXAS.
Underlying the problems of the STATE and LOCAL governments is the mishmash of local entities that have been allowed to be created by the STATES. Perhaps it is interesting to note that both Great Britain, and Japan have in the last 3 decades made major efforts to rationalize their local government administrations. Is this a force for centralization, maybe but seems warranted when the US has over 90,000 local entities with some trappings of government. Homeowners Association Law is a developing legal field, including liability issues and this is another area for which the focus on crisis management, response and recovery needs a lot of work.
So here is my recommendation for repair of the federal system. First create a JOINT COMMITTEE ON FEDERALISM in the US Congress. This would analyze each piece of proposed legislation on the current federal system and arrangements, but also focus on both short term and long term issues. Originally I had thought to just modify the role of the CBO (Congressional Budget Office) to require a report on federalism with their analysis of each piece of legislation to go with budget implications as they do now. And they certainly should have a section of each analysis they produce now on impacts of the funding arrangements, or amount of funding on STATE and LOCAL governments. You see actually no single focus exists for federalism analysis anywhere in the Executive Branch, even after enactment of the Intergovernmental Relations Act of 1984 and its supposed mandatory implementation.
My second recommendation is based on the need for national uniformity in medical care and cost control and perhaps we will get this out of the litigation arising from the new health care reform legislation. The litigation filed so far, together with the immigration litigation coming out of Arizona, appears to have the liklihood of dramatic impact on federalism. The failure of SCOTUS to continue its thinking about the 10th Amendment of the Constitution in National League of Cities v. Usery in the early 80's indicates again that even the judiciary has no clear concept of federalism nor of its history.
Finally, I would make MEDICADE, UNEMPLOYMENT INSURANCE and several other programs entirely federal programs. I include the funding of declared Presidential disasters and emergencies under the Robert T. Stafford Disaster Relief and Assistance Act. Thus, 100% federal financing of the response and recovery from the start. Too many situations including both Hurricanes Hugo, Andrew, and Katrina have resulted in delays over funding arguments. Included in that of course is FEMA's insistence on NO STANDARD FEDERAL-STATE AGreement, determined by a federal Court of Claims decision in 1973 as a contract, but instead a hand tailored document for each disaster or emergency. Note that my fall back is 100% funding by the federal government for first 45 days and use that time to work out the details and not delay response over funding issues. This has already been described in some detail on this blog. Admittedly it would change the paradigm that all federal assistance is supplement, but only in some details, not in the long range overview. Disasters and emergencies are often "black swans" at the STATE and LOCAL levels and seems federal resources appropriate for these outliers.
And finally and controversially perhaps immigration and quotas on who resides in any state should be left to the states, since that issue and its policy debates will in fact determine which states are truly the laboratories of "democracy" foreseen by Jefferson or merely rump vestigal inadquate administrative units of our system. The STATE and LOCAL governments compete among themselves now on the basis of economics (often in the form of tax reductions) so why not let them compete on the basis of who lives there
Well hoping someone analyzing all these issues has both a sense of where the US and its federal system needs to go to compete in the Globalized World and also has common sense as to how to achieve any of this. Seems perfect for a JOINT COMMITTE on FEDERALISM and because it looks like none but Governors can be elected President in the future, despite their lack of international experience, I think demand to sit on that Joint Committee by the members would be significant.