O’Hara’s Summary and Observations, Class # 4---PAD 700, Fall 1998

General Warning to Students: This commentary should NOT be your source for test answers, homework development or other graded exercises. Your assigned readings and exercises are THE source for gathering the information and insights upon which you will be graded. The purpose of these commentaries is to reflect on lectures already delivered, and to work in relevant ideas developed by students and/or professors in the course of class discussion. In developing this commentary, Professor O’Hara is going to be free-wheeling, and at times irreverent. Though the subject matter of Professor O’Hara’s commentary usually will relate to materials from assigned readings, the commentary is designed to augment and flavor what you have already read and absorbed. This commentary IS NOT a substitute for assigned work.

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Federalism is again a major theme in this week's readings. Denhardt's takes an historical view of the relationship between the state and federal governments. St. George looks at unfunded mandates, in which one governmental entity requires, but does not pay for, the enactment of policies by another governmental entity. Gold looks at "Stage II" of devolution, noting that, just as the federal government has pushed responsibilities down to the states, the states are now pushing responsibilities down to the local governments, sometimes as unfunded mandates.

How localities pursue efficiency and/or stagger under the burden of more responsibilities with fewer dollars is another element in the "intergovernmental" picture. Thus we have Wagar, along with Denhardt, talking about the "tricky path to going private." Finally, Rusk talks about the role of the states in limiting city geographic growth which, in turn, reduces the options of cities attempting to deal with declining tax revenues and concentrated social problems.

Students should know the definitions and contexts of dual, cooperative, picket fence and coercive federalism. That is what the syllabus asks you to do. In addition, I would urge students to think about the incentives and philosophies causing particular "federalisms" at different times. In the early days of the republic, states needed little from the federal government which, in turn, intruded only minimally on the states. Clearly, states looked to the federal government during catastrophes such as the 1930's Great Depression. In 1930's, the social dislocations of widespread unemployment and poverty coincided with major population movements from agricultural dustbowls and industrial wastelands to big city and pacific coast promised lands. States ended up with gigantic local problems that were really the result of a national disaster. So the incentives and the philosophy supported a large role, particularly fiscal, for the federal government.

President Johnson's Great Society/War on Poverty extended cooperative federalism to the limits. Federal monies flowed freely, often directly to citizen-run social programs in city neighborhoods and rural towns. The Great Society represented the high water mark in cooperative federalism for several reasons. The by-passed Mayors and Governors were ticked. The local programs were frequently poorly-run, produced few results, squandered substantial money and often featured community-based administrators who looked and sounded more like anarchist revolutionaries than managers.

The reaction to the Great Society's high water mark of cooperative federalism was Richard Nixon's election in 1968. The Nixon administration got out of micro-managing the local scene, and withdrew support from federal government enterprises, such as community legal services, that featured federally paid lawyers taking on local clients and suing state and local officials. Nixon instead instituted General Revenue Sharing, giving the federal bucks directly to mayors and governors to do with as they wished. Nixon took "the federal dictates off of the federal dollars," a position that has guided Republicans ever since. Reagan and Bush and, most recently, the Republican Congress, have sought in many ways to free the states from the detailed federal requirements accompanying federal grants. A good example is the Welfare Reform legislation of 1995.

Money is always a huge incentive. Cost savings, as well as philosophy, drove the Nixon, Reagan and Bush administrations to devolve responsibilities to state governments. Similarly, as the economic pinch got even tighter in the 1980's, the federal government started to push down responsibilities to the states without money, a practice called unfunded mandates. Such mandates could often be buried in an obscure line of a long and complicated piece of legislation.

The problem got so bad that Congress ended up passing a law prohibiting such mandates without the Congress explicitly enacting a law saying, in effect, "We are dumping this particular responsibility on the states without giving them a penny of help." By making Congresspersons loudly declare what they were doing, the sponsors of the law hoped that unfunded mandates would diminish. St. George points out that valid reasons exist for mandates: some needs are national, many localities wouldn't comply without being forced. In addition, St. George states and localities get "no strings attached" federal monies through tax subsidies and other mechanisms, and get other federal funds, for things like local crime control, that the federal government need not provide.

The article on "Devolution II" is worth reading. Again, do so while considering the incentives and philosophies that are at work. States have also had fiscal crunches. And governor after governor has been elected promising and then delivering tax cuts. This leads to spending cuts. But when state aid to education is cut, local parents don't want to hear about their children getting less in school. This then puts the locality under pressure that is hard to resist. But replacing the lost state money means in increase in local taxes. Another way of looking at this is that the buck stops at the bottom.

In New Jersey, Governor Whitman, who followed the state tax cut plan, and then heard the howls from local officials, started a state commission to advise local governments how to run themselves better (with less of course). This leads to the "Path to Going Private." Like it or not, privatization and contracting out, because they offer immediate monetary gains, are all the rage for government jurisdictions pinched for cash. As Denhardt and Wagar point out, privatization's longer-term downsides may more than cancel out the short-term savings. Whatever! Few issues exist in public administration today that are a crucial as privatization and contracting out. You will almost certainly have to deal with such transformations as either an employee or as a manager. The more you know about this area the better prepared you will be.

The "Bend or Die" article is quite revolutionary. By revolutionary, I mean that Rusk proposes a fundamental change in the ways state governments have treated the creation and autonomy of municipalities. As Rusk says, you can downsize and reinvent, privatize and contract out. But if your dollars are shrinking while your dependent population is growing and the middle class is fleeing, your city is in crisis. And the crisis cannot be escaped without some radical restructuring where the resources of a Scarsdale are shared with a New York City, either through regional funds transfers or an actual amalgamation of the two cities. Students ought to become quite conversant with this article because the issues addressed reflect a dilemma faced by most of America's large cities, and the 30%+ of Americans who live in and around them.

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