INTERGOVERNMENTAL RELATIONS IN THE EARLY 21ST CENTURY:
LINGERING IMAGES OF EARLIER PHASES OR EMERGENCE OF A NEW PHASE?
J. Edwin Benton
Department of Government and International Affairs
University of South Florida
Tampa, Florida 33620-8100
jbenton@usf.edu
Paper prepared for delivery at the 2014 Deil S. Wright Symposium on “Understanding
Intergovernmental Relations: Reflections and Directions,” preceding the 2014 ASPA Meeting,
Mayflower Hotel, Washington, D.C., March 14, 2014
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INTRODUCTION
In crafting the U.S Constitution and setting into motion what Tocqueville (1999) would
call the “novel American Experiment,” the Founding Fathers probably never envisioned the
complex system of intergovernmental relations and ubiquitous interactions that would result in
the new republic. From the launching of the new democracy in 1789 until the end of the 19th
century, the scope of government activity and the impact on governmental decisions were in line
with the Jefferson proclamation that “…government that governs best… governs least.” This
period of time was marked by Americans embracing the notion of laissez-faire and many of the
basic tenets of Social Darwinism, while the dominant political culture could be characterized as a
mixture of the traditionalistic and individualistic types (Elazar 1984). With the national
government, and even state governments, performing only a limited number of functions and
providing a relatively short menu of services, there was little opportunity for these governments,
and subsequently, their officials, to come into contract or interact with one another. State-local
relations could be characterized by a top-down approach, with states exercising oversight
authority over their creations (local governments), while national-state relations could be viewed
as “two ships passing in the night,” and each respecting the sphere of authority of the other. That
is, these two planes (levels) of government tended to act independently of each another and
generally did not encroach on the other (Zimmerman 2008). Therefore, the concept “Dual
Federalism” seemed to be an appropriate depiction of the operation of American federalism and
subsequent IGR for over 100 years.
IGR) were destined to change, however, with the dawning of the twentieth century, as the
seeds for change were visible even before 1900 (see O’Toole 2000, 6-7). Deil Wright (1988, 65)
explains the coming IGR changes and the reason for them in this way: “It is an accepted fact
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that since 1900 the U.S. political system has experienced major shifts that represent dramatic, if
not evolutionary, upheavals.” He is obviously referring to history-changing events and
significant political and public policy decisions that are listed here in abbreviated form and in no
particular order: 16th (individual income tax), 17th (direct election of U.S. Senators), 18th
(prohibition), 19th (women’s suffrage), 21st (repeal of prohibition), 23rd (right to vote for citizens
of the District of Columbia), 24th (prohibition against poll tax), and 26th (lowering of voting age
to 18-years-of-age) Amendments to the U.S. Constitution, World War I, Great Depression,
World War II, Civil Rights Movement, Congressional enactments and U.S. Supreme Court cases
in areas like health care, welfare, housing, labor relations, civil rights and civil liberties,
environment, homeland security, immigration, and so forth. To better understand and explain
how these events and policy decisions contributed to the evolution of our political system as well
as changes in patterns of relations in IGR in the U.S., Wright identified and described seven
phases or periods of IGR. The descriptive nature and nuances of each phase crystallized upon
Wright’s consideration of the following questions: What underlying forces precipitated the
changes? What were the directions and subtle shapes of the shifts? Around what policy issues
did the changes revolve, and what were the mechanisms by which the changes implemented?
What were the short- and long-term effects of the shift? The resultant seven phases and their
approximate periods of prominence are as follows: Conflict (1930s and before), Cooperative
(1930s-1950s), Concentrated (1940s-1960s), Creative (1950s-1960s), Competitive (1960s1970s), Calculative (1970s-1980s), and Contractive (1980s-1990s).
Over the last twenty-five years, few scholars (including Wright) have either identified or
described a new phase of IGR beyond his seventh “Contractive Phase.” Do the principal
components associated with the “Contractive Phase” (that is, the main problems or policy issues
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dominating the public agenda, participants’ perceptions, and IGR mechanisms) still accurately
describe and explain the workings of IGR or has a new phase emerged? Given changing
citizenry and private sector needs and expectations and profound national and global events,
have the basic contours of IGR and roles of various governments and subsequently relations
among these governments’ elected and appointed public officials been reshaped and redefined?
While it may be the case that remnants of Wright’s seventh phase may still be evident, is it
possible that enough has changed in the workings of IGR to suggest the emergence of a new
eight phase of IGR? Therefore, the purpose of this paper is to explore the possibility that we
have already entered into or about to enter a new eight phase of IGR.
Before proceeding to the principal objective of this paper, it is instructive to present a
brief synopsis of Wright’s seven phases of IGR.
WRIGHT’S SEVEN PHASES OF IGR: AN OVERVIEW
Deil Wright’s identification and characterization of seven distinctive periods or phases of
U.S. IGR that were evident during the twentieth century has served as an invaluable and
insightful guidepost for scholars and practitioners in their desire to better understand and
appreciate the dynamic relations and interactions among the national, state, and local
governments, but especially, their elected and appointed officials. Hence, it is important that any
effort to determine if Wright’s Contractive phase continues to adequately depict IGR in the early
part of the twentieth-first century or if a new phase has emerged should start with a review of the
significant political and economic happenings and defining moments in IGR that preceded the
opening of the new century. A condensed chart of the distinctive features (i.e., main problems,
participants’ perceptions, IGR mechanisms, federalism metaphors, and approximate climax
period) of each of phase located in Table 1 will assist in this overview.
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(Table 1 About Here)
In the second, third, and fourth columns of the table, three major elements of each of the
seven phases are considered. First, what policy issues dominated the public agenda? Second,
what dominant perceptions did the chief participants seem to have? In other words, what
orientations or mind-sets guided their behavior? Third, what mechanisms and techniques were
used to implement governmental actions and objectives? The fifth column of the table provides
a metaphorical characterization of each phase (usually a form of federalism), while the sixth
column gives the approximate time span of the climax period.
For those not familiar with Wright’s phases, two clarifications are in order. First, the
descriptors do not include all aspects of intergovernmental interaction during the time period
indicated for each phase. For instance, while conflict is the predominant characteristic of the
period prior to 1930, it does not preclude the possibility or probability of important cooperative
IGR activities. Second, since the dates for each period are approximate and not finite, this means
that the phases, in fact, overlap. Therefore, the term “climax period” not only identifies a time of
peak prominence but also leaves open the possibility for the continuation of a phase beyond the
dates given. For example, even though the conflict phase climaxed before and during the 1930s,
the conflict relationship did not end then but often reappears in future periods as a subsidiary
theme of the present dominant phase.
To repeat, it is noteworthy that none of the seven phases of IGR stops at any particular
place and time or actually fade away. That is, phases tend to overlap one another, and elements
of them continue on indefinitely. Wright (1988, 66) describes what happens in this manner:
“Like successive, somewhat porous strata that have been superimposed on each
other (by the interactions and perspectives of public officials), no phase ends at an
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exact point—nor does it in fact disappear. Each phase is continuously present in
greater or lesser measure, bearing the weight, so to speak, of the overlying strata
(subsequent phases).”
Simply stated, each phase has “carryover effects” much wider than the climax periods indicated
in Table 1. In reality, the present state of IGR is the product of manifold overlays of each of the
seven phases.
Conflicting Phase: 1930s and Before
This phrase was characterized by an emphasis on pinpointing the legitimate areas of
government authority and jurisdiction and identifying the limits of officials’ actions. This focus
was evident at the state and local levels as well as between national and state governments.
Dillon’s Rule became synonymous with state supremacy in state-local matters and was relied
upon to determine the precise limits of local government authority. The national, state, and local
officials who wanted to identify the exact specification of their respective authority believed that
their authority would be mutually exclusive. Furthermore, it appears that officials presumed that
resistance and antagonism would be part of the usual process of determining who was authorized
to do what.
Identifying specific government roles and spelling out distinct boundaries (usually
through court interpretation of statutes and regulatory authority) were distinguishing attributes of
the conflict period. The well-known U.S. Supreme Court case of McCulloch v. Maryland (4
Wheaton 316, 1819), early on, decisively established the conflict-oriented pattern in one very
important policy arena with particular relevance for IGR—finances. Although this case is
perhaps better remembered for it interpretation of the U.S. Constitution’s Necessary Clause, and
especially for upholding the power of the national government to establish a bank, it firmly
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established the precedent that state laws are null and void if they conflict with the national
governments delegated powers, laws enacted by Congress, or federal treaties. But, the Court’s
decision in McCulloch did much more than assist and assert national supremacy, for it heralded
the beginning of a century and a half of battles between national, state, and local taxing
authorities over who could or could not tax what activities of “opposing jurisdictions.”
The preoccupation with separating or sorting out powers—however limited or restricted
in practice—gave credibility to the metaphor “layer-cake federalism” to describe exclusive or
autonomous spheres for national, state, and local governments.
Cooperative Phase: 1930s-1950s
While the first phase of IGR was mainly characterized by conflict, there nonetheless was
some degree of intergovernmental collaboration during the nineteenth and twentieth centuries.
However, there was one period of our political history that lasted for approximately two decades
(from the 1930s and extending into the 1950s) in which complementary and supportive
relationships were most pronounced and had notable political implications. This period was
known as the cooperative phase.
The principal issues of concern to the country during this period were the alleviation of
the widespread economic suffering and distress associated with the Great Depression and
responses to international threats such as World War II and the Korean Conflict. Hence, it was
reasonable and expected that internal and external challenges to national survival would result in
closer contact and cooperation between public officials at all levels of government. This
significant increase in the level of cooperation manifested itself in several and varied forms, but
especially such innovations as national planning, tax credits, and formula-based grants-in-aid.
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The principal governmental mechanism as well as the main legacy of the cooperative
period was fiscal. Substantial and important financial relations were firmly established and a
harbinger of more to come. Subsequently, these relations inspired a new metaphor of
intergovernmental patterns—the much-publicized “marble cake” expression that was originated
by Joseph McLean (1952) of Princeton University and later popularized and elaborated on by
Morton Grodzins—as contrasted with the layer cake conception of the previous period.
Grodzins argues that government operations in the U.S were wrongly depicted as a threelayer cake. “A far more accurate image,” Grodzins (19060) said, “is the rainbow of marble cake,
characterized by an inseparable mingling of differently colored ingredients, the colors appearing
in vertical and diagonal strands and unexpected whirls [sic].” From Grodzins’ perspective, the
U.S. system of governance should be viewed as one of shared functions in which “it is difficult
to find any governmental activity which does not involve all three of the so-called ‘levels’ of the
federal system.” Supportive of these shared functions was an implicit (and sometime explicit)
disposition and pattern of behavior among participants that included collaboration, cooperation,
and mutual assistance.
Concentrated Phase: 1940s-1960s
The setting for this period covers the presidencies of Truman, Eisenhower, and Kennedy,
where intergovernmental relations became increasingly specific, functional, and highly
focused—that is, concentrated. Between 1946 and 1961, twenty-one major new grant-in-aid
programs were created, nearly doubling the total enacted in the Great Depression era. With this
growth in the number of categorical grant programs, greater increasing attention was paid to
service standards. Consequently, administrative rules and regulations as opposed to legislative
acts began to govern such thing as award criteria, reporting, and performance requirements.
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These new grant-in-aid programs focused on two general problem/need areas—(1) capital
works, public construction, and physical development; and (2) burgeoning middle class
expectations and needs. Examples include airports, hospitals, highways, slum clearance and
urban renewal, schools, waste treatment, libraries, and urban planning. Despite the fact that
there was a substantial federal involvement in local affairs via such programs, substantial local
political control was both encouraged and practiced. In fact, the techniques of grants, service
standards, construction projects, and the like were consistent with the local tradition of initiative
and voluntary participation. Moreover, IGR techniques were fitted with middle-class values of
professionalism, objectivity, and neutrality and therefore gave the appearance that objective
program needs rather than politics were being served. That said, it seemed that programs were
separated from the sordid side of pork-barrel politics.
These key political principles coincided with the reorganization of Congress in 1946 and
the establishment of congressional standing committees with specific program emphases. The
creation of these committees was to have significant IGR implications. It was not long before
these congressional committee patterns quickly became the conduit for access and leverage
points for influencing program-specific grants.
During this phase, the term or metaphor “water taps” began to be used to describe the
intergovernmental relations process that resulted. Due to the flow of influence combined with
the concentrated, or focused, flow of funds in this period, the national government had become a
heavily-relied upon source of financial resources to which a greatly growing number of water
taps were being connected. The flow of funds could be facilitated by those most knowledgeable
(the program professionals or specialists) at turning on the numerous “spigots,” and federal funds
usually went directly to states that could then turn around and release them in part or in whole to
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local governments. Cooperation, while prominent during this period, occurred in concentrated
and selectively channeled ways. And it was during this phase that the interconnectedness and
interdependency of national, state, and local relations were confirmed and solidified.
Creative Phase: 1950s-1960s
The foundation for the creative phase can be traced back to the cooperative and
concentrated periods of IGR. The period was marked by a compelling need for decisiveness in
politics and policy and the clear articulation of cohesive national goals. The term “creative” is
associated with this period partly because of President Lyndon Johnson’s use of the slogan
“creative federalism” and partly because of the many new innovative programs in IGR. Three
IGR mechanisms were characteristic of this period—program plans, project grants, and citizen
participation. First, comprehensive, area-wide, and statewide plans had to be submitted and
approved prior to the receipt of federal grant funds. Second, there was greater use of project
grants, whereby grant proposals had to be submitted in a project type format. These kinds of
grants not only involve wide-ranging and often detailed proposals or requests but also give much
greater latitude to grant administrators than do formula grants, in which statutory or
administrative formulas determine recipient entitlements. In addition, public participation was
strongly encouraged through the inclusion of the “maximum feasible participation” requirement
in legislation. This involvement of clients in program operations and administrative, however,
proved to be significant and a troubling component in intergovernmental programs.
This period is perhaps best known for the proliferation of the number of grant programs,
thus leading to the employment of the metaphor “flowering.” The main policy issues and major
themes addressed by this creative activism were two-fold: an urban-metropolitan focus and
attention to the disadvantages through antipoverty programs and aid-to-education funds. By
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1969, there were an estimated 150 major programs, 400 specific legislative authorizations, and
1,300 federal assistance activities (Wright 1988, 78). Of the 400 specific authorizations, 70
involved directly funneled money to local governments, thus bypassing the state governments
(Wright 1988, 78). In dollar magnitude, federal grants rose from $4.9 billion to $23.9 billion
between 1958 and 1970, while state aid to local governments also increased significantly from
$8.0 billion to $28.9 billion (Wright 1988, 78).
The significant increase in project grants and the amount of money accompanying them
compared to formula grants led to a noticeable change in the attitudes and behavior of IGR
participants. Specifically, a grantsmanship perspective grew quickly and extensively, but
particularly around poverty and project grant programs. Playing the federal grant “game”
became a familiar but time-consuming activity of mayors, local government managers, school
officials, governors, and particularly program professionals.
Competitive Phase: 1960s-1970s
The competitive phase of IGR was distinguished by the escalation of tensions that was
fueled by the proliferation of federal grants, the clash between program professionals and
participation-minded clients, and the intractability of domestic urban and international problems.
Issues related to bureaucratic behavior, administrative competence, and implementation, become
dominating concerns. Perhaps one of the most daunting concerns was the lack of coordination
among programs and within and among levels of government. Other festering concerns related
to program accomplishment, effective service delivery, and citizens access. Subsequently,
attention of public officials at levels of government turned to administrative performance or the
lack thereof or on organizational structures and relationships that either impeded or improved the
delivery of public goods and services.
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The period was also marked by a sharply different approach with regard to appropriate
IGR mechanisms. Pressure mounted to change and even reverse previous grant trends.
Suggestions ranged from grant consolidation in the form of block grants to revenue sharing.
President Nixon envisioned revenue sharing as a means of improving program effectiveness and
strengthening state and local governments, especially elected officials in their competition and
disagreements with national bureaucrats. On the national administrative front, efforts were made
to encourage metropolitan and regional cooperation (under Office of Management and Budget
circular A-95) and reorganize government agencies.
The level of disagreement, conflict, tension, rivalry that earned this period the label
“competitive intergovernmental relations” meant that there was far too little coordination and
cooperation all along the line of administration from top federal policymaker and administrators
to state and local professional and elected officials. However, the competition differed in degree,
emphasis, and configuration from the inter-level conflict of the older layer cake phase. First,
there was competition between professional program specialists or administrators (national, state,
and local) and state and local elected and appointed officials. Second, there was competition
among several functional program areas (e.g., highways, welfare, education, health, urban
renewal, etc.), whereby like-minded program specialists or professionals, regardless of the level
of government in which they served, formed rival alliances. These cross-cutting rivalries and
fragmentation prompted former North Carolina governor Terry Sanford to suggest the “picketfence” metaphor as descriptive of this period of IGR.
Calculative Phase: 1970s-1980s
This period was marked by the out-of-control finances and near-bankruptcy of New York
City during the mid-1970s. These problems however were not confined to just NYC but rather
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were reflective of broader societal, economic, and political problems across the nation. The
problems included lack of accountability of public officials, bankruptcy and fiscal stress, unwise
and heightened dependency on federal aid, perceived overbearing and meddlesome role of
federal authorities, and the loss of public confidence in government and government officials
generally.
While IGR during this period still tended to revolve around federal aid to state and local
governments, it was practiced, according to Wright (1988, 98) from a calculative perspective and
“contained only the surface trappings of federalism.” State and local governments had the
appearance of making important choices, but the choices in reality were few and elusive. The
major choice was whether to participate in federal assistance programs. If they decided to take
part in these programs, a larger array of more limited options was available. These choices,
however, were constrained mainly, if not exclusively, nationally specified rules of the game.
This is why “façade federalism” has been chosen as a metaphor characterizing this phase of IGR.
The perceptions of IGR participants of this period can be summarized as gamesmanship,
fungibility, and overload. Gamesmanship means that IGR players used various strategic games
to achieve desired ends. Fungibility refers to the ability of state and local governments to shift or
exchange resources received from the federal government for one purpose to accomplish another
purpose. Overload denotes the belief that democratic governments have been expected to do
more than they are capable of doing in an effective, efficient, and low-cost manner.
Several mechanisms were used to implement IGR activities in the calculative phase. One
was the channeling of more federal aid on a formula basis as entitlements and in the form of
general aid and block grants to states and their local governments. Closely linked to the
mechanism of general aid is the practice of bypassing, whereby federal funds would go directly
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to local governments without having to pass through state treasuries. Loans to governments or
individuals (e.g., to New York City or students) constitute a third IGR mechanism. Regulation
(in the form of grant guidelines in the Federal Register, grant law, and crosscutting requirements)
was a final implementing mechanism.
Contractive Phase: 1980s-1990s
This most recent period will probably be remembered as one in which federal aid was
shrinking, local autonomy was eroding, and court decisions and congressional legislation
constricted the range of action of state and local governments, and the increasing tendency of
governmental agencies at all levels to enter into contracts for the purchase and delivery of
services.
Four IGR problems confronted public officials during this period. First, all levels of
government have been preoccupied with borrowing and budget balancing as the size and
persistence of the federal deficit loomed large and cast a foreboding shadow of the current and
long-term IGR fiscal scene. Second, federal deficits and conservative politics resulted in
significant cuts and changes in federal aid to state and local governments. Third, the federal
court and nonelected officials increasingly directed their attention to detailed, specific, and
judgmental policy action of state and local officials (schools, prison, and mental health facilities)
and found numerous faults with their actions. Moreover, these nonelected, non-constitutional
officials sought to convene, cajole, and convince popularly elected officials into following the
“best course of action” in resolving disputes. Fourth, federal mandates in the form of court
orders, congressional statues, and administrative regulations abounded and were branded by
Zimmerman (1990, 52) as “the principal irritant of American intergovernmental relations.”
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Contentiousness, disagreement, and even confrontation (that is, between federal and state
and local officials) often characterize IGR interaction of this period. Moreover, state and local
officials came to the realization that the “good old days” of abundant federal grant money and
non-intrusive federal government were over, while they should also be wary of an overbearing
federal government. These perceptions produced a sense of defensiveness and distrust on the
part of state and local government officials and more litigation. To respond to this deterioration
of IGR, President Ronald Reagan was aggressive in efforts to reshape, reform, and restore
national-state relations through decentralization (devolution) of the federal system.
Three sets of IGR mechanisms (federal statutes/court decisions, information sources,
negotiated dispute settlement, and privatization) appeared to be new. The first set of
mechanisms represented a partial “rerun” of the conflict phase and evokes a strong sense of “us
against them.” Problem solving was revolutionized as a result of changes in computer
technology (particularly the sharing of information among like-minded IGR actors) and the
development of new social technology (e.g., mediation). Finally, privatization, though the
encouragement of competition and innovation, gave especially state and local officials the
opportunity to provide services in a more efficient, effective, and less costly manner.
The sometimes divergent and even contradictory characterization of the contractive phase
meant that was unlikely that a single federalism metaphor satisfactorily described the nature of
relations in this period. Therefore, a trio of metaphors (de facto federalism, telescoped
federalism, and whiplash federalism) was suggested as reasonable descriptors.
IGR SINCE THE LATE 1990s
As the preceding review illustrates, IGR in the American federal system of government is
subject to major change over time. Unanticipated (or even anticipated) national and international
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events, public opinion and philosophical shifts, technological and scientific advances, volatile
and precarious economic forces, climate and ecological changes, and the advent of a globalized
world can serve as underlying causes and catalysts for the development of new patterns in IGR.
Have these and other harbingers of change resulted in the emergence of a new or eighth phase of
IGR or does the seventh phase persist?
Holding Pattern in the Seventh Phase?
One of the key observations made by Wright in distinguishing between different phases
of IGR is that the emergence of a new period does not necessarily mean the definite end of the
previous period or the disappearance of all of the defining characteristics of that phase. That
point is emphasized by Wright, when he proposes approximate dates for each phase and allows
for the distinct possibility that phases in reality overlap. This perspective on the phases of IGR
would suggest that there is the real likelihood of “carryover effects” from one phase to the next.
For example, there is no reason to expect that conflict in IGR, to some degree, did not persist
beyond the 1930s and into the Cooperative Phase (1930s-1950s) or later periods. Likewise, there
is no reason to believe that noteworthy cooperative IGR endeavors or “partnership” efforts did
not occur during the Conflict Phase (nineteenth century-1930s). Similarly, it is quite plausible
that cooperation and collaboration and mutuality and supportive activity (major hallmarks of the
Cooperative Phase) spilled over into the Concentrated, Creative, Competitive, and future phases,
for this is the nature of a constantly evolving process of IGR and interactions set in an open
system. For certain, new main problems emerge, new participant perceptions arise, and new IGR
mechanisms are employed and redefine a new phase of IGR, but remnants of the preceding phase
remain and represent subsidiary themes of the current dominant phase. Indeed, the idea of
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“climax period” is suggestive of the peak prominence of the basic characteristics of a phase, but
it does not preclude the continuation of some of the attributes of the previous phase.
But before considering whether we have transitioned from the Contractive Phase to a new
phase of IGR, it is important to determine if what Wright labeled the Contractive Phase is still a
reasonable depiction of IGR from the late 1990s to the present. To facilitate the analysis that
follows, it will be useful to examine three distinctive sets of IGR relationships separately. That
is, I will initially examine federal-state, federal-local, and federal-state-local relations and then
turn my attention to separate analyses of state-local relations and finally interlocal relations.
Federal-State, Federal-Local, and Federal-State-Local Relations
In the most recent Annual Review of Federalism published in Publius: The Journal of
Federalism, the Special Issue guest co-editors report that “the state of American Federalism is
arguably more chaotic, complex, and contentious than ever before”(Bowling and Pickerill 2013,
315). This certainly appears to be an accurate characterization of the state of federal-state,
federal-local, and federal-state-local relations. Descriptions of federalism and IGR and
federalism metaphors like layer cake, marble cake, and picket fence are too one-dimensional to
accurately describe the relationships between administrators at the national, state, and local
levels of government. Moreover, federalism and IGR is no longer either “cooperative,”
“creative,” “coercive,” or “calculative.” Presently, all of these descriptions and approaches, as
well as many more, depict the operation and relations of the federal system, even within the same
policy area. A good example is the Patent Protection and Affordable Care Act (PPACA), which
contains cooperative (grants-in-aid), creative (health exchanges and mandates for individuals),
coercive (penalties for citizens and businesses), and calculative (cross-cutting regulations and
confrontational politics) elements. In fact, the foregoing description of IGR bears a close
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resemblance to the depiction of IGR that Wright provided for the “Contractive” phase as he saw
it in the 1980s and 1990s, except for the caveat that a new federalism metaphor (fragmentation)
should be added to the three suggested by Wright (de facto, telescope, and whiplash).
What Remains the Same?
In recent years, the President and Congress and both major political parties have been
preoccupied with the increasing federal debt, balance of trade deficit, and slow recovery from the
Great Recession. No quick solutions have been forthcoming in any of these and other related
daunting economic challenges as sharp ideological and partisan differences have brought the
federal budgetary process to a virtual standstill and gridlock has taken Washington hostage in
what could be called a war of perpetual attrition. Democrats and Republican (and liberals and
conservatives) seem content and committed “to slugging it out” until the last man/women falls.
In the Publius overview of the Annual Review of Federalism in 2011-12, Gamkhar and Pickerill
(212, 359) wrote: “The federal executive branch remained embroiled in political standoffs with
Congress on debt and budget issues.” This statement is still the most accurate description of
fiscal federalism in 2014. Moreover, since 2013, the federal government has flirted with what
would have been a crippling government shutdown, narrowly averted going over the fiscal cliff,
and “played chicken” with automatic budget cuts (sequestration) that would have taken $1.2
trillion out of the budget over the next ten years. Ideological and partisan roadblocks not only
threaten vital federal programs but also create uncertainty about intergovernmental transfers for
state and localities’ budgeting efforts. This is significant because budgetary decisions at the
federal level will be pivotal as intergovernmental transfers are a large part of state and local
government budgets.
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More than in previous decades, states are now in a precarious and vulnerable position.
Many of them are just beginning to see noteworthy improvements in their economies. Fortythree states enacted higher spending budgets in FY2013 than in the previous year. And while
state revenue collections in FY2013 surpassed pre-Great Recession levels in 2008 (5.7 percent
increase), states project that revenues will rise by only 0.8 percent in FY2014 (NASBO 2013a).
The ARRA stimulus grants-in-aid helped states to recover from average general fund decreases
of 3 percent in FY2009 and 6.5 percent in FY2010 to modest 4 percent increases in FY2011 and
FY2012 and a smaller increase of 2 percent in FY2013 (NASBO 2013b). Unfortunately, federal
grants to states fell faster than state revenues grew. Although most states enacted higher
budgets, the average state budget was authorized to increase by about 2 percent in 2013 (NASBO
2013a). And even though some states were able to partially replenish their fund balances or
“rainy day funds,” several finished FY2013 with a zeroed ending balance (NASBO 2013a).
Then, only around half of the states predict a fund balance over 5 percent of state expenditures in
FY2014, a percentage considered to be insufficient to smooth state expenditures in case of
physical or fiscal disaster (NASBO 2013a). Simply put, while a considerable number of states
have achieved a degree of stability in their own-source revenues, others are still working on a
thin margin.
To repeat the obvious, the federal government’s budget has an enormous effect on subnational governments. Federal grant-in-aid programs, both competitive and matching, have
increased the dependence of states and their local governments on national funding. In spite of
the fact that the number of federal grants has varied over the past half century, overall more state
agencies receive federal funding than ever before, with 75 percent of agencies receiving federal
monies. In fact, over half of those receiving federal funds are dependent on intergovernmental
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transfers for more than 25 percent of their overall budgets (U.S. Department of Education 2013).
Because of this growing dependence on federal funding since the 1950s, state and local
governments will have problems cutting their services in response to reductions in federal grantsin-aids.
Just as fiscal federalism continues to define IGR in the early part of the twenty-first
century, constitutional federalism also continues to shape federal-state, federal-local, and federalstate-local relations. In the last several years, the U.S. Supreme Court has decided cases with
significant federalism consequences. While some of these decisions have provided further
protection for sovereign state immunity, others have reasserted the legal authority of the national
government to preempt state laws.
In perhaps the most celebrated case to be handed down in several decades, the Supreme
Court in National Federation of Independent Business v. Sebellius (NFIB) (507 S. Ct. 2566,
2012) ruled on the constitutionality of President Obama’s signature piece of legislation—the
PPACA. Writing for the 5-4 majority, Chief Justice John Roberts upheld almost the entire Act,
as well as the controversial “individual mandate” that requires individuals to buy health
insurance and penalizing those who can afford to purchase insurance but do not. Seen by many,
including the media, as a victory for President Obama, the majority opinion was a nuanced one
that, while upholding the act under Congress’s taxing power, also established some clear and
potentially important limitations on federal power with protections for states. In an odd twist and
as a surprise to many Court observers, Roberts reasoned that the individual mandate could not be
upheld using the commerce clause but could be upheld under Congress’ power to tax.1 In this
respect, the Court’s decision can be viewed as reinforcing and possibly expanding the limitations
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placed on the commerce clause in two influential decisions of the Rehnquist Court—United
States v. Lopez (514 U.S.549, 1995) and United States v. Morrison (529 U.S. 598, 2000).
Upon further consideration, this case in the future could serve to limit federal authority in
another respect. Since the Court in the end concluded that the individual mandate could stand
because the penalty for not purchasing health insurance is really a tax, the inference is that for
Congress to enact similar policies in the future, it will have to do so through policy procedures
that amount to a tax. Although the Court’s decision would make such policies constitutional in a
legal sense, members of Congress might find themselves in a politically untenable or at least
unpopular position since they would have to justify such policies as a “tax.”
While the NFIB case was the most widely known case pertinent to federalism, the Court
handed down other decisions that obviously represent a continuing trend of constitutional
protections for state sovereignty over the past two decades. In both Coleman v. Court of Appeals
of Maryland (132 S. Ct., 1327, 2012) and Nevada Department of Human Resources v. Hibbs
(538 U.S. 721, 2003), the Court provided further protection for states from law suits and
reinforced and adhered to the high bar that Rehnquist Court decisions had set for abrogating
sovereign immunity.
While it can be seen that the Court has taken several opportunities to restrict federal
authority and even reaffirm support for state sovereignty, it has also remained active in deciding
cases involving federal preemption of state laws. These holdings in these more recent cases have
been consistent with earlier Rehnquist Court decisions in siding with the federal government. In
in Arizona v. United States (132 S. Ct. 2492, 2012) (cited and discussed in another context later
in the paper), the Court held that three of four provisions of an Arizona law (known as SB 1070)
intended to discourage and curb illegal immigration into the state was preempted by federal
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regulation laws. Also, in 2012, the Court decided in Kurns v. Railroad Friction Products Corp.
(565 U.S, ___ ) that a federal law (Locomotive Inspection Act) extensively regulated all design
aspects of locomotives and preempted state law on any issues involving design effects.
What’s New?
“Fragmented federalism” is becoming more and more noticeable from the burgeoning
patchwork of policies that are popping up across the country. American federalism, by its very
nature, produces variation across states; that is, states serve as laboratories of democracy where
creative or innovative ideas or policy experimentation are permitted and encouraged. In recent
years, however, one sees differentiation occurring not necessarily because of the particularistic
needs of the state or its efforts to improve the quality of services or even to enhance servicedelivery efficiency or service effectiveness. Instead, differentiation is driven by at least three
other reasons—political polarization, in action of the federal government, and state efforts to
cope with federal mandates.
Political Polarization
Increasing political party polarization continues to have an influence on both short- and
long-term governance at all levels of government as well as on IGR. For many observers both
inside and outside of government, the distance between the two major political parties has never
been greater (see Poole and Rosenthal 2012). Intense partisanship was a distinguishing feature
characterizing the conduct and impact of the 2008 and 2012 elections and will likely continue to
shape federalism and IGR in the years ahead. Evidence of this lasting effect can be seen from
legislative and policy decision-making that occurs within the context of the ongoing ideological
divide between the Democratic and Republican parties. According to Bowling and Pickerill,
“there is a prominent and prolonged level of heightened partisanship that accompanies seemingly
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every major policy, budget, and implementation decision at the state and federal levels of
government as well as the interactions between them” (2013, 317). Party tensions at the national
levels between the two parties have resulted in them being unable to reach compromises on most
important policy issues, including the budget. Simply stated, the increasing party polarization
coupled with divided party control of the executive and legislative branches has brought
“gridlock” to an entirely new level in the past few years. With increasing frequency, one sees
political parties (along with factions within the parties, interest groups, and unions) engaging in
protracted and passionate battles often depicted as zero-sum games, where there is only a winner
or loser and no thought being given to a compromise between divergent views.
Unlike the national government which has been embroiled in gridlock, many state
governments with conservative Republican governors and Republican-controlled legislatures
have been able to make changes to state policy more easily. Specifically, Republicans in these
states were able to advance policy agendas on controversial issues like abortion, public sector
unionization, gun control, elections, and immigration. Many of these policies, which can be best
characterized as extreme policy responses, have resulted in an exaggerated from of “fragmented
federalism” or a patchwork of policies across the country created by factions and implemented in
fragments. This is perhaps best illustrated by some states’ immigration laws. In a recent study,
Schraufnagel and Marquez (2013) report that restrictive immigration policies are positively
related to growth in the state’s Hispanic population and Republican control of the legislative and
executive branches while negatively related to state legislative professionalism.
Extreme partisanship has also been responsible for intense “pushback” scenarios, most
notably in the fields of health care, education, and elections. States and local governments have
always objected to federal government intrusion into the first of these arenas and have seen
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federal actions as treading on state sovereignty. With respect to health care and education, state
and local governments questions the extent to which the federal government should be involved
in the regulation of health care choices and educational goals. Even in the area of elections
where the federal government does have the authority to insure against discrimination in both
voter registration and the operation of elections, states and local government express a strong
dislike for the imposition of “Big Brother” type oversight.
The PPACA will probably be remembered as one of the most controversial pieces of
legislation to be adopted by the Congress in recent memory. Over the last four years, several
parts of the law that are aimed at requiring changes in insurance systems, and thereby regulatory
in nature, have already gone into effect. They include requiring insurance companies to provide
coverage for adult children (until the age of twenty-six years), requiring coverage of preventative
services, limiting the percentage of funds that insurance companies can spend on administration,
and prohibiting insurance policies from creating or enforcing yearly or lifetime benefits limits as
well as preexisting conditions exclusions. However, a new round of partisan bickering has
begun over two larger, and more expensive and expansive, provisions of the law—required
Medicaid expansion and the creation of state insurance exchanges. The result has been the
creation of pushbacks in two different directions--state governments pushing back against the
federal government and the federal government pushing back against the states.
On one hand, partisan state pushback has resulted where the U.S. Supreme Court in
NFIB, nullifying the overly coercive requirement that all states expand Medicaid coverage or
face massive losses in federal funding. In essence, expansion decisions are no longer federal
mandates but sovereign state choices. On the other hand, pushback by the federal government
toward the states has put conservative states in an untenable position with respect to the creation
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of health exchanges. That is, their choices are either to adopt the minimal undesired standards
required by the progressive federal policy or step aside and permit the federal government to
operate the health exchanges. While there is speculation as to how states (but especially those
where there is intense opposition to the PPACA) will respond to these two provisions of the law
(see Bowling and Pickerill 2013; Kaiser Family Foundation 2013; Rigby and Haselswerdt 2013),
states’ actions are certain to add complexity to IGR through its diverse and fragmented
implementation. In short, shared implementation will leave oversight fragmented.
Federal Inaction
Variance and fragmentation in federalism and subsequently in IGR is also created by the
failure (or perception of failure) of the federal government to act in areas traditionally seen in
their domain. Subsequently, a number of states have resisted the federal government or adopted
their own laws in immigration policy and regulation of “fracking.” In the area of education,
frustrated state and local government officials operate in an environment of uncertainty and must
proceed as best they can due to the lack of guidance from the federal government.
Historically, citizenship requirements come under the scope of federally-delegated
powers and immigration has traditionally has been a national, rather than a state, policy concern.
However, numerous failures to enact meaningful immigration reform at the national level have
been used as justification for a dramatic increase in states adopting their own legislation in this
area. Since 2001, Congress has considered but failed to adopt several pieces of immigration
legislation, including the Secure America and Orderly Immigration Act (2005), two
Comprehensive Immigration Reform Acts (2006 and 2007), and other pieces of immigration
reform legislation under headings like development, relief, and education for alien minors
(DREAM Acts). In addition, one DREAM measure did pass the House of Representatives in
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2010 but the measure failed to get the sixty votes required to invoke cloture and permit a Senate
floor vote. In 2012, President Obama weighed in on the subject by issuing an executive order to
protect immigrants who would have been eligible for relief under the 2010 Act that granted them
work permits and relief from deportation. Also, in 2012 and as mentioned earlier in the paper,
the Supreme Court struck down some provisions of Arizona’s controversial immigration law in
Arizona v. United States. Yet, the Court left intact a provision authorizing state and local police
to investigate the immigration status of individuals they encounter in the course of their duties.
On some level, these recent federal action might be interpreted as a reassertion of national
government authority in the realm of immigration policy. Nevertheless, there is still no
comprehension action on the part of Congress.
Since passage of the Elementary and Secondary Education Act (ESEA) in 1962 and
creation of the U.S. Department of Education, the federal government has been playing an
increasingly important role in education. States and local school districts more than ever look to
the federal government for leadership, financial support, and accountability. Yet, in recent years,
assistance in these and in other areas has waned. Not only is the federal government unable to
act quickly, decisively, and boldly in important educational matters it has also created an
environment of uncertainty for state and local governments.
At present, four policies are working together to produce uncertainty. First, the No Child
Left Behind (NCLB) component of the last reauthorization of the ESEA in 2001 is pushing state
governments and the federal government toward an inevitable fiscal showdown. States are
facing a 2014 deadline to meet the goal of having 100 percent of students reach proficiency in
reading and math. If this target is not met, states stand to lose federal funding. By all accounts,
no state will meet this requirement by this year, and one recent report estimates that as many as
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80 percent of school will be in this situation. The loss of these funds along with the loss of
funding most localities suffered during the Great Recession, public education, but particularly in
poor districts, would be devastated. Yet, legislative overhaul of NCLB is not imminent.
The inability or unwillingness of members of Congress to compromise on issues like the
creation of charter schools, state flexibility in the use of federal funds, and teacher accountability
has led to a second policy contributing to states’ uncertainty for state and local education
systems. Without new congressional legislation, the president and U.S. Secretary of Education
have used executive authority to grant waivers to states who would meet certain requirements
(e.g., new state standards, new methods of evaluating and aiding low performing schools, new
personnel evaluation systems, and streamlining state reporting systems. To date, a significant
number of states have applied for and received waivers. However, these states worry about how
the reforms they have implemented will fit with federal guidelines when and if ESEA is
reauthorized. In any event, uncertainty is made worse by federalism “end-runs” around partisan
factions.
The third federal policy, which is part of the Obama administration federal stimulus
package, is the Race to the Top (RTTT). The RTTT grants have been awarded to states that
applied and agreed to meet the criteria of the program, which are comparable to the rules
required by NCLB waivers. The most difficult part of RTTT is getting agreement on the use of
new performance-based teacher and principal evaluations and pay scales that are tied to increases
in students’ test scores. Another complicating factor in implementing these programs is the fact
that, while over $4 billion has been granted to state applicants, some states are having difficulty
implementing programs because of opposition from teachers’ unions and lobbies. An additional
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concern is that some states refused to apply for the grants. Thus, uncertainty looms large for
states and school districts as they try to follow yet a third set of criteria.
A fourth factor creating uncertainty is the rapidly approaching end of the American
Recovery and Reinvestment Act (ARRA) stimulus funding. Since 2009, over $100 billion of
stimulus funding was allocated to education and about a third of this money was in the form of
budget stabilization funds that assisted states and localities avoid some employee layoffs and
reduction in services. In spite of the fact that state revenue collections are improving, they are
not necessarily growing as quickly as the stimulus funds are being reduced. In some instances,
states have been able to make up the difference by shifting funds previously allocated to other
program areas. However, if the threats posed by the implementation of federal sequestration
materialize after 2014, education funding could be in peril.
The case of fracking represents an unusual case of the [un]involvement of the federal
government in a newly emerging area. Historically, the federal government has played a primary
role in regulatory policy in commence matters by setting broad parameters and state and local
governments acting as the principal implementers. But, the case of fracking” is unusual because,
unlike a classic federalism problem in which states act in the absence of federal regulation, here
the federal government has largely and deliberately cut itself out of the regulatory picture in
ways that are seemingly more conducive to the big business interests in the state and the states
themselves” (Warner and Shapiro 2013, 474-475). The consequence of what amounts to an
abdication of federal regulatory authority has been the development of a fractured and
fragmented regulatory policy nationwide, increased court action, and interstate conflict over the
transport of fracking waster across state lines (Warner and Shapiro 2023)..
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Federal Mandates
In addition, differentiation and fragmentation in federalism and subsequently IGR is the
product of state efforts to cope with federal mandates or satisfy conditions of aid in areas like
education, elections, and health care. Federal-state hybrids emerge as states seek to retain
elements of their own programs even as mandates, preemptions, and conditions of aid create new
processes and dependencies. In the area of education, however, state and local government are
hit with a “double whammy.” Federal mandates and conditions of aid not only create uncertainty
but also present daunting challenges to state and local governments in their efforts to achieve
compliance in the implementation of federal policy. As seen above, states and their local school
districts have had to continually requests waivers when compliance with mandates such as those
in NCLB and RTTT is not possible. This places not only undue burdens on these governments
but also creates a fragmented and disjointed array of different compliance standards and
exceptions for different states and areas of the country. This fragmentation is also evident in the
elections and health care policy areas (see Shelly 2013: Nussbaumer 2013; Hale and Brown
2013) as sub-national control of the administration of federal elections and the delivery of health
care services creates complex networks of dependencies and interdependencies between the
national and sub-national governments.
Navigating mandates or even conditions for federal aid, as two scholars (Nugent 2009;
Shelly 2013) have suggested, has meant that state and local governments increasingly feel the
need to engage the federal government over the terms of programs for which they traditionally
have had implementation responsibility (e.g., education, elections, and health care). More and
more, state and local officials think that they can no longer depend on constitutional protections
of their power and federal deference to state supremacy on certain policy issues of vital interest
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to them and their citizens. Since 1990, waivers have become an important “informal and extraconstitutional safeguard” of state power and one of the most common methods by which federal
and state governments have reached accommodation on mandates and conditions for aid that
cause dispute (Nugent 2009). Both the federal government and the state governments have
numerous reasons to seek flexibility in the implementation of conditions attached to federal
grants-in-aid and compliance with federal mandates. For their part, state and local officials
governments want to continue to receive federal funding and gain input into the content of the
program they will implement, as well as benefit from a reduction in the amount of federal
oversight and even be permitted to modify policies to fit specific state needs (Weissert and
Weissert 2008). As for federal policy makers who may want to implement bold reforms
successfully, they understand that state and local governments have considerable experience in
certain issues or knowledge of relevant conditions, and this can provide an opportunity to
“borrow strength” from the states or create a sense of raison d’etre or legitimacy for federal
involvement (see Manna 2006). In addition, Congress and the President may view waivers as an
opportunity to push decisions on polarizing topics that could derail legislation onto
administrators and to avoid difficult decisions about the nuts and bolts of policy implementation
and blame when a policy goes wrong.
Waivers in education, health care, and election policy may have other positive
governance qualities. For instance, waivers permit states with less developed capacity to still
participate in a program and address the issues that gave rise to it. Moreover, those states with
more developed capacity may be able to experiment with alternative approaches and may
become models for future nationwide reform. With that said, however, the increasing incidence
of state and local governments “cutting deals” with federal authorities via waivers ultimately
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results in a patchwork of implementation policies scattered across the country rather than a
uniform set of standards for everyone to follow. Such is the case with regard to federal-state,
federal-local, and federal-state-local implementation policies in the areas of education, elections,
and health care.
In sum, the federal government remains factionalized and fragmented which also
characterizes its relationships with both state and local government as well as the relations that
the federal, state, and local governments have with one another.
State-Local Relations
The state of state-local relations, whether it be a snapshot of the present or an assessment
over time, must always be considered within the context or knowledge of local governments
being creatures of their state. Some have compared the relationship between states and their
local government to that of the relations between parents and their children, where states like
parents set rules and expectations and local governments like children obey and carry out
assigned responsibilities. Therefore, from the outset, state-local relationships were cast in the
form of an inferior entity doing the bidding or a superior entity. These early notions about statelocal relations were reinforced when Dillon’s rule was promulgated in what seemed to be a
obscure ruling of an Iowa judge in 1868 in the case of City of Clinton v. Cedar Rapids and
Missouri Railroad Company (24 Iowa 455). Over time, however, the grant of various degrees of
home rule to counties and municipalities has resulted in a moderation in this rather hierarchical,
top-down legal arrangement that exists between states and localities. Nonetheless, the presentday legal relationship between states and their local governments, like what was the case a
hundred or two hundred years ago, still sets the tone for state-local relations.
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When functioning as administrative arms (or “branch” or “satellite” offices) of their state
government or as semi-autonomous local governments, counties and municipalities (and even
townships and school and special districts) are still legally creatures of the state. This
arrangement therefore can lead to relations ranging from cooperation to conflict and from
harmony to friction. In reality, interactions fitting these descriptions are found in a number of
policy areas, but most likely when the issues relate to revenue-raising limits, state mandates, and
home rule.
In sizing up state-local relations since the approximate beginning of Wright’s contractive
phase, it is reasonable to conclude that not much changed. More specifically, local officials
complain about overbearing state regulatory oversight, top-down management approach, lack of
revenue flexibility, burdensome and costly state mandates, too little shared governance, and
insensitivity to or lack of respect for a local government perspective. State officials counter by
saying that, given the unitary nature of the legal status of local governments and expectations of
citizens that they maintain a vigilant watch for over overzealous, incompetent, or even corrupt
local officials, they are simply doing their job. However, both state and local officials are quick
to point out that some of the heightened tension found in state-local relations has been
exacerbated because Congress has become more polarized, the president and Congress are
constantly at loggerheads (i.e., divided government), intense partisanship has become a fixture at
the national and state level, and the Great Recession is still causing lingering economic pains.
From a macro-level perspective, it is easy to see that local officials are not reticent about pushing
back at state officials,2 while a fair amount of state-local negotiation over divisive issues is on
the rise. In examining the most likely areas of contention (program cut-backs, revenue
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inflexibility, state mandates, and home rule), a pattern of fend-for-yourself federalism
nonetheless seems like an accurate portrayal of state-local relations since the 1990s.
The fend-for-yourself descriptor of state-local relations is most evident with respect to
the related issues of state programmatic cut-backs, dwindling state aid, and inflexibility in local
revenue options. In the last several decades, state revenues have been erratic and revenue
stability has eluded many states due to a number of significant downturns in the economic and
changing taxpayer moods, while the effects of the Great Recession have been compared to the
cataclysmic era of the Great Depression. Beginning in 2008, state revenues began to decline
precipitously and have only begun to show signs of modestly increasing (Bowling and Pickerill
2013; NASBO 2013a). Moreover, most states had exhausted their rainy day funds by 2011 (Prah
2011). State revenue projections for the years ahead, while guardedly optimistic, may languish
for some time. This means that state governments, constrained by economic and political
resistance to raising taxes as well as constitutional requirements to balance their budgets, have
had to make deep cuts in public services. This situation may continue for some time.
The service hit the hardest by state cuts has been public education, since it is the largest
discretionary budget item in state control; states have also cut higher education funding radically.
K-12 education cuts led to the loss of thousands of jobs among teachers and support staff and
produced a huge outcry from the public and, of course, from local school districts and employee
unions. In response to these cuts, numerous lawsuits were filed. Additional fallout from these
funding cuts occurred when local school districts and city and county operated schools fell out of
compliance with state education budgeting rules and legislation as well as mandated requirement
associated with NCLB and RTTT.
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Although welfare is not a big budget item for states, welfare programs also were hit hard
during the Great Recession, undermining the national social safety net when it is most needed.
Nationwide, the welfare cuts affected roughly 700,000 families and 1.3 million children who
were dropped from various assistance programs at the height of the crisis in 2011 (Schott and
Pavetti 2011). Needless to say, this situation heightened state-local tensions when local officials
in major urban centers and large central cities with large dependent populations had to find ways
(possibly through reallocation of funds from other programmatic areas) to assist the truly needy.
As expected, state budget woes in recent years did not bode well for local governments
for other reasons. Specifically, state aid to localities, on average, constitutes from 30 to 40
percent of local revenue—a significant portion of their budgets. Again, the Great Recession has
made it necessary for a number of states to drastically cut local aid besides the public school
funding cuts. For instance, Ohio cut aid to localities by one-half in one year (2011), while
Nebraska cut all state aid to cities and counties entirely in 2001 as well (Gurwitt 2011). The
legislators in these states maintained that they would balance the cuts in aid by reforming state
laws regarding collective bargaining to reduce costs at the local level and incentivizing cost
savings at the local level by starting targeted aid programs (Gamkhar and Pickerill 2012).
However, frustrated local officials were hardly placated by these gestures and another “dagger to
the heart” of state-local relations had been delivered.
One of the most contentious state-local issues has to do with state restrictions of revenueraising abilities. State governments have long imposed controls on nearly all aspects of local
financial management—assessment, taxation, indebtedness, budgeting, accounting, auditing,
financing, and, of course, revenue sources. In the 1970s, local government stepped up the pace
of lobbying state legislatures for greater authority to set reasonable property tax rates (subject
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citizenry approval) and to tap a larger variety of revenue sources. Fiscal stress has become a
common ailment of many local governments over the last four decades and not just an isolated
phenomenon. Fiscal stress continues to plague local governments of all sizes and is not a
respecter of section of the country or form of government. Yet, state governments have for the
most part been very reluctant to acquiesce to pleas to grant greater latitude and flexibility in
revenue schemes. In fact, in recent years (even during the midst of the Great Recession), we
have seen a wave of new restrictions that have “centered not so much on keeping local
governments out of financial trouble as on reducing local governments’ demands of taxpayers”
Berman 2005, 51). Other state-imposed limitations on local finances have to do with local
borrowing, and this can sometimes encourage localities to bypass limits by creating special
districts and authorities. While this may solve one problem, it can also create two other
problems—the negative side-effect of producing fragmentation in service delivery and less
accountability.
Another sore spot in state-local relations is the issue of costly and burdensome mandates,
many of which are unfunded. In fact, mandates serve to worsen state-local relations at a time
like the Great Recession when revenues are in short supply and state aid is shrinking. This
situation has prompted Zimmerman to refer to mandates as “the principal irritants of staterelations” (1987, 78). While some mandates cost relatively little money, their collective effects
can have a dramatic impact on local government budgets. In fact, the cumulative effect of bigticket service expenditures in areas like health care, education, land use, judicial and court
systems, and environmental protection can overwhelm county and municipal budgets (Berman
2008, 47). Without mandate reimbursement or mandate rollbacks, local governments facing
their own financial constraints and fiscal stress are hard put to provide simultaneously mandated
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services and services identified by constituents as high priorities. Over the years, municipal and
county officials who believe that they should not have to both “obey and pay” have lobbied state
legislatures basically to no avail in efforts to prevent the enactment of costly mandates or even
repeal existing mandates (Benton 2012).
A final area of long-standing contentiousness in state-local relations is that of home rule.
Again, owing to the fact that local units of governments are creations of their state, local
governments have no right to home rule authority. States have advanced slowly and cautiously
toward authorizing some type of local home rule, but this progress has done little to change or
even challenge fundamental assumptions about the legal status of counties and municipalities. In
fact, home rule jurisdictions have few of the protections against capricious state action that
private corporations, also chartered by the states, commonly enjoy (Berman 2005). And,
although local governments with home rule are usually better off than those that do not have this
protection, “local governments, with or without home rule, have limited power to initiate action
and spend much time and energy trying to ward off mandates, preemptions, and prohibitions that
further limit their authority” (Berman 2005, 46).
In sum, state-local relations, while showing some relatively modest signs of moving in a
more positive direction over the last forty years, are still basically in a contentious state and
fraught with enduring tensions that will not be resolved any time soon.
Interlocal Relations
For many years, interlocal relations were marred by turf wars, jurisdictional jealousies,
and petty rivalries. Common descriptions of local officials by media and state officials was that
they were too laid back, lazy, incompetent, intellectually challenged, corrupt, inept, and operate
with a backwater mentality. Consequently, state and local textbook and commission report
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treatments of local governments and their officials often have characterized them in unflattering
ways. Moreover, anecdotal stories of urban politics, service delivery, and governance-styles
seemed to confirm these characterizations. Most importantly, local governments seemed to
follow a “go-it-alone approach in the provision of myriad services (many of which had
metropolitan or area-wide implications) and only infrequently communicated with one another
about common areas of interest and a broad spectrum of issues where collaboration made a lot of
sense intuitively as well as from a practical perspective. Perhaps most unforgiving was the
unwillingness to think beyond their borders and explore opportunities for realizing cost savings
and efficiencies which collaboration likely could have provided. Not surprisingly, referenda on
city-county consolidations (with a handful of some notable exceptions) were rejected by voters
after heavy opposition was usually expressed by county and municipal officials.
Beginning in the 1980s, local governments and their officials, now feeling the deleterious
effects of fiscal stress and retrenchment and the brunt of taxpayer revolts, seemed to be warming
up to the idea of pursuing collaborative ventures with other governments. Unlike the relatively
few large cities of the mid-1970s that experienced near-fiscal collapse, insolvency, and default of
debt, fiscal problems and uncertainly engulfed cities and counties of all sizes and in parts of the
country. With encouragement from the federal government and requirements built into the A-95
review process, local governments were also beginning to think regionally in areas like planning
and zoning, land use, conservation and environmental protection, water supply, sewage disposal,
and solid waste management. But more than anything else, it was the eroding tax base, taxpayer
disgruntlement, a faltering economy, and sharp cut-backs in federal grant-in-aid monies (and, in
some instances, state aid) that convinced local government officials to put the option of
collaborative service provision on the table for serious consideration. Yet, there was still a
37
hesitancy to engage in collaboration when divisive and sticky issues like loss of autonomy and
shared governance were likely collaboration tradeoffs. Local officials, while intrigued with the
prospects for interlocal collaboration and the benefits of it, proceeded with extreme caution and
doubt. In the end, there was only a modest spike in interlocal collaborative ventures.
The real push to consider seriously interlocal collaboration however did not occur until
the onset of the Great Recession. By all indications, it took a major jolt to the economy similar
in magnitude to the Great Depression to persuade local officials to abandon their parochial
mentality and get past dislikes for and distrust of jurisdictional neighbors as well other
stereotypical views of how local governments ought to operate and seriously consider and pursue
interlocal collaborative opportunities. As one local government official in Florida in 2009
candidly admitted when asked why his city had begun to actively study and enter into serious
negotiations with neighboring cities and the county to jointly fund and provide services like
sewage disposal, solid waste management, vehicle purchasing and maintenance, IT training,
roadside mowing, and parks and recreation, “it was like a gun had been put to our head and the
option of in-house production and provision was no longer a viable one” (Benton, Aikins, and
Miller 2009). In a recent article in a special issue of State and Local Government Review that
was devoted to local government collaboration, Carr and Hawkins perhaps sum up the reason
why local governments feel compelled more than ever to engage in collaborative efforts. They
write that “the fiscal realities many local government face represent a ‘new normal’ in which
accountability to the public is a public agenda priority” (2013, 224). This assessment is
congruent with the conclusions drawn by others who have also studied interlocal collaboration
(Martin, Levey, and Cawley 2012; Elling, Krawczyk, and Carr 2013). For many local
governments, delivering high-quality services within the constraints they now encounter is a
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serious concern. Therefore, these pressures have prompted greater interest than ever before in
creating more shared service delivery arrangements and focused attention on the difficulties
involved in managing complex relationships among participants in cooperative efforts
(Zeemering 2007, 2008; Hawkins 2009; LeRoux, Brandenburger, and Pandey 2010; LeRoux and
Carr 2010; Scholz and Feiock 2010).
Other evidence exists that there has been a resurgence of interest in collaborative service
provision during the Great Recesssion (Perlman and Benton 2012, Benton, Aikins, and Miller
2009). Moreover, a recent survey of local government officials found that collaboration with
other local governments “top[ped] the list of trends taking center stage in 2013 (Reach the Public
2013). While organizations like the Interntional City/County Management Association, National
League of Cities, and National Association of Counties, as well as “good government” groups
and study commissions have endorsed the utilization of collaboration in service delivery and
identify them as win-win scenarios, they are actively providing a rich cache of information and a
virtual “how to” toolbox or library of guides and instructions via reports, case studies, best cases,
webinars, conferences, workshops to walk a local government through the process of planning
for, designing, executing, and monitoring collaborative efforts. If this is not incentive enough,
some state governments are actively pushing local governments to become more proactive in
both the consideration of and participation in collaborative service delivery efforts (Franzel,
Newfarmer, and Stenberg 2013).
To sum up, collaboration in the provision of local government services is a significant
and compelling new and evolving feature and currently defines the state of interlocal relations.
39
Emergence of a New Eighth Phase?
In my summary assessment of the state of American federalism and IGR over the last
four decades, it does not appear that enough has changed to herald the emergence of a new or
eighth phase of IGR. Yet, as history has taught us, American federalism and IGR are not static
or in a perfect or perpetual state of equilibrium. Change has occurred, and some of it has been
significant and even dramatic. Furthermore, this change has had an obvious and profound
impact on the content and tenor of federalism and relations between officials at the federal, state,
and local levels of government. These changes, like changes in the past, have been prompted by
the necessity to respond to new and extraordinary political, economic, and social problems and to
the new realities associated with public opinion, ideology, and partisan shifts. What has been
happening in recent years in the federal system and to IGR can be best described as a continuous
process of further refining or flushing out the basic contours and boundaries of the contractive
phase. At the same time, there has also been an unremitting layering or superimposing of many
of the earlier phases of IGR on top of the current contractive phase.
With that said, there is clear evidence of two newly evolving patterns in IGR. First, there
is the reoccurring picture of increased fragmentation in federal-state, federal-local, and federalstate-local relations, where there is a patchwork of polices across the country. As seen in the
summary assessment earlier, one of the elements of “fragmented federalism” is the development
of state-specific policy. Many times, these policies are fashioned in response to a perceived need
to which the federal government has failed to respond to, even though it may be a purported
“national interest.” A second element can be seen in state policies that might be developed in
response to federal guidelines, like in the case of education waivers (NCLB) or health
insurance/Medicaid (PPACA). Another element can be found in state-specific policies that have
40
high political salience and are motivated at least in part by partisanship (immigration reform,
abortion restrictions, right-to work laws, and legalization of same sex marriages and marijuana).
In sum, IGR are deeply affected by political factions, and fragmentation continues as state policy
development and policy implementation occurs in a piecemeal fashion by the states often driven
for all the wrong reasons.
A second newly evolving pattern that is evident in the interlocal arena is the increasing
incidence of collaboration among local governments. While interlocal collaboration has always
been an attractive alternative to in-house provision, it had not been widely utilized until local
governments began to experience the pains of severe fiscal stress, beginning in the early 1980s.
With the onset of the Great Recession and the prediction that the effects would likely linger for
most of the remainder of the second decade of the twentieth century and may be beyond, local
governments have recognized the dire necessity of findings ways to cut the cost of service
provision. There is a “new normal” in how local governments must operate in the future if they
are to survive, and interlocal collaboration is likely to be an integral part of this new way that
local governments conduct business in an environment with fewer resources and a public that
expects leaner government and cost efficiencies.
Therefore, the significance of these developing two patterns may suggest the need to add
two new federalism metaphorical descriptors (“fragmented federalism” and “collaborative
federalism”) to the three descriptors already identified by Wright. These recommended
additional descriptors have been inserted (in italics) in Table 1.
In addition to these observations about American federalism and IGR and the conclusion
that the contractive phase persists, it is important to consider the need for some qualifications as
to how various phases of IGR are depicted and subsequently viewed. First, in examining the
41
scholarly literature and the ongoing intellectual dialogue about IGR, it seems that less
consideration is given to interlocal relations in spite of the fact there are more interlocal IGR
actors and more governments involved than at the national and state levels. Yet, most
characterizations of American federalism IGR (including IGR phases) revolve around what is
occurring in the federal-state, federal-local, and federal-state-local arenas. Therefore, should
these descriptions of IGR, generally, and IGR phases, specifically, be more balanced in their
content, discussion, coverage? Would additional scholarly attention to interlocal policies,
politics, and issues assist in shedding more light on the need for a balanced treatment in efforts to
accurately and fully depict the substance and nature of IGR?
A second qualification would be to view, study, and describe IGR, in general, and IGR
phases, in particular, from a “multi-angled” perspective. While efforts to generalize about a
subject matter as broad and heterogeneous as IGR have their usefulness, much is lost for the sake
of brevity and identifying overall common characteristics. Simply put, the diversity of relations,
richness of context, uniqueness of mission and goals, and countless nuances implicit in the
various IGR arenas is often lost in attempts to summarize and generalize for the sake of
simplification and brevity. Therefore, it may be useful for a better understand the federal system
and resulting IGR if one were to view them through a kaleidoscope, as suggest by Zimmerman
(2008, 201-202). The utility of this approach is that it may lead to varied and more enlightening
assessments and portrayals of American federalism and IGR because it allows for the possibility
that IGR participant perceptions and IGR mechanisms may differ noticeably from one arena to
another.
42
NOTES
1.
As noted below, the Courts decision in NFIB also held that the provisions of the PPACA
that required states to accept all the conditions placed on them to continue participating in
an expanded Medicaid program or forfeit all federal funding for the program were overly
coercive on states and violated principles of state sovereignty. This holding again
reinforced key Rehnquist Court precedents on state sovereignty, namely New York v.
United States (505 U.S. 144, 1992) and Printz v. United States (521 U.S. 898, 1997). In
addition, the Medicaid holding seems to put teeth in the Court’s spending clause
jurisdiction articulated in South Dakota v. Dole (483 U.S. 203, 1987).
2.
For an excellent discussion of local governments pushing back against state policies, see
Riverstone-Newell 2012, 2104.
43
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