August 6, 1964
PAGE 18174
ADDRESS BY SENATOR MUSKIE ON FEDERAL-STATE-LOCAL RELATIONS
Mr. HILL. Mr. President, in April the junior Senator from Maine [Mr. MUSKIE] delivered a most timely, informative, and thought-provoking address on Federal State-local relations in government, at the annual convention of the Alabama League of Municipalities.
As we know, Senator MUSKIE, in his position as chairman of the Subcommittee on Intergovernmental Relations, has given much time and study to this important area of governmental interest; and it is a pleasure for me to request unanimous consent that his able address be printed at this point in the RECORD, so that his presentation and recommendations may receive the wider circulation and study they merit.
There being no objection, the address was ordered to be printed in the RECORD, as follows:
INTERGOVERNMENTAL RELATIONS
(BY EDMUND S. MUSKIE, U.S. Senator, State of Maine)
Whether we work as public officials at city hall or in the State capitol, at the courthouse, or in the Halls of Congress, we are all part of the same Federal system -- the oldest unchanged system of constitutional government the world has ever seen. Anyone who has studied this system or served under it cannot fail to realize that the basic foundation of our country is, and hopefully always will be, local self-government. Our national responsibilities today in both the domestic and international sphere cannot be met unless we successfully discharge our local responsibilities.
For 18 years our attention and resources have been focused on meeting the demands of national security and international relations. Our needs at home, as a result, have been subordinated to this paramount concern; many have been neglected and some have even been ignored.
DIVIDE OUR ATTENTION
We have reached the time, however, when we must divide our attention. Tensions in world politics are certainly not ending.
The threat to freedom has certainly not passed away. We must obviously continue to maintain America's national posture. But it would be foolish for us to continue -- as we have tended to do in the past -- to ignore the challenges that confront us right here at home. The continuing strength and dynamism of our entire social and political system depends upon a positive response to the problems confronting our States and their local units of government.
If we catalog the most urgent of our domestic issues, a majority of them appear to be primarily local in nature. Water and air pollution, urban sprawl, education, economic development, and adequate transportation systems, to mention only a few, are challenges that initially demand a forceful local response.
The States and the Nation obviously have a vital interest in the successful solution of these local problems. It does not follow, however, that the central government either in Montgomery or Washington can achieve solutions by taking over wholesale the rights and responsibilities of local governments. Federal and State involvement must not destroy local government but must assist it, and supplement it and enable it to surmount its difficulties.
DEFEND INDEPENDENCE
It is constitutional and fitting that we should be stout defenders of the independence and autonomy of each level of government. But as the then Vice President Johnson pointed out in an address last August to the 40th Annual American Municipal Congress in Houston: "There is a lesson we can learn and apply from the world today. The most independent local governments on earth are those in the underdeveloped nations. In fact, the major obstacle to development in many parts of the world is the non-cooperation, jealousy, suspicion, and enmity, village to village, tribe to tribe, section to section. What much of the world has still to learn -- what we must not forget -- is that levels of government must function interdependently if they are to succeed independently."
This is wise counsel. The result of a survey done by the Senate Subcommittee on Intergovernmental Relations, of which I am proud to serve as chairman, indicates that most State and local officials accept that counsel.
The responses from more than 460 State and local officials gave the subcommittee and the Congress a balanced and informed cross section of grassroots opinion concerning the broad issues bearing directly on the future of American federalism. More than 75 percent of the respondents accept the principle of cooperation as the approach to be followed in Federal-State-local relations. What does this involve?
First, Federal-State-local relations are essentially one system when it comes to practical matters; but each level must attempt to maintain its separate identity and source of power.
Second, the functions of Government are not and cannot be neatly parceled out among the three levels; instead, several activities are undertaken jointly and result in significant continuing responsibilities to be exercised by all on a partnership basis.
POLICYMAKING PROCESS
Third, policymaking in the intergovernmental process is and must be shared among the various public bodies in the three echelons, so that the basic principle of traditional federalism is preserved.
Fourth, Federal grants-in-aid continue to be an inescapable and important feature of contemporary intergovernmental relations; they provide a necessary means whereby the three levels of government can collaborate to fulfill common purposes; if not encumbered with excessive administrative red tape, they can also strengthen State and local governments.
Fifth, representative, responsive, and responsible State governments are vital to the proper functioning of American federalism; they collect a sizable proportion of our total revenues, directly administer several important governmental services, and provide much-needed assistance to the local units of government.
Sixth, when properly empowered, financed, and aided, county and municipal governments -- singly and in voluntary association with one another -- can themselves meet many of the challenges that urban growth has created.
And lastly, Federal-State-local relations should be viewed primarily as a network of functional, financial, and administrative arrangements which seek to advance the common good; a power balance, however, must exist among the three levels of government for successful collaboration in this area, if we are to preserve the voluntary stimulus that is so essential for any full pledged cooperative endeavor.
COOPERATIVE FEDERALISM
These, then, are the elements of what I like to call cooperative federalism:
1. Our system of government;
2. Operating on three levels;
3. Meshed into a flexible, living, dynamic instrument for dealing with our common problems;
4. Sharing responsibilities in such a way as to insure:
a. That no problems are ignored;
b. That each level of government is equipped to do its share of the job competently;
c. That each problem is dealt with effectively; and
d. That each level of government has enough authority to meet its responsibilities, but that such power is subject to safeguards which will insure against abuse of that authority.
Are these impossible standards? My answer is that we have come close to meeting them for 175 years.
If we focus our attention on the financial and administrative aspects of Federal and local relations, Alabama emerges as one of the foremost proponents of cooperative federalism. These practical aspects of intergovernmental relations -- it is to be remembered -- tell us more about the Federal system than most of the political slogans and campaign oratory that deal with the subject.
IN 20TH CENTURY
To begin with, the dollars and cents of federalism reveal that big government at all levels has been one of the major developments of the 20th century. Over the past 60 years, aggregate Federal, State, and local taxes experienced nearly a hundredfold increase. Total governmental revenues jumped from $1.7 billion in 1902 to nearly $149 billion in fiscal 1962. Total governmental indebtedness amounted to an average of $41 for every man, woman, and child in 1902.
Today it amounts to more than $2,041 in current dollars. Past wars, the depression, the cold war, inflation, the population explosion, and a mushrooming metropolitan growth are basic causes for these increases.
The real question raised by this development, however, is whether any one level has experienced a disproportionate growth, to the detriment of another. During the thirties and World War II, Federal revenues greatly overshadowed those of State and local government. The record since the war, however, clearly demonstrates that this gap is closing rapidly.
In 1944 the State and local share amounted to only one-fourth of all governmental revenues. Today it is nearly two-thirds as large as the Federal take, despite the fact that the Federal Government must finance foreign policy and the astronomical costs of defense from its share.
IN THE FIELD OF DEBT
The same pattern reveals itself in the field of intergovernmental debt. Federal indebtedness increased by 15 percent between 1946 and 1962, while State and local debt skyrocketed 410 percent during the same period; and private indebtedness reached an all-time high of more than $322 billion by 1962 -- a 420-percent increase. In 1946 the national debt constituted 58 percent of all public and private debt. Sixteen years later, this proportion had shrunk to only 27 percent.
Compared with State, local, and private standards, the postwar Federal growth rate has been modest, even conservative. The State and local figures demolish the widely shared belief that these levels of government are unwilling or unable to assume their proper share of the financial responsibility for the expanding services required to meet today's problems. In fact, if we concentrate solely on the total direct civil expenditures of all levels of government for fiscal 1962 (this excludes Federal defense, space, veterans and interest costs), we find that the Federal Government's proportion came to only 27 percent, as against more than 48 percent for local governments and nearly 25 percent for the States.
Big cities, big counties, big States, as well as a big Federal Government, are obviously with us, whether we recognize it or not. And they have grown because the problems have grown, in size and complexity.
CONTROVERSIAL CHAPTER
Nationwide, Federal aid to State and local governments is probably the most controversial chapter of the intergovernmental relations story. In absolute terms, these expenditures have increased greatly during the past 3 decades. Federal grants totaled about $200 million in the early thirties, and even with numerous depression programs the figure came to only $2 billion in 1940. During World War II it slipped back to less than $1 billion annually. Most of the real growth, then, came after 1946 with the expansion of existing grants and the enactment of some 49 new programs, and, in the last fiscal year, it amounted to $7.9 billion.
Overall, these figures dramatize the need to supplement local resources. We should recognize that the postwar growth in national production, population, urbanization, and standard of living has generated mounting requirements for additional governmental services, especially at the State and local level. And the fact is that the State and local governments have found that their resources are limited and strained. Cooperative federalism has been an effective means for supplementing these resources-as a way of making available to lower levels of government the revenue sources of higher levels of government.
CENTRALIZATION HALTED
This device has thus slowed down the trend to centralization, and has enabled lower levels of government to retain responsibilities and jurisdiction they might otherwise have lost. The picture of shared revenues in Alabama is a case in point. Federal payments totaling nearly $182 million accounted for over 31 percent of your total 1962 State and local revenue. Only three other States had a higher percentage for that year. Clearly Alabama recognizes the need for Federal involvement in various domestic programs and accepts the grant-in-aid device as a means of solving urgent common problems.
The National Government, of course, has no monopoly on grants-in-aid. While it dispersed $7.9 billion to State and local applicants during the last fiscal year, the States awarded nearly $11 billion in grants to their own local governments. Last year over 30 percent of Alabama's general expenditures was earmarked for local government purposes. State aid provided nearly 41 percent of your total local revenues.
Is it better for a higher level of government to share its revenues with lower levels, or to assume more of the responsibilities of lower levels? As you well know, both National and State aid is of crucial importance at your level of government. The significance of these two grant sources can be better appreciated when we remember that approximately $7 out of $8 of all local revenue are provided from the much-criticized and overburdened property tax. At present its $20 billion annual yield nearly equals the combined revenues of all State-imposed taxes. Nationwide, almost 50 percent of the greatly increased State and local tax burden required to finance postwar increases in local services has been borne by this tax. It is understandable, therefore, that many local officials here and throughout the country accept the grant-in-aid device as an indispensable feature of our intergovernmental relations system.
EQUALIZATION FACTOR
The equalization factor is another dimension of Federal-State -local relations. Since World War II, Congress has paid increasing attention to the question of whether the distribution of Federal grants should take into account the differences in the ability of States and their local units of government to finance these grant programs from their own sources.
Recognition of this varying capacity has usually taken the form of attempting to compensate for the imbalance by including an equalization provision in the matching and/or apportionment formulas. Many programs, however, do not include this feature. In some, it has been applied in a way that fails to accomplish the objectives of Congress. In still others, it has been ignored altogether, when changing conditions indicate a pressing need for its inclusion. Of all the Federal grants enacted prior to 1963, only about one-third contain fairly explicit equalization provisions. Putting it more bluntly, the intent of Congress to level out some of the inequalities in grant-aided State programs has not been fully realized. And inadequate consideration has been given to variations in program needs and in the ability of the States to support grant activities.
A question of growing concern in the Intergovernmental relations field is: To what extent should the Federal Government be involved in direct relationships with local government? To what extent should the Federal Government undertake to promote more effective local action in dealing with problems which overlap local jurisdictional lines? Metropolitan area problems are especially involved in the answers to such questions.
GREATER COHERENCE
I firmly believe that the Federal Government must recognize the need for greater coherence, greater economy, and convenience in its local development programs by reexamining the 40-odd existing grant programs that bear directly on urban activities. Congress and the appropriate executive agencies should authorize and encourage, to a greater degree than has been the case in the past, responsible joint participation by local governmental units that have common problems and common program objectives. Federal programs should promote, not hinder, procedures for interlobar cooperation and joint exercise of powers. Specific Federal authority for joint participation in Federal aid projects by two or more eligible State or local governments exists in only one-quarter of these programs, and only another one-quarter has implied legislative authority and administrative regulations permitting such cooperative efforts. We all have a stake in correcting this condition.
The States also have a responsibility in enacting legislation to encourage joint undertakings by political subdivisions that face an area wide problem. I understand that Alabama does provide partial authorization for such inter jurisdictional contracts and joint agreements. And your State constitution does contain a provision permitting such activities. An enactment last year by the Georgia Legislature, however, merits close examination. The Georgia act attempts to actively, not passively, encourage interlocal projects by authorizing increased State aid as an incentive to political subdivisions to join in such undertakings.
FEDERAL-LOCAL GROUP
Of all the Federal-local development programs, 25 are in the direct Federal-local category. To encourage greater State participation in these programs, some authorities recommend that these grants be initially channeled through the States. Such a proposal would affect some 22 programs, with a 1963 total of nearly $23 million, in which you directly participated.
While believing that the States have a major responsibility in developing their urban and regional areas, I doubt that such a proposal would be wise. In the first place, the nature of the problems involved does not always require that all levels of government be involved in every program of joint action.
Secondly, a uniform administrative pattern for channeling all Federal funds for urban and related activities would undermine the flexibility that has contributed so greatly to their successful operation. And finally, the failure of many States to develop an understanding of and sympathy for these cooperative efforts should not be overlooked.
In light of these considerations, I believe the States, not the Federal Government, should seize the initiative. They should first establish appropriate administrative machinery to carry out their new responsibilities, make significant financial contributions, and, when appropriate, provide technical assistance to the local governments concerned. Then and only then should Congress require that such Federal grants to local governments be channeled through the States.
In brief outline, these are the significant dimensions of intergovernmental finances as they relate to the Nation, to Alabama, and her local units of government. If they tell us anything concerning the applied theory of federalism, they tell us this:
BIG GOVERNMENT
First, big government is as characteristic of all jurisdictional levels in Alabama as it is throughout the rest of the Nation.
Second, like their counterparts elsewhere your State and local governments have indicated a capacity and a willingness to assume a major share of the fiscal burden imposed by the requirements for expanded public services.
Third, with soaring State and local budgets, Federal aid has taken on added and crucial significance for decision makers at these levels of government.
Fourth, the specific inclusion of an equalization factor in one-third of the existing grant programs has somewhat benefitted yours and other less wealthy States; its exclusion from the remaining two-thirds, however, hinders the reduction of inequality in program performances here and in other States, like my own.
COLLABORATION PATTERN
Fifth, a pattern of collaboration in the fiscal and program areas exists among the three jurisdictions, and the Federal and State grants-in-aid are the chief manifestations of this cooperation.
Sixth and last, this grand design of cooperative federalism has emerged without undermining the independence and freedom of fiscal choice of the State and local units of government; on the contrary, many authorities believe, and I concur, that these joint efforts have actually reinforced the identity of these governments.
These are the hard dollars and cents facts of federalism in the Nation, in Alabama, and in her local governments. Your record suggests that you prefer interdependence, not anarchy -- and cooperation, not jealous competition. If the spirit prevails here and throughout the other 49 States, we can confidently face the lengthy agenda of unfinished business that confronts us at each of our different levels. Success in this great enterprise will dramatically demonstrate that the Federal Government, the States, and the local governments are allies, not adversaries, under the Constitution. Equally important, the world will again observe that we can work closely together for the benefit of our country which we all seek to serve.