Briefing Report: Localized Federalism - A Roadmap for Government Transformation

Wednesday, April 17, 2013


"The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

The Tenth Amendment of the United States Constitution was written to emphasize the limited nature and scope of the powers delegated to the federal government. In delegating just specific powers to the federal government, the states and the people, with minor exceptions, were free to continue exercising their sovereign powers.

The Tenth Amendment embodies federalism, the idea that federal and state governments have separate areas of activity and that federal responsibilities were "few and defined," as James Madison noted. Historically, federalism has acted as a safeguard of American freedoms. Indeed, President Ronald Reagan noted in a 1987 executive order, "Federalism is rooted in the knowledge that our political liberties are best assured by limiting the size and scope of the national government."[i]

Federalism and Local Government

“It is one of the happy incidents of the federal system that a single courageous State may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.”
- Supreme Court Justice Louis Brandeis, 1932

Justice Louis D. Brandeis’s metaphor of the states as "laboratories" for policy experiments is perhaps the most familiar and clichéd image of federalism.  But could not this quote also apply to our local governments?  Where government is the closest to the people involved, and people are that much closer to policy makers, it is time that we begin to recognize our cities as America’s greatest laboratories for government innovation.

Across the country, local governments are mobilizing citizens in innovative ways to set priorities, make decisions, overcome conflicts, and solve critical community problems.  Local government officials, both elected and appointed are governing their communities in participatory, deliberative, collaborative ways.[ii]

Rather than Justice Brandeis’s image of 50 laboratories, imagine thousands.  More to the point in California, nearly 5,000 laboratories of experimentation and innovation with the ability to create new ideas, budgetary practices and approaches to policy.

Local Laboratories

From the Articles of Confederation to the unveiling of the Constitution, the American federal system was absolutely unique. Older nations like France treated their provinces as mere administrative subdivisions of their central government. But when the 13 original colonies joined to form a "more perfect union," they reserved large swaths of power for the states. 

Today, it can be argued that the State of California treats its counties and cities as mere administrative subdivisions of a government that is becoming ever more centralized, ever more heavy handed with its menagerie of mandates and regulations.

When it comes to size, California’s state government in Sacramento, where fiscal power has been centralized, is too distant and unrepresentative to serve a diverse and sprawling population.  This problem is only compounded as California’s population grows, increasing the number of citizens each Assemblymember and State Senator represent.  Moreover, in the two intervening years between redistricting efforts, large swaths of the state, and citizens in those regions are only represented by a caretaker Senator of an adjacent district. This makes it extraordinarily difficult for regions to get what they need from a distant state government.[iii]

When there are limited opportunities to tax or assess or borrow, and there is proper oversight by an interested and engaged public, local governments must make sure that their limited revenues match their public policy priorities.  The result is that local governments are often ahead of the state and federal government in pursuing popular democratic policies or being fiscally prudent in their budgeting practices.  Local governments are far more responsive to public opinion and election outcomes, and often more quick to respond to economic conditions.

Local governments are drivers and hubs of economic development in their respective regions.  Indeed, they provide an effective platform for trade and industry when considering availability of capital, labor and processing or transit opportunities.  Cities provide environments that allow businesses to flourish or fail.  Further, they are investors in education, infrastructure, and other public goods that are critical to the state and nation’s long-run productivity and growth.

In California specifically, local governments are uniquely positioned to pursue innovation, apply technological solutions and implement open government initiatives that engage the public, save money and improve overall civic life.

No Experimenting Allowed

Unfortunately, local governments are not completely free to pursue their own innovations.  Today there are several barriers that prevent local governments from freely operating as “laboratories” of democracy and policy.

The first barrier is the state and local relationship.  Because cities derive their power from the state, city and state interactions can never be a mirror reflection of those between federal and state government.  Interactions will always be weighted in favor of the state to one degree or another, and often, this puts cities at a disadvantage for which they often bear the costs which can come in the form of unreasonable mandates and regulations.

Today, local governments continue to face a difficult budget climate.  Some may rightly see this as a severe barrier to innovation.  However, even in the midst of the current economic malaise, many cities are using the opportunity to approach tough, complex, and controversial decisions by seeking input from the community about their wants and needs, their evaluation of services and their priorities.

Local governments are seizing the initiative by experimenting with new and innovative policies that can only come from local thinkers (and doers) living in communities seeing local problems, and testing solutions.  These innovative solutions and approaches can help lay the foundation for future growth and prosperity.

Perhaps the greatest barrier to local governments acting as laboratories of innovation and economic development in California is an unprecedented level of mandates, taxes, rules and regulations.  These factors have become one of the heaviest burdens on California’s cities and counties, eliminating the flexibility necessary to meet local needs while at the same time jeopardizing the ability of local governments to deliver on critical priorities and programs.

Indeed, if local governments can be fairly described as laboratories for innovative ideas, state legislatures tend to be innovation killers.  As we have seen in California, the quickest way to stop cities and counties from adopting ordinances and policies that special interest groups find objectionable, is to get the Legislature to prohibit them or make them exceedingly difficult to pursue.  Or, rather intentionally or unintentionally, simply overwhelming localities with a veritable cornucopia of mandates and regulations from the State eliminates much of the freedom cities and counties have to pursue their own priorities and objectives.

Trickle-Up Ideas, Not Top-Down Mandates

“…we Republicans define government's role where needed at many, many levels, preferably through the one closest to the people involved.”
- Barry Goldwater

Through smart thoughtful strategic planning, local governments can develop and implement local plans and priorities that comprehensively and holistically address their individual needs and opportunities.  At the same time this allows new ideas to be tested on a limited scale to see if they work and can be applied on a broader scale.  And where there is failure in policy, those who are closest to the local government officials can make expeditious change and improvement. 

This approach has two primary benefits to the state.  First, it helps ensure that funding and resources fulfill local needs, not State desires.  At the same time, by allowing local governments to deal with local issues, the Legislature is better able to focus on matters of State importance such as transportation, housing and public safety.

In Conclusion

“Freedom is lost gradually from an uninterested, uninformed, and uninvolved people.”
- Thomas Jefferson

Federalism gives people choice and options.  Federalism keeps government within the reach of the individual, keeps government in its place, and people actively involved.  Today, the people have no control over the vast federal and state bureaucracies.  As such, a new form of localized federalism within California’s cities and counties can be the mechanism by which power can be returned to the people. 

Restructuring state and local government involves difficult decisions about what services are best performed by each level of government. The answers are not simple and often involve important value judgments about the kind of state we want to live in.  And while the answers are not simple, the principles are: Decentralize at the high level of state government, and empower local governments with the tools and flexibility they need to solve their own problems and control their own destiny.

[i]  Ronald Reagan, Executive Order 12612, October 26, 1987
[ii] McGrath, Mike. Philanthropy for Active Civic Engagement. The New Laboratories of Democracy: How Local Government is Reinventing Civic Engagement. May 2009.
[iii] Matthews, Joe. Public Policy Institute of California. To Right-Size California Government, Empower the Regions.

For more information on this report or other Local Government issues, contact Ryan Eisberg, Senate Republican Office of Policy at 916/651-1501.