Suppose Iowa decided to slap an export tax on all the corn that leaves its borders. A stiff tax, say 30 percent of the price. Food prices would rise nationwide, maybe even worldwide.
What if the states around the Great Lakes formed a cartel to control use of the world's largest pool of fresh water? What if South Dakota and a lot of other states decided to empty their prisons into California?
The first steps toward these hostile acts have already been taken. The opening salvos in a new war among the states, spawned by recession and federal budget cuts, are bringing state governments to court and to Congress with more and more arguments that make the debates over joining the 13 colonies look like child's play.
The fights of the 1700s were mostly about borders and water rights. While such clashes will endure as long as rivers meander, the battlefield has expanded to include "just about anything that can go across a state boundary," including pollution, said Mavis Reeves, University of Maryland political scientist and coauthor of "Pragmatic Federalism." "Nothing like a Berlin Wall exists to keep the states from passing their problems along."
Iowa Gov. Robert D. Ray, a Republican, proposed the tax on corn at the Midwestern Governors Conference in Milwaukee last year. "People were startled by the idea," recalled Ray's assistant, David Oman, in an award-worthy understatement.
Such a tax would be "reciprocation," he said, for the severance taxes that oil- and coal-rich states like Louisiana and Montana have been charging Iowa when it buys fuel.
Although 33 states have some form of severance tax to bring in money as a natural resource declines, energy-rich states have lately been using the device as a weapon, according to their less fortunate neighbors. The Northeast-Midwest Coalition, one of the alliances that states with similar interests have formed recently, calculated that 12 energy-exporting states in the South and West will earn $193 billion from such taxes over the next 10 years.
"It's not fair. They did nothing to gain that money," said Dave Merkowitz of the coalition, "and now they can lower tax rates and compete for new industry even harder."
The pain is sharper for the industrial Northeast and Midwest because it represents a turning of the regional tables. "When we were the industrial dynamo of the national economy, a lot of the revenue we paid in taxes went to the South and West to build flood-control systems, highways, military bases, everything that allowed those states to get prosperous," Merkowitz grumbled. "We say to them now, 'Are you a part of the union?' "
The states were friendlier when the Great Society was dishing out dollars to every district. But then the price of oil began climbing.
New York City's financial crisis in 1975 "was to municipal finance what the collapse of Penn Central and the teetering of Chrysler were to corporate finance:" a loud warning bell, a publication of the federal Advisory Commission on Intergovernmental Relations said.
Then there was California's Proposition 13 that meant taxpayer revolt nationwide, and finally the Reagan administration's New Federalism.
Where federal aid provided 25 percent of state and local spending in 1981, it will be only 15 percent by 1986, according to National Governors Association figures. Topped off by recession, which means more unemployment and welfare checks going out and less coming in from sales and taxes, the mix has most states at the barricades.
"The states have always been competitive, but the newer issues like severance taxes genuinely produce distinctions between winners and losers, and the impact is substantial," said Stephen B. Farber, NGA executive director.
Louisiana's tax on natural gas processed in the state was challenged in the courts by Maryland and seven other states, and was struck down by the Supreme Court last year on grounds it discriminated between Louisianans and other Americans in violation of the interstate commerce clause of the Constitution.
But the Supreme Court upheld Montana's 30 percent severance tax on coal, which makes no such distinction.
"We lost the battle to overturn the Montana tax but we opened up a major front in the war," said Merkowitz.
The ruling invited Congress to legislate in the severance tax mine field, and several bills are pending that would impose ceilings or levy a federal tax to be redistributed to the states.
Some battles are to keep things out, not to keep them in. Northeastern states claim pollution from Midwestern smokestacks makes acid rain that kills Adirondack fish, and they are pushing Congress to clamp down on Ohio Valley industries.
At the local level, the Public Service Co. of Indiana built a coal-fired power plant on the state border at Jeffersonville, apparently knowing that prevailing winds would carry its sulfur dioxide and soot across the Ohio River into Kentucky.
Like many states with similar foxy neighbors, Kentucky now gets into trouble for violating Environmental Protection Agency air pollution ceilings.
"It's really frustrating. There used to be an EPA task force of officials to deal with these interstate problems, but it's apparently not in effect any more," said Jackie Swigart, secretary of Kentucky's natural resources and environmental protection department.
In South Dakota, Gov. William Janklow recently disclosed that 93 people charged with forgery, burglary, theft and other crimes were given the choice of being prosecuted or moving to California over the past five years. All of them moved, he said. California officials called it outrageous, and other less printable things.
Although this dispute was linked to California's refusal to extradite a man wanted in South Dakota, South Dakota is clearly pioneering a new way for states to save money. Other frugal states are exporting welfare recipients and unemployed workers, or trying to keep new ones out.
When Florida first ran out of federal relief for its thousands of Haitian refugees, it notified each of them that they might find additional help from any of 10 other states. At the same time, Texas officials printed brochures with the warning that state welfare payments are the nation's second lowest, after Mississippi, and show no signs of rising.
In Michigan, Gov. William G. Milliken, another Republican, last week hosted a gathering of eight governors or their representatives and two Canadian provincial officials whose turfs border the Great Lakes to discuss how to keep control over the water. They voted to block any attempt to divert water without agreement from all bordering governments.
Milliken predicted the "availability of adequate fresh water is the coming national and international resources issue of the decade" and will rival concern over oil supplies during the 1970s.
Water rights have always been points of interstate conflict, but technology is now available for really big battles. Nebraska plans to sue South Dakota to keep it from diverting part of the Missouri River into a Wyoming coal slurry pipeline, an agreement governors and other experts at the Great Lakes meeting viewed as a bad omen.
El Paso, Tex., is challenging a New Mexico law that forbids any out-of-staters from using any of the groundwater beneath New Mexico, and the Supreme Court will soon rule in the Sporhase case, in which two Colorado farmers oppose a similar Nebraska law. The verdict will affect laws that lock up the water in dozens of states.
"If the court upsets this existing balance, a water war between the states would ensue, sending them in pursuit of each other's water supplies," Nebraska's legal brief argued.
All this is not to deny that the states are also trying harder to cooperate with one another in various commissions, compacts and associations tackling everything from joint hazardous waste disposal to soil conservation. The Great Lakes Basin Commission, trying to allocate water, is having it both ways.
"The idea is to agree before the disagreements arise," said Milliken's Washington aide, David Harrison.