While Washington lawmakers battle again this week over how to keep the federal government running, their state and local counterparts have been busy raising money for public works and otherwise taking over duties that Congress is too paralyzed to handle.
The partisan gridlock that has gripped Washington for four years has gradually thrust more responsibility for taxes and administration onto states, cities and counties, according to officials and private analysts.
The change has drawn praise in some quarters, especially from conservatives who say state and local authorities are closer to the people and hence wiser about governing and handling money.
But it’s also set off alarms around the country, where state and local budgets aren’t growing fast enough to pay for all the investments needed to modernize aged infrastructure and deal with social strains caused by widening economic gaps.
“States and cities are stepping up to the plate, but there’s no way that they can do everything that’s been done in the past without the federal government being a stronger, better partner in all this,” said Marcia Hale, president of Building America’s Future, a nonpartisan coalition that supports increased infrastructure spending.
The immobility in Washington and the 2013 mandated budget cuts known as sequestration have forced state and local governments to assume numerous duties.
Congress can’t agree on a transportation bill? Fifteen states, including Virginia and Maryland, have raised gasoline or sales taxes in the past three years to pay for roads, bridges and transit, according to Building America’s Future.
The Department of Housing and Urban Development curbs grants to support affordable housing? Cities such as the District and New York are pumping money into programs to soften the impact of urban gentrification.
On immigration, cybersecurity and the minimum wage, state and local jurisdictions are forging policy in arenas where Congress and the White House once exerted sway but no longer can agree.
The trend has had some curious political fallout. Many red states are among those that raised gasoline taxes, as the need to fix crumbling roads led Republican governors and legislators to back increases that they had resisted.
The pressure to pay for public works recently made reluctant bedfellows of New Jersey Gov. Chris Christie (R) and New York Gov. Andrew M. Cuomo (D).
The two grudgingly offered this month to line up financing for half of a massive project to build a Hudson River rail tunnel at an estimated cost of between $8 billion and $12 billion, if the federal government would pay the other half.
As recently as August, Cuomo said that New York should not have to pay for any of it, saying, “It’s not my tunnel.” Also, in a significant change that adds to the states’ burden, much of the federal contribution will come as low-cost financing rather than outright grants.
In another twist, in many of the nation’s big cities, Democratic mayors are taking on more responsibility because the GOP has succeeded in reining in federal programs. One example is the push by cities to raise the minimum wage much higher than the national pay floor, set by Congress, of $7.25 an hour.
“There’s an odd sort of equation here where Republican ideology at the national level is combining with Democratic leadership at the local level,” said Bruce Katz, director of the Metropolitan Policy Program at the Brookings Institution.
“There’s a new math, frankly, whether it’s transportation, housing or economic development. The new math is that this is going to be locally owned, locally designed and locally financed,” said Katz, co-author of “The Metropolitan Revolution: How Cities and Metros Are Fixing Our Broken Politics and Fragile Economy.”
Close to home, the shift of burdens from Washington has led Fairfax County to scrounge for funds to educate immigrant children, provide rental assistance to low-income residents and pay for stormwater projects. One result has been county property tax hikes, including a half-cent increase in 2014.
“Certainly the inaction and dysfunction at the federal level are getting in the way of our being able to address these issues,” Fairfax Board of Supervisors Chairman Sharon Bulova (D) said. “The bottom line is that local governments are picking up the tab for costs that the federal government used to pay for, and should be paying for.”
Across the Potomac, loss of federal dollars has forced Prince George’s County to increase the caseload for social workers and delay major transportation projects, such as widening Addison Road or adding buses.
The county has suffered a sharp drop in highway user revenue from $30 million in 2008 to $3 million at present. The flow of dollars should recover somewhat as a result of the 2013 state tax increase, but meanwhile Prince George’s can do little more than resurface the roads that need it most.
“We used to be able to go to Senator [Barbara] Mikulski or [Rep.] Steny Hoyer and say, ‘Hey, I need money for a bridge in Suitland,’ but we’ve lost that ability,” County Executive Rushern L. Baker III (D) said.
Baker, who is president of County Executives of America, said Washington’s failure to agree on immigration reform has caused headaches for the group’s members.
“The federal government is requiring counties to house people who are here illegally before deporting them, but it is not sending along money to pay for that,” Baker said. “This is one of the biggest issues we hear in the meetings.”
In 2013 and 2014, state legislatures passed 609 laws related to immigration, according to the National Conference of State Legislatures. They included measures to raise funds for immigration enforcement and English classes, and grant driver’s licenses and in-state tuition to illegal immigrants.
“State legislators have long been active in finding local solutions to immigration challenges, but this issue ultimately requires reform at the federal level,” said Virginia state Sen. John Watkins (R-Powhatan), co-chair of the conference’s Task Force on Immigration and the States.
One exception to the trend is health care, where federal aid to the states has risen substantially. That’s partly because of the expansion of Medicaid, the federal health-care program for the poor, under the Affordable Care Act, also known as Obamacare.
After stripping out health care and adjusting for inflation, however, federal grants to state and local governments have dropped from $832 per person in 2010 to an estimated $639 in 2015, according to an analysis of data from the Office of Management and Budget. (The comparison is somewhat skewed because grants were inflated in 2010 in the post-recession stimulus package. Compared to earlier years, real aid in 2015 is down from $692 per person in 2005, but up from $571 in 2000.)
Advocates of free-market policies welcomed the slide in the past decade. Chris Edwards, a CATO Institute economist who edits the “Downsizing Government” blog, said state and local governments are more prudent and efficient when spending their own money instead of Uncle Sam’s.
“In general, the states view the federal government as Santa Claus,” Edwards said. “As a general philosophical thing, I’ve written that the proper amount for federal aid to states is approximately zero.”
The federal government’s retrenchment has had the biggest impact in curbing spending for road, transit and water projects. Congress hasn’t passed a long-term transportation bill since 2005 and hasn’t raised the gasoline tax since 1993.
Since 2003, after adjusting for inflation, federal spending on transportation and water infrastructure has fallen by about 19 percent, according to the Congressional Budget Office.
The spurt of increases in state gasoline taxes has been one response. Another has been city and county referenda to increase funding for transportation. In November 2014, voters approved nearly three-quarters of such local ballot initiatives.
At the state and local level, support for more money for transportation increasingly crosses party lines. Red states such as Utah and Idaho approved gasoline tax increases this year. In Virginia in 2013, then-Gov. Robert F. McDonnell (R) and House Speaker William J. Howell (R-Stafford) incurred some conservatives’ wrath for backing a sales tax increase to fund transportation.
A bipartisan coalition of mayors — including Republicans Mick Cornett of Oklahoma City, Tomás Regalado of Miami and Richard J. Berry of Albuquerque — has urged Congress to pass a six-year transportation measure that significantly increases investments from the current level.
In one innovative effort to deal with the federal spending slowdown without raising taxes, California, Oregon and Washington state have teamed up with the Canadian province of British Columbia to find new ways to attract private funding for public works.
Basically, the idea is to tap user revenue to pay the private sector to design, finance or build a construction project but allow the state or local government to own it.
The West Coast Infrastructure Exchange, formed in 2012, is engaged in three water projects. Colorado and Maine are considering launching similar efforts.
“There certainly is a sense among the three [West Coast] states that, as a nation, we’re not as focused on funding infrastructure as we were in previous generations,” Jonathan Trutt, the exchange’s executive director, said. “The solutions are likely going to have to come from state and local levels, more than in previous years.”
It’s not all about money, though. One example is cybersecurity. The National Conference of State Legislatures has been pressing Congress for years, without success, to agree on national standards for how companies are supposed to notify and compensate victims of identity theft or other Internet wrongdoing.
In the absence of congressional action, individual states have passed their own laws. The variation from state to state is a headache for companies such as Target, that operate nationwide, according to Neal Osten, a director of the conference’s Washington office.
Congress seems set to approve a temporary budget extension this week, but such a stopgap measure is frustrating to state legislatures.
“What we really want out of Congress is more budget certainty,” Osten said. “We really have a hard time getting our budgets done on time unless we’re sure what we’re getting from the federal government.”
With such information, most state legislatures will avoid the gridlock familiar in Washington.
“Our members are used to passing budgets,” Osten said. “They’re used to doing their jobs.”
Niraj Chokshi contributed to this report.