Devolution and Preemption

What level of government should exercise what kinds of authority? That question has been vigorously debated throughout U.S. history. Indeed, the U.S. Constitution itself represented a radical departure from the nation's original governance structure under the Articles of Confederation from 1776 to 1789. The Constitution established the supremacy of the federal government vis-a-vis the states, and political power has increasingly been centralized in Washington. The Civil War cemented this supremacy. By the turn of the 20th century, the Courts had interpreted the Constitution as giving states virtually unlimited power vis-a-vis their cities and counties.

In the early 20th century the municipal home rule movement gained modest autonomy for local governments. Since the late 20th century there has been a substantial move to devolve authority from Washington to state capitols. At the same time, however, Washington increasingly preempts state authority and states increasingly preempt local authority. In the 1990s a new factor was added as free trade agreements began to undermine national authority as well.

The strongest argument in favor of local control is that government works best and is most legitimate when it is most intimately connected with its citizens. The strongest arguments against local control are that it fragments decisionmaking, burdens commerce, and often leads to parochialism and an erosion of civil liberties.

As befits the complex nature of the issue, this section is different from the other parts of the New Rules. It offers insights into the many dimensions of the devolution-preemption debate and discusses initiatives that devolve authority to communities while preserving the rights of minorities.

RULES:

• Executive Order on Federalism
  In May 1998, President Clinton issued Executive Order 13083 on Federalism. Its centralizing language generated such a firestorm of opposition from conservatives and state and local elected officials that the House of Representatives voted 417-2 to reject it. Exactly a year later, the President issued a second executive order (13132). This one tilted in the opposite direction, forbidding federal agencies from preempting state law unless the Congressional bill contains an overt intention to do so. More...
• Environmental Ordinance - Jay, Maine
  In 1988, the town of Jay, Maine (population: 5,259) passed an ordinance that allowed the town to license, monitor and enforce the same environmental regulations that the state Department of Environmental Protection and the Federal EPA oversee. Since enactment of the ordinance, there has been a 50 percent reduction in accidental spills, a complete elimintation of foul-smelling emissions from one of the paper mills, and much faster reporting of environmental violations. More...
• Local Preemption Constitutional Amendement - Michigan
  Fed up with repeated state preemption of local laws, Michigan cities spearheaded a campaign to require a two-thirds vote of the Legislature, rather than a simple majority, to pass any law dealing with an issue that could be addressed by city, county, village or township government. More...
• Preemption of State Banking Rules
  States have long played a critical role in setting banking policy and overseeing both local and national financial institutions. In crafting banking laws, Congress has generally chosen to establish a basic framework of rules, allowing states to adopt additional rules and higher standards, particularly with regard to consumer protection. In recent years, however, two federal agencies have sharply limited state authority over national banks. The Office of the Comptroller of Currency, OCC, the chief regulator of national banks, and the Office of Thrift Supervision, OTS, which regulates thrifts, savings and loans, have preempted dozens of state banking laws designed to protect consumers, ensure fair lending, and maintain competition. More...

REPORTS AND OTHER RESOURCES

• Rogue Federal Agencies Gut State Banking Laws - ILSR Release, September 4, 2001
• Preempt This: Michigan Cities Fight Back - by Daniel Kraker, The New Rules, Fall 2000
• A Devolution Test for George W. Bush - by David Morris, The New Rules, Winter 2001
• One Percent for Citizenship - by David Morris, The New Rules, Fall 2000
• It's the Community, Stupid! - by David Morris, The New Rules, Summer 2000
• The Place of Place in the 21st Century - by David Morris, The New Rules, Winter 2000
• Devolution as if Community Matters - by David Morris, The New Rules, Fall 1999
• Democratizing Ownership - by David Morris, The New Rules, Summer 1999
• The New Rules of Localism- A speech by David Morris presented at the International Forum on Globalization in Washington, D.C., May 1996.
• The Politics of Preemption: The Role of State and Federal Government in Environmental and Consumer Protection under the Bush Administration - U.S. PIRG Education Fund, October 2003
• Anything left to Legislate About? - an overview of federal-state preemption on a variety of issues from the states' point of view, State Legislatures magazine, September 1999
• Urban Institute's Assessing the New Federalism Program - a multi-year research project to analyze the devolution of responsibility for social programs from the federal government to the states, focusing primarily on health care, income security, job training, and social services.
• The Other Side of Devolution: Shifting Relationships Between State and Local Governments - by Keith Watson and Steven D. Gold, Urban Institute, August 1997.
• The Devil in Devolution - by John Donahue, American Prospect, May 1, 1997
• Come the Devolution - by Lenny Goldberg, American Prospect, December 1, 1999
• The National Governor's Association page on federalism, with updates on current legislation.