By Larry Jones
March 28, 2005

On behalf of the Conference of Mayors before the House Committee on Government Reform hearing March 1, Oklahoma City Mayor Mick Cornett said that mayors wholeheartedly supported the passage of the Unfunded Mandates Reform Act (UMRA) ten years ago and had high hopes it would curb the number of new mandates imposed on state and local governments. But, Cornett said, it has fallen far short of achieving that goal. There is new evidence that Congress and federal agencies are still imposing a huge number of costly mandates on state and local governments.

Enacted in 1995, UMRA put in place a number of procedural roadblocks to discourage the passage of new unfunded mandates. Ten years later, Rep. Tom Davis (VA), who serves as chair of the committee and was one of the key sponsors of UMRA, has initiated a series of hearings to determine if the act is achieving its intended goal.

In a report released by the Government Accounting Office (GAO) March 8, GAO said that in 2001 and 2002, only five enacted by Congress and nine of the 122 major regulations issued by federal agencies contained federal mandates as defined by UMRA. However, the reports points out that despite the determination under UMRA, at least 43 statutes and 65 rules issued during that time imposed new costs or resulted in negative financial impact on state and local governments, and the private sector.

Rising Costs Cited

Cornett said, "While mayors across the nation are pleased to have UMRA in place, we are still concerned about the rising costs of unfunded mandates and other federal actions." Under the act, members of Congress must be notified by the Congressional Budget Office when a legislative proposal includes an unfunded mandate that is estimated to cost state and local governments $50 million or more on an annual basis. If a bill includes a costly mandate, notice must be provided before a vote on the House or Senate floor. Federal agencies must also be notified by the Office of Management and Budget when a proposed regulation includes an unfunded mandate that is estimated to cost $100 million or more.

On legislative proposals, any member can raise a point of order to stall floor action on a mandate and force members to take a recorded vote to waive the point of order so action can be resumed. While this procedural roadblock has established a process for holding members more accountable for how they vote on unfunded mandates, Cornett told committee members, "There are loopholes in the act that are allowing mandates to move through the legislative process unchecked. And the federal government is finding more ways to shift costs to state ad local governments."

Law Has Loopholes

Cornett explained that the loopholes in the law stem from the fact that the act does not require the CBO to conduct an analysis of unfunded mandates added to appropriations bills or those added to a statute after the CBO's cost analysis. Between 2001 and 2002 the GAO's report shows that 8 mandates were included in appropriations bills and 4 were added to statutes after the CBO's review. Cornett also pointed out that statutes relating to national security and those that provide grant assistance to state and local governments are not covered by UMRA although in some cases they may impose significant costs on state and local governments. The No Child Left Behind Act, the Homeland Security Act and the America Vote Act were cited as examples of statutes that impose costly requirements on state and local governments.

Cornett explained "these loopholes and federal actions are eroding our limited local resources and making it more difficult for us to provide the services that our citizens expect. Every dollar we spend on a federal mandates is one less dollar available at the local level to fight crime, improve education, expand transportation and modernize our aging infrastructure." In closing he told members of the committee that UMRA needs to be "strengthen to capture those mandates that are falling through the cracks and other federal actions that continue to impose huge financial burdens on state and local governments."