The federal government in the United States is responsible for establishing national policies and objectives that are often not achievable without the active participation of state and local governments in our federalist system of government. Federal funds are usually included as part of these efforts to assist state and local governments in following federal guidelines and procedures to implement these policies. This reliance on the involvement of state and local governments places significance importance on strong intergovernmental relationships.
The implementation of the bipartisan infrastructure bill highlights the importance of strong intergovernmental relationships to strengthen and improve the nation’s infrastructure system. Part of the White House’s fact sheet, for example, recognizes the important role of the states and their transportation departments in establishing a national network of electric vehicle charging stations through a $5 billion federal investment. States will take the leading role in developing an electric vehicle charging deployment strategy that will sustain the use of electric vehicles within their state. The recently formed federal Office of Energy and Transportation will monitor and oversee state approaches and strategies. The federal investment is also “the floor and not the ceiling.” States are not prevented from providing additional funds and resources, if needed, from their own coffers in this national effort.
Some policy initiatives may also require state and local governments to commit their own resources to take advantage of and participate in a federal program. State and local governments may be required to provide their own matching funds to gain access to federal programs and funds. For example, the Reconnecting Communities Pilot Discretionary Grant Program within the U.S. Department of Transportation requires state or local governments to provide a certain level of matching funds before receiving a federal grant for removing transportation barriers that divide communities and hinder economic development.
Tensions may rise at times when the federal government advances a national policy through unfunded federal mandates that may include the preemption of state and local policies and laws. State and local concerns with having to bear the costs of taking action and implementing a federal policy with no assistance led to the passage of the Unfunded Mandates Reform Act of 1995, sponsored by Senator Dirk Kempthorne, a former governor from Idaho. Although the act is intended “to curb the practice of imposing unfunded federal mandates on state and local governments” and strengthen the intergovernmental relationship between governments, the Congressional Budget Office, according to BallotPedia, has reported 420 intergovernmental mandates and 790 private sector mandates from the federal government between 2007 and 2019.
Intergovernmental relationships are also challenged when policy objectives are not aligned between the levels of government. This may lead to policy inconsistencies and intergovernmental conflicts, even within the same state. For example, Arizona has enacted legislation prohibiting local governments statewide from banning the use of natural gas as a heating and hot water system within residential and commercial properties. Localities in the state, however, may still turn to regulatory processes and building codes that compel building electrification by commercial owners and developers as the only viable option for local compliance in obtaining a construction permit.
The development and implementation of federal policies is not just a top-down approach. Policies tend to migrate for discussion between states and each level of government. Some may eventually become part of the national debate by policymakers on Capitol Hill and within the Biden administration. This underscores the importance for NAIOP chapters and its members to be engaged in the policy development process at every level of government.