The California Constitution requires the state to reimburse local governments for state mandates. “Unfunded mandates,” which are orders that induce “responsibility, action, procedure or anything else that is imposed by constitutional, administrative, executive, or judicial action” for state and local governments and/or the private sector, are not allowed, or at the very least are not enforceable without compensation.
If this is true, how did we end up in a situation where the State of California is sucking more and more of our tax dollars up to Sacramento while making more and more demands on local county and city governments about educational requirements, health and safety requirements, and particularly on local planning and things like affordable housing Regional Housing Need Assessment (RHNA) quotas without providing any funding to accomplish them? And if they don’t provide funding, how are they able to force us spend so much of our local time and money to comply with them, holding public hearings, doing expensive studies, creating Housing Elements, and crafting elaborate 20 year plans for housing and “Smart Growth” and what have you?
I’m not a lawyer but it seems to me these are questions someone should be asking. And as the financial situation for California cities and counties becomes increasingly dire and more and more cities declare bankruptcy due to lack of funding, why aren’t any of our elected officials asking these questions?
So I decided to do some digging. In my research, I kept coming across something called “Dillon’s Rule.”
According to Black’s Law Dictionary, Sixth Edition, Dillon’s Rule is a rule handed down from an 1868 Iowa State Court case that has been used ever since in interpreting statutes delegating authority from states to local government. In the case of Clinton v Cedar Rapids and Missouri River Railroad (24 Iowa 455; 1868), Justice John Forrest Dillon ruled that "Municipal corporations owe their origin to and derive their powers and rights wholly from the legislature." In plain English this meant that cities and counties only have the powers that are expressly granted to them by their states. Without the state’s granting of powers, cities and counties have no inherent powers themselves.
Apparently, since then this ruling has become the cornerstone of an endless number of court decisions regarding the rights and powers of cities and counties and states.
To understand why this ruling came about a little history is helpful. In 1868, shortly after the Civil War ended in 1865, the country was not anything like it is today. States, or what was left of many of them, had very weak governments while many local jurisdictions (cities and counties) were by and large run like private fiefdoms that were notoriously financially corrupt. And many cities and county governments didn’t accept (have never accepted?) that the war was over. They pretty much made up their own laws which varied widely from one place in the state to the next.
So in order to bring about some semblance of order to our newly re-formed “Union” the courts took the position that’s stated in Dillon’s Rule. Strictly interpreted it meant that a city had to ask the state for permission to levy a tax or create a new ordinance. In those times, this probably made good sense. Today, when states hold all the power and cities and counties are weak and without significant resources or options, it makes no sense at all. The effect of Dillon’s Rule and its legal interpretation is still subject to great debate.
However, as time passed, many states adopted “Home Rule” laws that freed up the situation a bit (California being one of them) that essentially said that cities and counties could pass their own laws and taxes (without asking permission) so long as those laws and taxes didn’t contradict state law.
Okay, so far I understood all this, at least in theory. But you’re probably asking what does all this have to do with unfunded mandates?
There’s No Such Thing As Free Lunch
As I’ve pointed out in previous articles (see ), starting in the early 1990’s the “spend more than you earn,” debt and leverage game in our state and federal government and in our economy (big banking) started in earnest. The federal government began to amass enormous public debt and states quickly followed right behind them, piling on one unfunded program after another. As a result, California started down the road of withholding more and more tax and fee funding from cities and counties while at the same time dramatically expanding the number of state mandated programs and standards required of those cities and counties.
But wait a minute didn’t that directly contradict the California State Constitutional prohibition against unfunded mandates? Well, yeah, it did. But in order to allow them to continue to pass legislation that they didn’t have to pay for, the California State Legislature pulled off an act of “spin” worthy of Machiavelli. They cited an interpretation of Dillon’s Rule that said that local governments are “administrative arms of the states and can be ordered to carry out state programs or policies generally referred to as mandates.”
Huh? Did you get that? In other words the state legislature turned the original intention of Dillon’s Rule on its head. In layman’s language they said that what Dillon’s Rule really meant was that the state can require unfunded mandates if they decide to (i.e. they legislate it to be so) because cities and counties only derive their powers from the state. And since “home rule” says that cities and counties can only have powers over things that are not precluded by the state legislature then voila! - unfunded mandates are fine so long as the legislature legislates them to be so.
In know. I’m still scratching my head, too. But subsequent legal challenges, particularly regarding school funding issues, have largely failed to correct this. This opened the floodgates to the avalanche of unfunded mandates that have been cascading out of Sacramento ever since, having dramatic impacts on our schools, infrastructure, public services and yes, affordable housing and local planning. Which brings me to the current situation in Marin with regard to the MTC, ABAG, RHNA, affordable housing quota driven, Smart Growth, Transit Oriented Development (TOD), Sustainable Communities Strategy (SCS), Preferred Scenario, etc., etc. mess at hand - all of which adds up to one huge unfunded mandate.
So what have our elected representatives been doing about all this? With all their resources and bright legal minds at their disposal (courtesy of our tax payments) isn’t there any reasonable argument that can be brought forward to challenge this? Isn’t it time someone stepped up and questioned whether or not it’s appropriate to allow the California State Legislature to cite a one hundred and forty four year old court ruling as a basis to contradict the clear intentions of our state Constitution prohibiting unfunded mandates by the state?
This all bothered to no end. How could this be happening? And then it hit me. It’s not about doing what’s right or wrong, or financially prudent, or good for taxpayers. It’s really all about what's politically expedient.
The Big Schmooze
Think of it this way: You’re an elected official or political appointee, sitting in your office in Sacramento, worrying about the things that are most important to you like getting re-elected or re-appointed, increasing your power and political influence, enjoying the fabulous perks of your position (free health care, great retirement benefits, etc.), and most importantly increasing the number of financial supporters contributing to your campaign fund. And with all this important stuff to worry about you’re faced with a choice. Do I roll up my sleeves and try to really fix this financial mess we call California (or the United States for that matter) and take on pension reform, government inefficiency, tax reform, affordable housing, education, etc., etc., etc.? Or do I just keep passing “responsible sounding” legislation (e.g. SB375) that only end up adding to the long list of unfunded mandates and costly responsibilities of cities and counties downstream?
Hmmm… which is easier politically and less controversial with my friends and colleagues here in Sacramento? How can I appear “do the right thing” policy-wise (good sound bites in the media), but not add to the state’s budget deficit (to show how “responsible” I am)? And most of all which choice will allow me to continue to “go along to get along” and move up the political food chain?
It’s pretty clear the choice they’ve been making. And locally we now live in a world where everything we thought, for decades, we were paying taxes for, like running our schools and fixing our roads and keeping our parks open, we now have to pay for by voting to tax ourselves again with special bonds and fees and assessments.
The Big Spin
In the 1960’s a small group of Marin residents, calling themselves the Golden Gate Headlands Committee, took on the Marin County Supervisors and fought against all odds to save the Marin Headlands, a movement that led to the creation of the Golden Gate National Recreation Area and became the cornerstone of everything we enjoy and prize today about Marin. In their time they were ruthlessly ridiculed as radicals, hippies, no-growth fanatics, NIMBY’s, communists and worse. They were not “important” people in high places. They we just regular citizens who saw the truth of things and stood up for it.
Today local elected officials and self-appointed “leaders” of housing advocacy groups shamelessly wrap themselves in the memory of those preservationist pioneers to promote massive social engineering policies and misguided, pro-development legislation in support of the MTC / ABAG / TOD / SCS / One Bay Area Plan juggernaut. And at the same time they label the groundswell of local community voices now rising against it as radicals, no-growth fanatics, NIMBY’s, and worse, apparently without the slightest awareness of the irony of it.
My question is where does this all end? When are we going to find the political will to say no to ill-conceived, financially burdensome, community destroying, unfunded mandates and begin to really with the kinds of services and development and affordable housing we really need?
Regrettably, however, I doubt we’ll see any evidence of that until the number of community voices reaches a tipping point where elected officials, political appointees, and paid planning staff begin to worry about their jobs.
Federal and State Mandating on Local Governments: Report to the National Science Foundation; Catherine H. Lovell, Max Neiman, Robert Kneisel, Adam Rose, and Charles Tobin, Riverside, CA: University of California, June 1979.
The Regional Governing of Metropolitan America; David Y. Miller; Westview Press, 2002.
Dillon’s Rule is From Mars, Home Rule is From Venus: Local Government Autonomy and the Rules of Statutory Construction; Jesse J. Richardson, Jr. Virginia Tech, 2005.
GG32 - Reform the State Mandates Process to Make Reimbursement More Cost-Efficient, Predictable and Fair; CA.Gov: California Performance Review; 2012.
California Legislative Unfunded Mandates and Realignment Impacts on Local Governments; Allen K. Settle, Ph.D. Professor, California Polytechnic State University, San Luis Obispo, California; March 22-24, 2012.