Unfunded Mandates

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Through either statutory provisions or legislative rules, most states in the Midwest have policies to ensure that lawmakers understand the monetary impact of proposed bills on local governments.  A 2013 CSG Midwest survey of nonpartisan legislative service agencies (which provide these fiscal estimates for lawmakers) highlighted the different policies employed by the region’s legislatures. In some instances, fiscal notes are only prepared upon request.

NOW, THEREFORE BE IT RESOLVED, that The Council of State Governments encourages Congress to amend the Unfunded Mandates Reform Act to give states a more accurate picture of the cost of federal programs.

With the flow of federal funding slowing dramatically, states will need to look to Washington for flexibility rather than dollars to meet their own budget challenges.


The 2010 elections exacerbated party polarization and, along with it, a polarization of state federal relations, which is produced when one party controls most of the federal government and another party controls most of the states. The 2010 federal health care law aggravated this polarization and, because of its impacts on the states, produced an unprecedented challenge to its constitutionality by more than half the states. The 2010 federal financial regulation law and the U.S. Supreme Court’s application of the Second Amendment to the states also presage further federal incursions into state and local governance at a time when federal budget cutbacks and rising social welfare costs will heighten state and local fiscal stress.

Unemployment rates remain high and people are unemployed for longer, exhausting state unemployment trust funds quickly. More states are borrowing from the federal government to cover costs, which could have an impact on future fiscal stability.

BE IT THEREFORE RESOLVED, that The Council of State Governments encourages Congress to amend the Unfunded Mandates Reform Act to:

1. Apply UMRA’s cost estimation requirements to legislation that alters the conditions for receiving already existing federal grant assistance such as Medicaid and federal grants under the No Child Left Behind Act.

2. Expand the scope of cost estimates to include indirect costs imposed by new legislation and rule making such as lost revenue.

3. Remove the exception for mandates issued by independent regulatory agencies such as the Securities and Exchange Commission (SEC).

4. Remove the current exception for urgent federal regulations issued without prior notice by requiring cost estimates to be issued for such urgent rule making decisions within six months after their adoption.