From minimum wage to ‘soda tax,’ local policies preempted by states

State law sets forth X, but some municipal ordinances set forth X+1 or 2. Or some, but not all municipalities in a given state, regulate smoking, bagging materials, minimum wages or myriad other measures. Which layer of law prevails? Which should?

The tension between states and cities results in part from dueling doctrines: “Dillon’s Rule,” which holds that states are supreme; and “Cooley’s Doctrine,” which says local government is an absolute right. Both are rooted in 19th-century jurisprudence in the Midwest (see side story on this page). Increasingly in the 21st century, however, states are preempting their municipalities.

“Anecdotally, yes; preemption has increased,” says Trevor Langan, a research associate at the National League of Cities and co-author of the report “City Rights in an Era of Preemption.” Issued in February, that study found laws in:
  • all 11 Midwestern states limiting local finance authority through tax and expenditure limitations;
  • Indiana, Iowa, Kansas, Michigan, Nebraska, North Dakota, Ohio and Wisconsin that stop local regulation of ride-sharing companies;
  • Indiana, Kansas, Michigan, Ohio and Wisconsin that prevent locally established minimum-wage rates;
  • Indiana, Kansas, Michigan, Ohio and Wisconsin that preempt paid-leave ordinances by local governments; and
  • Michigan, Minnesota, Nebraska and Wisconsin that block municipalities from establishing their own broadband services.
In March, Iowa joined those states preempting local minimum-wage ordinances and paid-leave requirements when HF 295 was signed into law. That new statute also preempts local governments from having plastic bag bans — ordinances that prevent grocery stores or other retailers from providing these bags to customers at checkout). 
Most recently in the Midwest, in reaction to local “soda taxes” being considered across the country, Michigan’s HB 4999 was signed into law in October. It bars local municipalities from establishing their own taxes on food and drinks.
“What really enables preemption is the ‘trifecta of control,’ when one party controls both legislative chambers and the governorship,” Langan says. Over the past few years, in the Midwest and around the country, single-party control has become more common in state legislatures. Langan adds, too, that various interest groups have pushed for state preemption via “model legislation.”
Cases of ‘super-preemption’
States sometimes go beyond simply trying to stop specific local-level policies. “Blanket” or “super” preemption is another possibility, with states threatening cities financially or legally, says Lori Riverstone-Newell, an associate professor in the Department of Politics and Government at Illinois State University. 
Writing in the summer 2017 edition of Publis: The Journal of Federalism, she cites two examples of “super-preemption” outside this region.
In Florida, a state preemption law prohibits the use of public funds in defending local gun-ordinance cases. As a result, the city of Tallahassee must fight a lawsuit brought by two gun-rights organizations without the benefit of its legal department. 
Texas’ SB 4 prohibits local authorities from adopting policies that prevent police officers from asking people about their immigration status. The Texas law also strips local authorities of their right to decide when it’s appropriate to report undocumented immigrants to federal authorities, and allows for financial penalties and removal of officials who disregard the law. (SB 4 was set to go into effect on Sept. 1, but a preliminary injunction was granted on Aug. 30 by a U.S. District Court judge. Texas has appealed that decision.)
Under a bill passed this year by the Illinois General Assembly but vetoed by the governor (SB 1905), municipalities would have been forbidden from creating local “right-to-work” laws. Officials who ignored the law could have been charged with a Class A misdemeanor, the Chicago Tribune reports.
Then there is Arizona’s SB 1487, which has been referred to as the “mother of all preemption bills.” Signed into law last year, the measure allows the state to withhold shared revenues if a local government passes an ordinance that “violates state law or the Constitution of Arizona.” A legislator’s request is enough to trigger an investigation of a local ordinance by the attorney general, who must then provide a report within 30 days.
All states, whether they claim to operate under Dillon’s Rule or Cooley’s Doctrine, “step into local affairs whenever they feel like it,” Riverstone-Newell says. That’s not necessarily a bad thing, but the difference lately is the “tone and broad brushstrokes” with which states are preempting cities, she adds.


Foundations of home-rule authority and state preemption are court rulings from Midwest

The legal tension between states and their municipalities traces back to the 19th century, specifically to the post-Civil War years, says Dr. Lori Riverstone-Newell, an associate professor in the Department of Politics and Government at Illinois State University.
Many cities pre-date their states, and states (and the federal government) mostly ignored these local units of governments. But in the late 1800s, cities became more active and proactive — for example, issuing bonds or occasionally investing in railroads, etc. — and also increasingly fell under the control of political machines.
That, in turn, prompted states to take a closer look at local governments and a more active role in their affairs, Riverstone-Newell says. Dillon’s Rule, named for Iowa Supreme Court Justice John Forrest Dillon (later a federal judge appointed by President Ulysses Grant), originated in an 1868 Iowa case: Clinton v Cedar Rapids and the Missouri River Railroad
In that decision, the Iowa Supreme Court struck down a municipal ordinance from the town of Clinton that had barred the railroad from laying track without the City Council’s permission. This local ordinance directly conflicted with a state law allowing the railroad to do so.
Dillon wrote: “Municipal corporations owe their origin to, and derive their powers and rights wholly from, the legislature. It breathes into them the breath of life, without which they cannot exist. As it creates, so may it destroy. If it may destroy, it may abridge and control.”
Contrasting Dillon’s Rule is the Cooley Doctrine, named for Michigan Supreme Court Justice Thomas Cooley. The Cooley Doctrine stems from an 1871 Michigan case, People ex rel. Leroy v. Hurlbut, regarding the state’s creation of a public works board for Detroit. In doing so, the Legislature named the board’s first members and gave them control over streets and parks, the construction of water and sewer systems, and public buildings except school houses.
The Michigan Supreme Court ruled that move unconstitutional, agreeing in essence that the Legislature could not appoint officers for a full term whose duties were solely municipal. In his opinion, Cooley held that “local government is [a] matter of absolute right; and the state cannot take it away.” 
The Cooley Doctrine underpins the concept of “home rule” that spread in the 20th century and, through state statutes or constitutions, has given local governments more discretion over their own structures, fiscal policies and regulations. However, as the National League of Cities notes in its 2017 report “City Rights in an Era of Preemption,” local governments’ power under home-rule laws are “limited to specific fields, and subject to constant judicial interpretation.
Stateline Midwest: November 20174.92 MB