Stateline Story

A Time for Thanks

Nearly 400 years ago, a group of colonists who had fled their country to gain certain liberties sat down and gave thanks for all they had. Joined by their new neighbors, native Americans now known as the Wampanoag, the Pilgrims of Plymouth Plantation embarked on a three-day celebration of plenty later to become known as Thanksgiving.

As Thanksgiving preparations often distract us from the true purpose of the holiday, let us not forget those things for which the early settlers were thankful. Wild turkey, venison, clams, fish, berries, nuts, beans and squash were all offered as a token of gratefulness for the new liberties the settlers enjoyed.

Likewise, the states have plenty for which to be thankful. Of course, the bounty enjoyed by the nation's state and local governments does not exactly amount to a four-course meal. However, the "harvest" that states have enjoyed over the years ensures states many of the same liberties sought by the early settlers and allows states to provide the necessary services to their citizens. Here are just a few items that states are thankful for:

10th Amendment to the Constitution. The last amendment included in the U.S. Bill of Rights clearly delegates a great deal of authority over public policy to state governments:

"The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

As the federal government has grown in size and scope, issues involving federal preemption of state policy continue to arise. However, over the past 10 years, the U.S. Supreme Court has time and again sided with state and local governments based on precedent established under the 10th Amendment.

Cases such as Printz vs. U.S. (1997) and New York vs. U.S. (1992) have restored the spirit of the 10th Amendment and returned power back to state legislatures where it belongs.

Unfunded Mandate Relief Act. Passed in 1995, UMRA was designed as a tool to ease the level of federal preemption on state fiscal policy. The law requires Congress to consider the cost of implementing federal programs by state and local governments. According to the Congressional Budget Office, UMRA dramatically has reduced the number of proposed measures that would impose unfunded mandates on state and local governments as defined under the law.

Because UMRA requires Congress to take a second look at the costs of proposed legislation, legislative sponsors often revise their proposals after it has been determined to have a substantial cost on the states. This awareness of unfunded mandates has created a culture within the halls of Congress that definitely has spared the states hundreds of millions of dollars collectively.

Medicaid Relief. The state-federal program known as Medicaid has been a tremendous success in providing health care to many individuals and families who otherwise would not have the means to afford it. It also has been the fastest growing expenditure within state budgets. The program requires a state to match a federal contribution toward providing health care coverage to low-income and other underserved populations. Medicaid expenditures continue to skyrocket because of the rising cost of health care, including the cost of prescription drugs.

In 2003, the National Conference of State Legislatures and other state groups convinced members of Congress to enact a one-time $10 billion relief package to help ease the pain inflicted by Medicaid on the already taxed state coffers. This relief package provided states with the necessary breathing room to be able to bring their budgets into balance and concentrate on issues other than the mantra of declining revenues and rising expenditures.

Streamlined Sales Tax. States can be incredibly grateful for Michigan becoming the 21st state to reform its sales- and use-tax code to comply with the provisions of the Streamlined Sales and Use Tax Agreement. The agreement provides states with a blueprint to create a simplified sales-and use-tax collection system that removes the burden and cost from sellers.

With 21 states and more than 35 percent of the population in compliance with the agreement, states have exceeded the threshold outlined in proposed congressional legislation that would give states the authority to require online and catalogue retailers to collect sales taxes. Enactment of the congressional legislation would overturn several Supreme Court decisions and provide states more than $10 billion in additional revenue now lost to online sales.

Of course, when you think of Thanksgiving, most people think of those traditional items such as sweet potatoes, pumpkin pie and cranberry sauce. However, most are surprised to learn that these items were not available to the early settlers for the first Thanksgiving back in 1621.

Just as the Pilgrims had to do without some pretty traditional Thanksgiving items, so too do states have to live without some pretty basic wants. UMRA could stand to be tweaked so that it has a broader reach. Medicaid could stand a major overhaul to help states contain rising costs. And Congress could stop dragging its feet and enact S. 1736 / H.R. 3184, the Streamlined Sales and Use Tax Act.

But, of course, harping on what states do not have wouldn't be in keeping with the spirit of the Thanksgiving holiday, now would it?

William T. Pound is the executive director of the National Conference of State Legislatures, a bipartisan organization based in Denver that provides research and policy assistance for state legislators and their staffs.

Contact William Pound at NCSL