Neighborhood Effects blogger Bob Nelson had an op-ed in Friday’s Salt Lake Tribune arguing that Utah should offer to take control of federal lands in the state:

The largest area of Utah public land, 22.8 million acres, is managed by the Bureau of Land Management in the Interior Department. Another 8.1 million acres is in the national forest system managed by the U.S. Forest Service in the Agriculture Department. On these lands, the most important decisions concern matters such as the number of cows that will be allowed to graze, the levels of timber harvesting, the leasing of land for oil and gas drilling, the prevention and fighting of forest fires and the areas available to off-road recreational vehicles.

Except in Utah and other parts of the American West, where the federal government still holds about half the total land area, such matters are the responsibility of private land owners and of state and local governments. It is time to end this antiquated system which has failed the test of time. Despite the possession of hundreds of millions of acres of land, and vast oil and gas, coal and other valuable mineral resources, the federal lands proved to be a money-losing proposition.

Read the whole thing here.

In 2008, Bob wrote about how local control of federal lands in California can lead to more effective fire management. And, of course, Bob is the author of one of Neighborhood Effects’ all-time most-read posts, wherein he argued that the US Senate is obsolete.

Chris Papagianis of E21 asks the question: Can the Greek crisis happen in the United States? Papagianis suggests that the problem lies not on the federal level, but at the state level:

Obviously, states – like the Eurozone members – don’t have their own individual currencies to devalue during a budget crisis. It’s also not simply whether California, Nevada, or Arizona’s deficit and gross debt compare with those of Greece, but how financial markets would deal with a state default and to what extent the political culture in these state capitols can be counted on to avert such an outcome.

[...]

However the Greek situation is resolved, it is a reminder that financial panics are not just about specific debt-to-income ratios, but investor sentiment and the financial system’s ability to absorb a default. As more investors become aware of their exposure to the unthinkable, they take actions to hedge that risk. This leads to greater awareness of the risks, an erosion of confidence among counterparties, and the potential for the kind of “run on the bank” that ultimately did in Bear Stearns and Lehman Brothers.

Whole thing here. Niall Ferguson wrote about this prospect earlier this week in the Financial Times. Here’s an easy backgrounder on the Greek crisis.

On NPR today, Morning Edition featured a story about peace officers in Texas, which number one per 330 state residents. The reporter tosses out this fact and then goes on to report on something basically unrelated: the number of police forces in the state.

The story begins skeptically:

Texas has so many police officers, some lawmakers are worried there are too many.

Among the many entities in Texas that have their own peace officers is the State Board of Dental Examiners. But you won’t generally hear these officers saying “Stop, put your hands up! Dental police!”

[...]

It turns out Texas is just full of small, specialized police forces: the State Insurance Department has one, as do the Lottery and Racing commissions, the Pharmacy Board, and a handful of water districts.

But the story ends on a very different note, profiling Gary Patterson, the police chief (and only officer) in the Blooming Grove Independent School District:

Patterson patrols the halls of Blooming Grove High School — home of the Fighting Lions — a benign figure in his blue police shirt with a tonsure of white hair and a shambling gait. After a long career as a dispatcher for the state troopers, Patterson came back to the town where he grew up.

“You’re kind of like a father or grandfather figure to a lot of them,” Patterson says. “Cause you’ve known them since they were in elementary and you’ve kind of grown up with them.”

It would be easy to criticize his position as one more example of superfluous Texas peace officers — until you follow him around the school. He knows the kids by name. He knows their parents. He knows what’s going on in their lives. He knows why they’re in trouble.

This story reflects a point made by Eileen Norcross and Frederic Sautet here, and by Robert Nelson here: in the public sector, where there are no prices to convey information, hence making benefits and costs hard to weigh, there is no universally correct number or size of local government entities.

It’s easy to scoff at the idea of a single-person police force for a three-campus school district. We likely assume that there are non-trivial fixed costs associated with running a school district police department, so economies of scale could be achieved by just having, say, a county sheriff’s deputy police the school. But we don’t really have the information necessary to make that call, and certainly not from the vantage point of a state capitol or the ivory tower.

So the bottom line: be skeptical when you hear “common sense” pleas to eliminate small local government entities like one-man police forces. There may well be a case for eliminating them, but proponents of elimination cannot just assume that economies of scale are achievable — and they cannot discount local knowledge as worthless.

When it was created last year, the Energy Efficiency Conservation Block Grant (EECBG) was barely noticed.

Today, EECBG is rolling into city halls as a green-certified Trojan Horse.

Authorized in Title V, subtitle E of the Energy Independence and Security Act of 2007, EECBG was fully funded at $2.7 billion with the stimulus bill of 2009.  It is intended to help local governments:

• Reduce fossil fuel emissions,
• Reduce total energy use,
• Improve energy efficiency in government buildings, and
• Create and retain jobs.

In practice, this means it was intended to fund installation energy efficient street lights, building code improvements, transportation programs, recycling, and so on.

EECBG is modeled after HUD’s Community Development Block Grant (CDBG). Before getting to EECBG, here’s a primer on CDBG.

Back in 1974, the Nixon administration decided to merge a bunch of urban aid grants. Experts agreed Urban Renewal and President Johnson’s Model Cities had failed in part because it was impossible to direct grants in DC to the local level, and getting out of the federal micromanagment was part of the “New Federalism.”

Block granting, it was hoped, would free cities from federal control allowing local government more flexibility with funds, as long as the projects fell into one of 72 possible activities and the grantee stuck to HUD’s general guidelines. The idea, in a nutshell, was federal money, local control.

But block granting isn’t a solution to centralized government; it only provides the illusion of local control. Grants-in-aid carry the policy priorities of the federal government. Local priorities are shaped by federal grants. Whether your community needs a park or not is another matter. You now have a grant to build one.

Such grants may stimulate greater local spending but to what’s known as the Flypaper Effect. Once the park is built, it will need local maintenance.

There is no such thing as “free” federal money. Grants comes with rules. Before a CDBG project is undertaken it may have to meet Davis-Bacon wage requirements, environmental reviews, and other regulatory tests.

Now back to EECBG, a second-generation experiment in block granting.

Loudoun County, Virginia is one of many communities to receive EECBG money. To spend its $2.215 million grant, the county must submit a plan to the Department of Energy (read it here). The plan begins by assuming passage of Cap and Trade (p. 11), and then lays out a familiar future. The plan is less an example of local experimentation as it is of federal policy cloning.

There will be an Energy Performance Labeling rating of homes, before sale or rental, to “give transparency to actual consumption of both new and existing structures.” Some Northern Virginia Realtors really don’t like this. There is also Smart Growth, and an Energy Environmental Trading Team to help implement Cap and Trade. There will be electric cars, mixed used housing, bike paths, more transit, less driving, and “parking strategies.”

The plan is no surprise, once it is understood that federal grants are carriers of federal policies that grow roots in state and local governments. But does the plan reflect the needs of Loudoun’s residents or the wants of Washington, DC?

People want to live where they can maximize their standard of living.  But it’s not just the high taxes driving residents out of states like California, New York, and New Jersey.

According to Eamon Moniyhan, director of The Cost of Living Project (COLP) in New York, states with the largest population growth are those with a low cost of living, in particular the South and Mountain West states. The reverse is true in the high cost of living Northeastern states — Massacussets, Connecticut, and New Jersey.

According to the U.S. Census, New Jersey has  the second highest median income in the nation at $67,142, but once the cost of living is factored in, that shrinks to $56,147. Not coincidentally, New Jersey has been experiencing a steady loss of residents for lower tax (and lower cost of living) locales such as North Carolina.

As Rutgers economists Joseph Seneca and Richard Hughes find in  “Where Have All the Dollars Gone?”, between 2000 and 2005, over one million people left New Jersey. Among the top ten destination states, some are high tax and high cost of living (New York, California, and Massachusetts). Others are low-tax and/or low cost of living states in the South and West (North Carolina, Virginia, Texas, Georgia, and Florida).

What drives the high cost of living? According to COLP, excessive regulations. This is why the average metro New Yorker’s income doesn’t stretch that far. A person earning $50,789 in Chicago has the same standard of living of someone earning of $100,000 in New York City. For more, read here.

Anthony Flint of the Lincoln Institute of Land Policy wrote a Boston Globe op-ed explaining that cities are well placed to become increasingly important centers of population and commerce. This is due in part to the ongoing pattern of national urbanization and in part to the Obama administration’s emphasis on the importance of cities and sustainable development.

Smart growth, a policy championed by some people within the environmentalist and urbanist movements, advocates goals such as improving public transportation, protecting the environment, creating affordable housing, and supporting economic development. These goals are hard to find fault with, but the question remains whether federal policy is an appropriate place to be promoting a specific type of urban development.

Flint cites Jane Jacobs as an important thinker in shaping the contemporary ideal of urban living with vibrant mixed-use development that invites pedestrian use. While this sort of development fits in with some “smart growth” objectives, Jacobs emphasized that land use needed to be determined using local knowledge rather than top down mandates. She fought these mandates at the municipal level, and one can only imagine how she would react to development direction from the newly created Office of Urban Affairs.

Flint writes:

Metropolitan regions are poised to benefit from a New Deal-like infusion of investment over the next year, as Congress considers reauthorization of federal transportation spending, with more of an emphasis on transit over highways, as well as climate legislation that rewards sustainable urbanism and smart growth. Cities, after all – places of density and transit and a mix of uses – are the greenest form of human settlement we can aspire to.

This rhetoric makes federal cash injections to urban areas sound risk-free, but looking to history shows us that federal transportation support can create systemic problems. Highway spending fueled the current epidemic of urban sprawl, an unforeseen consequence of New Deal policies. Ex ante, spending on public transit sounds like the antidote to this problem, but maybe we simply cannot foresee the problems that it could create.

In a similar vein, Flint suggests that policy can be designed to promote the economic diversity that Jacobs saw as essential to healthy cities:

There are strategies to ensure economic diversity, such as inclusionary zoning and community land trusts, which remove the cost of land from home ownership. But we need to embrace density, which increases supply to meet the great demand for living in cities, in the places where it’s appropriate and desirable.

Again, it is easy to explain hypothetical, ideal zoning practices, and to imagine flawless outcomes, but the idea such policy would come out precisely as theorists imagine is reflective of nirvana fallacy. When zoning came into practice in the early 20th century, it was touted as a way to protect citizens from living near the dangers of industrial land uses. However, zoning has an ugly history of being abused by policy makers and community activists to oppress groups of residents based on income or race.  A blogger at Discovering Urbanism describes “The Origins of Zoning” and the practice’s unpleasant history here.

In short, policy makers can easily verbalize how their imagined programs could be an improvement upon development realities, but unfortunately history demonstrates that government action often takes urbanities further away from their imagined ideal.  There is no reason to believe that policies in vogue today will have greater success, even if they are championed as “smart growth.”

Matt A. Mayer is this week’s guest on Inside State and Local Policy, where he discusses his new book, Homeland Security and Federalism: Protecting America from Outside the Beltway. The podcast runs just over 15 minutes. Here’s a description:

Local governments have historically played a key role in homeland security that most of us living in the early 21st century wouldn’t recognize.  In this episode we discuss where and how we draw the line between homeland security functions and which are the responsibility of the federal governments and and the responsibility of state governments.

Joining us to discuss these issues  is Matt Mayer, CEO of Provisum Strategies and Adjunct Professor at The Ohio State University.  Matt served as the head of the Office of State and Local Government Coordination and Preparedness within the US Department of Homeland Security, and now works to help policy makers better understand how federalism is a key component of an effective homeland security strategy.  In this episode, Mayer discusses his new book, Homeland Security and Federalism: Protecting America from Outside the Beltway, which was released earlier this month and is available at Amazon.com and other book retailers.

Matt’s bio is here. His book is an excellent analysis of how and why state and local governments can and should take leadership on many aspects of homeland security and disaster preparedness.

Subscribe to Inside State and Local Policy via iTunes by clicking here.

The publication of Nick Reding’s book Methland: The Death and Life of an American Small Town has refocused national attention on the abuse of methamphetamine that was widely reported on as an epidemic a few years ago.

Although fears of about the spread of methamphetamine have somewhat subsided, the Wall Street Journal documents that last year more than 7,000 residential meth labs were discovered, so clearly the drug remains prevalent in national culture.

A New York Times blog about the book’s release explains the shift in perception over the past years:

It was going to destroy the heartland, this methamphetamine epidemic, just as crack cocaine had done to the inner city. There was no George Bailey in this version of Bedford Falls. No John Mellencamp melodies on the soundtrack. Just toothless boys on bikes peddling some nasty stuff cooked up from cold medicine and farm products.

And then it all passed, as these things do, the damage done, leaving the impression of rural America as a broken land, scary. In the interim, the more traditional narrative, of country people somehow more authentic than city folk — “the best of America in these small towns” — came roaring back in the form of Sarah Palin.

Both of these stereotypes reflect the human tendency to lump people into broad categories and stereotypes, masking the nuances that make each community, rural or urban, unique.  While the blogger, Timothy Egan, acknowledges that neither view of rural America is correct, he does not acknowledge that these subtle differences in place require different policy approaches to methamphetamine abuse or other social problems. Egan continues with a quote from President Obama’s primary campaign:

“You go into these small towns in Pennsylvania and, like a lot of small towns in the Midwest, the jobs have been gone now for 25 years and nothing’s replaced them. And they fell through the Clinton administration and the Bush administration.”

Every president said he would do something about it, Obama continued, but never did. But he has a chance to make a difference in places that are neither methland nor mythland, just overlooked parts of the same country.

Looking to national leadership for dealing with local problems is doomed to lead to mass inefficiencies because the program that works to curb the meth problem in one town in unlikely to produce the same results in another.  In a public radio interview, Reding described police strategy in Oelwien, Iowa:

“I think it worked incredibly well. Their small-lab meth production plummeted to basically zero by sometime in mid-2006. To go from getting a lab every few days to having zero is a remarkable success.”

This local success may provide a model that could be adapted to use in other areas.  However, suggesting that the federal government could possibly enact such successful policies across small town America is a dangerously naive belief.

One casualty of the state budget crises is the low attendance of governors at their annual meeting in Mississippi. NPR reports that Governor Ed Rendell of Pennsylvania, chairman of the National Governors Association, opted to stay home to work out the state’s budget stalemate, and because, as of today, state employees are not being paid.

He was not the only governor who stayed home. Only about half showed up.

As NPR notes, with states facing a $200 billion revenue shortfall, this year’s budget crises are certain to continue into the next fiscal year.

Interestingly, of those in attendance, a few items seemed to bring consensus. First, there is “little appetite” for a second stimulus.

Governor Bill Richardson of Arizona is worried about the size of the national deficit. And Governor Haley Barbour of Mississippi cites Americans’ concern over the effect of this rate of spending on the value of the US dollar.

Also of great concern is national health care’s effects on state budgets.  The New York Times reports that governors know that the proposed national health care legislation represents a very large Medicaid bill for state governments, which shares the cost of providing the program with the federal government.

Vermont Governor Jim Douglas sums up the mood: “I think the governors would all agree that what we don’t want from the federal government is unfunded mandates. We can’t have the Congress impose requirements that we are forced to absorb beyond our capacity to do so.”

Syndicated columnist Neal Pierce has been writing about state and local affairs since at lease the 1970s. In a recent column, he asks, “Are State Governments Obsolete?” It might have been more appropriate to ask whether state governments actually exist — at least in the traditional constitutional sense. Blessed by the Supreme Court and other judicial rulings, state governments have become administrative appendages of the federal government.

In one area after another in the twentieth century — matters of transportation, public health, land use control, education, wildlife management, etc. — the federal government assumed powers that had traditionally been reserved to the states. States might still have an administrative role, but they are now working under a very tight federal leash.

The sweeping environmental laws of the 1970s shifted control over clean air and water to the federal government. The states were, to be sure, left to administer air and water pollution laws day to day but under federally approved programs, leaving real control in federal hands. The Endangered Species Act not only federalized significant parts of wildlife management but also asserted federal authority over large areas of state and local land use. No Child Left Behind moved a large step towards the full federalization of education in the United States.

The federal government has not limited its takeovers to economic and environmental areas, where spillover effects do sometimes create difficulties for states whose  boundaries are awkwardly configured. As the Supreme Court declared in 2005 in the Raich case (with Justice Scalia surprisingly abandoning his previous federalism principles to support the decision), federal marijuana laws trump state and local laws. Federal power over the states now even extends bizarrely to the minimum drinking age for alcoholic beverages, an area explicitly reserved constitutionally to the states. (Like many others, the Supreme Court justified this federal undermining of state authority on the grounds that the states “voluntarily” accepted it — in order to protect their federal transportation funding.)

It is not the states but the U.S. Senate that is obsolete. When the United States was founded, the ratio of the largest state in population to the smallest (Virginia to Delaware) was 13 to 1. Now it is 71 to 1 (California to Wyoming). The U.S. Congress makes most of its decisions by forging compromises that bring together large enough coalitions of winners to pass a bill. Senators from Wyoming and other sparsely populated states sell their disproportionately large voting rights for disproportionately large federal moneys (relative to population). That is a main reason farm subsidies have been impossible to curb: states like North Dakota and South Dakota trade Senate votes for this abundant source of federal money.

In many cases small states actually want the federal government taking responsibility because then federal money pays. This dynamic is apparent in the Rocky Mountain states where 50 percent of the land is federal — and, even if it were offered to them, states would refuse to take financial and administrative responsibility.

We may be coming to a point where we should revisit the whole U.S. constitutional scheme. The usurpation of state authority is only one of many examples of current federal dysfunction. The U.S. fiscal situation seems dangerously close to veering out of control (see this recent Robert Samuelson column). Many of these problems have to do with the structure of Congress, starting with the Senate.

Another major problem is the assumption of far ranging policy making responsibility in the courts (the reason Supreme Court nominations now consume so much of the nation’s attention). Big changes are needed in both areas.

It is a very large subject. Obviously, nothing radical is likely to happen any time soon. But just to put out some ideas for discussion, I recently speculated on a brand new constitutional arrangement for the United States.

Recommendation No. 1 – abolish the U.S. Senate.