Speeches & Floor Statements

Remarks By Sen. Alexander - Unfunded Mandates

Posted on October 22, 2003

In our political speeches we senators, especially we Republicans, always have a lot to say in defense of the 10th Amendment, that all powers not expressly given to the central government are reserved to the states. We're big talkers about local control, state responsibilities, states' rights. Somehow when we get to Washington and away from home all that goes up in smoke. We start thinking of grand ideas and sending state and local governments the bill to pay for our grand ideas. Special education for children with disabilities — but you pay the bill. New construction to stop storm water runoff but you pay the bill. Higher standards for roads. You pay for it. New standards for highly qualified teachers — and you pay the bill. We call those unfunded mandates. What I want to talk about today is the worst kind of unfunded mandate. Not only are we having grand ideas and telling states and local governments they have to pay for them — we now want to tell them how to pay for them. The latest such example is to tell states and local governments that a tax on internet access or telephones is somehow a worse tax — a bad tax they shouldn't be allowed to pursue — than a tax on medicine, or food or an income tax. I supported a moratorium for 7 years on state and local access to the internet so that the internet could get up and going. But now it is up and going and it ought to be out there on its own with every other commercial activity. Yet our friends in the House and some here in the Senate would not only extend the moratorium on state and local taxes on internet access — they would broaden it. This is none of Congress' business. It is a state and local responsibility to decide how to pay the bill to fund state parks, local schools and roads, prisons, and colleges and universities. The inevitable result of such unfunded mandates — telling states what taxes they can and can't use — is to transfer more government to Washington D.C., because here we can print money. It sounds good to say we are banning a tax, but what we are actually doing is favoring one tax over another with the decision made in Washington. If you limit Tennessee's ability to have a broad-based sales tax then you are increasing the chances Tennessee has an income tax or a higher tax on medicine or food. Or higher college tuition for families to pay. The same goes for Florida, Texas, Washington, or any other state. Some say this is justified by the interstate commerce clause of the Constitution and that the internet is too important to carry its fair share of taxes. Is access to the internet more important than food? If not, then why not limit the state sales tax on food? Or medicine? Or electricity? Or natural gas? Or water? Or corporations generally? Or car tags, telephones, or cable TV? They are all in interstate commerce. Let us limit the tax on them! Unless we want to just get rid of state and local government and transfer all responsibilities for local schools, colleges, prisons, state parks and roads to Washington, D.C., and claim that all wisdom resides herethen we have no business telling state and local governments how they can pay the bill for legitimate services. We should read the 10th amendment to the Constitution, get back to our basic job of funding war, welfare, Social Security, Medicare and debtand leave decisions about what services to provide and what taxes to impose to state and local government to state and locally elected officials. Under the rules of the Senate, because this bill imposes costs on states without paying for them, it is an unfunded mandate and subject to a point of order. In its cost estimate of September 9, 2003, the Congressional Budget Office, determined that S.150 as reported by the Commerce Committee would impose direct costs on state and local governments of lost revenues of $80 million to $120 million per year beginning in 2007. Because the estimate exceeds the threshold of $64 million for 2007, this is an intergovernmental mandate, subject to a point of order. According to the Multi-state Tax Commission, the bill has the potential to exempt telephone and cable companies from a broad array of state and local taxes that could amount to an unfunded mandate on state and local governments of up to $9 billion a year. Every senator who votes to overturn the point of order is voting for an unfunded mandate which most of us have promised not to do. Let the moratorium on access to the internet die a well-deserved and natural death when it expires on Nov. 1st. And let us remember that the Republican Congress promised to end unfunded mandates.