EPA mandate report: States shoulder brunt of environmental regulatory costs

The U.S. Chamber of Commerce’s “Growing Burden of EPA Unfunded Mandates on the States” report examines the current challenge state governments face as they work to comply with and implement myriad new federal environmental regulations. States administer 96.5 percent of all Washington, D.C.-delegated environmental programs, while federal grants to states only fund 28 percent of the amount needed to run them, the report finds.

“Instead of being the system of cooperative federalism Congress intended, the current relationship between the Environmental Protection Agency and the states has become one-sided, with the federal government imposing its will,” says U.S. Chamber Senior Vice President of Environment, Technology and Regulatory Affairs William Kovacs, report co-author. “EPA and the Obama administration have introduced some of the most expensive regulations in our country’s history, and then left state and local officials with the tab.”

Within the last year, the EPA has finalized rules regulating the electricity sector, vast portions of land and water through the Waters of the United States, and ozone thresholds that determine where new projects and facilities can be built. A heavy burden of implementing and enforcing these regulations fall to state governments with little financial help, U.S. Chamber contends.

“Growing Burden” finds that grant assistance to states declined 29 percent between 2004 and 2015, while the cost of EPA regulatory mandates increased 35 percent. Arkansas Department of Environmental Quality Director Becky Keogh recently testified before a Senate Environment and Public Works Committee hearing, observing, “the uniquely American cooperative-federalism model” has been converted into a “coercive-federalism scheme, and the state role is now less partner and more pawn.”

To help alleviate this problem and prevent it in the future, the U.S. Chamber recommends redefining the term “mandate” to better track the impact on the states; requiring agencies to perform an analysis of probable unfunded mandate impacts; passing the Regulatory Accountability Act of 2015, which would improve the transparency of regulations; and, enacting the Sunshine and Regulatory Decrees and Settlements Act, which would ensure states are consulted before finalizing regulatory mandates.

To conduct “Growing Burden” research, the U.S. Chamber petitioned through open record requests all 50 states for a breakdown of their environmental agency expenditures and the associated EPA grant funding they received. Data from the EPA and 30 state responses is contained in the report.

“Growing Burden” is the eighth in a Chamber’s regulatory report series aimed at holding government accountable for an increasingly complex web of regulations. Reports are posted at www.uschamber.com/etra.