THOSE MANDATES

Meeting recently in Washington, many members of the National Governor's Association embraced House Republicans' pledge to restrict Congress' power to impose on state and local governments those regulations it doesn't pay them to carry out.

As Republicans flex their new muscle in Congress, the House GOP has invited Republican governors from across the county to help shape the new agenda. Thus the strong support for measures now working their way through Congress that would end unfunded mandates.

At stake are billions of dollars of financial burdens from such programs as the Clean Air Act, the Fair Labors Standards Act, the Family Medical and Leave Act, and the Safe Drinking Water Act. Nearly 75 percent of local officials surveyed by the National League of Cities say the budget impact of unfunded federal mandates got worse in 1994. The idea of ending unfunded mandates to the states seems almost as popular as the push for a constitutional amendment to require a balanced federal budget. The two measures are inextricably linked.

A balanced budget amendment would require the approval of three-fourths of the state governments for ratification. But many state lawmakers are wary of crimping the flow of federal dollars. Their apprehension is understandable.

Forced to balance the budget, what is to stop Congress from shoveling the responsibility for federal programs to the states as part of an unfunded mandates shell game? State governments depend heavily on the federal government for money, and the impact of a balanced budget amendment depends largely on how much the federal government relaxes its mandates on the states. A law to restrict unfunded mandates is important, then, to a successful balanced budget amendment.

For a return to federalism to truly succeed, Congress needs to go a step further. Without real federal tax relief and dramatic cuts in federal programs, a law to end unfunded mandates will provide only negligible relief. There is no such thing as a federal money machine that generates an unlimited supply of funds for regulations handed down to the states. That money must first be taken from the taxpayers of those states.

Right now, states that pay more in taxes than they get back in federal dollars are hit hardest by unfunded mandates. States on the other end of the scale, like West Virginia -- which sends 50 cents to Washington for every $1 it gets back -- see their windfall shrink with unfunded federal mandates. For those in the middle -- states that send $1 to Washington in taxes and get $1 back -- unfunded mandates can tip the scales against them.

Now consider the effect the unfunded mandates law would have. If a new regulation passes, the federal government raises taxes to pay for the mandates it passes on to the states. If the regulations costs $10 million in West Virginia, the state's tax load would increase $5 million so the feds could send the $10 million to pay for the mandate. States in the middle would see their taxes rise in direct proportion to the funding they received to comply with the regulation. Of course those states like New Hampshire, which sends $1.60 to Washington for every $1 received, would continue to endure a federal tax burden that exceeds funding returned to the state.

To the extent an unfunded mandates law dissuades Congress from passing regulations that require unpopular tax increases, the legislation is valuable. Certainly restricting unfunded mandates is an improvement over the current system. But it no panacea. Often the mandates themselves are as much a problem as is the lack of funding for their compliance. To truly return power to states, it isn't enough to impede a belligerent and oppressive federal government. Government must be cut down to a size that ensures relief for a citizenry overburdened by confiscatory federal tax policy.