Federal Reimbursement for Mandates on State and Local Governments

One of the remedies sought by state and local officials for the growing burden of federal mandates is a mandate reimbursement law. A major purpose of mandate reimbursement is to deter Congress from imposing excessive costs on state and local governments by making it fully accountable for its actions. The paper begins by extending the economic theory of grants to mandates and reimbursed mandates. It goes on to assess the benefits and costs of mandate reimbursement, and to distinguish mandates that should be reimbursed, should a reimbursement program prove desirable, from those that should not. Then, using the economic theory of grants and mandates, the paper compares reimbursed mandates with two alternatives for accomplishing the same objective, compensating grants and procedural rules. It concludes that the latter are more promising than mandate reimbursement.