Restoring Federalism – Step One
Restoring federalism will not only require courageous and determined state elected officials it will also require states to enact legislation that severs the coercive funding relationship they all have with the federal government.
For decades the federal government has used the carrot and stick of federal funding to force states to bend to its will. The federal government now collects and then redistributes money to states for infrastructure, education, health care, and countless pet projects in the form of earmarks. These federal funds often come with strings attached and states with limited ability to raise their own tax rates more often than not meekly comply. The states have thus allowed themselves to become subservient to the federal government through their dependency on federal funding.
The sad irony is that much of the revenue the federal government doles out to the states is collected from the state’s residents to start with so the entire exercise is a money recycling scheme with DC skimming off the top for administrative costs and redistribution to other states.
So how to strike the first blow for independence? The Federal Funds Act.
Already introduced in Georgia (HB877), Oklahoma (HB2810), and Washington (HB2712), such laws would require that all federal taxes come first to the states Department of Revenue. A panel of legislators would assay the Constitutional appropriateness of the Federal Budget, and then forward to the federal government a percentage of the federal tax dollars that are delineated as legal and constitutionally justified. The remainder of those dollars would be assigned to budgetary items that are currently funded through federal allocations and grants or returned to the people.
Once states are able to keep the tax dollars that otherwise would have been returned to them after a trip through the bureaucracy they will have much greater freedom to defy the diktats of the federal government and restore the liberties of their citizens.