State Mandates Act Revisited

By KATHY HAUGER, D.C.C.A.

A decade ago, DCCA took on responsibility for the preparation of State mandates fiscal notes. Despite passage of the State Mandates Act (Ill. Rev. Stat., ch. 85, par. 2201 et. seq.), local officials continue to express concern over the increasing costs associated with State-mandated programs and standards. Various amendments to the Act have exempted specific new legislation from reimbursement requirements, while the Illinois Municipal League has attempted to place a mandates constitutional amendment on the ballot.

This continued concern over mandates and their effects prompts me to share with you information about mandates, the purpose of the Act and DCCA's role in the mandates process.

A State mandate includes any executive order of the Governor, statutory action of the legislature, or administrative rule of a State agency, that requires a local government to establish, expand or modify its activities in such a way as to necessitate additional expenditures from local revenues, or that removes a specific item from the local tax bases. Five types of mandates have been defined in the Act, with State reimbursement required for the enactment of the first three types:

Service mandates

These mandates create local service or delivery requirements in such areas as: public health; hospitals; public assistance; air pollution control; water pollution control and solid waste treatment and disposal;

Personnel mandates

Mandates of this type directly affect local government costs. These costs consist of salaries and wages; hours; location of employment and other working conditions; fringe benefits, including insurance and pensions; and employee qualifications and training;

Tax Exemption mandates

Tax exemption mandates exempt property or other specified items from the local tax base;

Local Government Organization and Structure mandates

This refers to actions affecting forms of government and organizational statutes; establishment of forms for interlocal cooperation and coordination; elections; designation of local public officials and their powers and responsibilities; and the prescription of administrative practices and procedures; and

Due Process mandates

Due process mandates concern the administration of justice; notice and conduct of public hearings; procedures for administrative and judicial review; and protection of the public from malfeasance, misfeasance, and nonfeasance of local officials.

Originally, the Act provided for exclusions and defined the circumstances under which the reimbursement requirements for specific State actions could be waived. But since 1983, a number of pieces of legislation have also been exempted from the reimbursement requirement by the simple expediency of amending the Act.

DCCA is responsible for preparing fiscal notes for each bill which creates or expands a State mandate on

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local governments other than school districts and community colleges. The note must be filed with the General Assembly before the bill may advance from second reading.

A fiscal note includes an estimate of the costs of implementing the mandate for local governments and the State reimbursement costs for the first fiscal year of operations, if possible. The notes are based upon the best information available which can be analyzed in time to provide a reasonable estimate. Many of you have been called upon to assist the Department in gathering information, and League staff are consulted numerous times during the course of a session.

Ideally, this fiscal note activity would result in the halting of mandates that require you to modify your budgets and reduce services in other areas, or to increase property taxes in order to comply. Unfortunately this is not the case. Still, the notes provide information to your legislators and the Administration, and give your associations and yourselves a tool with which to discuss the effects of the proposed legislation.

While it is true that no reimbursement relating to a mandate has been passed through DCCA, it should be noted that a number of reimbursement and grant programs for the provision of services have been created over the last ten years and administered by regulatory agencies, and there have also been new sources of State revenue sharing, such as the temporary income tax increase, which have been provided. We also note that there have been no court cases relating to the Act brought by any of DCCA's constituents.

In the past decade, it has become apparent that the role of the State Mandates Act does not lie in the reimbursement requirement, nor in the right of a local government to refuse to comply, but in the fiscal notes themselves and the manner in which they can be used to shape and make decisions.

For further information relating to the State Mandates Act and DCCA's role in the process, call Cathy Hauger at 1-800-785-6168. •

Page 16 / Illinois Municipal Review / September 1990