U.S. EPA Headquarters Library
                                                      Mail code 3201
                                                 1200 Pennsylvania Avenue NW
                                                   Washington DC 20460

-.ALTERNATIVE MODELS OF EPA -  STATE RELATIONSHIPS:.

   .-;•-.          A LITERATURE SURVEY
                              Delegation II Study
                              Program Evaluation  Division
                              Office of Management Systems
                                and  Evaluation
                              August,  1983

-------
                      TABLE OF CONTENTS


                                                    Page

Introduction 	*	  1

Methodology 	  3

Section I:  The Issue 	  4

Section II:  Historical Perspective 	  7

Section III:  Models 	..	  9

Section IV:  Criteria and Evaluation 	 18

Conclusions	 29

Bibliography	 31


                        LIST OF TABLES

Table 1 — Models by Activity 	....12
                      .  -              •-    '            '
Table 2 — Models by Funding 	 16

Table 3 — Analysis of Activitiy Models
           by Criteria 	 23

Table 4 — Analysis of Funding Models
           by Criteria	 26

-------
    Literature Survey on Models of Federal-State Relations
            Module III of  the  Delegation  II Study*

 Introduction
      The goal of the Delegation  II study  is to provide a
 factual basis for considering  optional roles, responsibilities
 and relationships between  EPA  and the States once States have
 assumed responsibility for direct administration of major
 environmental programs.  The study consists of six components,
 each of which provides information on several factors which
 have a potential impact on EPA activities  after delegation.
 In addition to this report, the components are:  a profile
 of current EPA activities; an  analysis of  environmental
 trends; a presentation of  views expressed  by persons outs id?
 he Agency regarding EPA1s performance in  carrying out its
 activities; and a look at  how  EPA currently conducts oversight
 as compared to the procedures  used by other decentralized
 organizations.
      This report presents the results of  an extensive review
 of the literature on Federal-State relations.  The review sought
 to identify models which prescribed in some detail the activities
 EPA and the States should  perform once delegation has taken place.
We did not focus*'oh evaluations of current performance or specific
suggestions for improving  current work.   Rather,  we searched for
future-oriented analysis which proposed realistic alternatives
for defining EPA and State responsibilities.   The activities

*Prepared by Kerry Callahan in the Program Evaluation
  Division.

-------
                              -2-

    sought  to  find  assigned  in the models are  the  same  activities
 developed  for the  profile of  current  EPA activities:   direct
 program  administration, technical support, State  program
 approval and  oversight, research, standard setting  and national
 information collection.
      Wila this goal  in mind,  we found  surprisingly few useful
 models that addressed which level of  government should take the
 lead role  for specific program activities.  Instead, the  literature
 discusses the sharing of responsibilities in  a much broader sense.
 There is much debate  in the literature  regarding  the appropriate
 division of functions between  Federal and State governments,
 but by "functions" the authors mean broad topical areas like
 education and transportation,  not specific activities  like
         setting and oversight.  Moreover, the Federalism debate
 has been dominated by discussions of  fiscal issues.
      One study of a wide range of theories and models  recognized
 the paucity of specific activity models:
           There is, in fact,  no administrative theory  of
           federalism, in the  sense of  a coherent model of
           how a federal- system should  operate, from an
           administrative perspective (Advisory Commission
           on  Intergovernmental Relations, June 1981).
      Whatever .the reason, we  found only four models that
 addressed which level of government should take the lead  role
 across a spectrum of program activities.  The four  activity
models cited  in this report ?re derived from proposals  by the
Congressional Budget Office (CBO), the Advisory Commission on
 Intergovernmental Relations (ACIR), the Heritage Foundation, and
    National Governors'  Association (NGA).

-------
                             -3-


      An additional three models solely address funding

issues.  These models are based on the type and level of

Federal funding decisions associated with the administrations

of Presidents Johnson, Nixon and Reagan.  They differ in the

amount of State discretion allowed in spending Federal funds.

Methodjology

      In conducting this review, we consulted four types of

sources:

      o  academic literature on Federalism, including .some
         legal journals;

      o  reports .done by evaluators of current Federal-State
         relations, such as ACIR, the General Accounting
         Office (GAQ), the Congressional Research Service
         (CRS), in a study.done for the Senate Committee on
         Environment,and Public Works (Senate) and the
         Congressional Budget Office (CBO);. ;/•             -•

      p  works by groups which advocate certain positions on
         the division of EPA and State responsibilities,
         such as the Heritage Foundation and the National
         Governors' Association; and

      o  telephone interviews with individual experts in the
         area of Federal-State relations.

      Most of the works examined focused on the broader issue

of dividing responsibilities between the Federal and State

governments, and were not specifically directed at EPA and

the States.  The GAO report on the State .concerns regarding

environmental programs and the CRS study for the Senate

Committee addressed EPA's relations with the States, but did

not offer proposals for separating responsibilities.  Only

two of the sources reviewed - a report by NGA and a book by

The Heritage Foundation - recommended which activities should

-------
                             -4-
   handled by EPA and which  by  the States  following the

delegation of environmental  programs.  The experts contacted

by phone were asked  for assistance in finding additional

prescriptive models  for EPA, but they could not cite such

specific literature, and no  more models were found.

      This report is divided into four sections.  Section  I

describes the basic  issues in Federal-State relations  in

environmental, protection, and discusses the national and

State concerns underlying the current relationship.

Section II provides  a brief  historical perspective on  the

theories of Federal-State relations.  Section III offers

models for EPA-State relations  described by activity and by

funding.  Finally, Section IV introduces five criteria which

  n be used in assessing the appropriate activities of Federal

and State governments, and analyzes each of the models by

these criteria,


Section It  The Issue; Federal-State Relations in Environmental
                       Protection

      The ..role of the Federal government in administering

environmental programs has greatly expanded since the  late

1960s and 1970s.  Before 1968 environmental protection was

consider?d a State responsibility , and the Federal government,

for the most part, restricted its involvement to research

and technical assistance to  the States.

      A^ the end of the 1960s,  pollution control became a major

issue on^the national agenda.  The Senate report noted two

"actors which contributed to the Federal government becoming

-------
                              -5-

}j.nvolved  in  environmental  protection:   1)  the  need  to  account
 for  the regional  and  interstate nature  of  environmental
 pollution, and  2)  the  concern that  differing State  pollution
 control efforts threatened economic equity and efficiency.
 States lacked the  authority to regulate pollution sources
 outside their jurisdictions.   In  some cases, they also were
 either unable or unwilling to enforce strict pollution controls
 on industry  within their borders  due to economic competition '
 with each other (Senate, 1982).
      In 1969, the National Environmental  Policy Act set forth
 the  "right:to" a healthful  environment", thus legitimizing
 Federal involvement in environmental protection.  The  national
 concerns which led to  this  and .other legislation, such as the
 lean Air Act, being passed,  and  the State  concerns which have
 resulted from this Federal  involvement, are discussed  below.
National Concerns
      The national government  is  primarily  concerned with:
           o  ensuring that .the goals of national legislation
              are carried out by  the States;
           o  dealing with  interstate issues that affect  '
              pollution control;  and
           o. applying consistent national  standards
              to the States.
      The interstate nature of environmental problems  requires
national  attention because pollution does not  respect  State
borders  and States do not have the authority  to abate pollution
problems  when they come from a source in another State.  The
""ederal government seeks the consistent application of national,
uniform standards  so that environmental protection is  not

-------
                             -6-

 |ompromised by inequities or economic rivalries among the

States  (Senate, 1982).

State Concerns

      Along with these main national concerns, there are a

variety of State concerns.  It is clear States desire to be

equal partners with EPA in protecting the environment.

However, according to a GAO report, the States believe they

have become "forgotten partners" as a result of having too

little input into EPA's decision-making process.  Yet these

same State officials "must defend the programs and justify

the resources and enabling legislation to carry out the

programs" (GAO, 1980).

     State officials indicated the following concerns in

   t 1980 report:           •

           o  the need for flexibility in regulations;

           o  more confidence by EPA in the ability of
              the States to carry out programs; and

           o  less detailed oversight.

      Jn terms of State concerns regarding flexibility,

another study noted that:

           States are healthy, responsive and, best of all,
           innovative.  For these reasons, States must be
           free to adapt national standards to unique local
           needs and programs.  Many of the best national
           programs started as innovations of individual
           states (Lyons,  1982).

      According to GAO's survey,  State officials apparently

agree with this assessment.  They cite inflexible regulations

as the greatest problem in administering environmental programs.
        *
tfiey believe than EPA regulations do not allow them to tailor

-------
                             -7-



 national  standards  according to State  needs, problems  or


 resources  {GAO,  i960).


      The  desire  for more confidence and less oversight from


 EPA appear intertwined.  In the GAO report, some State officials


 expressed  the belief that EPA retains  almost total control of


 environmental programs through regulation, guidelines, grants


 and paperwork requirements because the Agency distrusts State


 personnel  (GAO,  1980).  States seek more confidence by EPA


 in their abilities, and prefer oversight in the form of an


 audit which assures consistency with national objectives.


 States would also rather receive technical assistance  instead


 of the Federal control expressed through daily supervision  •.
               "' *-             •

 'Senate, 1982).: '      .



 Section lit  Historical Perspective on Theories of Federalism


      As the role of the Federal government in environmental


 protection has changed over time, so,  too, have theories of


 Federalism.  Dual Federalism was the dominant approach to


 Federal-State relations until the 1930s.  It assumed that


 responsibilities of each level of government for broad


 functional areas, such as education and national defense,


 could be easily assigned,  the image such division evoked


was that of a "layer cake", since Federal and State responsi-


 bilities were not thought to overlap in any one functional area.

 Environmental protection was viewed as a proper State responsi-


 bility because it fell within the State police powers to


 rotect the health, welfare and safety of the people.  Federal

-------
                              -8- '





involvement in this  area was limited to technical  assistance



 to the  States  and research (ACIR, July,  1981).



      Cooperative Federalism came into prominence  during the



 1930s,  at  the  time of  the Kew Deal when the  powers of  the



Federal government greatly expanded.   The  approacl  stressed a



Federal-State  partnership in program implementation.   According



to this "marble  cake"  theory,  which  was dominant until very



recently,  the  responsibilities of Federal  and State governments



for functions  such as  transportation were  intermingled and,



like the swirls  in a marble cake, could not  be  clearly divided



 (Grodzins,  1966).



      In recent  years, ACIR has  noted a  tendency toward a



form of federalism which  they  term "dysfunctional".. According



 to  this view,"  every public  issue becomes an  matter of  inter-



governmental concern.  The  Federal government advances issues



historically considered  to  be  State  responsibilities,  while



the States  are used primarily  to implement policies formulated



at  the  national  level.  ACIR concludes  that  intergovernmental



relations have become more  intrusive, unaccountable and



ineffective because of the  range of  issues which fall  under



its scope  (ACIR, June,.1981).



    -  The New Federalism  initiative proposed in 1981 appear-,
            i
            i

to assign functions at either  the Federal or State  level,

            i

thus reducing the  number  of responsibilities which are  shared



by Federal and State governments.  However, this approach



has been viewed not so much as a division, but as  an opportunity

-------
'for States to decide for themselves whether to assume those


 functions no longer carried out by the Federal government


 (Huffman, 1982).



 Section III;  Models for EPA-State Relations


      The blurring of Federal and State responsibilities,


 indicated both by the national and State concerns which have


 developed and by the shifting theories of Federalism, demon-


 strate the need for models which delineate activities to be


 performed by EPA and the States.  As mentioned previously,


 our literature survey found that these models fall into two


 types: models by activity and models by funding.  The activity


models utilize the categories developed for the profile of  .


 mrrent EPA activities.*  In this report, direct program
 I

 administration includes enforcement, as well as permitting


and the monitoring or clean-up of specific environmental


problems.


Models by Activity


      There are four models which describe the activities to


be performed at the national or State level.  None of the


models recommends a strong Federal role in direct program


administration because they focus on the division of


 responsibilities after delegation.


      Models 1 and 2 are general, referring to a broad


division of responsibilities between the Federal government


and the States.  Models 3 and 4 are specifically directed at


 PA's relations with the States.
*A full descripiton of each of the activities is contained in
 the separate report on EPA activities.

-------
                               -10-


        Model 1 is drawn from a paper published by the

  Congressional Budget Office.  It gives the States the lead

  in devising and enforcing regulations, while the Federal

  government's primary responsibility is national information

  collection and dissemination (CBO, 1983).

        Model 2 is derived from ACIR recommendations regarding

  partial pre-emption statutes, many of which are environmental

  statutes.  Under partial preemption statutes, the national

  government sets minimum national regulatory standards.

  States retain responsibility for carrying out programs as

  long as they establish State standards as least as stringent

  as the national ones.  If a State fails to adopt such standards,

  the Federal agency involved, such as EPA, is authorized to••?*

jltestablish national standards within the State (ACIR, 1982).

  This model is based on.ACIR proposals to improve consultation

  and coordination between the national government and the States.

  It therefore emphasizes joint efforts in program review, the

  formulation of regulations and standard setting.  However,

  when a program requires rigid,  uniform national standards,

  ACIR calls for full Federal pre-emption, with State admini-

  stration by contract (ACIR, 1982).

        Model 3 is derived from proposals for the division of

  EPA and State activities made by the Heritage Foundation.

  States take the lead in program administration, except in

  directing clean-up efforts, and obtain flexibility through

  national performance rather than design standards.  However,
          *
  pA has the responsibility for setting environmental baselinc.s

  for minimum State standards (Sullivan, 1983).

-------
                             -11-

      Model 4 is based upon recommendations by the National
Governors' Association.  States also take the lead in program
administration in this model/ but EPA reserves the right to
plan and implement a program if a State is unable or unwilling
to do so.  The model also calls for different levels of
oversight by EPA depending on the maturity of the program
(NGA, 1982).                                   .
      Table 1 summarizes the specific national and State
responsibilities proposed in each model.

-------
«
o ifT w*

 n
rr o> IQ
3, 2
•
H-tr a i 3 ^ co r/> » "^i "a
g ffl (-•  0 

MJB £ "53 3 "• en a a a a O

O H- (P rrrri-'-Oni i Q. N H CT i (B rr i H 3 (A rt O Oi 3 CO 0> 0> B) O 5 CO ffi 3 .11-3 *-• ^ f^ w "V. jL ill rh t-> O <5 3 Q. 3 M* H • rt» co rr H- rr O O rr H- 01 CO A D co a. Q) i-" tp 3 O i^< ffl •• Q. rr ID rti <6 ID H- Ql 1^ H1' Q (0 n H- ca W 3 (D fl> 3 rr < ftt rr 05 H- H- 3 ca ,5,30. 1 O^ rr O H- Q w ffi a 1 CO T3. O.'O P3 *^ (6 rr S ro i^ >j a M> o> rr < $ O O Q. 3 0> (Q i-'-'O (D 3 I— ' ("&*< *O H- JO H- •• O & 3 rr i-i Qi rriQ O 0 §CL 05 T3 tfl 0) cj » . » rr 3 H- o co C H- 3 ID n (C SQ, T £U < 1 ^^ Q? 17 Ql *O CD 3 Cn fD C rt & iQ *• CU 4 O 1 t rr n- a n f- C i) f-S i» rr CO &J Q §3 0* a *** *~3 fffl 2 *3 2Z a r? H \b a Q ^ 51 . :§ CO i 2 o rr D I-- CO i JL5! CO »O n rr i-( 0) 0) Q |-> O H- CO i 3_ r. . _ > - W? 0 'tt .C M Q •o «» a ft Q> CD 131 l-h 1 0) C ^C M O* tO fl> O r"ft *5 Ml (0 Rl CO 1 " 3 rr (t> • a (Q H" * 3 o rr CO O "O RJ "3 • QJ 3 'OltH IIISCD 3O (o(DCO 0 > a, a, fS 3 3 tn C iu (D (->• 3 (D C D1*O1 Orr H-3(6 SBjh-a>- OO rrrr K> 3 &i t— ' 3i cocnco H- D" O 3 31 3 (D Cu rr P- Q,D IQ 3 3 CO (D rr CQ a § 2- § Q 0 rr H- i-n O < O ft 3 O 3 >"• 3 Qj rr ^3 t"^ (^ rr O C ro S i f? ft> rr rr CD rr (D C7 CO CO Of .0 H^ H^ C (D ^* 1 ' fs SS CO ^. ^ D? f"f §" (P 3 Qt (t> •O 1 n I a| | M* rt 'O 5 Q Q M 1 CO §M* M* rr i— > 3 ffl tQ 1 1 QI a ^^ 3 *~* 3 flJ i1 H- 3 !-•• CO rr f^ Qj rr »-•• s CO 0) H- 13 0> rr Q 0) 1 0> O 3 D) rr 3 ^^ ^3 T3 (p t^ $& i i [^ {U ? S Q 1 i en rr 0) rr S *• ai rr rr *• cn rr 0) rr CD to States: ff rr (-•• H- rr H- _ 0) H- ^ § C? (— ' h-1 co H M fl) 03 or cr *< M 3? ^ * O !> M O I-1 JO ^^ •— ' |^« < (-1- ^ M U) 5? E 1 3 H- Qi rr Q) 0} |* **^* I 4k .


-------
   8
   w

si
0>  (I
o
   §CO ^3 05
   fT ffl J
   &> a o ..
M- 3 ffi C (P
3  a. n i— 01
H" D> 01 Q, Cfl
MS*-

fT.a^
                                          to rr (0 ra
                                          rr O 3 W
                                          tu   < >
                                          3 >o H.

                                                 en
                                                 sr
                                                                         B>
                                                                CD
                                                                    W
                                                             3  X O  3 
-------
  •s
  tn
  jj
  u

  Is
rH 4J "*

.-< o •-<

-------
Models By Funding
      Table  2 outlines  the main  funding models found  in the
literature.  Models  1-4 refer to the same activity models
discussed in the previous table.  They are included here
because two of them  do consider  which governmental unit
should provide funding.
      Model 5 gained prominence-in the mid-1960s, and is
associated with Johnson Administration.  It emphasized the
use of categorical grants which  set detailed conditions on
the States' acceptance of Federal financial assistance.
Grants were regarded as vehicles for cooperative federalism
since they reflected Federal and State input into areas such
as environmental protection (Walker, 1981).  Project grants
  ving eligibility requirements  were created to deal with
specific program purposes.  States assumed a substantial
matching share for program funding instead of being limited
to a significant cash contribution.  There were also shifts
in the areas which received financial assistance, with money
being directed at health and social welfare programs  (ACIR,
July 1981).
      Model 6,  proposed in the early 1970s during the Nixon
Administration, maintained .categorical grants, but added
block grants and revenue-sharing.  The two new forms of
federal aid indicated a movement toward less centralization,
de-categorization and more state discretion (Walker, 1981).

-------
                                                                        »  01  t-C  »T) fh  'TJ


                                                                        «n  o>  ,O  Q, 5  Q.

                                                                        it  3  C  tt  Q>  (D
                                                                        ft  0)  fhT3 iQ 5
                                                                            85'8§S.
                                                                        en »-•• &  <  (t» ro
                                                                        ft M 3  M- ft ft
                                                                        0)  rt o  a a &
                                                                        rt a H- n>  g »-•
                                                                        -     m  to  IB

                                                                                      ft
       §

       8
                                   0 to  H- 3  S  C ft

                                   n- 3*  3  ft  o  en rt

                                   H--     i-h a  (-•• & en
                                   n*     lull* QJ  "^  *™^
                                   C     O  _ la  ft 0)
                                     -

                                   s
                                          5  Ml W  pi W
                                                                               CO


                                                                               I
                                                                              lO
                                                                               2
                                                                               ft
                
                 n rr
                 Q] {p
                 3 tO
                 n* o
                 to ^
ID
n
H-  a tn s
3  *-•• ft 0>
    W  &) X
D)  O  ft H-
«—  n  a> 3


    ft    N
Cr  f    (D
                                      Mi
cn
ft
0)
cr in  cr s-o  p en
M o  w  ?  ft  » rr
Q f-1 
                                                                                                ID
                                                                                                oo

-------
                               -17-




        Model 7 was proposed by President Reagan in 1981.


  This fiscal initiative seeks to maximize State discretion

                                                                           j>
  and responsibility for funding decisions.  The plan includes


  a turnback of over 40 domestic programs to the States, and


  categorical federal programs would be transferred to the


  States in the form of block grants.  It anticipates the


  Federal government providing the funds for some major programs


  previously financed by the States so that State funds can be


  applied to the programs being turned back.


  Summary of Models


        The general models delineating specific activities for


  the Federal government and the States indicate a more limited


.  future role for- the Federal government.  In the Models 1 & 2,


         have the lead in direct program administration.  They


  also are responsible for standard setting, either on their


  own in conjunction with the Federal government.  The primary


  responsibilities of the Federal government in Model 1 are


  research and national information collection.  In terms of


  State program approval and oversight, government at the


  national level conducts audits rather than detailed oversight.


  In  the Model 2,  the Federal government is given sole responsi-
                                                                            .   \

  bility for goal setting; other than that, it jointly carries


  out activities with the States.


        In Models 3 and 4, which specifically refer to EPA, the


  role of the Federal government varies according to the type


  of  activity.   Both give EPA responsibility for standard


  getting and .research.   States have the lead in direct program

-------
                                                                              -I
                             -18-

administration, but EPA can, in Model 4,  take over a  program
if a State  is unable or unwilling  to do so.  Likewise, Model
3 gives EPA responsibility  for directing  clean-up efforts.
However, Model 4 restricts  the extent of  EPA's  involvement  in
oversight for mature programs.  In comparing the four models,
the Federal government has  a stronger, though more circumscribed,
role in the EPA models than in those which refer qenerally  to
Federal-State activities.
      The funding models also indicate a  shift  to State
responsibility.  In Model 5, State discretion was restricted
by the Federal government through  categorical grants, which
 iet conditions for the States' acceptance of Federal  money.
But the most recent model reinforces the  activity models'
tendency to give the States the lead in administerii.g environ-
mental programs.  Just as the activity models recommend
State flexibility and input into the formulation of regulations,
this model provides State discretion in funding.

Section IV;  Criteria and Evaluation
      The activity and funding models presented in the previous
section divide responsibilities between the Federal government
and the States.  But some criteria are needed in .order to see
what kinds of implications these models have for the  States
and EPA if they are put into use.  Five criteria have been
        *
Let forth by .AC1R as guidelines in assessing the interdependence
within our intergovernmental system, both now and in  the

-------
                                -19-



'  —- .uture.  These criteria are: national purpose, equity, economic

   efficiency, administrative effectiveness and political account-

   ability  (ACIR, June, 1981).


         National purpose emphasizes the importance of ensuring

   that national goals specified in national .legislation are


   carried out.  If these goals are not being implemented; this

   criterion also implies that the Federal government may involve

   itself in direct program administration.  In the environmental


   area, ACIR points out that the national government used this

   criterion to begin funding more national and fewer State

   objectives.


        . Equity can be divided into two components:  economic


   externalities and fiscal equalization..  ACIR discusses -economic

    xternalities in terms of economics of scale, with responsi-

                                                   j
   bilities being assigned to jurisdictions large enough to

   contain their costs and benefits.  Fiscal equalization entails

   adequate fiscal capacity for States to finance their appropriate


   roles.  Along with these two components,  the Senate report


   suggested that equity may imply nationwide uniformity of standards

   since lax pollution controls in one State may attract industry

   away from a State imposing strict controls (Senate, 1982).


         However, in weighing this criterion decision makers may

   also want to consider two studies whose  findings dispute the

   concern that stringent environmental regulations result in

   industrial  relocation.   In October 1982, a report  by the

   Conservation Foundation found such regulations were a minor

    iterminant in siting a facility.   In choosing a location,

-------
                             -20-

industry ranked such factors as low labor costs and access to
markets higher than the latitude permitted in a State's
environmental laws (Duerksen, 1982).  A summary, released in
June 1983r of a report funded by the National Science Foundation
confirmed ?-he results of this study (Stafford, 1983).  Therefore,
uniformity in State environmental regulations may not be
necessary to assure equity.
      Economic efficiency involves assigning functions to the
level of government capable of performing them at the most
reasonable cost.  States may be more efficient at program
administration because they know what human and financial
resources can be allocated.  On the other, hand, it may be
more economical for the Federal government to conduct research
activities that can be applied on a nationwide basis.
      Administrative effectiveness assumes that activities
will be performed at a geographic level that facilitates
effectiveness.  The .jurisdictions involved should have adequate
management ability to carry out those activities.  In some
cases, ineffectiveness at the state level has been attributed
to vague national goals which complicate implementation.
States have been asked to administer inflexible regulations
which may not apply" to local conditions.  Much of the legislation
passed at the height of the environmental movement advocated
idealistic goals but the methods for translating them into
concrete programs were not so clearly set forth.
      Political accountability emphasizes a need for citizens

-------
                             -21-
sible  for the success or failure of programs.  From one
perspective, State government  responsibilities should be
maximized because States are closer to the people than the
Federal government.  Joint Federal and State actions may have
confused responsibilities, and led to a decline in popular
control over these issues.  National legislators create and
mandate policies, while State officials are obliged to imple-
ment them.  The enlarged federal role has resulted in "authority
costs" to State governments, as traditional decision-making
power has shifted from the State to the national government.
The cost is incurred because national government has
abrogated to itself.a State responsibility by declaring that an
  sue is a national problem to be dealt with at that level
(Hanus, 1981).
Analysis of Activity Models By Criteria
      The models are rated according to the five evaluative
criteria set forth by ACIR.  The models are rated "high",
"medium" or "low" depending on how closely their division of
activities comes to meeting the definition of the criteria.
For example, since political accountability is defined as
knowing whether to hold the Federal or State government respon-
sible for the outcome of a program, then ACIR's model is
rated "low" because it emphasizes joint responsibilities, which
confuses accountability.  The ratings are not based on any
scientific analysis.   Rather, they are strictly "judgment calls"
 ffered in order to provide some perspective on the strengths
and weaknesses of the models in meeting the criteria.

-------
                           - 22 -



      As Table 3 indicates, no model scores high on all of the

criteria.  Instead, the criteria often conflict with one

another, both between themselves and among the models.  In

determining which model to employ, decision-makers will have
                »•
to make choices from among the various criteria, and recognize,

for example, that if equity is desired it may sometimes be

obtained at the price of national purpose.

-------
      3?
   C  rr
   3  M-
   rr  O
 cn cn cn o|x
 rr t— rr r*
 Oi CT 0> rr
 rr H- rr H-
 (D CD CD N

*O HI 0 3
 if O HI co
 Q tf Hi


 ^•8 S-cf
 a (p 0) s£
 to if H1
   0» co rr
   rr    0
Q
rfi
         a
cs  cr cn &  if  n
rr a  (D Q» CD  >"•
Oj  cn  rr p  M  rr

               N
  >a
i  < B w
CD  CD 3
3  » tn 01
rr    -  Q,

rrP-n-l-
S-lD C 3
                               n
                               cr>
                               rr H-
                               t- CO
                              rr
                              H-
                      (D  D) HI cntx
                      3  Q. 0 rt|»-
                      fti 3 rt ju
                      OH-   rr
                      n  3 a to
                              en
                         CO
                              8
                            0>  -  .
                            rr    CD
                            t-"*O I-1
                            *  w ><
                         §3
                      M   «Q
                CO
                      t-h 0) i-h CnlBC
CT Oi 0" £ Q  rr[e-
                   CT   O    D»
                CO  C  O rr'D  3
                   rr i-o co
                      S
                                                           n
                                                           O
                                                           O
                                              r
                                            go o  a 13 in:
                                            0 3  o  n
                                          rr M Q. 3  Q
                                          H- M    (D (Q
                                          O <0 3     if
                                      3
                                      rr
                            goTi"
                            h- rr i—

                            H-83.
                            3 -• CO

                            °goi

                            (T 0) 0

                            §13
                                         0? *o  H^ *O Cn
                                            aw  CD  f rr
                                            rt  <  O Of
                                            HI CD  CO
                                         3" 3  „,  3
                                         CD    O  ul fij


                                         0) o -
                                                    co.

                                                  8TU
                                      CD <  3
                                      W f rr
                                            83  m*o wiac
                                            01
                                            "fl

                                      i-1 rr >
                                      5
                                      s
&m
 25
                                         3  S s 9-
                                         HI CO I— C


                                         "  13 '^
                                            CD CO
                                            tn rr Q,
                                            .   .2
                                            O  H  rr
                                         H. o> 0) g
                                                  'O *O tO C/5
                                                  -  HI H- rr
                                                    .0) < 0)
                                                     3 CD rr
                                                       3 CD
                                                     0)    CO
                                                     3 0)
                                                     a c at
                                                    IS"0-
                                                    •6 n tn
                                                    cT
                                                                          4
                                                                          - (B  (C  W f
                                                                           X  3  rr b
                                                                           f)  tf< &i 5
                                                                  cn CD  &i
                                                                  "O W  rr tu

                                                                  rr O  S" B.
                                                                       rr
                                                                       01
                                           *O  Hi (fl tf  m
                                            '"  0 ft CD  P0t.
                                               ^ g ,g  >f§.

                                            if  D> Q> O (Q

                                               §3 n co  <*
                                               !"• CL H- CD
                                               3 ,  CT 3
                                            I*. »-•• CO !-••
                                            HI cn CD >- co
                                               rr rr h- O
                                            to  CD rr rr  M

                                            ST H- S"
                                            rr 3 (Q HI
                                            (D ID -  O

                                            «    o, "


                                            fr   S.
                                                                     cn
                                                                     rr
                                                                     &>
                                             HI cn
                                             o
                                                                                        3  H-   rr
                                                                                        a 3  a
                                                                                     0>
                                          80)
                                          rr
                                       rr i—'D
                                       rr ~ ~
         cn  r1
         rr  Q
         D)  C
         rr
         
        - CO
                                                                                             en
                                                                                                 O  n 3
                                                                                                 3  o cn
                                                                                                   IO H>
                                                                                                    if cr
                                                                                        I
                                                                     3W uj. CO  Z|
                                                                     rr O CD  0>
                                                                  «  O-K-rrrrl
&CTg-r?
CD CO rr Oi
Oi CD    rr
3 H- M CD
 I H- IS CO
C 3 >
*O CD    0)
   CO CO  Qi
0)    CD  3
HI oi rr f-
HI 3 CO .3
O Q,    I—
if    CD  01

sre-.^
                                                                                                 H- if 3



                                                                                                 rr cr §
                                                                                                   HI
                                                                                                ^O fl) Cfl


                                                                                                M
                                                                                                 Cu    CD
                                                                                  O
                                                                                                   0)
                                                                                                           a

                                                                                                          i
                                                                                                           (-••
                                                                                                           u
                                                                                                              (0





                                                                                                              n

                                                                                                              !->•



                                                                                                              ?


                                                                                                              0)
                                                                                                  0)
                                                                                                  o —
                                                                                                  (D

-------
                                   -24-

             In looking at Table 3, Model 4 stands out because it
      receives high ratings for three criteria:  national purpose,
      equity and administrative effectiveness.  While it does give
      States responsibility for direct program administration, it
      receives only a medium rating for political accountability
      because the model reserves the right for EPA to step in and
      implement a program if the States are unable or unwilling to
      do so.
            Model 3 rates high in the criteria of economic efficiency
      and administrative effectiveness.  It is weaker in the criteria
      of national purpose, equity and political accountability
      because although EPA is authorized to set environmental
      baselines, the level of stringency beyond these minimum standards
      [may differ from State to State.  The model does not describe
      an oversight role for EPA, nor does it consider circumstances
      where Agency intervention in direct program administration
      is warranted.
            Model 2 does not achieve high ratings in any of the
      criteria because of its emphasis on the joint working relation-
      ship between the national government and the States.  In
      stressing the sharing of responsibilities, without identifying
      lead roles for any of them, the model receives low ratings
      in administrative effectiveness and political accountability
      because,  except for direct program administration, neither
      level of  government is singled out as better able to perform
      certain^activities, such as standard setting.  As a result,
      ^citizens  are not sure who to hold accountable for the
L.

-------
                              -25-

 operation of programs.  ACIR prefers joint activities performed
 by the Federal and State governments.  However, it does
 recommend full Federal pre-emption for programs which require
 uniform national standards.  States would administer these
 programs through a contract with the Federal government.  In
 these special cases, political accountability would be
 strengthed because citizens would know to hold the Federal
 government responsible for the design of the program, and
 States for administration.
                                                i
       Model 1 .exhibits a range in criteria ratings.  Its
 strengths lie in economic efficiency, administrative effective-
 ness  and political accountability because only the States
 are given-the.responsibility to administer programs and  ~.        .
.devise regulations.   But these same responsibilities lead to
 low ratings in  national purpose and equity since  individual
 States may create individual standards.
 Analysis ofFunding  Models By Criteria
      Table 4 analyzes four of the funding models  by criteria.
 A  fifth model,  Model 4, is not analyzed  becaus the author
 did not specify the  kind or level of  financial assistance
 provided by EPA.   As in Table 3,  Table 4  indicates that
 criteria must be  weighed against  one  another in the funding
 models.
      None of the  other models achieves consistently high
 ratings across.all the five criteria.  Model 3 receives the
 best  ratings of  the  four.   Its  main strength is economic
Isfficiency because it  offers the  rationale that the Federal government

-------
   10  
EU l-ti CU     CO

^8^*
     (ODD'
n CD  O IO "<
o x  <  n
Q "D  CD  Q) rti
H w  i"(  3 0

"  5  i S *•
   (-••
      rrj
nt
ve
S-8
o>    57 »<
   Q  rr  (t
   <     CO  D>
                                 €  W
                                    W  p
                                    ft  Q

                                       ^
                                §
                                Ct  Q
                  CD  W
                  1 I

                  ?.:
                        Sft   
                             C H
                                      (D
                                      Q,
W 3  ruTJ


ft***  S. i  rr
(I> <  H- I-' CD

   SSfr"
                                   CfllCT
                                   ftlQ
                                   0)|€
                        W !-h  £  £ in
                        rt :-,  r  D rr

                        rr 3  o
                        (D
                                            3 N 3"


                                           "5-    £2-
                                            t->-       rti

                                            iS       o"
                                                              Q'
                                                                          "0
                                                        ft O




                                                        §0
                                                           o a 3 cu
                                                        Ml
                                                        I
                                                        s
                                         SO U3
                                         O ^

                                       (D Q^ 3

                                       J-ff^
                                       (8 f--
CD CD I
O rrl*''
8   tup
   rt|:r
*O CD
ft CO
                                                                       J1
                                                                       a
                                                                          CO
                                                                          ft
                                                                       s
                                                        y rr
                                                           •-•

                                                        g§
                                                                          §

                                                                 s-tt
                                                                 &
                                                                       Cfi 2E

                                                                       srs
                                                                       ft H1
   35 tr
   D* |Q
                                                              LJ- a N
                                                              CD H" CD
                                                              o en co
                                                              rt n

                                                              ^ CD
                                                              (D ft
                                                              CO I--
                                                                       §
                                                                                   o

                                                                                   H-

                                                                                   I?
                                                                                   n

                                                                                   o>
                                                                                   to
(Herit
3 (Foundat
)
on
                                                                                   (D
                                                                                      CO

                                                                                      O
                                                                                      hh



                                                                                      §  &
                                                                                      a &
                                                                                      »•*• I—i

                                                                                     ,3°
                                                                                         *>.
                                                                                         CO


                                                                                        <


                                                                                         ^

                                                                                         ("I
                                                                                         ^D
                                                                                         n
                                                                                   U1


                                                                                   !-•

                                                                                   VD
                                                                                   (Ti
                                                                                   -J
                                                                                   O
                                                                                   tn

                                                                                   0
                                                                                   tn

-------

-------
                              -28-

 assumes the cost of expensive Federal programs because it is
 in a better position to pay for them than the States.   Its
 greatest weakness is in equity because the rest of the funds
 are to come from the States,  which may vary in financial
 capacity.
      Model  6's  lowest point is in political accountability
 since the national government continues to fund programs
 even though the states have more discretion in determining
 priority programs.  Citizens may not be sure who to hold
 responsible for poor program performance: the States,  which
 may have given  priority to another program, or the national
 government, which may have provided inadequate funds.   The
 mixture of  State discretion with Federal funds leads to
'medium ratings  for the other crieria.
      Model  7 emphasizes State discretion and State financing
 of programs. This approach undercuts1 national purpose and
 equity.  It scores only slightly better in economic efficiency,
 administrative  effectiveness and political accountability
 because while States have more control over funding, State
 budgets may not be adequate in meeting these new responsi-
 bilities.   Citizens may blame the Federal government for
 surrendering essential progr?im at a time of State budget
 cutbacks.
      Model  5 is the weakest of the models in terms of  meeting
 most of the criteria.   National purpose is the strength of
 this model  since the national government sets conditions for
'state acceptance of Federal funds.  But these same conditions

-------
                             -29-

hamper administrative effectiveness and political account-
ability because States must follow Federal guidelines.
Conclusions
     A desire for more State autonomy in program administration,
expressed in the concerns voiced by the States, is reflected
in the activity and funding models, as well as in the New
Federalism initiative.  Federal involvement in administering
programs, including those in the environmental area, is reined
in by the most recent models.  The activity models, especially
Models 1 and 2, instead prescribe a Federal role similar to the
kind before environmental protection became a prominent national
issue.  Most of the activity models view research and national
information collection as the main activities of the Federal
government.  Participation by EPA in direct program adminis-
tration is confined to instances of interstate conflict.
     The notable exception to the shift to a reduced Federal
role is in the area of standard setting.  States had respon-
sibility for this activity before environmental protection
was placed on the national agenda.  The Federal govenment
then assumed this responsibiltiy, and EPA-specific models
recommend retaining this activity at the Federal level.
     The general shift toward State control over environmental
programs does advance the flexibility the States seek.  It
also promotes the capabilities of the States to administer

-------
                       - 30 -

programs and results in less detailed Federal oversight.
However, the alleviation of State concerns may come at the
risk of national concerns, which was revealed when the activity
and funding models were analyzed by criteria.  Decision-makers
may have to decide whether they will implement a model that
solely advances State autonomy, or one that strikes a balance
between nation.il and State concerns.

-------
                            -31-
                       WORKS CONSULTED
Advisory  Commission on Intergovernmental-Relations.  An
  Agenda for American Federalism:  Restoring Confidence and
  Competence*  Washington, D.C.:  Advisory Commission on
  Intergovernmental Relations, June, 1981.

	.  Protecting the Environment;  Politics,
  Pollution, and Federal Policy.  Washington, D.C.:  Advisory
  Commission on Intergovernmental Relations, 1981.

	.  Regulatory Federalism;  Policy, Process,
  Impact and Reform.  Washington, D.C.:  Advisory Commission on
  Intergovernmental Relations, 1982.

	.  The Future of Federalism in the 1980s.
  Washington, D.C.:  Advisory Commission on Intergovernmental
  Relations, July, 1981. :   ..

Duerksen, Christopher J.  "Siting New Industry:  An Environmental
   Perspective".  Washington, D.C.:  The Conservation Foundation,
   October, 1982.     •    :••'.'.         :.
                '•'"-:'   .-••.••-'•   -   •   " •' '•?'    '   • '     - •"•"
Elazar, Daniel J. American Federalism;  A View From the
  States, 2d Edition.  New York:  Harper & Row, Publishers,  .
  Inc., 1972.
Fairfax, Sally.  "Old Recipes for New Federalism."
  Environmental Law 945. (1982).
12
Grodzins, Morton.  The American System;  A New View of
  Government in the United States.  Chicago:  Rand, McNally,
  1966.

Hanus, Jerome J.  "Authority Costs in Intergovernmental
  Relations."  In The Nationalization of State Government,
  pp. 1-38.  Edited by Hanus.  Lexington, MA:  D.C. Heath
  and Company, 1981.

Hawkins, Robert B. Jr., ed.  American Federalism;  A New .
  Partnership For The Republic.  San Francisco:.  Institute For
  Contemporary Studies, 1982.

Huffman, James.  "Governing America's Resources:  Federalism
  in the 1980's."  12 Environmental law 863  (1982).

Leach, Richard H., ed.  Intergovernmental Relations In The
  1980s.  New York:  Marcel Dekker, Inc.; 1983.

Leman, Christopher K. and Robert H. Nelson.  "The Rise of
  Managerial Federalism:  An Assessment of Benefits and Costs."

-------
                              -32-
   12 Environmental Law 981 (1982).

 Lyons,  William W.  "Federalism and  Resource  Development:   A
   New Role For States?"   12 Environmental Law  931  (1982).

 MacMahon,  Arthur W.   Administering  Federalism  in a Democracy.
   New York:   Oxford University Press,  1972.

 National Governors'  Association.   "Report of Work  Group  on
   Delegation  and Oversight."  Washington, D.C.  3  December
   1982.

 Norton, Gale  Ann.   "Decentralizing  Environmental Decision Making."
   In Agenda '83, pp.  339-346.   Edited  by Richard N.  Holwill.
   Washington,  D.C.:  The  Heritage Foundation, 1983.

 Phaup,  Marvin.   "Regulation, Knowledge and  Federalism:   Should
   National Regulatory Authority Be  Limited?"   Washington,  D.C.:
   Congressional Budget Office, 1983.

 Stafford,  Howard A.   "The Effects  of Environmental Regulations
   on Industrial Location", Summary.  Cincinnati, Ohio:   University
   of Cincinnati, June, 19.83.

 Stewart, Richard B.   "Pyramids of  Sacrifice?   Problems-of
   Federalism  in Mandating State Implementation of  National
   Environmental Policy."   86 Yale  Law  Journal  1196 (1977).

 Sullivan,  William.  "Building An Environmental Consensus."
   In Agenda 83, pp.  333-339.  Edited by Richard N. Holwill.
   Washington,  D.C.:   The  Hertiage  Foundation,  1983.

 Sundquist, James L.  and  David W. Davis. Making Federalism
   Work.  Washington,  D.C.:  Brookings  Institution, 1969.

 Thomas, Richard D.  "Intergovernmental Coordination in  The
   Implementation of National Air and Water  Policies."   In
   Public Policy Making' in a Federal System, pp. 129-148.
   Edited by Charles 0. Jones and Robert D.  Thomas.  Beverly
   Hills:   Sage  Publications, Inc.,  1976.

 U.S. General  Accounting Office. Federal-State Environmental
   Programs — The  State  Perspective.   Washington,  D.C.:
   Government  Printing Office,  1980.   (CED-80-106,  Aug.,  22,
   1980)

 U.S. Senate.   Committee  on Environment and  Public  Works.
   Federal-State Relations in Transition! Implications.For
   Environmental Policy.   Committee  Print.   Washington,  D.C.:
   Government  Printing Office,  1982.  Prepared  by Congressional
   Research Service.

'walker, David B.   Toward  A Functioning Federalism.  Cambridge,
   MA:   Winthrop Publishers, Inc.,  1981.

-------

                              -33-
 Weidenbaum,  Murray L.   "Strengthening Our Federal  System."
   In American Federalism:,  A New Partnership For The Republic,
   pp.  89-98.   Edited  by Robert B.  Hawkins,  Jr.,  San Francisco:
   Institute  Conteporary Studies, 1982.

 Wildavsky, Aaron,  ed.   American Federalism in Perspective.
   Boston:  Little,  Brown and Company, 1967.

 Wright,  Deil  S.  Understanding Intergovernmental Relations.
   North  Scithate,  MA:   Duxburg Press, 1981.
                       PRIMARY INTERVIEWS
 Beam,  David.   Senior analyst  with the Advisory  Commission oh
   Intergovernmental  Relations,  Washington,  D.C.,  June*  1983.

.Fix, Michael.   Research  associate with the  Urban  Irfstitute,
   Washington,  D.C.,  June,  1983..

 Higgins,  Robert.   Director, Center for the  Study.of  Federalism,
   Washington,  D.C.,  July,  1983.

 Wrightson, Margaret.   Professor of Government,  Georgetown
   University,  Washington, .D.C.,  June, 1983.

-------
                         GROUP  III
ENVIRONMENTAL PRODUCTION TARGETS

      Until now, EPA's role in the Construction Grants program
has dealt almost exclusively with ensuring financial integrity,
planning, and process management.  For a variety of reasons,
both  technological and pragmatic, the Agency has emphasized
accountability for the quality of each major step in the
process of planning, design, and construction.  But EPA has
not set explicit, accountable production standards for bringing
projects on line within a certain period.  We have monitored
production, even issued report cards to our Regions to emphasize
the need for efficiency, but we have not moved to require the
achievement of a set amount of new treatment capacity as an
annual target.

      One means to address this situation becomes more available
as one actor,'EPA, removes itself from the review (and delay)
chain.  EPA might set certain performance standards for State
programs, negotiating with the State a given amount of treatment
capacity to be brought on line within a given fiscal year.  Top
priority projects could be weighted to provide an extra measure
of success to a State program as they are completed, and States
could be "scored" each year against annual performance targets.
States could then be rated on the basis of their performance,
matching their actual score versus their target,  and funds for
subsequent years could be apportioned, at least in part, on
-his basis.   States failing to meet their target by a substan-
tial margin would be subject to a diagnosis of their administrative
process, with technical assistance provided, to improve their
capability,  and to allow restoration of full funding for future
years.    .

     This proposal suggests a way of emphasizing production,
rather than.processing,  as the basic means of determining State
program success,  and suggests a simple but direct reward/sanction
system to reinforce the objective of completing projects in order
to realize their environmental benefits.

EPA REGULATOR - MUNICIPALITY PERMIT COMPLIANCE

     The Agency posture on discharge permit standards would be to
vigorously enforce against violators.   When violations are detected,
the State (or,  if necessary,  EPA) would notify the violator and re-
quest that the violator inform the State  (or EPA)  of the cause of
the' violation.   If the violator is reluctant to provide the informa-
tion we would request a court order directing that the information
be'provided.          -
                                33

-------