•What is the power relationship between state governments and local government? •How do the authors of State Preemption of Local Laws: Origins and Modern Trends define preemption? Note: The question is not asking you to describe forms and types of preemption. The question is asking you to provide the definition of preemption developed by the authors. •How does the ″new preemption″ differ from previous forms of preemption? Be sure to use examples to illustrate key points about the differences. Reading tips for the article State Preemption of Local Laws: Origins and Modern Trends Below are notes that will help you think about the 4 epochs addressed by the authors. 1970s/1980s Tax and expenditure limitations (TELs) State sought to prevent local government from taking action State places limits on local governments’ power in the area of revenue collection (collecting money) and revenue spending (spending money). Taxes are an important source of revenue for local government (cities and counties) and the two taxes typically used by cities and counties are property taxes and sales taxes. 1Most goods a person buys are subject to a sales tax. For example, residents of Texas will pay a sales tax when buying appliances, clothing, beer, electronics, cleaning supplies, vehicles, etc. 2For taxation purposes property is referred to as real property. Thus land (undeveloped acreage with no structures on it) and land with structures on it (residential homes, commercial buildings, etc.) are subject to taxes. Limits on revenue collecting (tax) Sales Tax The Texas state government imposes a statewide sales tax and the tax rate is 6.25. Thus, if an individual bought a pair of shoes priced at $30, the individual would pay $1.87 in sales tax to the Texas state government (30 X 6.25 ＝ 1.87). Texas state government allows local government to also charge a sales tax but places a limit on how much of a sales tax can be charged. The total sales tax rate (state tax rate plus local tax rate) on an item cannot exceed 8.25%, which means local government cannot have a tax rate above 2% (state tax rate of 6.25% + local government tax rate of 2% ＝ 8.25%). The Texas state government passed this tax law to protect consumers from being charged excessive sales taxes. Property Tax County government in Texas is responsible for establishing the value of property for tax purposes. The value of property is assessed each year and, in most cases, the value increases. For example, a residential home purchases in 2020 for $152,000 might have an assessed value of $165,000 in 2021 (an increase of 8.55%) and an assessed value of $175,000 in 2022 (an increase of 6.06%). If the local government property tax rate is 1.96%, then the total property taxes owed each year are as follows would be 2020 $2,979; 2021 $3,234; and 2022 $3,340. Obviously, as the assessed value increases, so does the amount of property taxes owed. The Texas state government limits how much county governments can increase the assessed value from year-to-year on a residential home that is the primary residence of the owner. This is commonly referred to as the homestead rule. Thus, in the case above, the highest change in assessed value that a county government could place on the house in 2023 would be no more than 10% of the 2022 assessed value, so the 2023 house assessed value could not go beyond $192,500. The Texas state government pass this law to protect homeowners against large increases in their property taxes from one year to the next. *Note: The homestead rule does not apply if a homeowner makes substantial improvements to their home, such as: new roof, new driveway, pool, new wiring, deck, etc. The value of the new improvement can be added to the assessed value and thus the assessed value could go above the 10% cap. Limits on revenue spending Most individuals have enough money to pay for their daily operation (rent, gas, groceries, etc.). But most individuals do not have enough cash on hand to make a big, costly purchase such as purchasing a home or a vehicle. Most individuals take out a loan from a bank to pay for a home or vehicle. Of course, the individuals must pay the loan back to the bank. The individuals will use a portion of their income to pay back the loan. Like individuals, local government has enough money to pay for its daily operation (electrical and gas bills for buildings owned by local government, maintenance fees for buildings owned by local government, wages and salaries for local government officials, etc.). Just like in the case there comes a when a local government may need to make a big, costly purchase for which it does not have the funds to purchase, such as the need to build a new school due to rapid population growth in a city. Individuals borrow from banks and local government borrows through bonds. The local government promise to pay back the amount of the bond typically through future property taxes and future sales taxes. Most large purchases made by local government is funded this way. One of the restriction the Texas state government places on local government spending is by requiring local government to obtain voter approval before taking on a debt that would be repaid through future property taxes or sales taxes. The Texas state government passed this law to give residents of local governments a means of controlling future taxes. 1980s/1990s Unfunded mandates States demanded local government take action but did not pay the cost of the action, hence the phrase unfunded mandates. Examples of unfunded mandates include: 1State governments requiring local governments to offer more training to local government law enforcement officers 2State governments requiring school districts to include science courses that would require the construction of science labs. 1990s/2000s Public health State preemptive laws aimed at public health issues and were attempts to prevent local government from taking action that would be stricter than action taken at the state level. Examples include: 1Smoking regulations 2Gun regulations 2000s New Preemption State preemptive laws are vacuum preemption which occurs when states prevent local governments from passing regulations, but the states do not provide regulation guidelines. For example, Texas state government passed a preemptive law that denied cities from regulating fracking, but at the state level the regulation regarding where fracking can take place, where fracking equipment can be set up, etc. is minimal and obscure. State preemptive laws are punitive laws that state governments tack on fees and other forms of punishment on local government not in compliance with the state preemptive laws. **************************************************** Outline for part two of revised and expanded essay IWhat is the power relationship between states and local government? AWhy and how are state governments in control of local government? (Sources for information: video lectures, State Preemption of Local Laws article pages 147 – 148, and the other assigned readings) BWhat is home rule local government? (Sources for information: video lectures) CHave states historically moved towards or away from home rule for local government? IIWhat are preemption laws? AExplain how home rule cities creates a situation where home rule cities and their respective state governments are in conflict. BExplain how state governments use preemption laws to resolve the conflict. IIINew preemption vs. earlier preemption ADiscuss vacuum preemption and punitive preemption 1Use an examples from readings, video lectures, and/or notes posted to Blackboard. BUnfunded mandates vs new preemption 1Define unfunded mandates (i.e., what did the mandates require local government to do – take action or restrict action?) 2Compare to new preemption CDiscuss public health and new preemption 1Define public health preemption 1. Compare to new preemption
