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Pass Interference: For State Legislatures Around the Country, Passing Bills 

By Scott Mooneyham, NCLM Director of Public Affairs

The laundry list of North Carolina laws preempting or otherwise whacking a stick over the collective heads of local government is, by now, pretty well known to those who operate in the arena of local government. Annexation restrictions, environmental and safety permitting limits, a prohibition on local hydraulic fracturing bans, undoing local business privilege license taxes – not to mention specific bills aimed at redrawing local election districts and wresting control of the water system from Asheville and airport from Charlotte – are some notable measures making the list, even if a few of them remain in limbo amid court challenges. Of course, House Bill 2, the so-called bathroom bill, put the national spotlight on the issue of local preemption. That legislation, passed during a March special legislative session, went beyond preempting a Charlotte local ordinance addressing transgender individuals’ access to public restrooms to more broadly prohibit local ordinances affecting discrimination and business employment practices, even those of local government contractors.

The national attention focused on North Carolina because of the Charlotte
ordinance and the state-level response was nearly impossible to miss by anyone living here. What may be less apparent to North Carolinians is that a trend of more and more preemption of local governments is happening all across the United States.

Last year, after Birmingham, Ala., passed an ordinance that would have incrementally raised the minimum wage in that city to $10.10 an hour, the Alabama legislature and governor stepped in to block it or any similar moves by other cities to impose local minimum wage requirements. St. Louis and other cities in Missouri saw the passage of the same kind of law to block local minimum wage ordinances as well as local efforts to ban plastic bags. Nineteen states now have put in place wage preemption laws. While some cities and towns across the United States have chaffed at those laws, they at least have avoided the fate of municipalities in Arizona. There, a law passed earlier this year requires the state treasurer to withhold revenue-sharing dollars from municipalities and counties should the state attorney general conclude that local laws or policies are contrary to state statutes. Arizona mayors called the bill “heavy-handed” and “intrusive,” and said that it “minimizes the important role of local elected officials.” Not surprisingly, they urged Arizona Gov. Doug Ducey to veto the bill, but it was likely a lost cause by then. Just a couple of months earlier, in his State of the State address, Ducey had said, “If these political subdivisions don’t stop, they’ll drive our economy off a cliff. These efforts are based on the trendy, feel-good policies that are stifling opportunity across the nation.” Note that he referred to that state’s municipalities not as “cities and towns,” but as “political subdivisions.”

In North Carolina, the state Senate passed a similar bill this year focused solely on any local policies that violated a 2015 state ban on immigrant sanctuary city policies. That more narrow legislation threatened Powell Bill transportation dollars for cities and towns, and school funding for counties. The bill, though, did not pass the House.

To some degree, preemption of local government is old hat, particularly in the Old North State. Longtime journalist and legislative observer Barry Yeoman, writing recently about HB 2 for the Triangle-based publication IndyWeek, pointed out that former Durham Democratic Rep. George Miller introduced a bill in 1987 making it harder to remove billboards considered nuisances just as the City of Raleigh was trying to do so. Yeoman also delved into the tobacco industry’s pioneering use of preemption in the 1980s to undo local indoor-smoking regulations in states across the country. Still, if preemption isn’t new, there is plenty of evidence that it has grown in recent years.

According to Grassroots Change, a health and environmental-related advocacy organization formed to combat preemption, the largest number of local preemption bills ever were filed in state legislatures in 2016. The group found that such bills had been filed in 29 states, with more than one local preemption bill filed in 17 states.

So, what’s going on here? Why this trend of state legislatures’ blocking and
tackling the decisions of locally-elected decision-makers? The answer depends
on who you ask.

Partisan politics certainly can’t be ignored. Since the 2010 election, Republicans have had control of two-thirds of U.S. state legislatures. Democratic mayors, meanwhile, lead 22 of the 25 largest cities in the country. In North Carolina and elsewhere, a growing number of Democratic legislators represent urban areas while rural areas are overwhelmingly represented by Republican legislators.

Republican governors and legislators, though, say they are responding to a trend of interest groups seeking to bypass GOP legislatures by approaching more receptive local governments with policy proposals. In the aftermath of the passage of HB 2, Gov. Pat McCrory made clear that he viewed the Charlotte measure and the national response to HB 2 in that way, although the proposed ordinance had been an issue in last fall’s race that led to the election of Mayor Jennifer Roberts.

Another line of thought is that state legislatures have increasingly become the place where the country’s real policy battles are being waged amid continuing gridlock in Washington. Lobbyist registrations back up that theory. According to the Center for Public Integrity, the number of entities hiring lobbyists at the state level has grown by 10 percent since 2010. In roughly that same period, from 2010 to 2014, the number of companies and organizations with registered federal lobbyists declined by 25 percent. In that atmosphere, it is not shocking that an organization like the pro-business American Legislative Exchange Council – with its uniform, model bills passed from state to state – would become a major player in state policy formation. Often, that uniform legislation comes at the expense of local ordinances tailored to pursue a unique community vision. Proponents say those bills are intended to avoid a patchwork of local regulation that hinders business. Lately, that word “patchwork” has come up a lot in statehouses around the country.

Lucy Allen, the longtime mayor of Louisburg, a former NCLM president and member of the N.C. House from 2003-2010, sees explanations a little closer to home than grand partisan battles or strategic maneuvering by competing interest groups. “Legislators who are promoting this type of legislation hear from people who have an axe to grind,” Allen said. “How often do you hear a candidate or elected official say, ‘I represent the people?’ Well, which people? They are talking about the people they listen to.” But helping one or even a few businesses while damaging the engine that is driving the overall economic success of a region is no way to create widely-shared prosperity, she said.

No doubt, the proponents of preemptive bills, particularly those focused on regulatory issues, see themselves as promoting business and economic growth. But a growing number of businesses look for unique cultural fits for their business models and workforces. Barring localities from pursuing their own visions of what their towns or cities should be about could mean fewer of those fits, and economic development opportunities lost. Bruce Katz, a Brooking Institution scholar who focuses on urbanization, recently told Governing Magazine that focusing on the progressive policies that surround many of these state-local battles ignores the larger issue of state government preventing cities from reaching their full economic potential. “In many ways, the mismatch between state political power and city market power has never been more dramatic,” Katz said.