By Lisa Blomgren Amsler
Readers of the National Civic Review care about effective local government, including innovative programs on health, housing, education, social services, transportation, economic development, environmental sustainability, and financial sustainability. We also care about creating these programs collaboratively, through civic engagement, racial equity and inclusion, and democratic governance. What if state law, instead of empowering communities to solve problems together, effectively prohibits it? This is what state legislatures throughout the United States have increasingly done over the past decade, under the guise of what legal scholars term “intrastate preemption.”
What is Intrastate Preemption?
Simply put, intrastate preemption is where the state legislature passes, and the governor signs, a state law that prohibits a municipality from enacting certain ordinances on programs or policies. We are accustomed to federal preemption. Here, Congress exercises its Commerce Clause power to enact and the President signs into law a bill that mandates all states enforce a consistent national rule, such as laws on minimum wage, clean air, or clean water. Federal preemption tends to operate for the public benefit by setting minimum standards above which states may go, for example, by enacting a higher minimum wage for their state.
Contemporary intrastate preemption tends to limit communities from enacting a rule that might benefit the public but may cost businesses money. For example, instead of raising the state minimum wage above the federal or leaving municipalities free to adopt a higher living wage ordinance in their community, states lock state minimum wage to the federal. They prohibit municipalities from adopting anything higher as a local ordinance regulating local businesses operating within their boundaries. This is true even though the federal Fair Labor Standards Act (FLSA) specifically authorizes state governments to raise their own minimum wages above the FLSA minimum. In other words, even if there is a strong community consensus supporting a higher living wage ordinance, the local city council may not enact it.
Where did it come from?
Intrastate preemption dates back to the early years of the industrial revolution and the developing law of local government (this discussion is adapted from a 2014 article I coauthored with Tina Nabatchi). Early 19th century courts viewed municipalities only as creatures of the state. Courts used the public/private distinction to limit municipalities. Wealthy private actors requested and paid for public improvements like streets using special assessments. Analogous to gated communities of the rich today, property owners then paid for police protection through private deputies. Under Dillon’s Rule, courts considered municipalities not as governments, but as corporate creatures of the state. Municipalities had only those powers the legislature explicitly delegated through law, or implicitly delegated by the state’s act of incorporation, including limited power to administer local affairs and make economic expenditures. Otherwise, municipalities were powerless to act.
In the late 19th century, the notion of “home rule” emerged. To strengthen municipalities, legislatures authorized a zone of action insulated from state legislative interference and potential corruption through special acts. There were three approaches. One sought home rule charters over traditional matters of local concern to maintain municipal autonomy as an impartial coordinator of private markets. The second was an effort to protect a municipality from state legislative interference by entrusting local powers to professional, impartial, and expert administrators. The third used broad public cooperation on an expanded scope of municipal action; it made previously private services public, for example transportation and utilities.
In the Post-WWII era, economist Milton Friedman advocated a wholesale strategy of countering New Deal-era policies by expanding the scope of the free markets and limiting the reach of government. Those influenced by him and other “Chicago School” economists believed markets were more effective than government in achieving their goal of maximizing individual utility and freedom of choice. Nowhere in Friedman’s frame were the interests of society in the common or public good.
In the 1970s, soon-to-be Supreme Court Associate Justice Lewis Powell (1971) wrote a highly influential memo for the US Chamber of Commerce. Ultimately, his leadership changed the Chamber from a bipartisan policy group into a right-wing lobbying entity working to change the laws and rules to favor corporate influence and power. It also actively and successfully sought Supreme Court appointees who would support this agenda. In 1975, inspired by the Powell memorandum, a group of conservative activists founded the nonprofit American Legislative Exchange Council (ALEC) to exert greater influence over state legislation. Since then, ALEC has developed model intrastate preemption statutes and offered these to newly elected conservative state legislators for passage.
In the 50 or more years since these initiatives, less regulated markets in the United States have contributed to a return to the Gilded Age’s extreme income inequality, according to the Economic Policy Institute. Congress significantly reduced the federal top tax bracket and corporate taxes in the Trump administration; people in the U.S. top 10 percent of income have the great majority of the wealth; life expectancy has dropped in the U.S.; and absent adequate tax collections from the wealthy, and due in part to global movement of wealth, the U.S. has a significant budget deficit. With an increasing number of people suffering what some call “economic despair,” we currently have a democracy fraught with adversarial language, increasingly violent action, and challenges to the rule of law.
While these developments are at the federal level, they have led to parallel developments at the state level through intrastate preemption. Intrastate preemption is often justified as a means for making the state more attractive to business by eliminating local regulation. While a single consistent state rule may make sense to provide public safety, it may not make sense to limit increases in minimum wage. It may simply make communities in that state less desirable for workers. Some states are experiencing brain drain, for example, where their public universities graduate students who simply move out of state.
What does intrastate preemption look like?
Increasingly, there are 50-state surveys revealing patterns of intrastate preemption. More conservative preemption statutes limit local action in a way that benefits business. In environmental policy, these intrastate preemption statutes limit local government action to mitigate climate change. For example, more conservative state legislatures have adopted intrastate preemption statutes that prohibit municipalities from limiting single use plastic bags or fracking, or from supplying a municipal utility for electricity or broadband services. Other policy arenas that particularly attract legislatures to prohibit local government action include employment, e.g., minimum wage, health-related benefits such as sick leave, and family medical leave, employment discrimination, meal, water, and rest breaks, vacation time, jury duty leave, voting leave, drug testing, and social media privacy), and housing, e.g., rent and regulation of landlords.
More liberal intrastate preemption statutes direct municipalities to provide certain benefits to the public or allow municipalities to mandate that businesses provide certain minimum standards or benefits to employees in that municipality’s jurisdiction. With the emergence of bussing or transporting thousands of immigrants from the southern border to more progressive major cities like San Francisco, Chicago, or New York, these preemption statutes too can cause problems, particularly where a municipality lacks the financial resources to meet a mandate to provide housing or services. In the environmental arena, some states ban municipalities from authorizing fracking or mandate that any new construction includes renewable energy sources such as solar panels.
ALEC’s models adopted by more conservative state legislatures illustrate how intrastate preemption takes form in state law. For example, examine its “A Local Resolution in Support of State Minimum Wage Law” (ALEC, 2014):
WHEREAS, [Insert Jurisdiction] is a political subdivision, created by the [Insert State]
WHEREAS, [Insert Jurisdiction] is tasked by the [Insert State] to carry out certain core responsibilities as approved by [Insert State].
WHEREAS, those core responsibilities are outlined in the [Insert State Code or Charter]
WHEREAS, a local minimum wage ordinance [Insert Jurisdiction] would go beyond our core responsibilities of the [Insert Jurisdiction] and place an undue hardship on local businesses.
WHEREAS, economic stability and growth are among the most important factors affecting the general welfare of the people of the state, and that economic stability and growth are therefore among the most important matters for which the Legislature is responsible;
WHEREAS, mandated wage rates comprise a major cost component for private enterprises, and are among the chief factors affecting the economic stability and growth of this state;
WHEREAS, local variations in mandated wage rates threaten many businesses with a loss of employees to areas which require higher mandated wage rates, threaten many other businesses with the loss of patrons to areas which allow lower mandated wage rates, and are therefore detrimental to the business environment of the state and to the citizens, businesses, and governments of the various political subdivisions as well as local labor markets;
WHEREAS, in order for businesses to remain competitive and yet attract and retain the highest possible caliber of employees, private enterprises in this state must be allowed to function in a uniform environment with respect to mandated wage rates; and
WHEREAS, mandated wage disparity between political subdivisions of the state creates an anticompetitive marketplace that fosters job and business relocation.
NOW, BE IT RESOLVED, by the (Insert Elected Body) of the (Insert Jurisdiction), that there is hereby support the [Insert State] to handle all issues pertaining to minimum wage laws in a manner that encourages business continuity across local jurisdictional boundaries, thereby securing economic growth and job creation.
Passed and adopted by the (Insert Elected Body) of the (Jurisdiction), on the (Insert date)
The resolution simply moves all control over minimum wage to the state; this prohibits local government from adopting a higher minimum or “living wage.” The clear rationale is support of business, regardless of how little the current federal minimum wage relates to the current cost of living. Even if there is a broad consensus in support of a living wage in the community, local government cannot adopt one if the state has preempted the field for this policy issue.
Another example of ALEC’s model laws, if adopted, would prohibit local governments from enacting rent control provisions. ALEC expressly uses the word “preemption” in its title, the “Rent Control Preemption Act (ALEC 2023):”
Model Policy
{Title, enacting clause, etc.}
Section 1. This Act may be cited as the Rent Control Preemption Act.
Section 2.
As used in this Act, “local governmental unit” means a political subdivision of this state, including, but not limited to, a county, city, village, or township, if the political subdivision provides local government services for residents in a geographically limited area of this State as its primary purpose and has the power to act primarily on behalf of that area.
Section 3.
(A) A local governmental unit shall not enact, maintain, or enforce an ordinance or resolution that would have the effect of controlling the amount of rent charged for leasing private residential or commercial property.
(B) This Section does not impair the right of any local governmental unit to manage and control residential property in which the local governmental unit has property interest.
Section 4. {Severability clause.}
Section 5. {Repealer clause.}
Section 6. {Effective date.}
Reapproved by ALEC Board of Directors on January 28, 2013.
Reapproved by ALEC Board of Directors on November 16, 2017.
Increasing rents make housing unaffordable. While the NIMBY or Not in My Backyard phenomenon may lead property owners to resist construction of new affordable housing near where they live, a more significant factor is the 21st Century consolidation of existing rental property through corporate ownership. Bottom line, rent control makes it possible for workers to live near where they work; banning rent control means communities have fewer ways of addressing the problem of housing affordability.
These are two examples of this increasingly dominant approach for disempowering local government in its efforts to address policy issues in its community.
How does intrastate preemption affect community problem-solving?
Tocqueville gave a gift to the young United States when he traveled the country observing and recording what he saw about how people in communities governed themselves. He marveled at how people used freedom to organize their communities and solve problems. He observed how free individuals, who may be weak alone, can become strong in association with each other in conditions of democratic equality. Municipalities are a building block of democracy in the United States.
For decades, conservatives advocated for small government and local control. However, divisions among members of a single party and between our two major political parties have become more extreme. The moderate center is facing factions that intentionally undermine the rule of law, e.g., recently Alabama disregarding court orders regarding voting districts. States have refused statewide expansion of Medicaid or increased unemployment benefits during the Covid emergency. Meanwhile, urban centers with larger populations directly confront the impacts on residents’ health from homelessness, food insecurity, and lack of access to physical or mental health care. Elective officials representing these population centers tend to be more progressive in tackling problems. Intrastate preemption on policies that affect social determinants of health can have an adverse impact on health based on race and ethnicity.
Intrastate preemption also effectively limits community collaboration and problem-solving. It hinders effective collaborative governance by the public, private, and nonprofit organizations, and the civic sector in a community. It means that every community in the state is prohibited from adopting contrary ordinances, rules, and regulations enforceable as law on a range of policy issues.
This places local elected officials in a Catch-22 position. They may conduct innovative public engagement processes bringing members of the community together for facilitated dialogue and deliberation. They may use National Issues Forums with issue guides for facilitated and deliberative public choice making on specific policy proposals. Or, worst case scenario, elected officials may simply sit back and listen to angry members of the public complain for their two or three minutes at the microphone during a public meeting of the city or town council under a Sunshine or Open-Door law.
However, with intrastate preemption on a policy arena, they cannot take action in the form of an enforceable ordinance that conflicts with the state legislature’s mandate. Even if there is a strong consensus on a policy among members of the public across political parties and demographics, the elected officials in a municipality cannot implement that consensus through the rule of law in the face of intrastate preemption.
Where do we go from here?
Every municipality faces its own microenvironment and ecosystem, its own geography, economy, and population demographics, its own culture, history, and traditions. Through local collective action, it can address shared problems. We have democracy and voting for local, state, and national representatives through which we take collective action. Through collective bargaining, elected representatives engage in workplace democracy within a zone of mandatory negotiation. Members then vote on whether to ratify a tentative contract deal. Intrastate preemption effectively eviscerates aspects of local democracy by prohibiting elected officials from voting to take collective action on certain policy issues like living wage, rent control, certain forms of land use, renewable energy, and many other important community interests.
States could adopt laws that let communities override intrastate preemption through democratic action. The state legislatures could require that a city or town council and/or voters in a municipality pass an ordinance overriding state law on a particular policy by a certain majority. For example, it could authorize municipalities to adopt a living wage ordinance by a 60 percent majority vote. Not all municipalities are alike. Towns in rural America have different demographics from major cities. People who live in a place have a better sense of what they need to do to solve problems in their own community.
Polls show that many people in the United States are angry with big government. However, that anger tends to focus on the national government. The vast majority of voters in the United States have no idea what intrastate preemption is. They know there are major problems that they see in their communities and through media nationally. However, they may not know why their local government is having trouble taking action on some of these problems. They may blame the federal government for barriers to effective action that their own state legislatures have created. The United States is a republic of states, each with its own history and resulting widely varying approaches to policy in public health, employment, housing, safety, property, education, and many other areas.
The starting place for building a more collaborative and less adversarial democracy is strengthening the power of communities to take collective action to solve their own problems. This means freeing people acting in association with each other to reach consensus on rules that effectively address policy issues locally, consistent with the U.S. Constitution and Bill of Rights, and consistent with their state constitution. It is time to make intrastate preemption a topic of public debate.
Lisa Blomgren Amsler is Distinguished Professor and Keller-Runden Professor of Public Service Indiana University Paul H. O’Neill School of Public & Environmental Affairs
