NCPA - National Center for Policy Analysis

What Are Unfunded Mandates Costing the States?

June 8, 2015

Since President Obama took office, his regulators have added $35 billion in unfunded regulatory costs and at least 75 million paperwork burden hours on state and local governments. Regulation of industries or businesses tends to receive a majority of the coverage, but the mandates placed on cash-strapped states and local governments can result in far more profound impacts.

  • In 2010, when the president signed the Affordable Care Act (ACA) and the Dodd-Frank financial reform, the federal government imposed 86 unfunded mandates on state and local governments, easily a modern record. 
  • More impactful, however, might have been the seven mandates that exceeded the statutory threshold, which currently stands at $77 million annually. For comparison, from 2002 to 2006, there were only seven unfunded mandates that exceeded the threshold and Congress and the president managed to match that total in a single year. 

The ACA has played an outsized role driving up burdens for the states. Despite several states' reluctance to expand Medicaid or create exchanges, according to administration figures, the new burdens on local governments are tremendous. There are six paperwork requirements related to the ACA that impose more than one million paperwork hours on local governments. Combined, these six collections impose 27.1 million paperwork burden hours. In dollars, this translates to about $880 million.

One of the largest culprits for these escalating burdens is the "Essential Health Benefits; Exchanges: Eligibility and Enrollment" requirement. According to the administration, the measure will add more than 12.8 million hours of paperwork and cost $336.9 million annually. Per state (including D.C.), this amounts to 251,000 hours and $6.6 million, for one ACA paperwork requirement.

Given recent history, it is unlikely that these burdens will dissipate soon. 

Source: Sam Batkins, "The State Share of Undunded Regulations: Nearly $35 Billion, 75 Million Paperwork Hours," American Action Forum, June 4, 2015. 


Browse more articles on Government Issues