Federal government should match state railway funding—allows state flexibility
NCSL 11 [National Conference of State Legislatures, 2011, “Surface Transportation Federalism”, http://www.ncsl.org/documents/transportation/SurfTransFederalism.pdf] aw
User fees designated for deposit in the HTF should be made available for flexible transportation usage by states. States should have flexibility in the use of funds for intercity passenger rail service, including Amtrak. The federal match should encourage state efforts in specific programs of national significance, but not discourage flexibility in state or insular area transference of categorical funds. Despite separate federal authorizing legislation for Amtrak, Congress must ensure that surface transportation authorizing legislation acknowledges and fully supports the role of passenger rail for ensuring interstate mobility. States that invest in or otherwise support passenger rail services to complement highway mobility options should be rewarded and encouraged.
Only perm can solve—Decentralization fails democracy gains are insignificant, lack of good budget management, and no way to generate enough revenue without money from the government
Erik Wibbels, Associate Professor at Duke University, October 2k, American Journal of Political Science, Vol. 44 No. 4, “Federalism and the Politics of Macroeconomic Policy and Performance”, pg. 689, JSTOR, http://www.jstor.org/stable/2669275?seq=2, TB
First, federal political institutions are often less democratic than their counterparts in the developed world. Civic participation is often marginal at the provincial level; the local press can be compromised; provincial judicial systems are often unfair; and provincial politics often rely on clientelism (Prod’homme 1995; Wildasin 1997). Thus, even if one accepts the suspect assumption of the economic literature on fiscal federalism that local electorates are fiscal conservatives by nature (Shah 1998), the quality of democratic institutions in these nations complicates the transmission of that information to politicians. The importance of democratic accountability vis-à-vis provincial fiscal policy can be overstated, however. Give the three additional characteristics outlined below, one can expect provincial politicians to resist reforms even under ideal democratic conditions. Second, resistance to reform is likely because subnational governments in developing nations have limited capacity to raise money on international financial markets. Where subnational governments are unable to borrow from any institution other than their own national or provincial banks, the market concerns that push national officials toward stabilazation policies do not operate.2 The importance of a free market for provincial debt as an important signaller to voters of state overspending is often overlooked in the U.S. literature on state fiscal performance (for an exception, see Gold 1995). Absent bond markets that punish overspenders, provincial voters often lack information on fiscal performance. Instead, national governments in developing federations generally have to guarantee provincial loans, taking on the role of lender of last resort. Because provincial defaults will ultimately reflect on national credit ratings when national guaratees are implicit (if not explicit), provincial governments face tempting incentives to default at the expense of national governments. Third, the tendency for divergent economic policies is exacerbated by the vertical fiscal imbalance characteristic of most federal nations. State governments can rarely achieve economies of scale in tax collection and cannot raise the revenues consistent with their expenditure requirements (Oates 1977). The result is extensive systems of fiscal transfers from central to provincial governments. Provincial finances are, therefore, subject of “fiscal illsuion.” Fiscal illusion occurs when citizens cannot recognize the full clost of a public good and tend to overdemand that good. Since provincial citizens associate provincial services with relatively low provincial tax burdens, they underestimate the costs to themselves of provincially provided public goods. The result if overdemand on provincial spending. Thus, extant political pressures will often be to increase spending, not cut it in accord with national austerity efforts.
Permutation
Federal power allows government to safeguard the states
Chemerinsky 97
Erwin Chemerinsky, Founding Dean and Associate Professor of Law at the University of Southern California Law Center, 45 u. Kan. L. Rev. 1219 (1996-1997), “Federalism Not as Limits, But as Empowerment,” 1996-1997.
This simple idea has important consequences for the debate over federalism because it helps to explain why it is misguided to focus on federalism as being solely or primarily about protecting state sovereignty. Federalism must be about protecting the interests of both the federal and the state governments. Indeed, from this perspective, the single most important provision in the Constitution concerning federalism is Article VI, which expressly declares that federal law is supreme.46 It is the constitutional provision that most directly speaks to the relationship of federal and state law and thus between federal and state governments. Yet it is striking that throughout this symposium there has been scarcely a mention of the Supremacy Clause. Put another way, focusing on federalism almost entirely as constraints on federal power commits a basic logical fallacy of confusing the part with the whole. The total concern must be about upholding the powers and prerogatives of both federal and state governments. Safeguarding the states is a part, but not the entirety of the appropriate focus in federalism decisions.
Bell et al. 05
(George Washington Institute of Public Policy Mike Bell, David Brunori, Royce Hanson, Chanyong Choi, Lori Metcalf, and Bing Yuan, 11-5- 05 ‘State and Local Infrastructure Financing,’ Pg 1, http://www.gwu.edu/~gwipp/papers/wp028.pdf)
Governments at all three levels—federal, state, and local—play a significant role in ¶ financing public infrastructure. The federal government contributes to state and local ¶ infrastructure through either direct expenditures in the form of grants or indirect expenditures in ¶ the form of tax credits, loans, and loan guarantees (Feldman, Mudge, and Rubin 1988). The use ¶ of excise taxes and user fees is especially prominent in transportation finance. Federal transportation funds are composed mainly of fuel taxes, which account for 90 percent of the ¶ revenues deposited into the Federal Highway Trust Fund (Morris 2001), which is responsible for ¶ 75 percent of all highway and mass transit capital expenditures (in 2001). State governments ¶ also rely on user taxes and fees as their primary sources of funding. These taxes and fees include ¶ state motor fuel taxes, vehicle licenses and registration fees, emission fees, and sales taxes. Due ¶ to variations in state tax structures, not all user revenues are designated for transportation ¶ disbursements. In many states, local governments also levy gas and vehicle sales taxes (Morris ¶ 2001). Such taxes are generally, albeit not universally, earmarked for transportation projects.
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