Tying Federal Funding to Regional Cooperation

If the Obama administration gets its way during the next few years, the means by which the federal government interacts with states and localities across a wide range of policy areas will be redefined, changing the entire structure and process of dispensing federal funds and steering federal policy.

The White House has embraced a concept, advanced largely by the Brookings Institution's Metropolitan Policy Program, that stresses the primacy of the nation's metro regions--cities or clusters of cities, plus their inner and outer suburbs and some rural areas that are linked to them economically. The Brookings mantra is that these regions are the economic drivers of the country; they do, after all, contain three-quarters of the American population and generate most of the nation's economic activity. So the idea is for Washington to start approaching governments below its own level not as separate states, cities and counties, but as "metros."

Soon after it took office, the administration started pushing its domestic agencies to find a more regional approach to use in dealing with all sub-governments. Federal departments in charge of housing, transportation, energy, the environment, labor and small business are trying to coordinate hundreds of programs addressing a wide range of activities. And the expectation is that those efforts they will be funding--clusters of governments acting collaboratively--must be similarly integrated. If they are, great. If not, no dough.

There may be a rich supply of federal stimulus money coursing through the system right now, but most of it is subject to the old rules, since Washington wanted to pump it out as fast as possible, and didn't have time to write new ones. A recent New York Times analysis of more than 5,000 transportation projects in the first few months under Obama showed that "the 100 largest metropolitan areas are getting less than half the money from the biggest pot of transportation stimulus money. In many cases, they have lost a tug of war with state lawmakers that urban advocates say could hurt the nation's economic engines."

But this could be the last time federal funds are distributed that way. Top managers in all the relevant agencies seem serious about forcing metropolitan collaboration, particularly when it involves more than one area of domestic policy. At HUD, Secretary Shaun Donovan (former commissioner of housing in New York City) and Deputy Secretary Ron Sims (former executive of King County, Washington) already have budgeted $150 million to implement the collaborative effort.

Bruce Katz of Brookings predicts optimistically that the growing recognition of the importance of metro areas "will stimulate a new generation of political and policy organizing at the metro scale." He believes this will include reinvigorating and funding long-dormant metropolitan planning organizations (MPOs) that were resuscitated 16 years ago when Congress passed a landmark transportation bill, only to be largely ignored in more recent years.

Of course, there are problems with this strategy, both practical and political. As columnist Mary Newsom of the Charlotte Observer points out, far too many MPOs still seem to believe that " 'transportation' means only highways," and that regional organizations are little more than instruments for local turf protection. The Charlotte metropolitan region, Newsom notes, "is home to four separate MPOs, or five, depending on how you count. So transportation planning here is completely fragmented--and Charlotte gets shorted when dollars are divvied."

That's true in a lot of places, because governors and legislatures like to spread the funds around their states rather than concentrating them in metros. And they may not be too interested in changing the process or the rules. But that is exactly what the Obama administration is pressuring them to do.

Federalism scholar Paul Posner of George Mason University has some doubts about how successful the new administration's metro initiative will be, not only because states and locals have the political clout to avoid ceding too much authority, but also because "the feds have a track record of good intentions over the past 50 years" that have ultimately amounted to very little.

But Posner concedes that some incremental progress is taking place. "The lesson learned," he says, "might be that the only way the federal government will succeed in institutionalizing regionalism is if it follows and supports demand from the bottom of our system, rather than seeking to create and impose demand from the top. Where the demand exists and the regional institutions are strong, there is promise. But where they are not, then progress will be much slower."

That's how I'm guessing this will play out. Some of the efforts to reorient the federal agencies toward a regionally collaborative approach will bog down in Washington's bureaucratic muck. Governors will see to it that their states retain at least some control. Those areas that already have strong metropolitan institutions, such as the ones in Chicago; Minneapolis; Portland, Oregon; and Kansas City, will see some real benefit. Many of the rest will not. A mixed result, but an effort very much worth trying.