Decentralization, by its definition, moves decision-making and delivery from the federal government to state and local governments. We have all seen that all knowledge and ability does not flow from Washington. At the same time we decentralize, we must

not over-fragment.

Therefore, where is the proper federal-state-local balance in meaningful decentralization?

Before discussing the Governors' Conference bill, I wish to first review certain approaches of other bills to decentralization.

Under several bills, sponsors include: local general units of government over 50,000 or 100,000; combinations of local general units of government over 100,000; any rural general unit having high out-migration and unemployment; or the state. Although further federal aid may be given to encourage combinations of local units, the smallest eligible unit applying may have priority for approval. In other words, if City X wanted to be a prime sponsor (assuming that it had the requisite population), there would be no countywide or labor market plan, despite the wishes of the remainder of the population. This would allow a municipality to frustrate necessary areawide planning.

We therefore must seriously question the population "numbers game" as a sound approach to prime sponsorship. For example, in Los Angeles County, using 100,000 prime sponsor criteria, there would

be five eligible cities, all within one basic labor market. 50,000, there would be 23 eligible cities. We submit this is fragmentation and is not workable.

Using

Under some bills, the state would be responsible for the areas not represented by a local prime sponsor. We submit that, with the possible exception of states with one or two isolated cities, this "residual theory" is not good government. This approach has both the disadvantages of over-centralization and fragmented local control. Over-centralization would arise from the fact that the Secretary of Labor will be dealing directly with local government. The federal bureaucracy would certainly completely control smaller governmental entities. The danger of fragmentation exists since there is no local elected official who would have authority to meld the local plans into a coherent whole. This, combined with the fact that under some bills the Secretary of Labor would be running programs for certain groups himself, promises little likelihood of coherent areawide planning.

Most governors could certainly support a bill that provides for complete governor or state control of manpower programs. However, we argue for local participation as a philosophy and recognize the value of local impact, particularly in planning and setting priorities. We believe that there can be more effective local government participation and, at the same time, retain sufficient state control.

A large part of the answer, which none of the other bills provides,

is decentralization from the federal to state and local governments.

S.3346 Dominick (Governors' Conference-supported bill)

The NGC-sponsored bill, S.3346 (companion bill HR 13461), best provides this decentralization. It provides that the governor shall designate manpower planning areas throughout the state.

Such

areas shall encompass, as far as possible, a cohesive labor market. This makes more sense than difficult population criteria emphasizing city boundaries.

Progressive government planning often involves

regional approaches to issues transcending city limits. The need

for manpower services to relate to labor markets fits precisely into such approach.

The governor, or his delegate, shall be the state manpower agent (Sec. 109). Within each manpower planning area, local manpower sponsors shall be selected by agreement of elected officials of all cities, counties and other local units of government within the area. In the event no agreement is reached within a reasonable time, the governor may select a sponsor. However, the unit or units of local government representing 50 percent or more of the manpower planning area's population will have a veto of his selection. Also within the local areas and on a statewide basis, there must be planning councils in an advisory capacity.

Role of Employment Service

As indicated, the governors' bill provides that the governor shall be the state manpower agent. The state manpower agent's responsibilities shall include fiscal administration of funds under this Act, the WIN Program (Title 4 (c) of the Social Security Act), and the Wagner-Peyser Act. We believe this form of interrelation of the Employment Service (ES), the WIN Program for welfare recipients, and the activities authorized under this Act provide the most

meaningful approach to manpower.

There is some question as to the role of the Employment Service in There are some critics who feel the ES should be Others believe the ES is the only existing vehicle

manpower reform.

eliminated.

that can carry out major manpower responsibilities in a coordinated way. In some states ES retains a certain autonomy and is not under the general direction or control of the governor. California strongly believes that the ES must clearly be tied in with the state administration. In California and many other states, the

ES has become an integral part of the governor's administration. As you know, in 1968 California established the Department of Human Resources Development by bipartisan legislation. This department combined the ES with other state agencies in the manpower field and redirected the thrust of the Employment Service to particularly serve the disadvantaged.

-

It must be recalled that there are basic functions under federal law that must be operated on a statewide basis unemployment insurance programs and general public employment. Also, the need for statewide uniform standards for welfare recipients will be

discussed later.

We believe this Human Resources Development approach, which many states are pursuing, has demonstrated that the ES need not be a rigid organization but is capable of performing wider functions particularly if tied in with an overall state-local system and freed of many of the existing federal categorical guidelines. governors' bill provides this framework.

The

Decision making: Role of Federal, State and Local Government

In preparing a state comprehensive manpower plan under the NGC bill, to the fullest extent possible, authority and decision-making are kept at the local and state government level. Only after all issues cannot be resolved at such level will there be appeal to a broader level. Even then appeals will not go directly to the Secretary of Labor but to independent regional and national review board consisting of state and local representatives.

For purposes of sound administration, there is reason to leave the final decision, after significant local government input, with the governor. In any event, there may be merit to the more simple approach that the final level of any administrative appeal should be to a regional intergovernmental advisory committee.

This NGC approach, or the alternate approaches above, all avoid the procedure adopted in other bills leaving all ultimate decisions with the Secretary of Labor.

decentralization.

This is a key element of

Under the NGC bill the Secretary of Labor has a significant role without having absolute control. He retains 10 percent of the funds appropriated for a variety of purposes. He likewise has limited ability to refuse to fund the state plan, but only if the regional intergovernmental advisory committee first finds the state plan inconsistent with the Act (Sec. 116). The Secretary of Labor also has the ability to bring court action if he believes the state plan is not being properly carried out. If the court finds a violation, the Secretary can be directed to operate the manpower

programs (Sec. 117(b), (c)).