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When states overrule cities: report finds preemption is spreading

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“Aggressive moves” by state legislators “usurps local authority”

Old state capitol in Raleigh, North Carolina
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Preemption is the use of a state law to overrule a local ordinance. In a federal system, it’s not an uncommon practice, and can lead to more uniform policy and statewide improvements. That’s the argument used by supporters of SB 827, a proposed California law that would change zoning policies.

But preemption in the era of polarized politics has created friction, especially between progressive blue cities and more conservative red states. From civil rights laws to rules governing ride-hailing in Austin, state legislators have used their power to overrule local, municipal decisions.

According to a new report by the National League of Cities, City Rights in an Era of Preemption, the practice is spreading, with a number of “aggressive moves” by states to “usurp local authority.”

Many of these preemption bills at the state level overrule local decisions about inclusiveness, housing rules, the minimum wage, and other issues. The updated report found the most common issues subject to preemption included tax and expenditure limitations (with laws in 42 states), ride sharing regulations (41 states), minimum wage (28 states) and paid leave (23 states). There have also been preemption legislation aimed at limiting a city’s ability to enact stricter gun laws or ban plastic bags.

One of the more notorious examples of preemption was North Carolina’s passage of HB2, a law that overruled the city of Charlotte’s decision to pass an ordinance expanding its anti-discrimination protections to the LGBT community. The law, which “stripped local authority on a number of issues including regulating access of public facilities,” caused an outcry among advocates and led to boycotts from companies and artists estimated to have cost the state half a billion dollars.

Preemption has important ramifications for many of the new business models and technologies changing cities and real estate, including home sharing, ride hailing, and the potential introduction of municipal broadband. While statewide regulations can simplify operations, they also sacrifice local nuances and control, and in many cases, take away a localities rights to control or introduce new services. Twenty states have banned localities from creating their own broadband systems.

The report concludes that some state legislators have adopted a pro-preemption position, believing that cities need to be “put in their place.” The report suggests cities should approach the debate from an economic perspective. Allowing cities more autonomy, the argument goes, gives them the power to be better economic engines for the entire state.