Build Resilience Against Federal Control Over State Funding Needs

Build Resilience Against Federal Control Over State Funding Needs The federal government has shown it can and will place conditions on various forms of funding to states, including conditioning funding on state cooperation with administration directives. States have several ways to build resilience against such actions. Building greater capacity to fund and provide essential services with state and local resources would reduce reliance on federal funding that could be used as a cudgel to force action the state does not want to take. Broadband, utilities, banking, and health care are four key areas in which other states or communities have built, or worked to build, such resilience. Just a few of many examples include: Broadband: Chattanooga’s city-owned utility built the nation’s first citywide gigabit broadband network. A 2025 study estimates that its fiber network and automated electric grid have generated $5.3 billion in community benefit since 2010. Because the network is publicly owned and locally financed, Chattanooga has greater control over a critical piece of infrastructure and is less dependent on federal funding to provide high-speed broadband to its community. Utilities: Nebraska provides the strongest example of public ownership in essential infrastructure: it is the only state in which 100% of electricity customers are served by publicly owned or consumer-owned utilities. Nebraska’s average electricity price is among the six lowest in the nation. Public power utilities are locally controlled, and more than $100 million is paid each year to local governments through taxes and payments in lieu of taxes. The model keeps control of a critical service and much of the economic value it generates within the state and local communities, rather than placing that control in the hands of investor-owned utilities or relying on federal funding to provide the service.  Banking: North Dakota has operated a state-owned bank since 1919. Bank of North Dakota has remained profitable over its long history and reported $200.4 million in net income in 2024, with a $335 million total return to the state. Because a state-owned bank can retain public deposits and use its capital to support lending within the state, it can give the state greater control over its financial resources and reduce dependence on federally controlled funding streams. I believe our state should explore whether a state-chartered public bank could provide similar benefits. Health care: Washington and Colorado have demonstrated that states can have some success using public-option health care models to expand affordable coverage and exert greater control over premiums and provider participation. Before federal Medicaid funding and ACA subsidies become less available or are conditioned on state compliance with federal demands, we should examine a state health coverage system that could be even less dependent on federal approval and funding than Washington and Colorado’s models. Taking action in these areas can help build state capacity now, reducing dependence on federal funding and the leverage that comes with it, rather than waiting to react after federal support is withdrawn. I’d appreciate knowing your position on each proposal.