926                                      ARIZONA LAW REVIEW                                 [Vol. 31

 

centralization.96 He pointed out that, with the federal government immune from state tax and the states subject to federal taxes, no more powerful instrument of centralization could be devised. Effectively, the federal government could expand its activities at the expense of the states. He further claimed that for the states to find protection "in the will of a transient majority of Congress" was foreign to and a negation of our constitutional system97 and that if the power to tax was conceded, the states would be relegated to a servile status.98 Despite Justice Douglas" dissent, the federal expansion of authority and vitiation of the tenth amendment continued.99

 

DIRECT REGULATION OF STATE ENTERPRISE ACTIVITIES

 

Maryland v. Wirtz,100 a 1968 decision, penetrated another level of state authority. In Wirtz, the Court upheld the application of the FLSA directly to state enterprise funds, specifically, state hospitals and schools. Justice Douglas again dissented. He stated that the majority opinion constituted an "invasion" of the tenth amendment.101 He also observed that the impact upon the states would be pervasive and would strike at all levels of state government and their political subdivisions.102 In analyzing the potential impact of the decision, Justice Douglas predicted that: (1) an increase in taxes forced on the states by the FLSA's sanctions rather than through a vote of the people could occur; (2) a reduction in indispensable state services could result; and (3) states may be prevented from entering new fields of governmental activity because of the costs.103 He also warned that this decision would allow the federal government to tamper with and, potentially cripple the states' sovereign powers.104

 

DIRECT REGULATIONOF STATE ACTIVITIES

 

The Court reduced the protections over state sovereignty again when it upheld, in 1975, the direct regulation of state activities in Fry v. United States.105 In Fry, Ohio challenged the constitutionality of applying wage controls to the states.  Wage controls, enacted through the Economic Stabilization Act of 1970,

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96. Id. at 594 (Douglas, J., dissenting).

97. Id.

98. Id. at 595.

99. Reina v. United States, 364 U.S. 507 (1960) (Congress may restrict exercise of state powers to extent necessary and proper for a more effective exercise of a granted power); United States v. Kahriger, 345 U.S. 87 (1950) (requirement of gamblers to register with Collector of Internal Revenue is an extension of the power to tax and does not infringe on the state's right to regulate gambling under the tenth amendment); Federal Power Comm'n v. East Ohio Gas Co., 338 U.S. 464 (1950), Oklahoma v. United States Civil Serv. Comm'n., 330 U.S. 127 (1947) (grant conditions will be enforced including the condition that a state government employee may be terminated); Case v. Bowles, 327 U.S. 92 (1946) (federal regulation of timber prices under Commerce Clause is a valid exercise of authority). In 1974, grants in aid from the federal government amounted to $43.9 billion. FISCAL FEDERALISM, supra note 49, at 12. Federal expenditures in that year were $305.5 billion, far outstripping the $162 billion spent in 1974 by state and local governments combined. Id. at 2.

100. 392 U.S. 183(1968).

101. Id. at 201 (Douglas, J., dissenting).

102. Id. at 202-03 (Douglas, J., dissenting) (quoting Judge Northrop in his dissent below).

103. Id.

104. Id. at 205.

105. 421 U.S. 542 (1975).

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