South Dakota v. Dole

Brief Fact Summary. Appellant alleges that the federal withholding of a small percentage of highway funds to states allowing public possession or purchase of alcohol by individuals under 21 years is unconstitutional.

Synopsis of Rule of Law. Non-coercive financial incentives by Congress are a constitutional exercise of the taxing and spending power.

Facts. 23 U.S.C. Section: 158 directs the Secretary of Transportation to withhold a percentage of federal highway funds otherwise available to states that allow the purchase or public possession of alcohol by individuals under 21 years of age. South Dakota allows individuals nineteen and over to purchase beer with up to 3.2% alcohol. As a consequence, the Department of Transportation will withhold approximately 5% of the federal highway funds earmarked for the state.

Issue. May Congress withhold funds from states that do not maintain a 21 year old drinking age?

Held. Yes. Appeals court ruling affirmed. A withholding of a small amount of funds is not a coercive measure and a proper exercise of taxing and spending power.

Dissent. Justices William Brennan and Sandra Day O’Connor both dissent on the unrelated ground of the Twenty-first Amendment, which relegates regulation of alcohol sales to the states.

Discussion. Congress may put “strings” on funds disbursed to States, so long as the conditions are explicitly stated.