Atlanta…In August. Yes, the National Conference of State Legislatures held its 39th annual Legislative Summit in Atlanta, Georgia in the heat of summer, bringing nearly 6,000 legislators, staff, private sector, non- profit, union members and others together with over 100 issue forums, plenary sessions and meetings of NCSL’s eight (8) standing policy committees. And importantly, new officers were elected, Oregon Senator Bruce Starr (R) became the NCSL president, Nevada Senator Debbie Smith (D) president-elect and Utah Senator Curt Bramble (R) will serve as vice president.
The meeting started out with a bang. During the Welcome Reception on Monday evening, a thunderstorm rolled through the area, drenching many attendees as they tried to leave for their evening activities, but a lightning strike also hit the Omni Hotel next door, sending parts of the building crashing to the ground and breaking windows. Was it an omen for the tone of the meeting?
Thankfully, the answer was no. For the first time in a number of years this year’s meeting was not dominated by somber budget deficit discussions and dire revenue collection predictions. Instead, brighter fiscal forecasts and increased revenue projections created a different tenor, affording legislators the ability to talk (and enjoy talking) about the range of state issues, including the investment in infrastructure, economic recovery, state innovations, common core standards and even mobile payments.
This was Stateside’s 25th year at the NCSL Legislative Summit and while it seems we worked 25 hours a day the conference is so rich with opportunities to learn, network, advocate and educate—the time really does fly by.
Indeed, just as the weather became increasingly tolerable as the week progressed, NCSL reported at its budget update session that state fiscal conditions improved in 2013 and that general fund revenue growth was strong and outpaced projections in most states (there are a few exceptions, of course). The general state budget outlook from staff, who annually survey state fiscal officers, was upbeat: strong fiscal conditions resulting in continuing budget surplus projections. Most states reported midyear budget shortfalls and fewer states are projecting budget gaps for FY 2014. Contrast this picture with that of just three short years ago. States closed over $500 billion in budget gaps over the last five years.
According to NCSL’s Executive Director Bill Pound, “state legislators have once again made tough decisions that are required to balance their budgets in a slowly recovering economy.” Bill adds, “new budgets enacted for the new fiscal year reflect the cautious path that states are taking as they make their way through this economic transition.”
While state fiscal conditions continued to improve and stabilize in 2013, revenues are now expected to “decelerate” as states begin their new budget years, according to NCSL’s State Budget & Tax Actions report released at the Legislative Summit. State revenues grew at one of the fastest paces since before the Great Recession, growing at a 5.3 percent rate in FY 2013 and state officials remain cautiously optimistic heading into FY 2014.
This cautious optimism seemed to permeate the meeting and the ancillary events as well. After long days of policy discussions and issue forums, the mood during the evening seemed to improve as well. Whether it was at the state night dinners, late night events or other social gatherings, the mood of legislators and attendees just seemed a bit better than in recent years when the policy discussions during the day would even depress the most optimistic person you know.
Moving into 2014, the fiscal discussion in many states is expected to be dominated by tax reform conversations and the uncertainties that remain with the federal fiscal situation, sequestration impacts and debt ceiling negotiations.
Said one Texas legislator at the Summit, “we [state legislators] are doing our part – it’s high time our colleagues on the Hill and in the White House do theirs.”
Despite the fiscal uncertainty projected to face states in the coming year, public officials did not shy from shifting the discussion to other governing issues. In fact, we saw NCSL Policy Committee members open and excited to find room in the conversation to talk beyond the big policy themes that have dominated the meetings in recent years—state budget challenges and pension liabilities, Affordable Care Act implementation, and frustration with federal mandates. While not necessarily new, emerging issues such as immigration, common core standards and STEM, and 21st century transportation issues are rising to the top and receiving more attention.
While it is clear the state budget malaise is not entirely over, it is apparent that public officials see opportunities to take on policy issues outside of the fiscal arena. We expect this mindset to carry over into individual state policy approaches. What that means for the 2014 legislative session will have to been seen.
But we will make one bold prediction for 2014. The weather at the Legislative Summit in Minnesota will be more pleasant than what we experienced the first two days in Atlanta.
Michael Behm is Senior Vice President and a Principal of Stateside Associates. During his 20 years working at Stateside Associates, Mr. Behm’s advocacy work and leadership roles in the state officials Groups have brought him to many state capitols and local governments yielding an extensive network of relationships with legislative leaders and other public officials across the 50 states.
Steve Arthur is Vice President and brings more than 20 years of public policy experience in both the public and private sector to his work at Stateside Associates. Mr. Arthur provides clients with hands on state government relations support from strategic planning and issue management to lobbyist management and direct lobbying. He is one of the leaders of Stateside’s Attorneys General practice, guiding clients through the process of working with, and lobbying, state Attorneys General.
Heather Williams works at Stateside Associates to help clients manage state and local government issues. As Vice President at the company she also manages client relationships with key Groups, including her “alma mater,” the Democratic Legislative Campaign Committee (DLCC), where she served as National Finance Director.