Posts Tagged ‘local governments’

An Early Look at the 2012 Legislative Session

October 28, 2011

By Stateside Associates

Over the course of the past month Stateside Associates professionals interviewed contacts in all 50 states to get a sense of the top issues that will face lawmakers in the coming year.

With state budget debates looming and a busy election cycle serving as the backdrop for the 2012 legislative session, we provide you this list as a preview of some of the issues expected to dominate agendas and headlines in 2012.

Please note that next year is the second year of the biennium for most state legislatures—only New Jersey and Virginia start their biennium in even years. Twenty-seven states and Puerto Rico allow for at least some legislation to carry over from the 2011 session into 2012. Four states (Montana, Nevada, North Dakota and Texas) will not hold regularly scheduled sessions.

While the issues described herein will dominate the dockets of state legislatures next year, this list is far from exhaustive. The wrangling for early primaries and the focus on the presidential election will likely lead to electoral reforms cropping up in statehouses. Issues surrounding labor and public employee unions, such as pension reform and collective bargaining, will certainly be discussed in the wake of the vocal debates in Wisconsin, Ohio and New Jersey. Public safety and the environment issues are always prevalent, and technological advances spur new legislative initiatives every few months.

Legislative Elections

In the 50 states 86 of the 99 total legislative chambers will be holding elections, in which 81% of all state legislative seats will be considered. The partisan splits in chambers in more than half of states, ten or fewer seats separate the majority from the minority. Even though party control is not expected to change in the majority of states, a presidential election and redrawn legislative districts provide little reassurance when it comes to the balance of power within and across states. When it comes to campaign issues, expect legislators to focus pull out issues popular with both Democratic and Republican constituencies meant to excite each party’s base.

Budgets

After several years of deep cuts, state budget situations are showing signs of recovery, but remain significant effects from the recession remain. According to the National Conference of State Legislatures (NCSL), FY 2012 marks the fourth consecutive period that states have faced significant mismatches between revenues and spending. After lengthy budget debates in the 2011 session only New Hampshire and Washington project deficits at the end of FY 2012.

But state budget experts are still very worried about the situation. The budget projections used by states are based on tax collection rates that continue to lag behind expected tax revenues. Stimulus money is gone. Clever accounting can only push off costs for so many years. More than 20 states are anticipating a budget gap for FY 2013 and FY 2014 and all projections show this number growing in the coming years. Therefore, the 2012 legislative sessions will be marked by sharp budgetary battles in which legislators will be forced to reform state government, continue cost cutting and/or increase revenue.

Economic Development and Job Growth

Numerous states have seen jobless rates continue to climb, including states that have traditionally outperformed the rest of the country in the South and the West. Legislators in at least 15 states, including Arizona, Florida, Georgia, Louisiana, Mississippi and Utah have indicated that job growth and economic development will be the centerpiece of the next session. Legislators are expected to advocate several priority proposals in this regard including manufacturing facility development and modernization incentives, small business financing programs and financial incentives for job creation. Tax credits and incentives for hiring unemployed residents were approved in states like Alabama, Florida and Maryland in the 2011 session and many of the states mentioned above will consider similar legislation in 2012.

Education

Education funding and reform is a priority for lawmakers every year. One trend on the education front is the effort by states to pull away from federal education mandates. Eight states have indicated an intention to pursue waivers from the federal “No Child Left Behind” law. The new policy announced by the President last month is that in order to receive these waivers states will need to develop and implement certain standards for math and reading, create systems to measure school performance and develop teacher and principal evaluation programs. All this will take place during the 2012 session—lawmakers will approach public education with even less funding while trying to perform at a higher level.

Energy

The hot energy issues next year will be the plans that propose increased development of energy resources while aiming to develop future energy transmission corridors and other infrastructure. In the 2011 session three in every five states considered energy transmission language. The number of states tackling energy will likely increase in next year’s session—legislators in more than 25 states have noted energy issues as a major priority for 2012.

No energy proposal will be one-size fits all. The focus of any energy legislation will depend on the specific energy issues at play in each state. Transmission line deployment is a big issue in Western states like Wyoming and Montana. Pipeline development and hydro-fracking regulations will dominate the oil and natural gas discussions in states throughout the Marcellus Shale region and in Southern and Western States. Alternative and renewable energy sources will be discussed in states throughout the country, including in Maryland where Governor O’Malley (D) is in favor of an off-shore wind energy project.

Immigration Reform

Although state legislatures considered more than 240 immigration-related measures in 2011, only 10 states enacted legislation. Despite the plethora of bills considered, lawmakers have been hesitant to expend political capital on immigration reform until federal challenges to state immigration reform attempts are finalized. Until that happens the discord between the federal government and states on immigration policy will continue to set the tone for immigration efforts throughout the 2012 session.

While a federally-driven comprehensive immigration reform package is possible, it’s more likely we’ll see one or more bills narrowly targeting employment and the electronic verification of workers.

One development that will make states more willing to tackle immigration measures was a recent ruling from U.S. District Judge Sharon Blackburn to allow much of Alabama’s H.B. 56 to take effect. This ruling, along with previous rulings in Arizona and Georgia, may start to provide a roadmap for other states to follow.

Medicaid

Health care reform and funding for state Medicaid programs are always a priority issue in the states. Add to that the fact that revenue growth is not expected to keep pace with anticipated increases in Medicaid costs mandated by federal health care changes. To defray these costs, states will look to increase utilization of Medicaid managed care in place of traditional fee for service plans. At least 19 states decided to expand Medicaid managed care in 2011 and nearly all states will continue to consider additional proposals as they prepare for the projected addition of 16 million adults to the Medicaid rolls by 2014.

Redistricting

Only the four states with elections this calendar year (Louisiana, Mississippi, New Jersey and Virginia) were required to have redistricting completed this year. All four were approved in time for elections to take place on-time, but not without legal challenges. The deadlines for the other 46 states to finalize their maps are before state primary and general elections are held next year. While a number of other states have already redrawn districts, the threat of legal challenge have been ubiquitous in almost every case. Several legislatures have scheduled special sessions through the remainder o the year to tackle redistricting, but expect the debate to carry-over well into next year. The closer to a regularly scheduled election a given state redistricting battle gets, the more noteworthy an issue redistricting will become.

Tax Expansion and “Reform”

Legislators are wary of tax increases in good times—broadening revenues by raising taxes during an economic slump becomes a very hot-button issue. According to NCSL, 2011 marked the first year in the last ten that states reported lowering taxes more than they increased them. While the numbers may have been skewed by some large cuts or by the expiration of few temporary tax hikes, it demonstrates the pressure legislators feel when it comes to raising taxes.

Corporate tax rates have been cut in 20 states since the year began and 12 states lowered general sales tax rates. To make up for lost revenue from these and future tax cuts, states will get creative in identifying revenue streams by reforming business taxes, reducing or eliminating certain credits and exemptions and expanding the sales tax base.

One of the visible efforts taking hold is the move by many states to collect sales taxes from online retailers. Internet sales taxes have been a target for states for a number of years and its lean economic times that increase pressure to pursue it as a possible new revenue stream. Lawmakers in 15 states considered “Amazon Tax” style language this year. Numerous other states examined different approaches to capture this revenue. The legislation that passed in California, coupled with the recent agreement between the state and Amazon to begin collecting online sales taxes in 2013, may serve as a striking model for action elsewhere.

Despite only passing in five states, bills to the increase the taxes levied on alcohol and tobacco products were considered in 43 states this year. In addition, policymakers in nearly half of all states attempted to tax foods and beverages that are deemed to lack nutritional value. Ostensibly designed to promote health, the taxes are earmarked to fund the healthy lifestyle and obesity prevention programs that have become a priority across the country.

Are Local Governments Trendsetters?

June 15, 2010

Plastic bag bans, fast-food menu labeling requirements, and taxing of bottled water are all issues being considered in some state legislatures, and even in Congress. But what do these issues have in common? They all originated at the local government level.

  • San Francisco was the first local government to pass the plastic bag ban in March 2007. Many iterations of the ban have been considered by other local governments and by some states. A bill has even been introduced in Congress by Virginia Congressman James Moran (D), imposing a tax on single-use carry-out bags.
  • In July 2008, New York City became the first U.S. city to require fast food restaurants to post calorie counts in large type on menu boards. Philadelphia, Portland, Seattle, Westchester County (New York) and the state of California soon followed. And menu labeling was also included in the federal healthcare reform bill enacted this spring, calling upon the FDA to develop new regulations that will set forth national standards for restaurants to post the calories of the various food items offered on the menu.
  • Chicago began collecting a tax on bottled water purchases in January 2008. While the tax was proposed by the City for “environmental purposes”, many cash-strapped local and state governments have viewed the tax as a way to help fill empty coffers, and included it in budget proposals around the country.

Every day over 3,000 counties and more than 19,000 cities, villages, and towns in the United States are enacting ordinances. Many local governments are proud to be trend setters, and are actively looking for new ideas. If you want to forecast what the next “trends” will be in the state and federal governments, start paying close attention to what local governments are doing. The next ordinance passed by Chicago, New York City, Denver, San Francisco, or even your own local government may be the next big “trend.”

  • In May, the Santa Clara, California County Board of Supervisors voted to forbid the inclusion of a toy in any restaurant meal that has more than 485 calories, more than 600 mg of salt or high amounts of sugar or fat. This effectively eliminates “kids meals” at many restaurants.
  • Also in May, the Montgomery County, Maryland Council voted to enact a carbon tax of $5 per ton of carbon dioxide on power stations that produce more than 1 million tons in a given year. While the tax only applies to one utility company in that county, the county is the first to enact such a tax in the nation.

Could these be next new “trends” across local, state and federal government? It’s possible.

It’s Always Election Season

November 16, 2009

By Steve Arthur, Vice President

While the national political media focused on the gubernatorial elections in Virginia and New Jersey along with a congressional race in New York, in 2009 there also were almost 400 mayoral elections held in cities with populations over thirty thousand according to the US Conference of Mayors. And some of those cities aren’t done yet. Atlanta will hold a run-off election on December 1st, while Houston will have a run-off on Saturday, December 12th.

Less than eight weeks later, the 2010 election season begins with the Illinois primary on February 2nd. Texas holds its primary on March 2nd, with run-offs as needed April 13th. May will see ten states holding primaries throughout the month, and fourteen states have scheduled primaries in June. July is a light month with only two state primaries, while August finishes the summer with twelve states holding elections. The District of Columbia and ten additional states will keep us in suspense until September.

What does this mean for state government relations professionals? Next year is likely to be one of almost non-stop calls from campaigns looking for those last-minute donations to get their candidates over the hump. That is why it is so important to map out your contribution strategy in advance, so you know when you can say yes and when you can say no. You don’t necessarily need to decide exactly which candidates you need to support, but you should be making decisions about which states are important to your company or trade association, so you can plan your giving accordingly.


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