Posts Tagged ‘Texas’

EPA Conspicuously Absent at ECOS Spring Meeting

March 27, 2012

By Mark Anderson, Senior Vice President

The Environmental Council of the States (ECOS) convened its Spring Meeting last week in Austin, Texas. I would sum up the theme of the meeting by quoting the first lunch speaker, Executive Director of the Texas Commission on Environmental Quality Mark Vickery, stating that the relationship between EPA and the states requires “complete reformation.” Two trends conspired to make this so—dissatisfaction with EPA over increasing mandates and policy changes with little state input, and the dramatic decline in EPA participation with ECOS. The second-day lunch keynote speech, always reserved for the EPA Administrator or an appropriate high-level designee, was absent a speaker.

Throughout the three-day meeting, issue after issue was raised by ECOS members about states not having the resources to carry out many EPA directives. Yet there was not sufficient high-level EPA involvement in the meeting to have a meaningful dialogue about it. A state and federal co-regulator relationship that should be built on trust and cooperation has clearly deteriorated.

The problem was apparent not only in the rhetoric, but also in the specific policy discussions undertaken during the meeting. At the opening plenary, Pennsylvania Department of Environmental Protection Secretary Michael Krancer brought up his support for HR 3867, the “Sunshine for Regulatory Decrees and Settlements Act of 2012.” This legislation addresses the concern of the states that EPA, with increasing frequency, will settle lawsuits by organizations by agreeing to initiate rulemakings behind closed doors. As such, by the time states are allowed to comment on the subsequent rulemaking, EPA responds by claiming that they are bound by the lawsuit. The legislation would require EPA to allow comments by affected parties prior to agreeing to settlements.

Another more heated example of this lack of communication was a discussion over new air monitoring requirements. Wisconsin Department of Natural Resources Secretary Cathy Stepp spoke about the lack of clarity with EPA’s requirements. Many states chimed into the discussion both about the lack of adequate guidance from EPA in the face of substantial new requirements and the importance of good modeling. Again, the focus of the discussion was not on whether modeling is important, but the fact that EPA mandates policy changes for the states and then provides little communication or support about how to achieve them.

Which brings me to what I think is the most significant event during this meeting—passage of the resolution, “Challenges of Achieving Significant Greenhouse Gas (GHG) Emissions Reductions.” The resolution discusses the challenges that face the states in meeting the US-ratified United Nations Framework Convention on Climate Change GHG emissions reduction mandate. The mandate calls for an 80 percent reduction in GHG emissions from 1990 levels by 2050—a massive undertaking by any metric. The resolution calls on EPA to provide scenarios in which states could achieve these reductions and provide a study of the costs and benefits of doing so. As I discussed in an earlier blog, true discussion amongst the states about the costs associated with complying with climate change requirements had been unprecedented. The resolution passed unanimously.

States discussing challenges posed by EPA has been a mainstay at ECOS meetings. The difference at this meeting was the level of frustration, and the lack of significant participation by EPA officials to listen and respond. This is particularly troublesome for the states during times of great budget strain at both the state and federal level, and it represents one of the most fundamental hurdles in the EPA-state relationship.

As a result, “you should contact your federal delegation,” was a suggestion offered by ECOS members to their peers far more frequently at this meeting than I have ever witnessed. EPA is no longer engaging meaningfully with the states and is forcing states to look elsewhere for guidance and support.

All good relationships require trust. When dealing with any state and local officials group, I always advise my clients to participate consistently and respect the organization and its members through open and honest communication. EPA has violated these principles and the relationship is suffering as a result.

Attorneys General Meeting Disaster

February 1, 2012

By Steve Arthur, Vice President

Attorneys General and their staff from many southern states gathered in Tampa, Florida January 26 and 27 to learn about all aspects of disaster preparedness. From enforcing price gouging statutes to managing their offices more effectively in a disaster, the conference provided an opportunity to share best practices and provide guidance to the private sector.

While there were some excellent presentations about what Attorneys General offices can do to better prepare for disasters and how best to respond, I want to focus on the messages most relevant to the private sector.

Price Gouging

Of particular interest to the private sector were the discussions about consumer protection. In a panel addressing price gouging, there was agreement among the Attorneys General that enforcing price gouging statutes can be problematic. For example, Hurricane Ike (2008) did significant damage to refineries in Texas, but did not cause any damage in Tennessee. But the Texas damage did cause gas shortages which resulted in price spikes for gasoline. Since gas stations usually price their gas based on what they expect to pay for the next tanker, how does an Attorney General determine what price rise is excessive under a state’s statute?

The panel also addressed how best to draft a price gouging statute. Attorney General Roy Cooper (D) of North Carolina outlined two generic options. The first, a more prescriptive statute, sets out formulas for how much a price needs to rise before it would be considered gouging and outlines specific types of products covered. The second is drafted more vaguely and uses words like “excessive” and “unconscionable” price increases. It was described as more along the lines of pornography laws: you know it when you see it. This version understandably makes retailers nervous, but it was argued that this gives Attorneys General more flexibility to enforce against only those retailers engaging in the worst of price gouging, making it less likely that retailers who must pass along price increases will have to defend themselves.

In the end, there seemed to be agreement among the Attorneys General that the most effective deterrent to price gouging was high profile enforcement. By taking on one or two egregious offenders, others would be discouraged from trying to price gouge. They talked about enforcement actions against both the big guys and the little guys to make sure the message gets out. The lesson they were trying to convey: it’s okay to pass along legitimate cost increases, but don’t try to make excessive profits off other people’s misery.

On the plus side, some retailers were praised for their disaster response efforts. Wal-Mart, Lowes and The Home Depot were singled out on several occasions during the conference as model companies for their responses. Each of the companies were cited for their ability to quickly get their stores re-opened and re-supplied, as well as being proactive in freezing prices during and after disasters.

Public Private Partnerships

Also of note for the private sector was the support given to public-private partnerships to better prepare for disasters. General Bob Cooper (D) of Tennessee opened the discussion on this topic by noting that one of the best partnerships between business and government is simply for businesses to execute their disaster response plans and for government to remove barriers to those plans. That is the quickest way to begin getting things back to normal.

More proactively, some states are starting to create business emergency operations centers, which are designed to share resources and build trust between government agencies and the private sector. These centers are used to quickly connect businesses to those officials who might be needed to approve permits for things like overweight/oversized trucks or access to restricted areas to allow stores to quickly re-supply and be ready to re-open when residents are allowed back in.

There was also agreement that the more government and the private sector prepare in advance for disasters, the smoother the recovery will be. For example, multiple presenters mentioned that states should make sure that there is a credentialing system in place prior to an emergency to allow for quicker access to closed areas in order for business to quickly re-establish supply chains.

Establish Relationships Now

One of the most important messages that came through for the private sector was the importance of developing relationships with key state officials in advance of any disaster. Because of the focus on price gouging, this conference of Attorneys General highlighted the importance of having a relationship with those offices to quickly clear up any misunderstandings that might pop up in the aftermath of a disaster. This is especially important in those states where the price gouging statute is written broadly.

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.


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