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From Governing’s
January 2002 issue LEGISLATIVE ISSUES TO WATCH
Tightening Budgets, Heightening Security BY ALAN GREENBLATT
Budget crunchers in Ohio must feel like they can’t win. They’ve spent the past several years looking for billions of dollars in funding for school construction to meet mandates set by the state Supreme Court. Just when it looked like that issue might be resolved last spring, as the regular budget process was entering the home stretch, the state suddenly found itself $145 million short in Medicaid funding for the next two years. Medicaid woes, it turned out, were only the beginning of revenue problems leading to a special session this fall that sought to make up a brand-new, $1.5 billion budget shortfall.
Finding places to cut the budget or dipping into tobacco-settlement or rainy-day funds won’t be the only concerns before legislators this year, of course. Just as prominent will be the state-level response to terrorism and security concerns. Border states such as Arizona will look to beef up border security. California has already stepped up its security at major bridges. Every state will want to protect its major government facilities, airports, power plants and water supplies. In addition to problems of security, states will be revisiting public-health laws, making more explicit the power to impose large-scale quarantines, mandate vaccinations and seize property.
Given budget weaknesses, finding ways to pay for this heightened state of alert will eat into other, already-strapped programs. “As for extra dollars, you are talking about big money,” Anna Cowin, head of the Florida Senate Appropriations subcommittee that funds public safety, said at a recent hearing on port security. “I don’t see any money available.”
Higher education represents the largest discretionary spending item in state budgets, but public colleges and universities are already oversubscribed, and lawmakers will be wary of cutting too deeply into these prime training and economic development centers. Construction of that new science center or student union building, however, has probably already been put on hold. Innovations at the primary and secondary level, meanwhile, will suddenly seem less important than simply keeping the lights on and keeping kids in school for a full-length term. Governors and legislators will try to spare K-12 education from the cuts that will otherwise range across the board.
Reforms in other areas may suddenly be sacrificed due to the need to pay for security and still make budgets balance. After the presidential race in 2000, everyone talked up the need to replace aging balloting equipment. The problem was always how to pay for modern machinery. Congress is still dithering over a $3 billion aid package, and any extra funding for voting machines at the state level has probably dried up. Welfare reform, too, will likely be put on hold. States are awaiting federal reauthorization of the welfare law and, with it, knowledge of what size block grants they’ll be receiving over the coming years. In the meantime, welfare rolls are increasing due to the hard-up labor market. More families are going to need cash assistance, which will deplete funds for non-cash programs such as child care, which now accounts for one-fourth of Temporary Assistance for Needy Families (TANF) spending.
Other issues will inevitably come to the fore one place or another. The search for ways to combat sprawl and to streamline state sales tax laws will continue. States will still address controversial social issues such as gun owners’ rights, abortion and tobacco regulation. Redistricting — either the drawing of new political boundaries or the defense of them in court — will still require a lot of energy in many states. Hundreds of state legislators will be running for reelection, competing for attention with the three dozen gubernatorial races this year.
But nothing will demand as much time and effort from state elected officials as keeping budgets in order. “Right now, the budget items are just all-consuming here,” says Ohio Senate president Richard Finan. “People don’t want to talk about much else.”
BY MELISSA CONRADI and ALAN GREENBLATT
WHY IS THIS AN ISSUE? Two words: Falling revenues. Most states’ tax collections have been markedly below projections due to the slumping economy and the aftermath of Sept. 11. And layoffs mean that even more people will need state services. WHO ARE THE MAIN PLAYERS? Governors have implemented hiring freezes and demanded budget cuts. State employee unions and advocates of the poor argue in favor of using reserve funds to cover the gaps. WHERE WILL IT BE DEBATED? A better question: Where won’t it be debated? Almost every state is running up against some revenue shortfall. Tourism-dependent states, particularly Hawaii and Florida, are faring poorly; California faces a two-year, $12.5 billion gap, and New York is struggling. WHAT CAN WE EXPECT? Capital projects will go on the back burner first. Expect across-the-board budget cuts and hiring freezes, perhaps exempting K-12 education, Medicaid and public safety. A number of states will look into tapping rainy-day funds or tobacco money.
WHY IS THIS AN ISSUE? All states are scrambling to address security and public health concerns in the wake of the Sept. 11 attacks and the anthrax scare. States that held special sessions in the fall took a swing at such issues and they, along with budgets, will top legislative agendas. WHO ARE THE MAIN PLAYERS? Criminal justice agencies and public health departments are working with legislators to fashion packages. There are some civil liberty concerns; the New York Assembly balked at wiretap language in special session this fall. WHERE WILL IT BE DEBATED? Every state is certain to hold a debate about ramping up security at capitols, bridges, energy facilities and water storage and treatment facilities. States will also consider ramping up their powers to quarantine populations in the event of a communicable-disease outbreak. WHAT CAN WE EXPECT? Security, emergency management and public health budgets will get richer across the country, probably at the expense of other programs. Bond issues may proliferate where allowed.
WHY IS THIS AN ISSUE? In recent years, many states have expanded their non-cash benefits, funding after-school programs, early Head Start, home visits and child care. With welfare caseloads rising and revenues falling because of the economy, those services will contract. WHO ARE THE MAIN PLAYERS? Advocates for poor families and constituents of the new services focused on working clients will push for sustained funding. The programs will continue to exist — especially more successful models — but their proliferation has already ceased. WHERE WILL IT BE DEBATED? Florida, Nevada, South Carolina, Virginia and other states suddenly hard-hit by the economy will be among those looking for ways to trim child care while offering cash assistance for more children on the rolls. WHAT CAN WE EXPECT? Unfortunately, in most cases, legislators will have to decide their fiscal 2003 outlays before knowing what size block grants they’ll get from federal reauthorization of welfare law this year.
WHY IS THIS AN ISSUE? Skyrocketing costs, potential new state flexibility and some momentum to enroll more of the uninsured are all factors pushing the Medicaid debate to the forefront. WHO ARE THE MAIN PLAYERS? Hospitals, provider-care companies, doctors and prescription drug makers and sellers are all weighing in. So are children’s health watchdog groups and advocates of the low-income uninsured. WHERE WILL IT BE DEBATED? A number of states will look at ways to contain prescription drug costs, including Oregon and Florida. A private Louisiana task force says more people should be eligible. At least 20 states say that their Medicaid programs are over budget. WHAT CAN WE EXPECT? Intense debate, but legal challenges and conflicting agendas might stall progress. More states will make attempts to cut pharmaceutical expenses, perhaps using formularies that restrict the use of certain drugs without approval.
WHY IS THIS AN ISSUE? States face two big challenges in managing the power grid. The first is making power plants, transmission lines, oil tankers and seaports more secure. The second is coping with the ongoing process of deregulating electricity. WHO ARE THE MAIN PLAYERS? As in California, other states that opened up their electric markets to new providers still have regulations on price. Power marketers are pressing for more flexibility in pricing while utilities are looking to keep prices regulated and low so they can preserve their customer base. WHERE WILL IT BE DEBATED? Legislatures in New England will be debating bills trying to stimulate the electricity markets. Maryland has a proposal to let municipalities buy power as groups. Midwestern states will grapple with community resistance to construction of new plants. WHAT CAN WE EXPECT? The feds will want to protect infrastructure, such as nuclear facilities and the Alaskan pipeline, with the National Guard and other security. Look for proposals on “distributed generation” on the theory that it’s harder to attack many solar panels than one big coal plant.
WHY IS THIS AN ISSUE? Funding issues are huge. The education bill currently on the back burner in Congress will drive interest in testing and accountability. Teacher preparation and school leadership are also focus areas. WHO ARE THE MAIN PLAYERS? Schools of education will come to the table to address teacher preparation, and higher ed and pre-K programs will fight cutbacks. Urban schools stand to be hit the hardest by accountability measures. WHERE WILL IT BE DEBATED? California’s budget woes may have a devastating effect on education programs; several ambitious initiatives either recently passed or in the works could suffer. Ohio is dealing with ongoing litigation around its funding formula. Accountability and leadership issues are universal. WHAT CAN WE EXPECT? When budgets are pinched, higher ed and early childhood programs take the biggest hit. Legislatures will help shape teacher-preparation programs so that they’re more grounded in real-life classroom work. Sanctions and incentives tied to test results will be hammered out.
WHY IS THIS AN ISSUE? People like the idea of e-commerce but are wary of the potential for mischief. Some states considered the 1999 Gramm-Leach-Bliley Act to be an invitation to legislate access to consumer and financial records. WHO ARE THE MAIN PLAYERS? Businesses are generally against limiting the information that is available about potential or current customers. The direct marketing industry has come out strongly against restrictions. WHERE WILL IT BE DEBATED? Florida, New Hampshire and New York all had schedules heavy with privacy legislation to consider last year; much of that will carry over. California, Illinois, Massachusetts and Minnesota are also hot spots. WHAT CAN WE EXPECT? The complexity of privacy legislation has led to slower enactment. Some areas to watch: telecommunications records, including cellphone conversations and telephone bills, are a new area of concern. Also, more states might consider making credit reports free.
WHY IS THIS AN ISSUE? Remember the Florida recount? That debacle is still drawing attention to outdated voting machines, unclear recount standards and methods of purging voter registration laws. WHO ARE THE MAIN PLAYERS? State and local officials are lobbying Congress for funds — without strings. Voting-machine purveyors have also hired lobbyists. On the policy front, the ACLU and NAACP are pushing for greater enfranchisement protections, while conservatives worry about fraud. WHERE WILL IT BE DEBATED? Only Florida, Georgia and Maryland have passed comprehensive reforms. The outcome of legal challenges to Florida’s implementation will lend guidance to other states. Some have already outlawed punch-card voting, without providing money for alternatives. WHAT CAN WE EXPECT? States are waiting for Congress to finalize legislation that could set minimum standards and provide a huge infusion of cash. Legislatures that punted to task forces now have to grapple with recommendations. In March, Californians will vote on a $200 million ballot bond issue.
WHY IS THIS AN ISSUE? Pre-Sept. 11, states had been trying to make it easier for immigrants to get driver’s licenses in order to improve access to insurance. Now, states are looking to improve databases and issue identification cards. WHO ARE THE MAIN PLAYERS? Federal agencies will be pushing for better IDs. There was a fight in 1996 against creating national identification cards and that may be revisited, with states seeking to maintain authority and conservative groups joining advocates for immigrants against the idea. WHERE WILL IT BE DEBATED? Virginia, which was hit by terrorism, and other states will be lining up to improve their IDs. New Jersey is already asking for access to federal databases. States that liberalized access to licenses, such as Utah, may be taking a second look. WHAT CAN WE EXPECT? There are some 50 different valid forms of ID for immigration and citizenship status, a situation ripe for streamlining. In another area, states are eager to respond if Congress extends food-stamp eligibility to immigrants who have arrived in the U.S. since 1996.
WHY IS THIS AN ISSUE? As new technologies bring new capabilities, ethical questions and policy issues arise. WHO ARE THE MAIN PLAYERS? Health and life insurers have a stake in whether genetic information is admissible, as do some employers. Civil libertarians and workers’ rights groups would rather keep genetic records confidential. Creation of DNA databases is backed by law enforcement. WHERE WILL IT BE DEBATED? California’s moratorium on cloning expires in 2002. Utah will consider a bill to regulate the use of genetic information in health insurance, employment and privacy issues. WHAT CAN WE EXPECT? A lot of current legislation is preventative. Although the trend is increasingly toward protecting personal genetic information, states will need to tweak their laws as possibilities become realities.
Copyright © 2002, Congressional Quarterly, Inc. Reproduction in any form without the written permission of the publisher is prohibited. Governing, City & State and Governing.com are registered trademarks of Congressional Quarterly, Inc. |
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Unfortunately, Ohio’s bleak fiscal situation is not unique. With the economy weakening, sales, capital gains and income tax collections are falling well below projections while unemployment has risen in nearly every state. Almost every day last fall, it seemed, some governor somewhere was announcing millions of dollars’ worth of hiring freezes and highway and capital project cuts, imposing furloughs on state employees or floating the idea of raising or expanding sales or other taxes. Moreover, the executive branch was waiting for legislatures to enter into session to address the need for larger, more systemic cuts or revenue increases. “I think there is only one issue for us right now, the size of the budget hole we have to climb out of,” says Chris Cummiskey, assistant Democratic leader of the Arizona Senate. “Everything else is secondary.”