December 14, 2007 NCSL: States Legislatures Face Unsettled Conditions in 2008 Top 10 issues forecast: traditional and emerging issues meet up with unusual political and economic patterns. DENVER -The issues state legislatures will face in 2008 are relatively known factors this year but will be shaped by some very strong political and economic forces, according to a forecast released today by the National Conference of State Legislatures. NCSL's annual Top 10 forecast takes a look at the hot topics on state legislative agendas. State budgets top the list, joined by immigration, driver's license standards, transportation funding, uninsured Americans, education reform, concerns for the middle class, the environment, consumer protection, pensions and the nation's infrastructure. "Predicting the major issues state legislatures will address in 2008 is relatively easy," says NCSL Executive Director William Pound. "Predicting how the presidential campaign, the politics on Capitol Hill and the economy will affect these issues is difficult." Forty-four states and Puerto Rico hold regular sessions in 2008, most convening in January. Here is what NCSL's experts, the "meteorologists" of public policy, expect state lawmakers to be working on this year. To show how hot we expect each issue to be, we measured them against various weather patterns. If the issue is controversial or difficult, clouds will be on the map.
 Issue #1: State Budget Concerns
Forecast: Cloudy
Slow revenue growth rates mean states' budgets continue to weaken. Legislative fiscal directors reported to NCSL on revenues and expenditures for the first four months of fiscal year (FY) 2008 for most states. The report, State Budget Update: November 2007 includes information on revenue performance, spending overruns, projections of budget gaps or surpluses, and the top fiscal issues anticipated for the 2008 legislative sessions. Twenty-four states and Puerto Rico reported state revenues have been hurt by the housing sector slump. At least a dozen states and Puerto Rico are seeing declines in their real estate transfer or recording taxes. Many states anticipated a slowdown in this revenue source, but the drop is even greater than expected. Legislative fiscal directors identified health care and Medicaid, along with transportation, as key budget issues their legislatures will address in 2008. At least 16 states are expected to address a variety of K-12 issues, including funding levels, and at least 13 states and Puerto Rico are expected to consider overall budget issues.
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Issue #2: Immigrant Impact on States
Forecast: Cloudy
With Congress unable to act, state legislatures passed an unprecedented amount of legislation addressing immigration reform and immigrants in 2007. States introduced roughly 1562 pieces of legislation in 2007. 244 bills became law in 46 states, and NCSL expects similar numbers in 2008. While the presidential candidates have immigration issues at the top of their campaigns, there appears to be little hope that Congress and the administration will be able to pass any comprehensive reforms in 2008. Consequently, states will continue to focus on employment, education, health care, identification, public benefits and human trafficking.  Issue #3: Real ID
Forecast: Partly Cloudy
Real ID, the federally mandated program, requires states to issue driver's licenses and identification cards. The final rules or standards that each state must follow are still not in place, but are expected to be released in the first part of 2008. The federal government has set a May 11, 2008, deadline for states to meet the standards, and legislatures will have to deal with the regulations once they are finally released. Real ID is expected to cost states $11 billion over five years and will have a major impact on services to the public. Legislative bodies in 44 states considered approximately 130 Real ID related bills, resolutions and memorials in 2007. Legislation passed in 25 states with six states explicitly prohibiting compliance by law. Legislatures are also exploring "enhanced driver's licenses" that are compliant with the Western Hemisphere Travel Initiative.
Issue #4: Financing America's Roads and Infrastructure
Forecast: Partly Cloudy
The collapse of the I-35 bridge over the Mississippi River in Minneapolis, Minn., added urgency to an issue that has been high on the agenda in many states. Motor vehicles travel more than 2.9 trillion miles each year on U.S. highways. Critical infrastructure, which includes transportation, energy, telecommunications, water systems and emergency services, are essential to the U.S. economy and national security. Transportation is incredibly vital to all sectors of the economy, connecting people to jobs and allowing products to be shipped worldwide. States are trying to compensate for a projected nationwide shortfall in transportation spending to be $1 trillion by 2015. Congress is working to replace the federal transportation funding bill that expires in 2009. Some states may consider increasing the gas tax, but with gasoline hovering around $3 dollars a gallon, many lawmakers are reluctant to raise it. A number of states will authorize greater participation of private companies in the construction, operation and financing of transportation projects. New toll roads may be planned. And the role of local governments in transportation will likely be strengthened. Issue #5: Insuring the Uninsured
Forecast: Cloudy
Health care is the single largest portion of total state spending at 32 percent. States spend more per capita on health care than any other industrialized country at more than $5,500 a person. One in six people are uninsured and millions more are underinsured. Twenty-eight states passed or considered new health care laws or proposals to change the system in 2007, some inching toward the goal of universal or affordable coverage. The State Children's Health Insurance program, or SCHIP, was vetoed by President Bush for a second time Dec. 12, 2007, which leaves the fate of the program undecided. It's unclear whether an override will be attempted at this point. Congress is expected to pass a temporary extension that would keep the program funded through next year, but 21 states are expected to experience federal funding shortfalls in 2008, and nine states will hit those shortfalls by March. The outlook for '08 is grim as states struggle without additional federal funding and face losing some of the 6 million children currently covered by SCHIP to the ranks of the uninsured. Issue #6: Transforming Education
Forecast: Partly Sunny
There is a renewed focus on lowering the high school drop out rate. States are looking at strengthening the curriculum so it is more challenging to students and providing training for career and work orientated options after high school. Recruiting and retaining high quality teachers and principals is another issue on lawmaker's agendas. They can be the most important factors in improving student achievement, school performance, and raising state graduation rates. In terms of higher education, lawmakers are working on ways to make college more affordable, especially for lower income students, and making sure students graduate on time. Issue #7: Helping Families
Forecast: Partly Cloudy
Homeowners will continue to see their adjustable-rate mortgage (ARM) and payments increase. This could put more homeowners at risk of losing their homes. An increased number of foreclosures could have an impact on state budgets as property values fluctuate. States may also consider homeowner assistance programs similar to what Puerto Rico recently passed that offers various programs directed to low-income, low- to moderate-income families and individuals. In addition, gas prices and ballooning health care costs are subjecting more families to serious financial hardship. One-third of families in the United States has no net worth or is in debt. Using a variety of relatively new tactics, legislators are creating incentives for working families to build assets, thereby increasing the likelihood of weathering a financial crisis. Policies to build wealth include promoting financial education among students and adults, matched savings accounts for investment in a home/business or education, and tax refunds. Issue #8: Environmental Protection
Forecast: Cloudy
Water policy is receiving increased attention in state legislatures as drought and rapid growth in many areas of the country pit competing users and states against each other. Water is an economic driver for expanding energy production, creating new industrial applications, improving recreation and commercial fishing, as well as meeting drinking and agriculture irrigation needs. Some of the bills legislatures could pass in 2008 would have an immediate impact. They would authorize local governments to restrict residential lawn watering during droughts, establish water conservation standards for buildings and appliances, and authorize use of reclaimed water for non-potable purposes. Other pieces of legislation that could have a long-term impact are issuing state bonds to provide funding for state and local reservoirs and pipelines to store and move water more efficiently, and negotiating or modifying interstate water compacts. States are also beginning to see what some feel are the direct effects of climate change: elevated temperatures, more severe forest fires, decreased rainfall, an increase in severe weather, and warmer ocean waters that are harming sea life. While discussion continues to evolve as to the role of human activities in these events, states are taking action to limit the greenhouse gases are contributing to the rise in global temperatures. In 2008, states will continue the discussion of what to do to deal with climate change and some are likely to embrace voluntary and mandatory greenhouse gas emission plans, as a number of states did in 2007. Issue #9: Protecting the Consumer
Forecast: Partly Sunny
Outbreaks in 2007 of contaminated spinach, peanut butter, and pet food led consumers to be wary of our food safety system. In addition, the recalls of toys from China and the Consumer Product Safety Council's inability to protect consumers from these products created even more concern. Several states are now looking at tightening the law surrounding sales of products containing lead. For example, New Jersey adopted a law making it illegal to sell products that have been recalled by the Consumer Product Safety Commission, whether it is a voluntary or involuntary recall. Trade organizations are now asking Congress and states to strengthen food and product safety requirements because of increased concern and poor sales on some of the recalled products. Issue #10: Pension Plans
Forecast: Cloudy
Retiree health care costs will go up for states with a large number of baby boomers retiring in the next few years. All states provide retirement pension plans for state employees and teachers, and many have made commitments to provide or share the expense of retirees' health care. In recent years, states have paid increasing attention to the issue and state pension plans are in good to excellent condition. For retiree health care costs, however, no easy solutions present themselves. Most states appear to have more flexibility to change structures for retiree health care than for pension plans, and may do so in the future. Systems that are still on radar screens or developing on the horizon:
State legislatures will see several issues still leftover on their radar screens from previous sessions and a few new issues that are starting to develop on the horizon. Systems still on the radar screens of various legislatures include access to broadband technology and laws that will prohibit drivers from sending text messages while driving. Ethics and ethics reform will likely be hot topics during an election year. States also have until mid-2009 to comply with The Adam Walsh Child Protection and Safety Act of 2006. If not, states face a 10 percent reduction in federal crime funds. Obesity also remains a hot topic because rates continue to rise, increasing health care costs and chronic diseases such as diabetes, heart disease and certain cancers. Issues developing on the horizon deal with antibiotic resistant infections. MRSA (methicillin resistant staph aureus) infection outbreaks are happening in more states, and legislatures are wrestling with how the infections should be reported. More states will likely be seeing a shower of new bills pertaining to paid family leave and sick leave. Eleven states have passed their own family leave laws, but only two states, California and Washington, provide for paid leave benefits. And a December report released by Major League Baseball on steroid use by players will likely result in legislatures taking a look at tightening use of controlled substances by young athletes. NCSL is a bipartisan organization that serves the legislators and staffs of the states, commonwealths and territories. It provides research, technical assistance and opportunities for policymakers to exchange ideas on the most pressing state issues and is an effective and respected advocate for the interests of the states in the American federal system. ### |