Trends and Transitions March 2014

Trends and Transitions | March 2014



User Fees Inch Up

States are relying on user fees more and more. State revenue from highway tolls, sewage assessments, park visitor charges and other user fees is up 5 percent over FY 1992. In FY 2011, user fees provided, on average, 17.1 percent of revenues raised directly by states. That’s still far less than state tax collections, however, which provided 71.6 percent of annual state revenues that year. 

pie chartIn this era of protracted revenue growth following years of declining tax collections during the Great Recession, user fees have become an attractive trend for funding public services. But they’re not a new idea. State and local governments have imposed user fees for admission to parks and recreation facilities for decades.The first modern state turnpike, in fact, was financed by tolls. The Pennsylvania Turnpike opened in 1940, 16 years before the Federal Aid Highway Act authorized—and funded—the federal interstate highway system. 

The rising importance of user fees raises a number of questions for state policymakers. Proponents of fees argue they allow governments to impose the cost of services on the citizens who want and use them. This prevents general fund tax money from paying for government services that benefit only specific individuals, they argue. Opponents argue that, since fees are the same for everyone, they are regressive—that is, they cost low-income households a greater proportion of their income than higher-income households.  

State tax policy can be a complex and often divisive subject, but when fees are included, it becomes even more so. Every source of revenue has its advantages and disadvantages from the perspective of citizens and state government. Finding the proper mix remains an ongoing challenge for state lawmakers.

Is It a Tax or a Fee?

In some cases, there is very little practical difference between a tax and a fee. But legal distinctions between the two are very important because several states require approval by the voters or a legislative supermajority to raise taxes, but not fees. 

Some revenue sources—such as sales, income and property taxes, for example—clearly fall into the tax category. Payments for government services, like park entrance fees, sewer charges and highway tolls, clearly fall into the user fee category.  

Other revenue sources, such as payments in lieu of taxes, court-imposed fines and sales of state property, are not so easily categorized. Yet courts must make these types of determinations every day. 

In general, state courts have focused on the intent and uses of the funds by asking: Are revenues placed in the general fund or in a specific fund designed to cover regulatory or other costs? Is the purpose of the fund to raise revenues for the community or for specific individuals and industries? 

When the revenue benefits the community or goes into the general fund, it is often categorized as a tax. Revenues benefitting specific industries often are categorized as fees.

—Todd Haggerty

Avenging Revenge Porn 

It’s not unusual for young romantic couples to send intimate photos or risqué “selfies” to each other via the phone or Internet. Unfortunately, when the relationship sours, those photos provide the spurned partner a new and especially cruel way to take revenge. Too often, those sexually explicit photos end up on porn websites, along with the subject’s name, address and links to social media profiles. Revenge porn websites started popping up in 2011. Most allow anyone to upload the photos or videos directly, and some charge the victim a fee to remove them.

Most states have laws prohibiting taking sexually explicit photographs without the subject’s knowledge or consent. Very few laws, however, address revenge porn. In 2004, New Jersey passed the first law to prohibit selling, publishing, distributing or disclosing a nude photograph, videotape or other image of another person without his or her consent. State lawmakers are trying to provide additional recourse for victims. California last year enacted a bill criminalizing distribution of revenge porn if it causes the victim serious emotional distress. 

Legislators in at least 14 other states have introduced revenge porn bills so far this year. Almost all the bills would criminalize revenge porn, with about half setting the crime as a felony and half as a misdemeanor. Several increase penalties for subsequent offenses. 

Some groups say such legislation may infringe on free speech. But the American Civil Liberties Union dropped its opposition to the California bill after language about intent to cause distress was added. The Electronic Frontier Foundation, which advocates for free speech on the Internet, criticized revenge porn legislation for criminalizing “victimless instances,” and other groups have cautioned against legislation that is overbroad.

Some victims have sought remedies under state laws on online harassment, stalking or invasion of privacy. Actions aimed at the websites, however, are limited, since service providers and website operators are granted immunity from lawsuits for user-submitted materials under the federal Communications Decency Act. Those who took the photos can claim copyright infringement and send a takedown notice to the website, claiming a violation of the federal Digital Millennium Copyright Act. Even so, once a photo is on the Internet, the damage—the embarrassment and distress suffered by the victim—is done, and the photo’s lifespan may be infinite.

—Pam Greenberg

Poll Books Go Digital

Just as technology has transformed how we manage our bank accounts and pay our bills, it is also changing how we run our elections. Increasingly, elections officials are replacing their pen-and-paper poll books with electronic ones.

E-poll books look like tablets or laptop computers. They list the names of eligible voters, like tradional poll books, but they typically save time and administrative costs of an election. With e-poll books, voters don’t have to stand in an alphabetical line while a poll worker flips through pages looking up names. Instead, the poll worker types in the name and quickly gets the voter information, including precinct, ballot assignment, past address or name changes and whether he already has voted. If anyone tries to vote in the wrong precinct, poll workers don’t have to sift through complicated tables or read the tiny writing on a huge map of urban precincts to find the right one. The e-poll book will identify it. In places with sophisticated e-poll book software, voters can sign in electronically to get the ballot.

E-poll books guard against fraud, since they immediately inform poll workers if someone has voted early or absentee. For greater security against voter fraud, some jurisdictions have discussed adding voter photos to the e-poll book, possibly from the motor vehicle department database, although none have done so yet. Having an electronic signature on file to use to compare with the voter’s can also save on processing time. E-poll books work in real time, allowing election administrators to quickly report turnout numbers to the media and political parties.  

The downsides? As with any new technology, e-poll books require an upfront investment, the cost of putting a laptop or two in each polling place. And, although rare, technology can have its glitches, malfunctions and security breaches. 

Jurisdictions in 28 states already are using some form of an e-poll book. Laws in some states explicitly authorize e-poll books. Last year, Indiana passed a comprehensive election bill that included an extensive section on certification and security requirements for e-poll books, the first state to do so.
In other states, administrators have published procedures and certification requirements for the use of e-poll books, even though no specific authorizing legislation exists. And some jurisdictions use e-poll books without any state guidance.

—Katy Owens Hubler

Irish Ayes By the Numbers

St. Patrick’s Day began as a holiday to honor the patron saint of Ireland, but has evolved into a celebration of all things Irish. The world’s first St. Patrick’s Day parade—on March 17, 1762, in New York City—featured Irish soldiers serving in the English military. It became an annual event.

34.1 MILLION                                
Number of U.S. residents who claimed Irish ancestry in 2012, more than seven times the population of Ireland itself (4.6 million). 

NO. 2
Rank of reported Irish ancestry in the United States, trailing only German. 

Number of New Yorkers claiming Irish ancestry, among the most of any state.

Percentage of Bostonians who claim Irish ancestry, one of the highest in the nation.  

The number of local governments in the  parliamentary Republic of Ireland.

Number of places in the United States that share the name of Ireland’s capital, Dublin.

Sources: 2012 American Community Survey, 2012 Population Estimates, U.S. Census Bureau


E-Cigarette Debate Lights Up

The verdict is still out on the health effects of electronic cigarettes. Without consistant scientific data, public health organizations are divided on whether they are safer than traditional tobacco. E-cigarette smokers inhale a water-based vapor that may contain nicotine and other chemicals. Some health professionals believe the vapor poses fewer health risks than traditional tobacco, which may reduce traditional tobacco use and the diseases it can cause, including cancer and heart disease. 

 Other health professionals aren’t so sure. They would like the U.S. Food and Drug Administration to regulate e-cigarettes—also known as vaporizers or digital cigarettes—as tobacco products under the Family Smoking Prevention and Tobacco Control Act of 2009. FDA officials stated in 2011 that the agency planned to regulate e-cigarettes, but no rules had been issued as of early 2014.

Several state legislatures have joined the debate. At least 27 states have banned the use by and  sale of electronic cigarettes or alternative tobacco products to minors. Three states have added e-cigarettes to their bans on smoking in all public places, and nine states have prohibited their use in public buildings such as schools, universities or corrections facilities, or on public transportation. About a dozen bills have been introduced this year, with more expected.

E-cigarettes come in many forms, but they often resemble plastic or glass cigarettes or rods. Unlike traditionally burned cigarettes, they don’t produce a combustible smoke or contain tar, a byproduct of burning tobacco. Instead, they contain a small battery that converts a liquid from small cartridges into a water-based mist or vapor. The liquid cartridges may contain varying amounts of tobacco-based nicotine, synthetic nicotine, or no nicotine at all, as well as flavorings and propellants. Studies on the personal and public health effects of the vapor have been inconclusive.

E-cigarette and liquid cartridge manufacturers, which include some traditional tobacco companies, state they are looking for new, potentially safer ways to allow adults to use nicotine and tobacco products in public places where smoking is now prohibited.

—Karmen Hanson

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