NEWS RELEASE
Date: December 30, 2002
Media Contact: Gene Rose 303-364-7700, ext. 1518
Budget Squeeze: State Legislatures
Face Tough Decisions in 2003 Sessions
NCSL releases its top 10 state legislative issues list
DENVER -- Blood out of a turnip. Toothpaste from a flattened tube. Water from a stone. Gold from a miser. Add a new item to the "tough things to squeeze" list: state budgets in 2003.
The National Conference of State Legislatures today issued its forecast of the top 10 state legislative issues for 2003, noting that state legislators around the country will have a common dilemma this year. Declining revenues and growing demands will cause each of the 50 states to make tough budget choices as they attempt to close an estimated $17.5 billion budget gap in the next six months and craft a balanced budget for what is expected to be a leaner fiscal year in 2004.
"State legislators will have to make important decisions on health care, education, election reform, sentencing and homeland security issues this year," said William T. Pound, NCSL's executive director. "But every issue state lawmakers debate this year will be influenced by the budget."
Legislatures in all 50 states will convene next year, 42 of which begin before January 21. About 1,750 new state legislators will take the oath of office this year, the highest turnover in at least 30 years, due in part to term limits and redistricting. Also, 120 of the top 320 state legislative leadership posts will be taken over by new legislators this year.
Here is NCSL's summary of key state legislative issues for 2003.
- Budgets.
States will be working to erase at least a $17.5 billion shortfall between now and the end of the fiscal year. This comes after erasing nearly $49 billion already this fiscal year. Two-thirds of the states report revenue collections below forecasted levels in the early months of the fiscal year. Nearly every state has a balanced budget requirement.
- Sales tax structure.
States have taken the lead in developing a blueprint for streamlining sales and use tax collections across the country, a move that would help local retailers stay competitive with online businesses. States and local communities lose an estimated $16.4 billion annually in sales and use tax revenue to online sales.
- Education reform.
With the enactment of the No Child Left Behind Act of 2001 by Congress, states must find ways to meet federal requirements that include subject testing, yearly progress reports, and reaching minimum proficiency levels. The lack of a federal budget agreement leaves states in a quandary on how to reach those goals.
- Rising health care and Medicaid costs.
When the economy goes down, state health care costs go up. Medicaid accounts for about 15 percent of the average state's general fund budget. Increases in health care and prescription drug costs combined with flattening revenue projections will force state legislatures to make tough decisions, especially when it comes to Medicaid spending.
- Election reform.
States must comply with the Help America Vote Act, passed by Congress last year. The act requires states to meet minimal standards by 2006, yet Congress has not appropriated money to the states to pay for those mandated reforms.
- Homeland security.
State efforts to respond to threats of domestic terrorism continue in 2003. Legislators must decide whether to sacrifice other programs in order to pay for terrorism and public health defense efforts.
- Crime and sentencing.
Due to two recent U.S. Supreme Court decisions, states will need to rethink their approach to the death sentence. With correction costs under close scrutiny, states may consider treatment and rehabilitation instead of incarceration for first-time drug offenders.
- Clean air and the environment.
With air quality reaching levels poorer than at any time in the last decade and water demands increasing due to severe droughts across the nation, legislators must weigh the potential costs and benefits of short- vs. long- term consequences.
- Welfare reform.
While states wait for Congress to appropriate federal block grants for the Temporary Assistance to Needy Families (TANF) program, the economic climate will require them to look for savings in state welfare programs.
- Privacy.
A national security crisis, increasing use of the Internet, sharing of health records and the question of employers' rights to gather information on employees, continue to make privacy issues a hot topic in legislatures. More than 400 bills related to Internet privacy were introduced in legislatures in 2002, with more action expected this session. Also, expect more legislation to control e-mail spam.
NCSL is the bipartisan organization that serves the legislators and staffs of the states, commonwealths and territories. NCSL 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.
Link to NCSL's 2003 Legislative Sessions and Hot Issues pages
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