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Trends and Transitions: January 2013 | STATE LEGISLATURES MAGAZINE

BabyIn All Fairness …

There is power in numbers. State legislators from across the country descended on Capitol Hill last month to urge Congress to plug a loophole that is costing states $23 billion a year. They were supporting the Marketplace Fairness Act, a congressional bill that would allow states to require out-of-state retailers to collect sales taxes on remote purchases. NCSL sponsored its largest legislative lobbying day in December while lawmakers met for briefings on federal issues affecting states at the organization’s Fall Forum in Washington, D.C.

“The stars are finally aligning in our favor for passage,” Utah state Senator Curt Bramble (R) told fellow state legislators at the event. “The Marketplace Fairness Act permits Congress to provide funds for the states without funds coming from the states. We are asking for control over our own destiny.”

State lawmakers met with some of the bill’s sponsors, including U.S. Senator Michael Enzi (R) of Wyoming and U.S. Representatives Steve Womack (R) of Arkansas and Peter Welch (D) of Vermont. They also visited with their own congressional delegations, and met with U.S. Senate Majority Leader Harry Reid (D) of Nevada and U.S. Senate Minority Leader Mitch McConnell (R) of Kentucky.

Policymakers from both sides of the aisle have joined forces to support the Marketplace Fairness Act because they believe brick-and-mortar retailers are at an unfair disadvantage by having to collect sales taxes from consumers while their online, mail-order and telephone competitors do not.

University of Tennessee researchers estimate that state and local governments lost at least $23.3 billion in 2012 in uncollected taxes from out-of-state sales, with more than $11.3 billion from online sales. Marketplace Fairness proponents argue that as electronic commerce continues to grow, so will losses to state and local revenues.

The U.S. Supreme Court ruled in Quill v. North Dakota in 1992 that although customers who purchase goods remotely owe state sales taxes, states cannot force retailers to collect them. The Marketplace Fairness Act is designed to close that loophole, providing the congressional action needed for states to be able to require tax collection.

“It is not a new tax, it is a due tax,” Womack told the state lawmakers. “Our retailers have such a hard job, all they are asking for is fairness. People go into a store and use it as a showroom and go home and order on the Internet and do not pay sales taxes.”

NCSL has long been a supporting force behind the Marketplace Fairness Act.

—Jon Kuhl


A Cocktail to Go

The French Quarter in New Orleans has long enjoyed its status as one of the country’s most famous tourist meccas. It’s a place where people can take their alcoholic beverages “to go,” stroll outdoors, and enjoy the area’s colorful sights and sounds with a few sips. Only a few places in the country, including Kansas City’s trendy Power & Light District, allow “open containers,” but that may be starting to change.

Taking note of how this allowance attracts tourists and locals alike, lawmakers in Alabama, Colorado and Nebraska recently enacted legislation to allow similar “common consumption areas.”

The Colorado law, passed in 2011, allows cities and towns to create entertainment districts where associations can set up areas for drinking alcohol, as long as they are closed off from traffic and have limited pedestrian entrances. The associations must include two or more people who own or lease property within the entertainment district, and they must organize and promote the activities within the common consumption areas.

These entertainment districts receive special licenses and must contain a tavern, brewpub, retail gaming tavern, vintner’s restaurant or a hotel with a restaurant. Drink containers are limited to 16 ounces and must have the vendor’s name printed on the side in at least 24-point font. Requiring vendors’ names or logos on to-go cups is designed to keep vendors vigilant about making sure alcohol does not end up in minors’ hands.

The Downtown Development Authority in Greeley, Colo., was the first to take advantage of the new law. It hosted a “Go-Cup Entertainment Area” last summer and fall during its Friday Fests featuring live music. Organizers addressed safety concerns in advance by promoting the festivals as family events, limiting hours from 5 to 10 p.m. and hiring extra security. The authority received a 2012 Governor’s Award for Downtown Excellence, in part for successfully carrying out the new program.

Lawmakers in Alabama and Nebraska passed similar bills in 2012. Alabama requires four retail liquor licensees to be located within the entertainment district but does not limit the size of drink containers. And like Colorado, Nebraska requires cups to prominently display the trade name or logo of the retail licensee, craft brewery or microdistillery selling the drink. But unlike its neighbor to the west, Nebraska does not limit cup size.

Arizona passed legislation in 2010 allowing local governments to exempt entertainment districts from restrictions on alcohol sales near churches and schools. Last year, lawmakers considered a bill to allow open consumption of alcohol within those entertainment districts, but it did not advance out of committee.

— Heather Morton

From Lawmaker to Congressman

Roam the halls of the Rayburn, Cannon or Longworth House office buildings in Washington, D.C., and it won’t take long to run into a former state legislator. About half of all U.S. representatives have experience back home in their statehouses.
Every two years, hundreds of candidates with state legislative experience run for U.S. Congress. Last November, a little more than 300 current and former state legislators ran for Congress as one of the major party nominees. In some races, both candidates had state legislative experience. While 261 of these candidates won, not all of them will be brand new to Congress. About 70 percent were incumbents running for re-election, while the rest were seeking new titles.

The 2012 election ushered in four new U.S. senators with state legislative experience, bringing the total number to 42—26 Democrats and 16 Republicans. Three of the winners—Tammy Baldwin (D) of Wisconsin, Mazie Hirono (D) of Hawaii and Chris Murphy (D) of Connecticut—were U.S. representatives before the 2012 election. They join Deb Fischer (R) from Nebraska, who moved directly from the Cornhusker State’s Unicameral Legislature to Congress’ upper chamber.
On the House side, 33 former state legislators traded the statehouse for the people’s house, accounting for about one-third of the freshmen class.

In total, there are 126 Republicans, 92 Democrats and one independent with legislative experience in the 113th Congress. That is consistent with the 50 percent average that has been fairly steady over the last several decades.

As is the case every cycle, Congress also lost a few former state legislators to retirement. Three senators—Texas’ Kay Bailey Hutchison (R), Joe Lieberman (I) from Connecticut and Olympia Snowe (R) of Maine—and another 21 House members will not be returning to Washington, D.C.

Although some of the names and faces have changed, the 113th Congress looks a lot like the 112th. Last year, 42 former state legislators served in the U.S. Senate and 228 in the U.S. House. This year, as Congress begins a new session, 42 senators and 219 representatives are former state legislators, retaining a strong and important presence in the halls of Congress.

“Their experiences back home from being on the receiving end of unfunded federal mandates and preemption serves as a reminder of what to avoid with their congressional initiatives,” says Michael Bird, senior federal affairs counsel with NCSL. “Many of them are our best supporters, voicing state concerns loudly and clearly.”

—Alex Fitzsimmons


Pushing for Full-Term Births

Too many babies are no longer choosing their own times of arrival. Around 10 percent of deliveries are being scheduled and induced before the full gestation period of 39 weeks for no medical reason, according to the U.S. Department of Health and Human Services (HHS). Mothers’ discomfort and doctors’ schedules are two factors driving the trend. According to the March of Dimes, the rates of induced labor have increased from 9.5 percent of births in 1990 to 22.5 percent in 2006.

Yet early deliveries can pose risks. A baby’s lungs and brain are not fully developed until the critical final weeks of a pregnancy. Early elective deliveries by induced labor or Caesarean sections increase the risk of breathing and feeding problems and blood infections, which may result in longer and costlier hospital stays and even long-term health problems.
Medicaid pays for approximately 40 percent of all births, giving states a considerable financial incentive to promote healthy pregnancies and newborns. HHS estimates that a 10 percent drop in deliveries before 39 weeks would lead to more than $75 million in Medicaid savings each year.

“Even babies who are born a week or two early have greater risk of death, cerebral palsy, developmental delays, and vision and hearing impairment, and that is because all of these vital organs, including the brain, need those final weeks to fully develop,” says Dr. Michael C. Lu, associate administrator for Maternal and Child Health at the Health Resources and Services Administration. “So one of the best things we can do is to make sure that no baby is delivered earlier than 39 weeks.”

To that end, lawmakers in Illinois, New York, Texas and Washington have passed laws since 2011 designed to reduce the amount of early elective deliveries. The law in Texas, for example, prohibits Medicaid from reimbursing hospitals for early, nonmedically necessary deliveries. Washington’s law appropriated $300,000 to study and manage early inductions and neonatal care.

The federal government is also encouraging full-term births through the Centers for Medicare and Medicaid Services’ “Strong Start” initiative. It allows states and medical providers to apply for part of the $43.2 million in grants available to reduce early elective deliveries or to develop other prenatal care initiatives in Medicaid programs.

—Austin Rueschhoff