STATE LEGISLATURES MAGAZINE | january 2015
Lawmakers have a slew of hot issues to juggle as sessions rev up around the country this month.
By Julie Lays
The overall economy is improving. Gas prices are down and state revenues are up. Things are better, but they’re not great.
Lawmakers are reporting for duty with partisanship and polarization casting longer than normal shadows down revered statehouse hallways. Social issues continue to divide, voters’ cynicism grows for all things “government” and federal inaction threatens states’ stability.
Still, state lawmakers find ways to get things done. They look for areas of agreement, they learn from experiences in other states and they find solutions to fairly serious problems, often quite innovatively and almost always more effectively than their federal counterparts.
As lawmakers roll up their sleeves to begin work on many important issues, state fiscal conditions, at least, are stronger than they have been for several years. With only a few exceptions, state finances continue to improve slowly but steadily from the depths of the Great Recession. NCSL’s most recent fiscal survey of the states found most spending in line with appropriated levels for FY 2015. In fact, as the New Year approached, only Medicaid and corrections in a couple of states were running over-budget.
The same survey found that the top funding issues state legislatures are expected to address during 2015 legislative sessions are education (from preschool to university), Medicaid, and transportation infrastructure. Other hot fiscal issues include tax reform and gaming.
As we do this time each year, we’ve listed the topics—many new and emerging—that will likely occupy a majority of lawmakers’ time and energy across the country.
1. Health Exchanges
It’s a given that some aspect of health care policy will always make it onto a top state policy list. From costs to care, it’s always hot. Along with debates over expanding Medicaid, bolstering the workforce and cutting costs, health insurance exchanges will be in the spotlight again. A pending U.S. Supreme Court case could have a big influence on state action this year. In King v. Burwell, the justices will determine whether the tax credits under the Affordable Care Act (ACA) for low- and middle-income health insurance purchasers apply if they use the federal exchange rather than a state exchange. If the justices rule the credits don’t apply, some say it could kill the ACA as we know it. Others say it may only encourage states to convert their federally run exchanges into state-run versions. Currently, 16 states and the District of Columbia have state-run exchanges. At least seven other states partner with the federal government to run their exchanges. These may be the most likely to switch to a full state-run marketplace. This is only the second case regarding the ACA to make it to the high court, so the ruling is highly anticipated.
Legalizing marijuana is undeniably one of the hottest issues today. In the first states to legalize small amounts, the proliferation of retail marijuana stores and the growth of the related industry would have been hard to imagine just a few years ago. New stores and emerging businesses are popping up offering pot users everything from exclusive tours to cooking classes, limo rides to ski trips. Voters, so far, have been the drivers behind these proposals. They passed the first initiatives to legalize, regulate and tax small amounts of marijuana in 2012 in Colorado and Washington, as did voters in Alaska, Oregon and D.C. last November. Bills to legalize recreational marijuana were introduced in 15 legislatures in 2014, and in 13 the year before, but none advanced.
In addition, 23 states and D.C. allow the use of marijuana for medical reasons, with more than half those proposals initiated and passed by legislatures. And 19 states and D.C. have changed their laws so that anyone caught with a small amount of marijuana is charged with only a civil or local infraction, with no possibility of jail time. Some of these laws date back to the 1970s, but many reflect a recent renewed interest that will continue in 2015.
The U.S. Department of Justice, meanwhile, continues to maintain that marijuana is illegal under the federal Controlled Substances Act and expects states to enact and implement laws that include “strong and effective regulatory and enforcement systems” to address any threat legal pot could have on public safety, public health and other law enforcement interests. Native American tribes are permitted to grow and sell marijuana on tribal lands as long as they follow federal rules already in place in states that allow recreational use, according to Justice guidelines issued in December.
Will 2015 be the year that a state legislature legalizes recreational use of marijuana? Questions on the minds of lawmakers include: Should the growing cannabis-related tourism industry be regulated more? How should drugged driving be defined and penalized? How should taxes be structured?
Other drugs under the policy spotlight are prescription pain killers and heroin. At least 22 state legislatures and D.C., mostly in the last two years, have enacted “Good Samaritan” laws to encourage people to call 911 by granting limited criminal immunity to both the person who overdosed and the one who seeks help. More states will be looking at these laws this year. Similar bills have been introduced in Congress.
3. Student Assessments
As a handful of states continue to debate the merits of and motivation behind the common academic standards, inescapable are the federal and state laws requiring schools to assess students’ mastery of the English and math standards. What’s more, the majority of states promised the federal government they would administer newly created “next generation” assessments during the 2014-15 school year in exchange for flexibility with other federal education requirements.
Since 2010, two federally funded, state-led consortia—Partnership for Assessment of Readiness for College and Careers (PARCC) and Smarter Balanced—have developed and field-tested assessments intended to measure not just students’ knowledge, but also their ability to communicate, reason, analyze and synthesize data, make complex inferences, and develop strategies to solve complex problems. Twenty-seven states and D.C. will administer either the PARCC or Smarter Balanced assessment during this school year and another 20 states will use assessments developed themselves or by private vendors. Three states remain undecided.
Because next generation assessments measure a wider range of knowledge and reasoning skills than previous tests, state lawmakers this year will be discussing how to best use this new and different data. Should teachers be held accountable for how their students do on assessments, and if so, how? How can the burden of over-testing be addressed? Should high-performing schools be waived from having to conduct certain assessments annually? Should they be allowed more leeway in which assessment to use?
4. Police Authority
The deaths of two unarmed black men at the hands of white police officers last year in Ferguson, Mo., and Staten Island, N.Y., sparked national protests after grand juries decided not to prosecute the officers. The protestors’ concerns are reverberating in state capitols where legislators will be considering several issues affecting how police officers interact with the public. New technologies, concerns over how the police use force and an expanded use of police authority to search are causing lawmakers to investigate several policy options.
Already, 14 states have enacted laws addressing when police can use unmanned aircraft, and 10 states regulate when law enforcement officers are allowed to search cell phone data. But the most recent issue vying for lawmakers’ attention is the use of body cameras. At least eight states last year considered legislation to enable or require police to use these cameras to record their interactions with the public. States and cities will have help buying the cameras and teaching officers how to use them in the coming year if Congress approves a $75 million grant program proposed by the president.
Lawmakers also are expected to look at police use of data, no-knock search warrants, seizure of assets, SWAT teams and the authority of citizens to film police. The issue of police militarization will be taken up at both the state and federal levels, and the U.S. Supreme Court is scheduled to hear a case this term on the boundaries of police authority under the 4th Amendment.
5. Pretrial Release
Most criminal defendants, except those facing very serious charges, are allowed to remain free in their communities before going to trial. How to determine whether, and under what conditions, those defendants should be released will continue to be discussed in legislative chambers this year. Since 2012, lawmakers in nine states have passed 10 laws requiring the use of risk assessments in making those decisions and facilitating better supervision of defendants once released.
An important new difference in these policies is a shift in focus onto the individual defendant, rather the alleged crime, to help identify those who pose the greatest risk to public safety and to reduce the number of low-risk people in county jails. Several states were at work in late 2014 to review and revise pretrial release policies; we expect several will be ready to act in 2015.
6. Pension Investments
In the world of public pensions, the latest concern is the increasing reliance on alternative investments, such as private equity and hedge funds, that offer the possibility of higher returns during down markets. This shift has resulted in higher fees and less transparency, however. Many hedge funds charge investors 20 percent of profits and 2 percent of assets, even with recent disappointing performance. Citing the high cost and complexity of these types of funds, last September, the California Public Employees’ Retirement System (CalPERS) announced it was terminating its hedge fund portfolio. Because CalPERS is the largest public sector retirement system in the country and is closely watched by other pension funds and institutional investors, interest is likely to spread this year.
Investments in private equity are also generating buzz in the pension world, as transparency concerns come to the fore. The New York Times, for example, early last November, exposed the fact that public pension plans can find themselves on the hook for paying the settlement costs when private equity firms are accused of wrongdoing.
Whether the potential benefits are worth the risks involved with these types of alternative investments will have lawmakers and retirement system managers debating into the wee hours. And rightly so, say the 14.5 million state and local employees trusting them with their pensions.
7. Sex Trafficking
A recent California report found that between 50 percent and 80 percent of commercial sex exploitation victims are, or were, involved with the child welfare system. Although every state criminalizes at least some trafficking activity, lawmakers continue to explore new methods to combat traffickers and to provide support and rehabilitative services for victims, who are often in foster care or the juvenile justice system. Such “safe harbor” laws are changing the way the system treats the victims of this crime—not as criminal prostitutes, but as crime victims in need of support and services.
State legislatures also will strive to meet the many new requirements set forth in the federal Preventing Sex Trafficking and Strengthening Families Act passed in 2014. State child welfare agencies, as critical partners in this effort, will be required to develop programs to identify, screen and treat children and youth in foster care who are victims of, or at risk of, sex trafficking. They will also have to report child victims, and youth missing from foster care, to law enforcement and to the federal government. Federal legislation has been introduced that would create a Domestic Trafficking Victims Fund to help state and local governments prosecute traffickers, aid victims and give states that pass safe harbor laws preference for Community Oriented Policing Services grants.
8. Social Impact Financing
More and more, states are turning to an innovative, yet controversial, financing mechanism to pay for social programs and services. Called “social impact bonds” or “social impact financing,” among other terms, under this approach the government contracts with an outside organization to provide a measurable government service. The organization is repaid with interest by the governmental agency if, and only if, it is successful. The idea originated in the United Kingdom in 2010. Massachusetts, in 2012, became the first state to use social impact financing for social services. Around the country, questions on lawmakers’ minds include: How exactly is success measured? While this financing method may delay the state burden, does it really save taxpayers’ money? What risks are involved? Debate is likely to heat up in 2015 as more states experiment with this financing alternative.
States have certainly been where the action is on immigration, as Congress drags its feet on any federal reform. And although 2014 saw a decline in immigration legislation enacted in the states, lawmakers across the country still approved more than 170 laws focused on addressing immigration challenges in budgets and appropriations, services, enforcement and education. What’s to come in 2015? Expect states to continue meeting immigration challenges, with federal actions, if any, spurring state responses to comply, and federal inaction encouraging states to continue developing their own solutions. Topics will be widely varied but likely to include discussions on driver’s licenses, E-Verify, in-state tuition and enforcement, including protections for victims of trafficking.
On the energy front, state legislators will be discussing how public utilities recover costs as interest in small-scale, on-site power sources—known as distributed generation—grows. These systems use rooftop solar panels, small wind turbines and other technologies to produce electricity on-site and are connected to the local electric grid.
At the center of the policy debate is “net-metering,” an approach that allows these small-scale power generators to sell power to their electric company when they produce more than they need and credit those sales against their energy purchases during times when their own systems are not producing enough to meet their needs.
States and utilities adopted net-metering to compensate people who invest in distributed energy technologies, such as rooftop solar, but many utilities now argue these individuals are being over-compensated. Discussion in legislative chambers and committee rooms this year will focus on whether the monetary benefit net-metering offers is fair or in need of a major update.
With state lawmakers juggling all these, and many more, policy concerns, what can we expect from the 114th Congress? The changing political dynamics—with Republicans controlling both chambers for the first time since 2007—could offer new opportunities to strengthen state sovereignty and bolster states’ rights. Or they could result in more of the same, a mere reflection of the previous session, a reincarnation of the “Do-Nothing” 80th Congress of the late 1940s.
If they so choose, federal lawmakers will have plenty of opportunities to tackle some of the nation’s pressing policy issues. This includes funding the improvement and maintenance of the nation’s infrastructure, addressing the federal government’s debt limit, considering reforms to entitlement programs and the federal tax code, and enacting legislation allowing states to require remote sellers to collect and remit sales taxes.
When the Congress convened on Jan. 3, almost half its members brought with them state legislative credentials, a high mark over the past eight years. NCSL will look to these members to join in the call to Congress and the administration to stop imposing unfunded federal mandates and preempting state authority with unwarranted federal over-reach.
NCSL’s advocacy efforts on Capitol Hill and with the administration in 2015 will focus on these top congressional issues for state legislators:
- Transportation funding and infrastructure
- Deficit reduction
- The Marketplace Fairness Act
- Cyber security
- Child care and early learning
- State-based insurance regulation
- National Guard funding
There you have it: 10 state policy topics sure to make it onto legislative calendars this year and nine of the most important issues facing Congress for states. That’s a whole lot of balls in the air for lawmakers to juggle. But they will, and they just might surprise us in how they deal with them. It’s worth watching at least.
More on the Horizon
It’s hard to limit the hottest new policy issues to just 10. Other emerging policies sure to make it into legislative debates include:
- Banning plastic bags
- Complying with EPA carbon dioxide limits
- Creating green and resiliency banks
- Expanding online voter registration
- Improving telehealth
- Limiting hydraulic fracturing
- Paying for effective, but very expensive, medicines
- Preparing and evaluating teachers
- Preparing for epidemics
- Promoting hybrid and electric vehicles
- Regulating ridesharing
- Teaching dual language learners from birth
- Transporting crude oil by rail
Julie Lays is the magazine’s editor. NCSL policy research staff contributed ideas and information for this article.