Geez, don’t make California Assemblymember Melissa Melendez angry. Or at least make sure the sharp objects are out of her reach. As CalMatters reports, fellow Republican Chad Mayes once gave Melendez a basketball signed by members of her favorite NBA team, the Los Angeles Clippers. But after Mayes failed to support a bill she was championing – and in fact spoke out against it – she took a pair of scissors to the ball and had the shredded remains delivered to Mayes’s office. You know, as you do.
In a statement issued last week, NEVADA Gov. Steve Sisolak (D) said he would sign legislation (AB 456) on his desk that will incrementally raise the Silver State minimum wage to $12 per hour by July, 2024. The governor said he would also sign SB 312, a measure that will require employers with at least 50 employees to offer workers up to five days of paid leave a year. The law would not apply to part-time, seasonal or on-call workers. (NEVADA GOVERNOR’S OFFICE, LAS VEGAS REVIEW-JOURNAL)
The NEW HAMPSHIRE Legislature overrode Gov. Chris Sununu’s (R) veto of a bill (HB 455) abolishing capital punishment. The Granite State becomes the 21st to abolish the death penalty. (NPR, LEXISNEXIS STATE NET)
In the wake of another mass shooting – this one ending with 12 people plus the shooter dead and three more critically injured in a May attack in Virginia Beach – VIRGINIA Gov. Ralph Northam (D) called a special session to focus on new gun control measures in the Old Dominion. His proposals to lawmakers will include imposing universal background checks; requiring people to report lost or stolen firearms; limiting handgun purchases to one a month; and a ban on assault weapons and related devices, including sound suppressors like the one used by the Virginia Beach gunman. (NEW YORK TIMES, CBS NEWS)
ILLINOIS Gov. J.B. Pritzker (D) has yet to take a stance on HB 3343, a bill that would allow Supplemental Nutrition Assistance Program (SNAP) recipients to obtain discounted meals from participating restaurants. Similar programs have recently been enacted in ARIZONA, MARYLAND and RHODE ISLAND, and in some CALIFORNIA counties. The measure passed with large margins in both legislative chambers, but Pritzker has not indicated if he will sign it into law. (CHICAGO TRIBUNE, GOVERNING)
A NEW JERSEY legislative panel released a report last week excoriating Gov. Phil Murphy (D) and his administration for its handling of a rape accusation against one of the governor’s top staffers. The panel, commissioned to examine how Murphy’s office handled the 2017 accusation, determined that senior officials in his administration were “more concerned with avoiding negative publicity than following proper protocols and getting to the truth of the matter.” (NJ.COM, PHILADELPHIA INQUIRER)
The NORTH CAROLINA House upheld Gov. Roy Cooper’s (D) veto of SB 359, a bill that would have required medical professionals to provide life-saving care to infants who survive an abortion and to report instances of such births. It was the first veto issued by Cooper to be upheld by Tar Heel State lawmakers. (NEWS & OBSERVER [RALEIGH])
-- Compiled by RICH EHISEN
As a native of South Lake Tahoe, California I know firsthand that it is one of the loveliest places in the world. But as the Sacramento Bee reports, the community is feeling under siege these days from an influx of two entirely different kinds of visitors. The first is an increasingly bold population of hungry black bears, which are making a habit of busting into homes to look for food. Then, as reported by the San Francisco Chronicle, there is the massive wave of tourists taking advantage of the growth in short-term rentals located in residential neighborhoods, sparking complaints of beer-soaked frat parties and other shenanigans destroying the tranquility of otherwise peaceful communities. It’s becoming an increasingly bitter battle, with the bears and the bros each having supporters and detractors. And being California, it appears both issues are headed to the ballot box. Of course.
Amidst widespread speculation that a GOP plan in the U.S. Senate to repeal the Affordable Care Act depends on his support, Nevada Gov. Brian Sandoval (R) reiterated last week his staunch opposition to the proposal. U.S. Sen. Dean Heller (R-Nevada) has announced his opposition to the plan, and GOP leadership believes that Heller will not change his vote without Sandoval’s clear okay. But Sandoval told the Las Vegas Review-Journal last week he remains committed to ensuring that Nevadans who have gained insurance through the ACA keep that coverage under any new plan Congress endorses.
“My position is the same in terms of protecting the 200,000-plus lives of the newly eligibles associated with the Medicaid expansion,” Sandoval said. “They are living healthier and happier lives. We have cut our uninsured rate by more than half. As I sit here today, there hasn’t been anything presented to me that would alleviate that concern.”
Sandoval is one of several governors from both parties who have voiced strong opposition to the repeal measures passed in the U.S. House and Senate.
Last week Standard & Poor’s lowered the bond rating for Hartford, Connecticut from B- to CCC, a four-grade drop. That news was bad enough, particularly coming after another four-grade drop in the city’s rating, from BB to B-, less than two weeks earlier. But the reason S&P gave for its latest downgrade of the city’s rating was even more alarming.
“The downgrade to ‘CC’ reflects our opinion that a default, a distressed exchange, or redemption appears to be a virtual certainty,” the agency said in a statement. “S&P Global Ratings could take additional action to lower the rating to ‘D’ if the city executes a bond restructuring or distressed exchange, or files for bankruptcy.”
The city is facing a cash shortfall of $7 million in November and $39.2 million shortfall in December, along with $30 million in debt payments in the next few weeks. And Mayor Luke Bronin said bankruptcy is a possibility unless the General Assembly approves at least $40 million in additional funding for the city this fall. But that body has problems of its own, with Gov. Dannel Malloy (D) having just vetoed the budget it narrowly approved this month. (HARTFORD COURANT, REUTERS, LEXISNEXIS STATE NET)
A proposed constitutional amendment that would permanently limit state spending in Iowa was unanimously approved by a Senate subcommittee last week. The bill - SJR 9, which would limit spending to “the lesser of 99 percent of the adjusted revenue estimate for the general fund of the state for the following fiscal year or 104 percent of the net revenue estimate for the general fund for the current fiscal year” - could move quickly through the Senate, with all 29 members of the chamber’s Republican majority having signed on as cosponsors of the bill.
Iowa lawmakers are already subject to a statutory 99-percent spending limit, but they can change that law and exceed the restriction. And Sen. Jeff Danielson, a Democrat who supports SJR 9, said lawmakers of both parties have been guilty of having “eyes bigger than their stomachs” at times and shouldn’t be allowed to spend more than the state can afford.
Tom Chapman, who lobbies for the Iowa Catholic Conference, expressed concern that having a spending restriction “locked into the Constitution” might limit the government’s options in a crisis. But Sen. Charles Schneider (R), who chaired the subcommittee that approved SJR 9, said lawmakers would still be able to tap state reserves in emergencies, and the measure could help even out state spending.
Still even if the Senate and House both pass the measure, it will have to be passed by both chambers again after the 2018 election and then approved by voters, in 2020 at the earliest. (DES MOINES REGISTER, LEXISNEXIS STATE NET)
COLORADO Gov. John Hickenlooper (D) signs SB 9, which allows Centennial State residents to store energy gleaned from renewable sources like solar power without discrimination in rates or excessive barriers in connecting to the grid (DENVER POST).
The SAN FRANCISCO Board of Supervisors unanimously approves an ordinance that requires brick and mortar retail establishments to accept cash as payment, becoming the second major city in America (after PHILADELPHIA) to bar retail operations from going cashless (ASSOCIATED PRESS).
OKLAHOMA Gov. Kevin Stitt (R) signs SB 365, a bill that bans local governments from adopting their own rules regulating autonomous vehicles (OKLAHOMAN [OKLAHOMA CITY]).
Voters in DENVER narrowly approve a ballot measure making the city the first in the nation to decriminalize the possession and use of “magic mushrooms,” which contain the hallucinogen psilocybin. Although the margin of victory was narrow (50.56 percent in favor to 49.44 percent opposed), it falls outside of the margin to spark a mandatory recount. Opponents are nonetheless weighing a possible recount, which they would have to pay for (USA TODAY).
State and local tax collections increased by 9.4 percent and 8.9 percent, respectively, in the final quarter of 2017, roughly three times the average quarterly growth rate for the last year, according to a report by the Rockefeller Institute of Government. State and local governments took in over $439 billion in tax revenue in the last three months of 2017, compared to $401 billion in the final three months of 2016, the report said.
The Institute attributed the tax revenue bump to a surge of high-income taxpayers prepaying their state and local income and property taxes to take advantage of the state and local tax (SALT) deduction, which was capped at $10,000, beginning on January 1, 2018, by the Tax Cuts and Jobs Act, passed by Congress and signed into law by President Trump in December 2017. (HILL, ROCKEFELLER INSTITUTE OF GOVERNMENT)
In an effort to combat the ongoing opioid abuse epidemic, health insurer BlueCross BlueShield announces it will stop covering OxyContin prescriptions in TENNESSEE. BlueCross BlueShield of Tennessee reps say the company will instead encourage doctors to prescribe two other painkillers engineered to be more difficult to abuse (TENNESSEAN [NASHVILLE]).
CALIFORNIA Gov. Jerry Brown (D) signs AB 595, which requires health insurers seeking to merge to first obtain permission from the state Department of Managed Health Care, which will have the power to block the transaction (MODERN HEALTHCARE). CALIFORNIA Gov. Jerry Brown (D) signs AB 2760, legislation that requires high-risk patients be prescribed the overdose reversal drug naloxone when receiving prescriptions for opioids. The measure goes into effect in January (EUREKA TIMES-STANDARD).
NEW YORK Gov. Andrew Cuomo (D) signs AB 6823, which relieves Empire State prosecutors from having to prove force, fraud or coercion was used to involve a minor in prostitution. (NEW YORK POST)
NEW JERSEY Lt. Gov. Sheila Oliver (D) signs AB 1414, a bill that mandates the state Board of Education include financial literacy instruction in the curriculum for sixth- through eighth-grade students in public schools across the Garden State. Oliver signed the bill while Gov. Phil Murphy (D) was out of state (NJ.COM).
MASSACHUSETTS Gov. Charlie Baker (R) signs SB 2374, which allows Bay State schools to incorporate personal financial literacy standards into existing mathematics, social science, technology, business, or other curricula (STATE HOUSE NEWS SERVICE [BOSTON]).
The NEW MEXICO House approves HB 29, which would allow local communities to impose curfews on teenagers under age 16. The measure moves to the Senate (KRQE.COM [ALBUQUERQUE]).
The U.S. Immigration and Customs Enforcement agency publishes new rules that allow international students earning degrees in science, technology, engineering and mathematics fields in the United States to be eligible to stay in America for three years of on-the-job training (NEW YORK TIMES).
Editor: Rich Ehisen Associate Editor: Korey Clark Contributing Editor: Mary Peck, David Giusti Editorial Advisor: Lou Cannon Correspondents: Richard Cox (CA), Lauren Davis (MA), Steve Karas (CA) and Ben Livingood (PA), Cathy Santsche (CA), Dena Blodgett (CA) Graphic Design: Vanessa Perez Design
OHIO Gov. John Kasich (R) signs HB 101, which authorizes Buckeye State pharmacists to substitute cheaper but equivalent alternatives to the brand-name product EpiPen, which is used to counter severe allergic reactions to bee stings, peanuts, medication, and other allergens (TOLEDO BLADE).
With wildfires burning the state down amidst the usual end-of-session jamming through bills that really ought to have had a lot more deliberation, California lawmakers can point to at least one epic accomplishment: surfing is now the official state sport. That’s right, Gov. Jerry Brown inked his name to a measure that gives riding the waves its due as “an iconic California sport.” At least the bill acknowledges that surfing actually originated in Hawaii, making it like most other things in this state – an import from somewhere else.
-- By RICH EHISEN
The SAN ANTONIO City Council unanimously approves a six-month pilot program regulating electric scooters. Riders will be required to use sidewalks or roads, but will be barred from roadways where the speed limit is over 35 mph. Scooter companies will also be required to employ a local fleet manager and pay a singular $500 vendor fee and an additional $10 per scooter levy (EXPRESS NEWS [SAN ANTONIO]).
The 5th U.S. Circuit Court of Appeals upholds a LOUISIANA law that requires doctors who perform abortions to have admitting privileges at a local hospital (REUTERS).
CALIFORNIA Gov. Jerry Brown (D) signs AB 2989, which changes state law to require helmets for electric scooter riders only if they are under 18. It takes effect Jan. 1 (CURBED LOS ANGELES).
CALIFORNIA Gov. Jerry Brown (D) signs SB 1108, which makes the Golden State the first to bar work requirements as a condition of Medicaid eligibility (LEXISNEXIS STATE NET).
CALIFORNIA Gov. Jerry Brown (D) vetoes AB 2888, which would have expanded the range of people who can petition the courts for an order removing firearms from those thought to be dangerous to include teachers, college professors, employers and co-workers. Current law allows only family members and law enforcement to see those orders (CALIFORNIA GOVERNOR’S OFFICE).
NEW JERSEY Gov. Chris Christie (R) signs AB 261, which bars the installation and sale of wheel weights containing lead or mercury and prohibits the sale of new motor vehicles equipped with wheel weights containing lead or mercury (NEW JERSEY GOVERNOR’S OFFICE).
In May the Board of Supervisors for the City and County of San Francisco approved an ordinance banning the use of facial recognition technology by all city departments. It’s the only major U.S. city to have taken such action against the emerging technology. But the measure is part of a larger and growing movement among localities and states to increase oversight of the use of surveillance technologies by government entities.
San Francisco’s ban on facial recognition technology is just one provision of an ordinance restricting the city’s use of surveillance technologies in general. Among other things, the law will require city departments to obtain approval from the Board before acquiring any type of surveillance equipment - from closed-circuit TV cameras to software for monitoring social media - or obtaining information acquired through the use of such technology. Departments that obtain Board approval, through a process involving a public hearing, will have to file a report each year on the use of the applicable technology.
The ordinance doesn’t apply to private entities, which as the Atlantic pointed out, “introduces some ironies.”
San Francisco’s police department “will be barred from using Amazon’s Rekognition software to scan video footage for suspects after a shooting - but a grocery store will be permitted to do the same thing to analyze shopper behavior,” the publication said.
San Francisco isn’t the first locality to pass such sweeping restrictions on government surveillance. Santa Clara County, encompassing much of California’s Silicon Valley, approved an ordinance like San Francisco’s - minus the ban on facial recognition technology - in 2016. And unlike previous laws dealing with the issue, it didn’t just apply to a particular surveillance technology that raised privacy concerns but to all such technologies, including those that hadn’t been developed yet.
“Silicon Valley’s local lawmakers made sure the law passed today was future-proof by creating consistent rules for all the surveillance technology that currently exists and those we know will come,” Nicole Ozer of the American Civil Liberties Union of Northern California said at the time.
In 2017 Nashville; Seattle; and Somerville, Massachusetts passed ordinances similar to Santa Clara County’s. And in 2018 Lawrence and Cambridge, Massachusetts; Yellow Springs, Ohio; and the California cities of Berkeley, Davis, Oakland and Palo Alto all did the same.
There are some significant variations among the laws, such as San Francisco’s ban on facial recognition technology and whistleblower protections in Oakland. But they all broadly restrict the use of surveillance technology by government agencies.
The laws came after a decade-long, federally-subsidized expansion of surveillance technology use by local law enforcement agencies across the country, spurred by the 9/11 terrorist attacks. Often those technologies, including automated license plate readers, biometric (e.g., face, voice, gait, etc.) identification systems, cell phone tracking devices, drones, and software for predicting criminal activity, have been deployed without notification of impacted residents or local governments. The New Orleans Police Department used predictive policing software to identify potential perpetrators and victims of crimes for six years without the city council knowing about it.
In response to this surveillance tech boom, the ACLU launched an effort in 2016 to ensure adequate oversight of municipal surveillance. The organization’s Community Control Over Police Surveillance (CCOPS) campaign included a model law requiring city council approval for the acquisition of surveillance technologies and annual reporting on the use of such technologies to the council and the public, among several other things.
According to the ACLU’s CCOPS webpage, the surveillance ordinances passed in Santa Clara County, Nashville, Seattle, Somerville, Lawrence, Cambridge, Yellow Springs, Berkeley, Davis, Oakland, Palo Alto, and San Francisco were all CCOPS efforts.
There hasn’t been much formal action on the issue this year in major U.S. cities other than San Francisco, according to a new local government service provided by LexisNexis State Net. That service, which currently covers major jurisdictions in 37 states, shows San Francisco, Santa Clara County and Seattle recently passed ordinances related to the government surveillance restrictions they’d previously approved. But most of the ordinances in the database, including those proposed or approved in Atlanta, Houston, Kansas City and Phoenix, authorize rather than restrict the use of surveillance technologies.
According to the CCOPS webpage, however, there are more than a dozen cities, large and small, working on their own CCOPS ordinances. They include Boston; New York City; Muskegon, Michigan; and Hattiesburg, Mississippi. The webpage also indicates California and Maine are working on statewide CCOPS legislation.
What’s more, ACLU Senior Advocacy and Policy Counsel Chad Marlow, who leads the CCOPS campaign, told SNCJ the localities and states identified on its webpage as “Working on CCOPS legislation” are just the ones where the process is far enough along to make it public. He said CCOPS efforts are also underway in “quite a few other places.”
In addition to the state CCOPS efforts, at least nine state legislatures have considered bills this session aimed at restricting government use of surveillance technologies, according to the National Conference of State Legislatures and LexisNexis State Net’s legislative tracking system (see Bird’s Eye View). At least 13 states have also considered measures dealing with government use of biometric data, one of which, New Mexico HB 98, has been enacted.
Pam Greenberg, who tracks technology issues for NCSL, said she’s “seen an increase in all types of privacy legislation this year” and expects “that trend to continue.”
As with other privacy-related issues, much of the debate over the government surveillance measures - in city halls and statehouses - revolves around the balance between security and civil liberty.
“This is really about saying we can have security without being a security state,” San Francisco Supervisor Aaron Peskin said of the city’s new government surveillance ordinance, which he wrote, as the San Francisco Chronicle reported.
Peskin and others say surveillance technologies raise serious societal concerns. Among them is the threat they pose to citizens’ ability to freely exercise their civil rights, such as attending a political protest. They also subject individuals simply going about their daily lives to the same scrutiny as those with criminal intent.
“When you have the ability to track people in physical space, in effect everybody becomes subject to the surveillance of the government,” Marc Rotenberg, executive director of the Electronic Privacy Information Center, told the New York Times.
Surveillance technologies also make mistakes. A test of Amazon’s Rekognition system last year by the American Civil Liberties Union misidentified as criminals 28 members of Congress, a disproportionate number of whom were people of color, including six members of the Congressional Black Caucus.
And critics say the technologies can too readily be used to intentionally target specific populations, such as African-Americans or immigrants, as China - a country with an estimated 200 million surveillance cameras – has been doing with the Uighurs, a largely Muslim minority in its western region.
But others argue that technologies like facial recognition make the public safer.
“It is ridiculous to deny the value of this technology in securing airports and border installations,” said Jonathan Turley, a professor of public interest law at George Washington University, as the Times reported. “It is hard to deny that there is a public safety value to this technology.”
And as Tony Montoya, president of the San Francisco Police Officers Association, noted, according to the Times, facial recognition technology has also “been successful in at least providing leads to criminal investigators.” One recent example is the use of the technology to help identify the suspect in a mass shooting at an Annapolis, Maryland newspaper in June.
For those and other reasons some oppose the idea of banning such technologies.
“We agree there are problems with facial recognition ID technology and it should not be used today,” the group Stop Crime SF said in a statement. “But the technology will improve and it could be a useful tool for public safety when used responsibly and with greater accuracy. We should keep the door open for that possibility.”
Some have also taken issue with the cost of complying with the surveillance ordinances. According to the Chronicle, the SFPD estimates it will take two to four full-time employees to carry out the compliance responsibilities associated with San Francisco’s new ordinance.
But more ordinances like it appear to be on the way. The ACLU’s Marlow said he thinks the momentum of the CCOPS campaign will not only continue but increase.
“Having passed 13 laws in 2 1/2 years - a startling average of one new law less than every 3 months - the question has gone from asking new cities if they would pass a CCOPS law, to asking them why they don’t have one,” he said. “In the next 12 months, I expect we will see quite a few more major U.S. cities adopting CCOPS laws, which will just add to the campaign’s ongoing strength.”
-- By KOREY CLARK
CALIFORNIA Gov. Jerry Brown (D) signs SB 1139, which bars the denial of applicants to Golden State medical schools based solely on their immigration status. The law also ensures that all medical students are eligible to apply for scholarships, regardless of their citizenship status (LEXISNEXIS STATE NET).
Although motor vehicle subscription services - similar to auto leases but with no long-term commitment, the ability to change vehicles periodically and insurance and maintenance bundled in - have only been around for a few years, they’ve been embraced by some automakers, insurers and consumers. But the services face potential roadblocks from state lawmakers and regulators that could keep “subscribing” for a car from becoming as commonplace as “buying” or “leasing” one.
Vehicle subscription services have existed since at least 2014, when Cox Automotive, the Atlanta-based auto auction, financial services and media company that owns Autotrader and Kelley Blue Book, launched Flexdrive, allowing consumers in select cities to obtain a recent model vehicle on a weekly basis via an app. In the years since then, auto manufacturers, dealerships and other providers have started their own subscription services, and there’s now a multitude to choose from, including Care by Volvo, Porsche Passport, Hertz My Car, and Canvas, initiated by Ford but recently acquired by competitor Fair.
Some automakers got off to a rough start with their subscription services, but others appear to be pretty enthusiastic about them. Porsche recently expanded the service it piloted in Atlanta two years ago to four new cities: Las Vegas, Phoenix, San Diego and Toronto. And despite the fact that the $2,100-per-month lower tier of that service, Porsche Passport, is about 20 percent more expensive than leasing a Porsche for three years, 180 people have signed up for it, 80 percent of whom had never owned a Porsche before, according to the Insurance Journal.
“If you engage 80 percent new people that have not engaged with your brand before, that’s certainly worth a lot,” said Klaus Zellmer, president and CEO of Porsche Cars North America.
Automakers like Porsche view subscription services as a way of appealing to a younger demographic used to hailing rides from Uber and streaming movies on Netflix - at a time when U.S. auto sales have plateaued. Passport subscribers, for instance, aren’t locked into a three-year lease, and they’re able to switch car models whenever they want, so they can drive a Panamera sedan during the week and a 911 sports car on the weekend. As Zellmer put it, according to CB Insights: “younger people ‘do not want to engage with a commitment for three years. They want to change their phones; they want to change their TV channels. It’s all about subscriptions.’”
Several insurance companies have also jumped into the market, teaming up with subscription service providers to manage their insurance needs. As of early last year, AAA had partnered with third-party subscription service Gig Car Share; Assurant had partnered with BMW and third-party subscription services Flexdrive, Fair and Carma; Chub ESIS had partnered with Cadillac and General Motors; Hamilton had partnered with Porsche; and Liberty Mutual had partnered with Ford, Volvo and third-party service Turo, according to CB Insights.
A major selling point for insurer MetLife, which joined with Hyundai last year to provide a three-year lease program that included insurance and maintenance, was that it didn’t have to foot the bill for marketing to potential customers for a change.
“There is a lot of marketing and advertising in the insurance industry — it’s one of the most marketed industries across the board,” Kevin Chean, vice president and head of distribution for MetLife Auto & Home, told Auto Finance News. “This program is offered through Hyundai so we’re not offering marketing to promote this program, Hyundai is leveraging their existing marketing program to sell cars and get consumers in the door.”
In addition, because MetLife was able to offer the programs’ subscribers - a low-risk population of Hyundai customers who qualified for a lease - a fixed three-year rate, the usual underwriting process wasn’t required for each of them, cutting down on labor and paperwork costs.
Auto dealers haven’t been as receptive to subscription services. They’re concerned that they’ll be left out of the new business stream being created by the services and end up having to compete with automakers.
Matthew Haiken, chairman of Volvo’s Retail Advisory Board and a principal at two New Jersey Volvo dealerships, told Automotive News last year that some automakers were only paying dealers $250 to $500 to deliver subscription vehicles, which often require more work than standard deliveries.
“What happens down the road if this takes off and you try to cut our margin, or you try to cut us out completely?” he told Volvo executive management. “We need to be able to protect our margins based on the expense structure that we have in the dealership.”
Dealer concerns contributed to Indiana lawmakers’ decision last year to impose a moratorium on vehicle subscription programs in the state until May 1, 2019 [HB 1195 (2018)].
Language that would have allowed automakers to offer subscription programs only through their dealer networks was also added to a broader dealer franchise bill introduced last year in California, AB 2107 (2017). The provision was later stripped out of the bill after the Alliance of Automobile Manufacturers, which represents a dozen automakers, including Volvo, and the California New Car Dealers Association, which represents 1,300 franchised new car dealers in the state, agreed to talk the matter over further, Brian Maas, president of the California dealer association, told Automotive News. He also said new legislation addressing subscription programs could come as soon as 2019.
So far this year only four states - Indiana, Massachusetts, New Jersey and North Carolina - have introduced bills dealing specifically with vehicle subscriptions, although two of those states enacted measures, according to LexisNexis State Net’s legislative tracking system. Indiana passed HB 1237, extending its ban on vehicle subscription programs to May 1, 2020. And North Carolina enacted SB 557, reducing the alternate highway tax on vehicle subscriptions.
Legislation is still pending in Massachusetts (HB 262 and SB 179) that would require vehicle subscriptions to be “offered through, or in partnership with” auto dealers. There are also several active bills in New Jersey (AB 5461 and AB 3847/AB 4634/AB 4819/SB 2252/SB 2382) that would provide for special license plates to identify subscription vehicles and establish a plug-in electric vehicle rebate program in part to foster “advanced mobility solutions, including vehicle subscription services, respectively.
And more legislation may be on the way. As Larry Dominique, CEO of French automaker PSA’s North American division told Automotive News last year, “The sense that I’m getting from the legal team is we can expect to see more legislative action on this over the next year or two” in a larger number of states.
At the moment, however, the bigger threat to vehicle subscriptions appears to be California regulators. The state’s Department of Motor Vehicles has launched an investigation of Volvo’s Care program. As NBC News reported, the California New Car Dealers Association says the automaker is using the program to cut franchised dealers out of its sales process, in violation of state franchise laws. The dealer group points out that the Volvo booth at the 2018 Los Angeles Auto Show actually had electronic banners proclaiming “Don’t Buy Our Cars,” and “Subscribe, Don’t Buy.”
“Franchise laws exist to protect dealers from this type of behavior,” said Maas, the group’s president.
The group also argues that Volvo is violating California consumer protection laws by rolling vehicle use, insurance and maintenance into a single payment, a central element not only of Volvo Care but of all vehicle subscription services.
In response to the news of the California DMV’s investigation, Volvo issued a statement saying it was “committed to developing Care by Volvo in collaboration with our retailers to offer the flexibility of subscription side-by-side with traditional lease and financing.” NBC News also reported that the company was taking steps to improve delivery of its subscription vehicles.
It isn’t clear whether those actions will satisfy either California auto dealers or regulators. The future of vehicle subscription services could be riding on the DMV’s report on Care, which is due by mid-February.
“A lot of us thought that subscription programs were going to be the way to buy a car,” Joe Phillippi, president of AutoTrends Consulting, told NBC News.
But he also said if the California DMV finds that Volvo is violating the state’s laws, other providers “are going to think twice” about the subscription business model.
Being in politics means learning to roll with the punches, but former California Gov. Arnold Schwarzenegger recently had to take that lesson a step further. As the Washington Post reports, Schwarzenegger was signing autographs at his annual Arnold Classic Africa in Johannesburg, South Africa when a man ran at him from behind and launched a drop kick into “The Governator’s” back. Arnold was unhurt and the man was quickly apprehended. Schwarzenegger joked about the incident on social media, saying “I’m just glad the idiot didn’t interrupt my Snapchat.”
According to Census Bureau data, there were about 7.5 million full-time equivalent state and local government employees, not including those who work in education, nationwide last year. That’s 3 percent fewer than there were before the Great Recession began forcing states and localities to implement hiring freezes and leave vacancies unfilled. Factoring in population growth, non-education government employment is down 11 percent at the state level and 8 percent at the local level 10 years after the official start of the recession, raising the question of whether staffing levels will ever return to pre-recession levels.
Several factors have contributed to the weak public-sector workforce growth, including sluggish income, property and sales tax collections, and rising pension and health-care costs, particularly Medicaid.
“There’s a crowding out effect,” said John Hicks, executive director of the National Association of State Budget Officers (NASBO). “The rest of the government has been living with flat or declining [spending levels].”
That doesn’t appear likely to change soon. Governors’ proposed budgets for fiscal 2018 call for only a 1 percent increase in general fund spending, the smallest recommended expansion since 2010, according to NASBO’s Fiscal Survey of States. (GOVERNING, NATIONAL ASSOCIATION OF STATE BUDGET OFFICERS)