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    Baker Proposal Could Bring E-Scooters Back to MA

    Electronic scooters could return to Massachusetts if a new proposal from Gov. Charlie Baker (R) eventually becomes law.

     

    The rapidly growing e-scooter craze hit a roadblock in Massachusetts last year when several cities ordered scooter-sharing company Bird to cease operations over a state law requiring any motorized vehicle to have both brake lights and turn signals, features e-scooters rarely possess.

     

    The wide-ranging road safety plan Baker unveiled last week would, among several things, change the law to regulate e-scooters and electric “pedal-assist” bicycles in the same way the state treats standard human-powered bikes.

     

    It would also impose a handful of new requirements, including a mandate for riders under age 16 to wear a helmet. Riders would also be required to yield to pedestrians and to provide some form of audible notice when they are passing another vehicle. It would also be illegal for riders to leave their scooters where they might block traffic or sidewalks.

     

    Baker’s proposal further directs state transportation officials to establish a “micro-mobility advisory working group” to consider possible regulations for future “emerging and undefined low speed mobility devices.”

     

    Scooters were not Baker’s only focus. He also called for allowing police to pull drivers over for not wearing their seat belts and requiring all electronic devices to be used only in hands-free mode when someone is behind the wheel.

     

    The proposals now go to lawmakers.

     

    “We look forward to working with our colleagues in the Legislature to pass this comprehensive road safety bill into law,” Baker said in a statement. (MASSLIVE.COM, BOSTON HERALD, STATE HOUSE NEWS SERVICE [BOSTON])

    Murphy, NJ Lawmakers Reach Minimum Wage Deal

    After months of haggling, New Jersey Gov. Phil Murphy (D) and Garden State lawmakers reached a deal to raise the minimum wage to $15 per hour by 2024. Under AB 15, the wage would climb from the current $8.5 to $10 on July 1 and then to $11 on Jan 1, 2020. It would climb another dollar per hour every January from there until reaching $15. It would be tied to the consumer price index for all urban wage earners and clerical workers.  

     

    The proposal would allow employers to pay so-called “starting wages” for the first 120 hours of a new worker’s employment while they were being trained, as long as those wages equal at least 90 percent of the minimum.

     

    The measure has different tiers for different workers. Seasonal workers, for instance, would not reach the $15 mark until 2026, while agricultural employees would be maxed out at $12.50 in 2024. Tipped workers would also reach the $15 mark, with employers required to cover a larger base of pay, reaching $5.13 by 2024.

     

    The bill would also provide employers with tax credits for hiring disabled workers and create a state task force to study how changes in the minimum wage could affect the eligibility of low-income residents for public services. (NORTHJERSEY.COM, NJ.COM) 

    Governors in Brief - January 28 2019

    MILLS REJECTS ME MEDICAID WORK REQUIREMENTS

    MAINE Gov. Janet Mills (D) sent a letter to federal officials rejecting new work requirements for Medicaid recipients that were requested by former Gov. Paul LePage (R) and approved by the Trump administration just days before LePage left office. “Maine’s low unemployment rate, its widely dispersed population, and our lowest per capita income in New England make mandates – without appropriate supports like vocational training and specific exemptions for groups like people undergoing treatment – problematic,” Mills said in a statement. (PORTLAND PRESS HERALD)

     

    REYNOLDS WANTS MORE IA PSYCHIATRISTS

    IOWA Gov. Kim Reynolds (R) introduced a proposal to greatly increase the number of psychiatrists trained and brought to practice in the Hawkeye State. Her proposal would add four psychiatric residency slots at the University of Iowa, which now graduates seven psychiatric residents annually. The new positions would be tailored to doctors who want to treat mental illness in rural Iowa. (DES MOINES REGISTER)

     

    POLIS CREATES CO HEALTH COSTS OFFICE

    COLORADO Gov. Jared Polis (D) issued Executive Order B 2019 03, a directive that will create a new state office tasked with finding ways to lower health care costs. The Office of Saving People Money on Health Care will focus on reducing costs associated with insurance, prescription drugs and hospital stays. It will also be asked to find ways to improve price transparency. (DENVER POST, COLORADO GOVERNOR’S OFFICE)

     

    LEE PUSHES TN RURAL DEVELOPMENT

    New TENNESSEE Gov. Bill Lee (R) issued an executive order last week calling for more emphasis on rural development in the Volunteer State. His order requires all state executive departments to provide recommendations for how they can better serve rural Tennessee through a “statement of rural impact.” (TENNESSEE GOVERNOR’S OFFICE, TENNESSEAN [NASHIVILLE])

     

    NEWSOM SHIFTS CA JUVENILE JUSTICE TO HEALTH DEPT

    Calling it a move that was long overdue, CALIFORNIA Gov. Gavin Newsom (D) said he would transfer control of the state’s Juvenile Justice Division away from corrections officials to government health and human services providers. “Juvenile justice should be about helping kids imagine and pursue new lives - not jumpstarting the revolving door of the criminal justice system,” Newsom said in a statement. (LOS ANGELES TIMES, CALIFORNIA GOVERNOR’S OFFICE)

     

    -- Compiled by RICH EHISEN

    Business - January 28 2019

    VA Senate Rejects SB 1200

    The VIRGINIA Senate rejects SB 1200, a proposal to raise the Old Dominion minimum wage to $15 per hour over a five-year period (WASHINGTON POST).

    MS House Approves HB 702

    The MISSISSIPPI House approves HB 702, which would raise the allowable annual earning for cottage food operations - cooks who make and sell candies, cakes and other foods – to $35,000. The measure now moves to the Senate (MISSISSIPPI CENTER FOR PUBLIC POLICY).

    VA Senate Approves SB 999

    The VIRGINIA Senate approves SB 999, which would establish a statewide fund to provide $5 million for the construction, rehabilitation and expansion of grocery stores in underserved communities across the Old Dominion. The measure moves to the House (ASSOCIATED PRESS). 

    Education - January 28 2019

    WV Senate Approves SB 1

    The WEST VIRGINIA Senate approves SB 1, which would allow Mountain State residents to attend community college or technical school for free provided they meet certain conditions, including passing regular drug tests and performing at least eight hours of community service. It moves to the House (CHARLESTON GAZETTE).

    NY Assembly and Senate Approves SB 1262

    The NEW YORK Assembly and Senate each approve SB 1262, a bill that would abolish the mandate that ties teacher evaluations to students’ scores on certain standardized tests. It moves to Gov. Andrew Cuomo (D) for consideration (NEWSDAY [NEW YORK CITY]). 

    Health & Science - January 28 2019

    WI Assembly Approves AB 1

    The WISCONSIN Assembly approves AB 1, which would require Badger State health insurers to cover pre-existing health conditions and ban them from dropping coverage for those who exceed caps on lifetime or annual coverage amounts. If adopted, the law would go into effect if the Affordable Care Act is overturned. The measure moves now to the Senate (MILWAUKEE JOURNAL-SENTINEL).

    ND House Rejects HB 1274

    The NORTH DAKOTA House rejects HB 1274, which would have barred drivers from smoking in a car when they have a passenger younger than nine years old (KNOX RADIO [GRAND FORKS]).

    NJ Governor Announces 

    NEW JERSEY Gov. Phil Murphy (D) announces that the Garden State will add opioid addiction to the list of illnesses legally treatable with medicinal marijuana. The governor said the state is also taking steps to ensure addicts have access to medication assisted treatment (NJ.COM).

    Immigration - January 28 2019

    Supreme Court of United Stares Declines Case

    The Supreme Court of the United States declines to take up a case challenging a lower court’s ruling that temporarily blocked the Trump administration from ending the Deferred Action on Childhood Arrivals, or DACA, program that offered special protections for more than 700,000 immigrants brought to this country illegally as children (LOS ANGELES TIMES).

    NY Assembly and Senate Approve SB 1250

    The NEW YORK Assembly and Senate approve SB 1250, a bill that allows undocumented immigrants to access state financial aid to pay for college tuition. It moves to Gov. Andrew Cuomo (D), who has said he will sign it into law (NEW YORK TIMES).

    Social Policy - January 28 2019

    IA Law Barring Abortion

    A state judge declares an IOWA law barring abortion procures as soon a fetal heartbeat is detected – as early as six weeks into a pregnancy - to be unconstitutional. Judge Michael Huppert said prohibiting abortions violates “both the due process and equal protection provisions of the Iowa Constitution.” The law’s supporters are weighing an appeal to the state Supreme Court (ASSOCIATED PRESS).

    NY Governor Signs SB 240

    NEW YORK Gov. Andrew Cuomo (D) signs SB 240, the Reproductive Health Act, which codifies the right to abortion services into Empire State law. The measure, which takes effect immediately, allows physician assistants to perform surgical abortions and midwives and nurse practitioners to perform nonsurgical procedures (BUFFALO NEWS).

    MS House Approves HB 571

    The MISSISSIPPI House approves HB 571, which among several things would ensure that a child under age 18 cannot be charged as a prostitute. It moves to the Senate (WXXV25 [NORTH GULFPORT]).

    The Local Front - January 28 2019

    San Diego County Announces New Program

    The SAN DIEGO County District Attorney’s Office announces a new program to add education about human trafficking to the school curriculum in seven schools around “America’s Finest City” (NBC SAN DIEGO). 

     

    -- Compiled by RICH EHISEN

    Gone to the Goats

    With wildfires having wreaked so much devastation in the last few years, more rural California towns are looking at warding off such blazes by clearing the brush and other fuels that feed them. One option gaining popularity is as old as time, and purely organic to boot – goats! Yes, as the Los Angeles Times reports, the tiny Sierra town of Nevada City (population 3,100) is looking to employ herds of goats to clear excess vegetation from hundreds of acres of city-owned land. The total cost, however, might be problematic. So city leaders have started a GoFundMe campaign to raise the $30K it will take to bring the goats to bear...so to speak.

    A Family Affair

    The Maine House of Representatives will have a family feel this year, at least in one row of the chamber. That’s where, as the Bangor Daily News reports, Rep. Amy Arata will sit next to Rep. Richard Bradstreet, also known as her dad. Thankfully for family harmony, they are both Republicans and not likely to spend much time butting heads. While they are the first father-daughter combo in Pine Tree State history, they are hardly the first in the nation. The National Conference of State Legislatures reports that as of 2016 there were a half dozen dads and daughters serving in the same legislature, though most served in different chambers.

    Shooting for the Stars

    Political folks are often accused of having their heads stuffed way up there...in the clouds. Fair enough. But Rhode Island Rep. Joseph M. McNamara is ready to take it a little further. As the Providence Journal reports, McNamara has introduced legislation to create the position of official state astronomer. If approved, said astronomer would promote astronomy, science and engineering in schools and other venues around the Ocean State, though with the caveat that nothing they say or do could “be regarded as the official position of the state in any court of law.” Uhhhh...wouldn’t that then make them more of an unofficial state astronomer? 

    Don’t Hold Your Breath

    The ongoing partial government shutdown is wreaking havoc on many Americans. It has also sadly led to some pretty abysmal behavior in our national parks, where the usual contingent of rangers and maintenance personnel remain furloughed. But some folks have stepped up to lend a helping hand where they can. Count Oregon resident Dan Little among them. As the Oregonian reports, Little recently came across a trash-strewn bathroom at a snow-park on Mount Hood. Rather than just ignore it, he put on his big boy pants and cleaned the place up. And then he sent President Donald Trump a bill for $28 for his services. This is where it is worth noting that Little is the husband of Oregon Gov. Kate Brown, who said afterward “This is just one of the many reasons I love my husband, Dan.” Given Trump’s lifetime of stiffing employees and contractors, Little ought not to hold his breath waiting on a check.

     

    -- By RICH EHISEN

    How Successful Teams are Working Together for Better Productivity, Insights and Integration

    Even though teams are becoming more spread apart due to the growing global landscape, it’s more of a requirement that teams collaborate for the best results. As a researcher, what does this mean for you? No matter what your industry, the days of working in silos and relying solely on your own brainpower or technology solutions are over. Today is about collaborative insights, 360-degree information and sharable data that anyone can use.

    LexisNexis Executive Vice President of Strategy and Business Development Ritu Khanna recently identified key trends impacting how researchers work together:

    1.  The Proliferation of Web and Social Content

    The rise in online content means that information is becoming more and more democratized. Getting to the numbers, facts and content doesn’t rely on subscription services, proprietary tools or business partners. Anyone can find anything. But this poses its own challenges. Just because you can find something, is it the right thing? Is it accurate? Complete? Unbiased? A good use of time?

    As you consider how your teams handle web and social content, think about collaborating in smart ways. First, make sure you have a tool that allows you to share, comment on and organize what you’ve found. LexisNexis’s upgraded Nexis solution is built for just that – agile sharing and commenting so teams know where everyone is in the review process and what everyone is thinking. It’s the most efficient way to keep up with the pace of online content. Secondly, be sure you’re using a content solution that is trusted and vetted. Get access to content sources that are continually updated and curated by editorial experts you can trust.

    2.  Customers Value Insights Over Information

    Be sure you’re developing deep insights that move business forward by leveraging the opinions and points of view of your entire team. Nexis allows you to search and share with anyone, anywhere. This means that even if your team members are on the go or not immediately available, you can still benefit from what they have to offer. You can save documents with annotations and highlights to a folder and then share the folder with your
    co-workers. They can then annotate and highlight the documents. It’s never been simpler to build holistic insights.

    3.  An Increase in Visualization, Analytics and Collaboration Tools

    The good news is that new tools are emerging to help you deliver the collaboration customers expect, and now Nexis is one of them. By starting with Nexis, you can ensure you’re sharing, editing and working together as effectively as possible, without ever leaving Nexis. Once you’ve uncovered your insights, be sure you develop them in reports that are easy to digest no matter the skill level of the people reviewing them. There are design tools available that create engaging, streamlined and highly visual reports and infographics. By using these programs, you’ll not only have a more engaged audience, you’ll more easily prove the value real research provides. A few free or inexpensive options to consider are canva.com, piktochart.com, visme.com and Google Charts.

    Nexis Fosters Collaboration with New Solutions

    If you’re ready to work together for improved outcomes, Nexis can help you and your team get there. Nexis, and our newest upgrades to the solution researchers trust, helps you collaborate, search and share on your terms. It’s the tool designed to go beyond being a reference tool toward being a decision tool.

    If you’re ready to change how you research and work together, check out these solutions and resources developed specifically for enhancing your research efforts.

    1. Want to see a demo of our upgraded Nexis? Sign up here.
    2. Want tips, tricks and videos on how to make the most out of Nexis? Visit our training and support page.
    3. Learn more about research trends and best practices on our blog.

    Investors increasingly favor companies committed to sustainable development goals

     Global foreign direct investment is shrinking rapidly—that’s the finding of the Global Investment Trend Monitor, which was released on Tuesday at the World Economic Forum (WEF) in Davos. At the launch, governmental actors and leaders in business and investment agreed that investors are attracted by trust and transparency, anti-bribery and corruption policies, and a commitment to SDG and ESG factors.

    The Global Investment Trade Monitor was launched by the United Nations Conference on Trade and Development (UNCTAD) at a round table at the Davos Hilton on Tuesday (22 January). The high-powered meeting included major investors and government representatives:

    • CEO of Invest India
    • Head of Investment South Africa
    • Vice-president of DSM
    • President of Botswana
    • Egypt’s Investment Minister
    • Nepal’s Finance Minister

    The headline finding of the report is that global foreign direct investment fell by 19 percent in 2018. It is now an estimated $1.2 trillion, which compares to the low point reached after the global financial crisis in 2008.

    Trust and transparency critical for attracting investment

    All parties at the table seemed to agree that countries which can demonstrate transparency and a strong commitment to anti-bribery and corruption (ABC) are more attractive investment targets.

    In fact, with less foreign direct investment available in the last year, ABC compliance is crucial. “The basis of investment, whether it is foreign or domestic, is trust,” a panelist told LexisNexis after the meeting. “As long as the level of trust is greater than the level of risk, investment will be attractive.”

    A former advisor on investment and infrastructure to Presidents Bush and Obama agreed with this assessment. “A clean, honest, transparent market will attract a lot more investment than any other,” he said. “Countries need to have rule of law and they need to make those laws transparent. And corruption is the poison that puts investors off.

    The message is clear: Anti-bribery and corruption efforts will generate a return on investment. Ignoring the issue could mean investment income drops off rapidly.

    Impact investing focuses on environmental, social and governance factors

    At the launch it was also revealed that there has been a continued rise in ‘impact investment’ which focuses on the Sustainable Development Goals and environmental, social and governance (ESG) improvements.

    James Zhan, Director of Investment and Enterprise at the United Nations Conference on Trade and Development, said there is a big opportunity for major companies to make a real impact on the achievement of these goals. He said there is still a gap of $2.5 trillion per year needed to finance the SDGs in developing countries. Another panelist told LexisNexis that he was surprised at how often the participants mentioned the Goals. “I keep hearing the SDGs mentioned today,” he said.

    Expert insights from UN insider on ethical investment

    Speaking outside the Congress Centre at Davos prior to the launch of the report, James Zhan, Director of Investment and Enterprise at the United Nations Conference on Trade and Development, explained these trends in more detail.

    Q: What are the trends in ESG and SDG investment?

    “In the area of SDG and ESG issues, there is a rapid scaling-up in the business and corporate world. For example, in the UN we have a Sustainable Stock Exchanges Initiative which started in 2009 and is scaling up now.

    We started with five stock exchanges and now we have almost all stock exchanges worldwide working together to promote ESG issues through the stock exchange platforms; having more and more listing requirements for firms to report their performance on ESG; and also, for the stock exchange to mobilize financial resources for investing in the SDGs. It’s coming up in almost all the stock exchanges from the largest like New York and London to the smallest like in Africa, South East Asia and Latin America.

    Regarding the SDGs, there are global efforts to mobilize financial resources, to fill in this $2.5 trillion annual gap for financing the SDGs in developing countries. For that we see firms are slowly but steadily moving into this area.

    We need to help governments to formulate new strategies, incentive schemes and a policy framework to attract international investment in SDG sectors and we also need to mobilize further the business community to invest in the SDG sectors.”

    Q: Why will it benefit companies in the long-term to focus on the SDGs and ESG factors?

    “My message is that investing in the SDGs is a must, and it is profitable and beneficial to sustainable development and inclusive growth. Investing in SDG sectors—if businesses can find risk return profile high SDG projects and also work responsibly in these sectors—will be very sustainable and will be very much welcome. So, look for business opportunities and look for long-term growth.”

    Next Steps

    1. Follow us on Twitter for on-the-ground updates from the World Economic Forum.
    2. Download our eBook on Ethical Expectations to see why CSR and ESG are hot topics in Davos this week.
    3. Share this blog with your colleagues and connections on LinkedIn.

    Corporate Social Responsibility and Compliance to Join Top Table at Davos

     The World Economic Forum (WEF) brings together leaders of government and business in the Alpine town of Davos in Switzerland this week. They are discussing the latest trends in business and society. The participant list is revealing—this year, some of the world’s biggest companies have sent executives responsible for Corporate Social Responsibility (CSR), Ethics, Compliance and Risk.

    Changes in the Davos guest list

    The 88-page participant list reveals that all the usual suspects are at this year’s WEF—namely government ministers, CEOs and chairs of the board of directors.

    But dotted among the participants are some roles which are not traditionally associated with Davos:

    • Chief compliance officers
    • Chief risk officers
    • Heads of corporate social responsibility

    Cisco Systems, Pfizer and Puma Energy have sent their CSR representatives; Audi, Credit Suisse and PayPal have sent their compliance officers; and Zurich Insurance and Australia’s The Westpac Group have sent risk experts.

    Given that most companies only send a small number of officials to the WEF, their presence at Davos indicates that more companies now consider CSR, ethics and compliance to be among their most important functions.

    These officials are coming to Davos from major companies in different sectors in many countries. This includes banking, insurance, motoring, energy and pharmaceuticals firms based in:

    • Singapore
    • Australia
    • Germany
    • Switzerland
    • India
    • Belgium
    • United States

    Clearly the risk of bribery and corruption, and the importance of CSR and ethics, is not only being taken seriously in the U.S. and the global banking sector. As we’ve noted recently, ethical business practices and corporate governance are a growing priority for any global business. On the evidence of this year’s WEF, we should expect the pace of this trend to accelerate in 2019.

    Ethics on the agenda

    If you look at the list of panels and events at Davos, an increasing focus on ethics becomes even clearer.

    • On Thursday, UN representatives will host a panel on ethical investment and present evidence that it can provide better returns than some of the world’s most established funds and indices.
    • Later that day, a poll will be launched at a meeting of young business leaders which will reveal what the next generation expect from the businesses they buy from, work for and invest in.
    • On Tuesday, there will be the launch of a report into global investment trends over the last year, with up-to-date statistics on the trend towards ethical investment.

    Our own on-the-ground correspondent arrived in Davos this morning armed with a notebook, a pen, a video camera and an extra-thick scarf—and ready to report back on these events and more. Stay tuned…

    Next Steps:

    1. Follow us here and on social media channels for the latest updates from Davos.
    2. Find out how investors and consumers are influencing the CSR trend in our Ethical Expectations eBook.
    3. Share this post with your colleagues and connections on LinkedIn.

    Most States Prepared for Next Recession

     It’s been 9 1/2 years since the last U.S. recession - the second-longest period between economic downturns on record. The economy still appears to be going strong. But there are signs trouble may not be far off. The good news for states is that most seem to be reasonably well prepared for it.

     

    By some key measures, the U.S. economy is humming. Non-farm employers added 312,000 jobs in December. The unemployment rate is at its lowest level in nearly 50 years. GDP is growing at a brisk 3-plus percent pace. And the core inflation rate, which excludes volatile food and gas prices, is relatively low, at 2.2 percent.

     

    But other economic indicators don’t bode as well. In 2018 the major stock market indexes had their worst year since the Great Recession and their worst December since the Great Depression. The housing market has slowed. The U.S. Treasury yield curve - a graphical representation of yields at different maturities, usually ranging from three months to 30 years - has been flattening and threatening to invert, an indication that investors lack confidence in the near-term economy and an enduring if not entirely infallible recession predictor.

     

    The global economy is also slowing, which hasn’t been helped by President Trump’s trade war with China. And the partial shutdown of the federal government could soon become a significant drag on the U.S. economy.

     

    Nearly 49 percent of the U.S. CFOs surveyed late last year by Duke University’s Fuqua School of Business said they believed the economy would be in recession by the end of 2019, and 82 percent said they believed a recession would begin by the end of 2020. CFOs around the world had similar expectations about their own economies in the near term, according to the survey.

     

    A poll of economists by Reuters in December placed the probability of a U.S. recession in the next two years at only 40 percent. But that rate is not only up five percentage points from a similar poll the month before, but is also one of the highest rates since January 2008, at the start of the Great Recession.

     

    If a recession does come this year or next, most states will likely get through it without too much difficulty, as long as it’s not too severe. According to the results of Moody’s Analytics’ most recent annual stress test of state budgets, released in September of last year, 23 states have sufficient rainy day and other budget reserve funds to weather a moderate recession without having to increase taxes or cut spending. (For more see Bird’s Eye View.)

     

    Within that group of states, reserve balances as a percentage of general fund spending ranged from 101 percent in Alaska and 137.2 percent Wyoming to 8.7 percent in Iowa and Tennessee, according to data Moody’s obtained from the National Association of State Budget Officers (NASBO). The potential fiscal hit from a moderate recession, by Moody’s calculations, also varied quite a bit, from -46.3 percent in Alaska, which is largely dependent on oil production - and, consequently, volatile oil prices - for its tax revenue, to -7.1 percent in North Carolina and South Dakota, which derive most of their revenue from more stable income and sales taxes.

     

    The number of states in the recession-ready group is up substantially from last year’s stress test, in which 16 states were found to be ready for a moderate recession. In fact, Moody’s report said that overall states “have never been more prepared for a downturn.”

     

    But the number of states that Moody’s deemed “significantly underprepared” for a moderate recession - meaning they were 5 percentage points or more away from having the reserves they needed - also increased from 2017, from 15 to 17.

     

    Reserve balances in those states ranged from 10.2 percent of general fund spending in Michigan to 0.1 percent in Pennsylvania and Kentucky. The projected reserve shortfalls resulting from a moderate recession ranged from -5.2 percent in Arkansas to -15.6 percent in Louisiana.

     

    Moody’s report stated that if such a downturn were to happen this fiscal year, it would force some of those states to increase taxes or cut spending by 10 percent or more of their total budget, “likely creating enough fiscal drag to cause those state economies to underperform for some time.”

     

    Moody’s identified another 10 states - Colorado, Connecticut, Florida, Maine, Maryland, Massachusetts, Ohio, Rhode Island, Utah and Vermont - that had reserve balances that were within five percentage points of the amount they would need for a moderate recession, conceivably allowing them to make it through such a downturn with some additional fiscal action.

     

    But there are still reasons in Moody’s report for those 10 states and many of the 23 others designated as being ready for a moderate recession to be concerned.

     

    First, is the fact that Moody’s also conducted a severe recession scenario, which found that only six states - Wyoming, Alaska, West Virginia, Oregon, Hawaii and Delaware - had sufficient reserves to get through a downturn like the Great Recession without having to make the kind of deep cuts the 2007-09 crisis necessitated, which included the elimination of nearly 750,000 state and local government jobs.

     

    What’s more, 36 states were nearly 6 percent or more short of having the reserves they would need to ride out a severe recession.

     

    In addition, in both the moderate and severe recession scenarios, budget surpluses were included in Moody’s reserve balance calculations along with funds designated specifically as “rainy day” reserves. If those calculations had been limited just to actual reserve funds, some top performing states, like Hawaii, Nevada and New York, would not have fared as well.

     

    Moody’s report also indicated that state pension payments, or actuarially defined contributions (ADCs), would increase by $11 billion on aggregate - a little over 1 percent of total state revenues - in a moderate recession and $14 billion in a severe one. It said the impact would be relatively insignificant in most states, but some, like Illinois and Kentucky, could face considerable stress, due to their already-large pension debts and high ADCs.

     

    On a more positive note, a report last fall from NASBO points out that governors and state lawmakers have remained cognizant of the importance of building up their reserves since the Great Recession. Between fiscal years 2010 and 2018, the median state rainy day fund balance rose from 1.6 percent of general fund spending to 6.4 percent, the report states. Thirty-two states also took advantage of strong revenue performance in fiscal 2018 to bolster their reserves, and the same number are planning to boost rainy day funds in fiscal 2019.

     

    Those two groups include states among the 17 designated by Moody’s as being least prepared for a recession. As the Pittsburgh Tribune-Review reported, last July Pennsylvania made the first significant deposit into its rainy day fund in almost a decade. The Trib noted that the $22 million deposit - bringing the reserve’s balance to $22.5 million - would only cover the state’s expenses for a quarter of a day, but that was still an improvement from the tenth of a day the fund would have covered before the payment.

     

    Arizona Gov. Doug Ducey (R), meanwhile, said last week that despite his state’s strong revenues, he wouldn’t include much new spending in his forthcoming budget but would instead focus on doubling the state’s rainy day fund to $1 billion, according to the Mohave Valley Daily News.

     

    “With revenue soaring, some have suggested loosen up, let the good times roll,” he said in his annual State of the State address. “Ladies and gentleman: We’ve seen that movie before, and we know how it ends.”

     

    For such states with limited reserve balances, Moody’s advised, “Every little bit helps.”

     

    “Although it may be too late to get reserves up to the level necessary to fully weather the effects of the next recession, every dollar that can be put away in the meantime is a dollar that will not have to be raised via taxes or spending cuts in a few years,” its report stated.

     

    For all of the states, Moody’s counseled that having a plan for how to use their reserve funds was just as important as having the funds themselves.

     

    “The importance of being purposeful with rainy-day reserves and developing a plan before it starts to rain cannot be overstressed,” the report said.

     

    As Dan White, director of government consulting and public finance research for Moody’s Analytics and one of the report’s authors remarked after the release of the 2017 version: “An inescapable economic reality is that there will be another recession, regardless of how high-flying the economy may appear.”

     


    More States Ready for Moderate Recession Than Not

     As of September 2018, 23 states had enough rainy day and other reserve funds to weather a moderate recession, while 17 states lacked such reserves, according to Moody’s Analytics. The other 10 states had reserve balances that were within 5 percentage points of the amount they would need to get through a moderate recession.

    Battle Over 2020 Census Under Way

    A federal judge issued a ruling last week blocking the U.S. Commerce Department from adding a question about citizenship to the 2020 census.

     

    Commerce Secretary Wilbur L. Ross Jr. had ordered the addition of the citizenship question nearly a year ago. But Judge Jesse M. Furman of the U.S. District Court in Manhattan said Ross had broken “a veritable smorgasbord” of federal rules in doing so.

     

    The ruling was a victory for the multiple cities and states that sued the Trump administration over the plan, which they say would result in undercounts of noncitizens and legal immigrants. But the decision is just the first shot in a court battle that seems likely to reach the U.S. Supreme Court before census forms are printed this summer.

     

    The lawsuit, however, isn’t the only action states and cities are taking in response to the Trump administration’s plan. They’re also putting a lot of effort into community outreach.

     

    Cities including Seattle, Baltimore and New York have already formed what they call Complete Count Committees, bringing together stakeholders from communities that have traditionally been hard to reach. Governors in 11 states and legislatures in six have created similar groups.

     

    “We’re mobilizing earlier, getting coordinated earlier and providing more resources than we ever have in the past,” said California Assemblyman Marc Berman (D), who chairs a special Select Committee on the Census.

     

    California has already made $100 million in Census-related appropriations - four times more than it spent before the 2000 Census, and 50 times more than it spent in 2010, during the Great Recession.

     

    Assemblyman Berman said spending that much makes perfect sense, given what’s at stake. The decennial Census determines how hundreds of billions of dollars in federal funding and all 435 seats in the U.S. House of Representatives are divvied up among the states. California’s share of each right now is $78 billion and 53 seats, respectively.

     

    With a single uncounted resident potentially costing a state as much as $19,000 in federal funds, according to Andrew Reamer, a research professor at George Washington University’s Institute of Public Policy, California “could lose billions of dollars if there’s a significant undercount,” according to Berman.

     

    He said the state could also see its Congressional delegation shrink for the first time in its history.

     

    “This is an opportunity for one-time spending that has a massive return on investment,” he said. (NEW YORK TIMES, HILL)

    DOJ Issues Bombshell Opinion on Internet Gambling

    The U.S. Department of Justice dropped a bombshell on the online gambling industry last week when it announced a legal opinion it issued in November saying the federal Wire Act of 1961 - prohibiting the use of wire communication facilities to conduct gambling across state lines - applied to all forms of interstate wagering.

     

    The opinion reverses one issued under the Obama administration in 2011 maintaining that the Wire Act’s prohibitions applied only to sports betting. The DOJ said that previous opinion misinterpreted the federal statute.

     

    “Based upon the plain language of the statute...we reach a different result,” DOJ attorneys wrote in the Nov. 2 opinion. “While the Wire Act is not a model of artful drafting, we conclude that the words of the statute are sufficiently clear and that all but one of its prohibitions sweep beyond sports gambling.”

     

    The reversal was a big win for major GOP donor and casino owner Sheldon Adelson, who’d long sought a reconsideration of the 2011 opinion.

     

    The new opinion is unlikely to have much of an impact on the sports betting industry because the Wire Act already applied to such wagering under the earlier interpretation. But the new opinion does threaten the viability of online gambling operations in Delaware, Nevada and New Jersey that let poker players compete across those states. And Daniel Wallach, co-founder and director of the University of New Hampshire School of Law Sports Wagering and Integrity Program, said the opinion could have “an immediate chilling effect” on state lotteries that do internet sales.

     

    Jennifer Roberts, associate director of the International Center for Gaming Regulation at the University of Nevada, Las Vegas, said the ultimate impact of the opinion depends on how strictly the DOJ chooses to enforce it.

     

    “Some could go really far and say even if you send a text message to a casino customer in another state and you are saying ‘Come play blackjack this weekend here’s a deal,’ arguably you can say that is information that assists in the placement of a wager,” she said. “I doubt it will go that far, but we will once again be subject to the interpretation.”

     

    The opinion will likely be challenged in court, a prospect the DOJ attorneys acknowledged themselves in the document. (ASSOCIATED PRESS, FORTUNE)

    States Rush to Fill Gaps Left by Federal Shutdown

    As the partial closure of the federal government continues to drag on, states across the country are stepping up to assist the tens of thousands of their residents impacted by the longest federal shutdown in U.S. history.

     

    Brand new Govs. Gavin Newsom in California, Michelle Lujan Grisham in New Mexico, and Tony Evers in Wisconsin, all Democrats, have each assured furloughed workers they will receive unemployment benefits. Oklahoma Gov. Kevin Stitt (R) called for his state’s Banking Department to direct banks to restructure loans or extend payment deadlines for federal workers unable to make their mortgage payments during the shutdown. And Connecticut Gov. Ned Lamont (D) has proposed a public-private partnership with a local bank to provide furloughed workers interest-free loans that would be guaranteed by the state.

     

    But some expressed concern about the potential impact of such actions on state budgets with no end in sight to the shutdown.

     

    “If this goes on another few weeks, it will be very significant for some state budgets,” said Scott Pattison, executive director of the National Governors Association. “There’s not extra money. So if they move funds into something the federal government isn’t covering, then something else is cut at the state level or they’re actually dipping into rainy day funds.” (HILL)

    Slew of State Abortion Bills

    Despite having two state laws restricting abortion struck down in federal court in the past 15 months, Kentucky lawmakers are making another run at enacting an abortion ban.

     

    Senate Bill 9, introduced earlier this month, would ban abortion as soon as a fetal heartbeat is detected, at about six weeks into a pregnancy, in direct conflict with the first-trimester stipulation of the Supreme Court’s 1973 decision in Roe v. Wade.

     

    But that’s precisely the point. The Kentucky lawmakers’ aim is to invite a legal challenge that ultimately results in the overturning of Roe v. Wade.

     

    “I would be proud if it’s Kentucky that takes it up to the Supreme Court and we change Roe v. Wade,” said Sen. Damon Thayer, Republican majority leader of the state’s Senate, adding that it would be “the pinnacle of my career.”

     

    Kentucky is one of several states – including Arkansas, Iowa and North Dakota – that have been looking to enact such laws as the Supreme Court’s majority has shifted more solidly conservative with the appointments of Neil Gorsuch in April 2017 and Brett Kavanaugh in October of last year.

     

    “It seems that conservatives are emboldened with the addition of Justice Kavanaugh added to Supreme Court, and this has set up a flurry of bills that would ban abortion,” said Elizabeth Nash, a policy analyst for the Guttmacher Institute, which supports abortion rights. (COURIER-JOURNAL [LOUISVILLE], LEXISNEXIS STATE NET)

    Budgets in Brief - January 21 2019

    BIG TRANSPORTATION FUNDING PROBLEM IN OH

    OHIO has run out of money for major road projects. A coalition of local governments, chambers of commerce, contractors, engineers and truck drivers called Fix Our Roads Ohio has formed to push for solutions to that problem, including increasing the state’s 28-cents-per-gallon gas tax. (COLUMBUS DISPATCH)

     

    LA TEACHER STRIKE COSTING MILLIONS PER DAY

    Tens of thousands of teachers walked off the job in Los Angeles last week in an effort to reduce class sizes, expand school support staff and boost their pay. With about two thirds of the L.A. Unified School District’s 485,000 students opting not to attend school since the strike began, district officials estimate they are losing $10 million to $15 million a day in state funding, which is based on student attendance. (LOS ANGELES TIMES)

     

    LEGISLATIVE LEADERS FOCUSED ON SCHOOL FUNDING IN TX

    GOP leaders in the TEXAS House and Senate have both unveiled budget proposals that would significantly increase funding for K-12 public education while capping property tax revenues. But among other things the lawmakers will have to resolve the disparity between the House’s 17.2-percent proposed funding increase and the 10.3 percent increase the Senate plan calls for. (AUSTIN AMERICAN-STATESMAN)

     

    CA TOWN LAUNCHES ‘GOAT FUND ME’ CAMPAIGN TO REDUCE FIRE THREAT

    The tiny Northern CALIFORNIA town of Nevada City, with a population of 3,100 and an annual budget of $4 million, has launched a crowdfunding campaign to reduce the threat of wildfires with goats. The city hopes to raise $30,000 from its “Goat Fund Me” campaign for a grazing project on city-owned land. The coastal town of Laguna Beach has used goats to reduce the threat of brush fires there for decades. (LOS ANGELES TIMES)

     

    -- Compiled by KOREY CLARK

    Northeast Govs Now Favor Legal Weed

    Saying it was “inevitable” that her state would soon be surrounded by states that have legalized recreational cannabis use, Rhode Island Gov. Gina Raimondo (D) joined a growing number of her Democratic colleagues in proposing to follow suit.

     

    Raimondo was hardly enthusiastic about the prospect.

     

    “I will say, I do this with reluctance,” she told the Providence Journal. “I have resisted this for the four years I’ve been governor...Now, however, things have changed, mainly because all of our neighbors are moving forward” with legalization.

     

    In recent years, Vermont, Maine and Massachusetts have all endorsed recreational weed use. They may soon be joined by New York and New Jersey, where Govs. Phil Murphy (D) and Andrew Cuomo (D) have both called for legalization.

     

    In his State of the State address to lawmakers last week, Murphy dubbed cannabis legalization one of his top two legislative priorities in 2019, along with raising the Garden State minimum wage to $15. He made a similar push on weed last year but could not reach an agreement with the Democrat-controlled Legislature. Lawmakers generally support legalization but have been unable to develop a plan on taxation and regulation that all parties can agree on.

     

    In New York, meanwhile, Cuomo unveiled his long-awaited legalization proposal last week. It included three separate taxes at the wholesale and cultivation level, with no additional levies on retail sales. It would also create a state office to oversee the industry, craft a licensing system for growers, distributors and retailers, and give cities and counties the power to reject legalization in their jurisdictions.

     

    Raimondo’s proposal also called for what her office said would be the “strongest regulatory framework for adult-use marijuana in the nation.” Raimondo said the state estimates it would garner approximately $6.5 million in new revenues in the first year of legalization. But her Deputy Chief of Staff Kevin Gallagher said money was not the motivation.

     

    We’re not doing this for the revenue,” Gallagher told the Providence Journal. “We’re going to be surrounded by [marijuana], and the only way we will be able to control the public health, to make sure we have safe products, control distribution, ensure proper enforcement, is if we take control of our own destiny and establish a framework here that has those significant protections.”

     

    Several other Democratic governors have or plan to propose legalization this year, including Colorado Gov. Jared Polis and Illinois Gov. J.B. Pritzker, both newly sworn in. Virginia Gov. Ralph Northam and Pennsylvania Gov. Tom Wolf have also noted their interest, though it is unclear if either will make a proposal this session (NEW YORK TIMES, ALBANY TIMES-UNION, NJ.COM, YORK DAILY RECORD, MARIJUANA MOMENT, BLOOMBERG, PROVIDENCE JOURNAL, DEMOCRAT & CHRONICLE [ROCHESTER])

    Newsom Faces Immediate Crises

    Barely a week into his governorship, California Gov. Gavin Newsom (D) is already dealing with two major crises: the bankruptcy of the nation’s largest public utility and a teacher strike in Los Angeles, the country’s second largest school district.

     

    Newsom called for both sides to work toward a settlement of the strike but declined to take sides. He has, however, called for lawmakers to pass legislation requiring more transparency from charter school operators, one of several issues of contention between the teachers unions and the L.A. Unified School District. Newsom also noted that his recently-released budget proposal includes over $80 billion in K-12 education funding – a record – and $3 billion for teacher pensions, which he said would also free up tens of millions of dollars in the LAUSD budget.

     

    The Chapter 11 bankruptcy declaration by Pacific Gas & Electric, the nation’s largest utility, may be even more problematic. The utility is facing approximately $30 billion in damages from its role in igniting a series of disastrous fires in 2017 and 2018 that killed scores of people and resulted in the loss of thousands of homes and billions of dollars more in damage. 

     

    The bankruptcy filing would coalesce the outstanding claims into one large suit that could be heard by a bankruptcy court rather than a jury. It also drew immediate criticism from lawmakers, who said fire victims were unlikely to receive proper compensation for their losses from a bankruptcy court.

     

    The filing started a 15-day window before it becomes official. Newsom told reporters last week he is hopeful that can be avoided, but he acknowledged that might not be possible. The biggest priority, he said, is determining a path forward that keeps consumer energy prices down and ensures wildfire victims are properly compensated and the state is still able to meet its long-term energy goals. (STATE NET CAPITOL JOURNAL, ASSOCIATED PRESS, CALIFORNIA GOVERNOR’S OFFICE)