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December 17 -- The New Federalism
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HomeSpotlight Story | Bird’s Eye View | Budget & Taxes | Politics & Leadership | Governors | Hot Issues | Once Around the Statehouse Lightly
As part one of our legislative preview indicated, a great deal of uncertainty surrounds next year’s legislative sessions, but as a result of President-elect Donald Trump’s surprising victory and with Republicans in control of both legislative chambers in 32 states - up from 30 before last month’s election - conservative focuses such as the Affordable Care Act and immigration are likely to dominate state legislative agendas. A few liberal issues that figured prominently on states’ November ballots, however, could also get attention in some statehouses, along with issues that cut more across ideological lines.
Marijuana Legalization: All four of the measures on states’ Nov. 8 ballots seeking legalization of marijuana for medical use were approved by voters, including the first in the South: Arkansas’ Issue 6 and Florida’s Amendment 2. And all but one of the five measures aimed at legalizing recreational use of the drug also passed, including California’s Proposition 64. That measure in particular could give a major boost to the recreational marijuana movement - which had already scored victories in four states and the District of Columbia - given that California, the nation’s most populous state, was the first to legalize medical marijuana, in 1996, and 24 other states have taken that action since.
“California is a game changer. California is a movement,” the state’s lieutenant governor, Gavin Newsome (D), said at a news conference before the election.
It remains to be seen, however, whether that game at the state level will continue to be played mainly at the ballot box or will carry over to state legislatures. So far, legalization of marijuana for recreational use has only come via ballot measure, although Vermont came close to becoming the first to accomplish it legislatively, with the Senate’s approval in February of SB 241, which was later derailed in the House, according to LexisNexis State Net’s legislative tracking database.
President-elect Trump’s pick for attorney general, U.S. Sen. Jeff Sessions (R-Alabama), who opposes marijuana legalization, could also end an Obama administration policy allowing states that have legalized the drug to operate in a regulatory grey area, despite the federal government’s classification of marijuana as a Schedule I controlled substance like LSD and heroin.
“We need grown-ups in charge in Washington to say marijuana is not the kind of thing that ought to be legalized. It ought not to be minimized, that it’s in fact a very real danger,” Sessions said at a U.S. Senate hearing in April.
But in a statement issued on Nov. 18, National Cannabis Industry Association Executive Director Aaron Smith said: “Voters in 28 states have chosen programs that shift cannabis from the criminal market to highly regulated, tax-paying businesses. Senator Sessions has long advocated for state sovereignty, and we look forward to working with him to ensure that states’ rights and voter choices on cannabis are respected.” And the business publication Quartz reported that half of the members of the U.S. Senate and 60 percent of the members of the U.S. House “hail from states that have legalized some kind of marijuana access.”
Minimum Wage: Voters in four states - Arizona, Colorado, Maine and Washington - passed initiatives increasing their respective minimum wage rates on Nov. 8. And voters in South Dakota, which supported Trump by a nearly 30-point margin (61.5 percent to 31.7 percent), rejected a popular referendum (Referred Law 20) on legislation signed into law last year (SB 177) making workers under 18 ineligible for a minimum wage increase - from $7.25 per hour to $8.50 per hour - approved by the state’s voters in 2014 (Measure 18).
Those results could spur other states to take action on the issue. In October Iowa Gov. Terry Branstad (R) said he and his state’s lawmakers would explore raising the minimum wage to replace hikes being approved by counties across the state. Wisconsin Republicans, on the other hand, said after the election - which gave them larger legislative majorities than they’ve had in decades - they might eliminate the minimum wage for workers on road and government building projects. Trump, meanwhile, has issued contradictory statements on the issue, saying in an interview on NBC’s Meet the Press in May that he’d “rather leave it to the states” but then saying at a press conference in July that the federal rate had to go up to “at least $10.”
Soda Taxes: Berkeley, California became the first city to pass a soda tax in 2014, with voters’ approval of Measure D. Philadelphia’s City Council approved a soda tax this past June. And three California cities - San Francisco, Oakland and Albany - and Boulder Colorado all passed soda tax ballot measures on Nov. 8 with over 60 percent voter support.
“This is the start of a national movement,” Larry Tramutola, a political strategist who organized the campaigns in support of the soda tax measures in San Francisco and Oakland, said after the election.
Michael Jacobson, co-founder and president of the Center for Science in the Public Interest in Washington, likewise, said, “I’m sure that other cities and states will look at this and put tax measures before their legislatures.”
“Legislators will say, ‘We get a twofer: balance the budget and improve public health.’”
It didn’t take long for the next soda tax measure to come: The Board of Commissioners of Cook County, Illinois, home to Chicago, narrowly passed one on Nov. 10.
Transportation/Infrastructure Funding: In the absence of an increase in the federal excise tax on gasoline - the primary source of federal funding for transportation programs - since 1993, states have had to carry more of the financial burden of maintaining and improving their deteriorating roads and infrastructure. Last month New Jersey raised its gas tax by 23 cents, to 37.5 cents per gallon, to provide more money for transportation projects, and other states, including Georgia, Idaho, Iowa and Nebraska, have done the same in the last few years.
Trump has promised to spend $1 trillion over 10 years to rebuild America’s infrastructure. But the American Society of Civil Engineers (ASCE) estimates the nation would have to spend $3.6 trillion over just the next three years to get its infrastructure - including roads, airports, railways, waterways, energy and water systems, hazardous and solid waste systems, schools and parks - to “a state of good repair,” enough to raise the ASCE’s overall grade for it from its current D-plus to a B. So more state tax hikes are likely on the way.
“There are still 20 states that have waited a decade or more since last raising their gas tax rates,” said Carl Davis, research director for the progressive Institute on Taxation and Economic Policy. “At least a dozen states are going to be discussing gas tax increases next year.”
Autonomous Vehicles: Since Nevada became the first state to authorize the operation of autonomous, or self-driving, vehicles in 2011, seven other states have enacted legislation and two states have issued executive orders related to such vehicles, according to the National Conference of State Legislatures. The number of introductions related to autonomous vehicles by NCSL’s count, meanwhile, has risen from 10 bills in six states in 2012 to 10 bills in eight states in 2013, 21 bills in 12 states in 2014, 15 bills in 11 states in 2015 and 36 bills in 17 states this year. And with self-driving cars increasingly in the headlines - Apple Inc. recently revealed it is “investing heavily” in the emerging technology - that growth trend is only likely to continue.
Cybersecurity: Twenty-eight states have introduced over 100 bills and resolutions - and enacted or adopted 24 - related to cybersecurity this year, according to NCSL analysis of LexisNexis State Net legislative data. Those numbers are up from the 25 states, 66 introductions and 20 enactments or adoptions in 2015. The profile of the issue has also been ratcheted up recently by the reports of Russian hackers targeting Democratic National Committee computers and state voter registration systems leading up to last month’s election, as well as of the massive cyberattack on Domain Name System (DNS) provider Dyn in October, which utilized hundreds of thousands of internet-connected devices like home network routers and baby monitors to disrupt traffic to major websites, including those of Twitter, Netflix and The New York Times.
Police Oversight/Protection: Since the highly publicized fatal shooting of Michael Brown, an unarmed, 18-year-old black man, by a white police officer in Ferguson, Missouri, and the suffocation of Eric Garner by police in New York City, in 2014, 30 states and the District of Columbia have passed laws dealing with the use of body cameras by law enforcement, according to NCSL. Fewer of the laws require police departments to use such cameras than set standards for those that do, but as of August, 43 of the country’s 68 “major city” departments fell into that category, according to a report by the Leadership Conference of Civil and Human Rights.
But controversial incidents involving police officers, including shootings, continue. As of early December, there were 888 fatal police shootings nationwide this year, just 21 fewer than at the same point in 2015, according to a database maintained by The Washington Post, fueling public demand not only for more body cameras but also greater civilian oversight of law enforcement. Last month voters in Oakland, California approved the creation of a powerful civilian-run police commission, while voters in Denver, Honolulu, Miami, New Orleans and San Francisco approved plans to strengthen existing police oversight programs, according to the Associated Press.
But there have also been calls for more protection of law enforcement officers. As of late November, 60 officers had been killed by gunfire themselves this year, a 67 percent increase from the same time last year, according to a statement issued by the National Law Enforcement Officers Memorial Fund. That statement also said 20 officers had been killed this year in targeted attacks, “part of a growing and alarming trend that has seen 44 officers gunned down in fatal ambush shootings since 2014.” And the organization urged elected officials and others to “confront those who are directing violence and hate toward” law enforcement.
Texas Gov. Greg Abbott (R) had already declared his intention to do so months earlier, announcing proposed legislation for the 2017 session - the Police Protection Act - that would make committing a crime against law enforcement officers motivated by bias against them a hate crime.
Immigrant Fees: In addition to the immigration issues covered in part one of our legislative preview, fees targeting undocumented immigrants could also catch on next year. A bill expected to be considered in Georgia - which the Atlanta Journal-Constitution’s political blog described as the state’s “first piece of Trump-era legislation - would impose a fee of 2 percent on personal wire transfers of money out of the state. That fee would be recoverable as an income tax credit or refund, meaning it would effectively only be paid by those who don’t file an income tax return, including - as the Center for Immigration Studies (CIS) pointed out - “aliens, many of them in illegal status” and “drug dealers, as well, whatever their status.” Oklahoma passed a 1 percent fee on out-of-state money transfers in 2009 that generated about $12 million for the state last fiscal year. And CIS estimates the higher rate of Georgia’s fee and the larger number of undocumented immigrants there could yield it as much as $100 million. Other GOP-led states with sizeable populations of undocumented immigrants will undoubtedly take note.
Public Pension Hedge Fund Divestment: In recent years state pension systems have poured billions of dollars into alternative investments like hedge funds in pursuit of ambitious return goals the retirement funds have been failing to meet, to the detriment of their respective states’ budgets. But in 2014 the California Public Employees Retirement System (CalPERS) - the nation’s largest public pension system - announced it was pulling out the $4 billion it had invested in hedge funds, which attempt to earn a profit regardless of market conditions through a combination of investments including stocks, real estate and other sometimes risky ventures, because the funds are too costly and complicated. This past April New York City’s Employees Retirement System (NYCERS) voted to divest the $1.5 billion it had invested in hedge funds, after deciding the funds’ lackluster performance didn’t justify their high management fees. In October the state of New York issued a report indicating that investments in hedge funds had cost its Common Retirement Fund - the third largest in the country - $3.8 billion in fees and poor performance over the last eight years. Retirement systems in Kentucky, New Jersey and Rhode Island have also recently announced plans to pull out of hedge funds. And although the California State Teachers’ Retirement System (CalSTRS) said in April that it would be adding to its holdings in hedge funds as part of a strategy to reduce losses in down years, the reports and actions in opposition to such funds are likely to spur more divestments.
Lottery Reform: An investigation in October by the Charlotte Observer revealed that hundreds of players of scratch-off ticket games in North Carolina have beaten overwhelming odds repeatedly. One resident reportedly won 46 times between 2008 and 2015, claiming a total of $56,000 in prizes. Another won a $150,000 scratch-off prize in 2014, a $150,000 prize this past April, and a $1 million prize in May. Lottery officials and lawmakers in the state say they’re now considering reforms including making the reselling of tickets a crime, with the presumption being that some of the winning tickets were redeemed by someone other than the purchaser to avoid forfeiting money owed to the state such as for back taxes or unpaid child support. Those developments may have the 44 other states with lotteries taking a closer look at their games, although at least three - Florida, Indiana and Iowa - already prohibit ticket reselling.