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HomeSpotlight Story | Bird’s Eye View | Budget & Taxes | Politics & Leadership | Governors | Hot Issues | Once Around the Statehouse Lightly
Despite the unusual amount of uncertainty heading into this year’s state legislative sessions, a few of the issues we predicted last December might receive particular attention from lawmakers, such as cybersecurity and transportation funding, have done so. But others, like soda taxes, have stalled, and a number that weren’t covered in our legislative previews, including perennials like election reform and redistricting, have also been active.
Cybersecurity: More than 240 bills and resolutions related to cybersecurity have been introduced in 41 states this year, over 40 of which have been enacted or adopted, according to analysis of LexisNexis State Net legislative data by the National Conference of State Legislatures, making it one of the most active issues in the states. That activity level is also up substantially from the 104 introductions in 28 states and 24 enactments and adoptions on the issue last year, and the 66 introductions in 25 states and 20 enactments and adoptions in 2015.
The significant escalation in activity comes after a massive cyberattack on Domain Name System (DNS) provider Dyn last October that utilized hundreds of thousands of internet-connected devices like home network routers and baby monitors to disrupt traffic to major websites, as well as the targeting of Democratic National Committee computers and state voter registration systems by Russian hackers leading up to last year’s presidential election. The recent revelation that the hacking of the election systems was more serious and widespread than previously reported, impacting as many as 39 states, along with the increasing frequency of headlines announcing major cyberattacks, will likely only spur more state action on the issue.
One particular focus of that action may be cybersecurity at government agencies, which are especially vulnerable to cyberattacks, as the Cap J reported in February. California, for instance, is considering a bill (AB 241) that would require state and local government agencies responsible for a security breach to offer free identity theft protection to affected individuals, which is already mandated for businesses in the state by a law passed in 2014.
Transportation Funding: In the absence of an increase in the federal excise tax on gasoline since 1993, states have had to carry more of the financial burden of maintaining and improving their deteriorating transportation infrastructure. Last year 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 taken similar action in recent years.
President Trump promised to seek $1 trillion over 10 years to rebuild America’s infrastructure. But in May his administration released a six-page fact sheet laying out its vision for that $1 trillion infrastructure plan, which calls for just $200 billion in direct federal spending on infrastructure over the next decade. The other $800 billion needed to reach the $1 trillion target would come from what the fact sheet describes as “incentivized non-Federal” investment by state and local governments and the private sector. Trump’s proposed 2018 budget, meanwhile, calls for a $928 million cut to a federal grant program for transit projects, a $499 million reduction in another program for transportation projects with significant regional or national impact, and lower spending from the federal Highway Trust Fund after 2020 to bring it into balance with declining revenues.
States haven’t been waiting on Washington to solve their transportation funding problems, however. At the end of April, California Gov. Jerry Brown (D) signed SB 1, which one Republican assemblyman called “the largest gas tax increase in California history.” The measure will provide $52 billion in transportation funding over the next decade, primarily by raising taxes on both gasoline and diesel fuel. As of May five other states - Indiana, Montana, South Carolina, Tennessee and Utah - had also passed gas tax increases this year, according to the Institute on Taxation and Economic Policy. In addition, Colorado Gov. John Hickenlooper (D) signed a sweeping bill (SB 267) that among other things will allow the state to make at least $2 billion worth of state facilities available for lease-purchase mainly to fund capital construction and transportation projects. With Washington signaling that states will largely be left to their own devices when it comes to their transportation needs, more state gas tax hikes and other transportation funding measures are likely to come.
Soda Taxes: For the past few years taxes on sodas and other sugary drinks have been on a roll. In November 2014 Berkeley, California became the first city to pass such a tax. And that levy’s dual benefit of raising new revenue while reducing the consumption of beverages linked to epidemic rates of obesity and diabetes spurred Philadelphia, in June of last year, and then San Francisco, Oakland and Albany, California; Boulder, Colorado; and Cook County, Illinois, home to Chicago, in November, to pass soda taxes of their own.
That streak came to an abrupt end this past May, however, when voters in Santa Fe, New Mexico soundly rejected (58 percent to 42 percent) a proposed 2-cents-per-ounce tax on soda distributors to provide free or low-cost pre-kindergarten for 1,000 local children. The contest divided the city’s four districts, with the two lower- and middle-income districts overwhelmingly voting against the measure and the two more affluent districts narrowly passing and narrowly rejecting it, respectively. And some voters were evidently put off by the amount of outside money that poured into the race, including over $1 million in support of the tax from billionaire and former New York City Mayor Michael Bloomberg.
“People saw through the political agenda of outside forces who wanted to impose an unfair tax at the expense of middle-class families and small-business people in Santa Fe,” David Huynh, who lead the anti-tax campaign, Better Way for Santa Fe & PreK, funded mainly by the American Beverage Association, said after the election, according to the Albuquerque Journal.
Support for soda taxes hasn’t been helped by the news that revenues from Philadelphia’s new soda tax, after a good first month, have gone flat, falling nearly $20 million short of the $46.2 million projected for the 2017 fiscal year, which ended June 30. And although West Virginia Gov. Jim Justice (D) proposed a 1-cent-per-ounce tax on sugary drinks in February to “promote better health,” and the state’s lawmakers introduced at least five soda tax bills this session (HBs 3044, 3045, 3046 and 3085, and SB 385), all of the measures failed, according to LexisNexis State Net’s legislative tracking system. A soda tax proposal also failed in Connecticut (HB 7314).
In fact, the only achievement on the issue at the state level this year appears to be the 5 percent increase (from 1.5 percent to 6.5 percent) in the sales tax on candy and soft drinks - and the simultaneous 40 percent reduction in the wholesale tax on the syrup used by soft drink makers imposed in 1992 - that Arkansas lawmakers enacted as part of a bill (HB 1162) granting a tax exemption for military retirees. Legislation is still pending in at least one state, Hawaii (HB 1210/SB 375), however.
Election Reform: Despite 2017 being an “off” year for elections, it’s been just the opposite for election reform. In January the U.S. Supreme Court declined to hear an appeal of a lower court decision last year striking down the voter ID law passed by Texas’ GOP-controlled Legislature in 2011 on the grounds that it discriminates against minorities, although Chief Justice John Roberts said the state could appeal the case in the future, after additional proceedings in the lower courts. Also in January Minnesota House Speaker Kurt Daudt (R) and Virginia Rep. Mark Cole (R) introduced identical bills aimed at dividing up their states’ electoral votes by congressional district rather than awarding them solely on the basis of the statewide vote, presumably to keep them from going entirely to the Democratic presidential nominee in the future, as they did last year. Cole’s bill (HB 1425) failed, but Daudt’s (HB 406) is still pending, although if it does pass, Minnesota’s Democratic governor, Mark Dayton, is likely to veto it.
In February the U.S. Department of Justice dropped its longstanding claim under the Obama administration that the Texas Legislature intentionally discriminated against minority voters when it passed its strict voter ID law in 2011. Rick Hasen, a professor of law and political science at the University of California, Irvine, wrote on his Election Law Blog that the DOJ’s action wouldn’t significantly impact the Texas voter ID case, since civil rights organizations were still challenging the law, but it signaled the department was “pulling back from aggressive defense of voting rights.”
In March Arkansas’ GOP-led General Assembly approved a joint resolution (HJR 1016), providing for the placement of a constitutional amendment on next year’s ballot that would require voters to show photo identification at the polls. The same month the General Assembly also passed, and Gov. Asa Hutchinson (R) signed, a bill (HB 1047) imposing a voter ID requirement. Both measures are aimed at reinstating a 2013 voter ID law that was struck down by the state’s Supreme Court.
In March and April Arizona’s Republican-controlled state government enacted a couple of measures tightening up the state’s initiative process, including HB 2404, which bars initiative backers from paying vendors based on the number of signatures they collect. As introduced the bill also would have required anyone wishing to circulate a petition to take an online course and submit to a background check. And other Republican sponsored bills that didn’t pass would have, among other things, barred initiative supporters from accepting contributions from out of state and given lawmakers the authority to amend initiatives approved by voters. Arizona Rep. Vince Leach (R), the sponsor of HB 2404, said his goal was to restore integrity to the state’s initiative process. But Democrats and progressives in the state said the real aim of the proposals was to stop the advance of liberal policies via the initiative process, with voters having approved measures legalizing marijuana for medical purposes and raising the minimum wage - which business groups have failed to block in the courts - in recent years.
Also in April Mississippi Gov. Phil Bryant (R) signed SB 2689 barring public officeholders from using campaign funds for personal expenses. An investigative report by the Clarion-Ledger revealed that politicians in the state have spent campaign money on cars, home improvements and travel, among other things, in recent years. In North Dakota lawmakers enacted HB 1369, amending the state’s voter ID laws to, among other things, allow voters to use identification issued by tribal governments, in response to a lawsuit brought last year by members of the Turtle Mountain Band of Chippewa, alleging they were disenfranchised by the state’s recently passed voter ID laws. In Nebraska the unicameral Legislature voted to do away with the requirement that felons wait two years after completing their sentences to vote. But Gov. Pete Rickets (R) vetoed the measure (LB 75), and the body split 23-23 on a motion to override. In Texas a federal judge ruled that the state’s 2011 voter ID law deliberately discriminated against minority voters. And in Hawaii, for the third year in a row a bill - this time it was HB 1401 - that would have instituted voting by mail statewide failed to make it out of conference committee.
In May the U.S. Supreme Court agreed to hear a challenge to a federal appeals court ruling striking down Ohio’s practice of purging voters who haven’t voted in successive elections from its registration rolls, which could mean some of the court’s more conservative justices believe Ohio and other states have a right to perform those purges. In Alabama Gov. Kay Ivey (R) signed a bill (SB 108) banning crossover voting - casting a ballot in one party’s primary election and then voting in the other party’s primary runoff - which is already prohibited in Democratic primaries in the state by party rules. The new law will be in place for the state’s Aug. 15 primary to fill the U.S. Senate seat previously held by U.S. Attorney General Jeff Sessions. In Alaska the House passed HB 1, which would allow residents of the state to register to vote and then immediately cast a ballot on Election Day. But the state’s Senate isn’t expected to consider the measure until next year. And Iowa enacted legislation (HB 516) requiring voters to present government-issued identification at the polls.
In June Texas enacted a bill (SB 5) loosening requirements of the state’s voter ID law, in accordance with the court rulings that the law discriminated against minority voters. Among other things the new measure adds options for voters who can’t “reasonably” obtain one of the seven forms of ID required by the 2011 law. And in Maine the Supreme Judicial Court issued a unanimous advisory opinion declaring the state’s first-in-the-nation statewide ranked-choice voting system unconstitutional, even though it was approved by voters in November. Legislation (SB 577) is pending in the state that, with the approval of voters, would amend the state’s Constitution to resolve the issues with the law identified by the court.
Prompted by headlines about Russia’s involvement in the 2016 presidential election, at least three states - Connecticut (HB 5589 and SB 582), Massachusetts (HB 2081, HB 2904, HB 3559 and SB 394) and Washington (SB 5570) - also introduced legislation aimed at blocking businesses owned in part by non-U.S. citizens from spending money on their elections, which, unlike contributions from noncitizens and foreign companies directly to candidates and political parties, is allowed by the U.S. Supreme Court’s decision in Citizens United v Federal Election Commission (2010). The Connecticut bills failed, but the Massachusetts and Washington bills are still pending. And California’s Democrat-controlled Assembly and Senate have each passed bills (AB 84 and SB 568, respectively) that would allow the state to hold its presidential primary elections in March or even earlier instead of June. The state’s 2016 primary didn’t come until after Donald Trump and Hillary Clinton had already become their parties’ presumptive nominees.
Income Tax Reform: In 2012, after signing into law one of the largest tax cuts in his state’s history in an effort to jump start its economy, Kansas Gov. Sam Brownback’s (R) said in a television interview: “We’ll see how it works. We’ll have a real live experiment.” Last month, faced with mounting budget deficits and inadequate funding for education, the state’s Republican-controlled Legislature, which had enabled that experiment to begin, effectively ended it by passing SB 30, rolling back $1.2 billion worth of the tax cuts, and then overriding Brownback’s veto of the measure. Democratic House Minority Leader Jim Ward, who voted for the override, said “the vast majority of legislators said ‘enough was enough; we have to move away from this failed tax experiment and on to sound fiscal policies.’” It’s not clear what impact the state’s action will have on other states considering similar tax cuts, but Democrats in Republican-led Nebraska and Iowa were holding out Kansas as an example of what not to do even before the passage of SB 30, according to the New York Times.
“It is something that Iowans talk about, that they don’t want to find themselves in a situation like Kansas,” Iowa Sen. Janet Petersen (D) told the Times.
A $1 billion tax cut plan has been passed by North Carolina’s Republican-controlled Senate, however. That proposal (SB 325) would increase the state’s standard income tax deduction and reduce the individual tax rate from 5.499 percent to 5.35 percent, as well as reduce the corporate tax rate from 3 percent to 2.5 percent over two years. But the state’s GOP-led House and Democratic Gov. Roy Cooper have both proposed more modest tax cut plans, and Cooper said the Senate’s plan gives too much to corporations and the rich.
Redistricting: Federal courts, including the U.S. Supreme Court, have rejected political district maps or individual districts drawn after the 2010 Census by Republican-controlled legislatures in several states, including Alabama, North Carolina, Texas, Virginia and Wisconsin, on the grounds that they discriminated against minority voters or, in Wisconsin’s case, were excessively partisan. The rulings have left GOP legislative leaders in those states planning their legal appeals (Wisconsin’s case is expected to go before the Supreme Court in October), awaiting the outcome of further rulings (the Supreme Court struck down 28 of North Carolina’s legislative districts but sent the case back to a lower court to determine how to fix the problem) or at least considering redistricting redrafts.