Pandemic Remains the Biggest Issue for Lawmakers in 2021

With no end in sight to the COVID-19 pandemic, 2021 is already shaping up to look a lot like 2020.

There is no part of our society that has not been impacted by COVID-19. Businesses across the nation have been shuttered or reduced to a fraction of their usual production since last March, resulting in millions of workers being put out of a job and sending state and local tax revenues into a deep freefall. And despite efforts at all levels of government to prevent it, those job losses may yet yield a tsunami of evictions. 

Many of those fortunate enough to keep their jobs have been forced to learn on the fly how to work remotely, often while trying to also guide their children through online classwork. And while many of us are also discovering the benefits of working from home, the mass migration to online work has also exemplified the nation’s dire need to close its digital divide.

This year has also shown that America’s divisions go well beyond who does or does not have high speed Internet. Political, economic and social polarization abound, with no easy solutions in sight. Even if the pandemic ended tomorrow, states would still be working through major issues like police reform and a growing public desire to legalize cannabis. And after yet another controversial and hyper-partisan battle placed a third conservative justice on the Supreme Court of the United States, equally partisan battles over abortion and a myriad of other social issues seem sure to follow.

With all that in mind, this marks the first of our annual three-part series looking ahead to the legislative, legal and regulatory issues we believe will have a significant impact on state and local policymakers in the coming year.

Gubernatorial Responses to COVID-19

Nothing is more critical right now than getting the pandemic under control. Vaccines are said to be close at hand, but when they will be available and how they will be distributed remains a work in progress. That task is right now mostly in the hands of the federal government and the drug companies working on the vaccines, but states will ultimately play a major role in determining how and when they are distributed to their citizens.

In the absence of federal leadership since the outbreak began, governors across the country have taken the lead in addressing the virus, issuing a plethora of executive orders aimed at stemming the virus’s spread and seeking to allow citizens to continue their lives as best as possible in the process.

But as the pandemic has dragged on, it has morphed from a health crisis to an intensely political one. Governors of both parties have increasingly faced intense resistance from business groups, conservative activists and, in some cases, members of their own parties. Lawmakers angry at how their governors have dealt with the pandemic have launched impeachment efforts in Michigan and Ohio, and more may follow in other states. And governors like Florida’s Ron DeSantis and South Dakota’s Kristi Noem, both Republicans, steadfastly resist mask mandates and other steps health officials are practically begging them to implement, even as cases skyrocket in their states. 

With the virus showing no signs of going away, it is hard to imagine that it won’t dominate the statehouse landscape for the foreseeable future. And with that, gubernatorial orders and the legal and legislative challenges to them.

Criminal Justice/Police Reform

The killing of unarmed George Floyd by Minneapolis police in May sparked global protests against excessive use of force by law enforcement and inequities in the criminal justice system that many people feel is biased against people of color.

Lawmakers and governors in several states subsequently introduced bills or created commission to develop new rules for how and when police are allowed to use lethal force. Virginia, Colorado, Iowa, New York and Connecticut endorsed measures to ban the use of chokeholds and to hold officers more accountable for not stopping a fellow officer from using them. As of this writing, Massachusetts lawmakers appear poised to have the Bay State join them.

Reforming the criminal justice system has in fact have been one of the few bipartisan issues lawmakers can agree on.

But the most action on reform came from voters, mostly at the local level. Voters in Philadelphia, Seattle, Portland, Los Angeles County, among others, endorsed ballot measures to impose greater restrictions on police conduct. Four states approved ballot measures legalizing recreational use of marijuana. Mississippi voters approved it for medicinal use. Approximately two dozen reform-minded district attorneys were elected in large municipalities around the country.

Even so, a large number of tough police or sentencing reform bills fared poorly, even in deep blue states like California. But with the incoming Biden administration promising major reforms - including doing away with private prisons and cash bail in addition to ending the use of chokeholds – state and local governments will likely have ample motivation in the form of increased federal funding to keep at it.

Avoiding the Eviction Tsunami

Several governors implemented eviction moratoriums when the economy went into lockdown in the spring, and the federal government imposed its own moratorium as part of the Congressional CARES Act.

As those original orders expired, governors widely extended them into December, while the U.S. Centers for Disease and Control issued an order of its own in September barring evictions through December as a means of controlling the spread of the coronavirus. Congress took several other actions as well, including proffering newly-unemployed workers enhanced unemployment benefits and temporarily halting student loan payments.

But all of these restraints expire when the clock strikes midnight on the 31^st, meaning as many as 23 million people could shortly thereafter be facing eviction. With Congress still not settled on a second stimulus package, it could again fall to states to pick up the slack.

This would place states firmly between the proverbial very large rock and a hard place: trying to fund their own rental assistance programs in the midst of a dramatic downturn in tax revenues or dealing with a potentially historic spike in homelessness, with all the accompanying challenges that entails. Neither option is sustainable, making another federal relief package an absolute necessity.

Remote Taxation

For a large percentage of American workers, Zoom calls and maneuvering the company’s VPN have become as normal as morning coffee. According to a recent Forrester survey, approximately 18 million workers – 12 percent of the U.S. workforce – will continue to work remotely after the pandemic has finally ended. But there is at least one regulatory issue that may soon confront lawmakers: how to tax remote workers and their employers.

To date, most states have told employers with remote employees in other states to continue withholding state income tax in the same manner as they have been. But concerns remain that people who have spent time working in another state this year – think health care workers in particular – could end up being hit with tax bills from multiple states. And with tax revenues taking a huge hit, this could also lead to a state vs. state battle over how to tax workers from other locales. With some observers predicting anywhere from 14 million to 23 million workers will soon be logging in from states other than where they are technically employed, it is an issue that could quickly grow by leaps and bounds.

Gig Economy Shake Up

In November, California voters strongly endorsed Proposition 22, a ballot measure that specifically exempts rideshare companies like Uber and Lyft from the state’s nascent employee classification rules as adopted under Assembly Bill 5 in 2019. They are not the only industry to seek out or be granted such exemption – the list is actually quite long – but they are the only one to spend over $200 million on a ballot campaign to do so.

In the immediate aftermath of the election, the rideshare giants made clear their intention of taking this same fight to other states or even Congress. They could potentially even do so in states that don’t currently have the kind of employee classification law they spent so much to overcome in California, acting to discourage lawmakers in those states from considering such a proposal in the first place.

The bigger question, however, is will Prop 22 inspire other deep-pocket industries to attempt to spend their way out of state labor laws? And will lawmakers in other states who are considering an AB 5-like bill be cowed away from doing so?

With most statehouses beginning session in January, we won’t have to wait long to find out.

-- By RICH EHISEN

Over the next two weeks, SNCJ Editor Korey Clark and SNCJ Editorial Advisor Lou Cannon will offer their perspectives on specific issues and trends they believe will impact all levels of government in 2021.