Legicrawler News : : November-December 2008 |
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BUDGET WOES TOP STATE AGENDAS FOR 2009
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| When President-elect Barack Obama met with the nation's governors early this month in Philadelphia, a key topic was the plight of the governors in tough economic times and Obama's promise of assistance. The president-elect cited sobering statistics to illustrate his awareness of the plight of the states. "Forty-one of the states that are represented here are likely to face budget shortfalls this year or next, forcing you to choose between reining in spending and raising taxes," Obama said. "Jobs are being cut. Programs for the needy are at risk. Libraries are being closed. Historic sites are being closed." But in an observation not widely reported in news stories about the event, Obama also indicated that initiative was a two-way street -- that he welcomed ideas from the governors. And he referred to Justice Louis D. Brandeis's famous remark that a "single courageous state" could serve as a "laboratory, experimenting with innovative solutions to our economic problems." Brandeis's actual comment, in a 1932 U.S. Supreme Court dissent, was as follows: "It is one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country." The comment has generally been seen since then as a classic statement of the principle of federalism. Given state budget woes, the president-elect did not have to admonish the governors to begin to take some initiative on their own. Most states are required to balance their budgets, unlike the federal government. They simply have to act, combining budget cuts with tax and fee increases. The nation now has an unusually small number of divided state legislatures -- eight. That much party control over the legislative process normally means substantial legislative activity. "In Washington (state), the re-election of the governor by a comfortable margin, and the return of large Democrat majorities (with essentially the same caucus leaders), means the course being steered by these elected officials will be essentially the same," observed Clifford A. Webster, representative of the Washington state member of the State Capital Group. The Group is an association of independent business law firms located in all 50 U.S. state capitals. Participants at the Group's annual meeting in October in San Francisco had generally agreed that the November elections would do nothing to change fiscal reality -- only the ways in which the states deal with it. The reality is there even with one party firmly in control, noted Webster, a partner with the Seattle law firm of Carney Badley Spellman, PS. "The budget shortfall is the only thing serving as a brake on an otherwise ambitious policy agenda containing the usual Democratic themes--health care, environmental policy, public education, etc.," he concluded. He predicted a legislative focus on "Puget Sound cleanup, the governor's climate action agenda, litigation expansion, tax increases. To a significant degree, efforts at overhauling health care will wait in Washington to see what action Congress takes." He suggested one possible surprise: "A tax increase referendum from the legislature on the 2009 general election ballot." How will other states respond to fiscal woes? Perhaps New York is a bellweather. Gov. David A. Paterson's new budget "will include 137 new or increased taxes and fees" and a sharp decline in education spending, The New York Times reported on Dec. 16. Nationally, state spending will decrease in fiscal 2009, according to a report released Dec. 15 by the National Governors Association (NGA) and the National Association of State Budget Officers (NASBO). The decrease, pegged at .1 percent, would be the first since 1983, the report said. "State fiscal conditions are on a significant downward trend," said NASBO Executive Director Scott D. Pattison. "We expect a continued deterioration in all financial indicators including revenues, balances and expenditures." NGA Executive Director Raymond C. Scheppach echoed his remarks: "Given the continued stall in credit availability, rising unemployment rates and increasing demand for state services such as Medicaid and welfare as people lose their jobs, the fiscal outlook for states is likely to get worse."
| Washington DC December 7-13, 2008 San Francisco October 4, 2008 Fresh from an exhibit at the American Legislative Exchange Council in Chicago, Legicrawler gave a presentation to the State Capital Group 2008 Annual Meeting in San Francisco. Legicrawler's Beckie Krantz, CEO, and Dennis Krantz, President, discussed "Legislative Tracking and Trend Analysis -- Now and Next" at a State Government Relations session on Oct. 4. The Legicrawler presentation focused on legislative tracking techniques and web-based flexibility for government relations experts on the move. Chicago: American Legislative Exchange Council 2008 Annual Meeting July 30 - August 1 
Past Editions: May 2008 June 2008 July 2008 August-September 2008
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