The Thicket at State Legislatures

Don't Forget to Turn Out the Lights

By Todd Haggerty and Erica Michel

At all levels of government, federal, state and local, the budget provides the legal basis for spending and the failure to enact a budget can have wide ranging consequences. With Congress' failure to pass a budget resulting in a partial federal government shutdown, it's worth noting that many state governments have also faced shutdowns over the years.

In the absence of a budget or a temporary appropriations bill, 22 states require the government to partially shut down. This most often involves furloughing state employees not deemed critical to the maintenance of public safety and health, closing state parks, and shuttering some non-essential state offices such as those that issue driver’s licenses.

Since 2002, at least 20 states have started one or more fiscal years without a finalized budget. In several of these states, incomplete budgets resulted in partial government shut downs. Here are some of the more recent state government shutdowns:

• Minnesota is the most recent state to have a partial government shutdown. The 2011 shutdown lasted for 20 days, resulting in the temporary layoff of 22,000 state workers. The shut-down also closed state parks during the busy July tourism season, as well as two state-owned race tracks. Driving exams were also suspended. State officials estimate the state lost $1.25 million from unsold lottery tickets alone and an additional $1 million per week from closed state parks. However, other state officials estimated the state saved approximately $65 million from unpaid salaries to laid-off employees.

• Michigan faced two partial shutdowns in 2007 and 2009. The state’s shutdown in 2007 lasted only four hours—from midnight of the last day of the fiscal year until 4 a.m. on Oct. 1, 2007, when the governor and legislature reached a deal for temporary funding. In anticipation of the shutdown campers had been asked to leave state parks the night before. The short disruption also resulted in decreased state police on the highways. Plus, highway rest stops were barricaded, drawbridges closed and traffic cameras turned off. The partial shutdown involved temporary layoffs of 35,000 of the state's 53,000 employees. In 2009, Michigan experienced a technical two-hour government shutdown as lawmakers worked on a temporary spending plan. However, there was no interruption in the delivery of state services.

• New Jersey's state government partially shut down in 2006. This occurred despite the state having missed its budget deadline in three of the previous five years without shutting down. Before the governor signed the budget eight days into the fiscal year, 45,000 non-essential employees were placed on unpaid leave. One of the more dramatic results of the furloughs was the three-day shutdown of Atlantic City's casinos for the first time since their launch. This occurred because state casino inspectors, who are required by law to be present in the casinos, were among the state workers included in the furlough order. State officials reported that closing Atlantic City casinos alone resulted in daily losses of $1.3 million in gambling tax revenue for the state.

A partial federal government shut-down would likely have similar effects to a state shut-down, but with broader effects. National parks across the country will likely close, Americans could face delays applying for passports, and many federal government workers could face furloughs. The Wall Street Journal examined many more potential effects on its “Washington Wire” blog.

Todd Haggerty is a Policy Specialist in the Fiscal Affairs Program at NCSL and Erica Michel is a Research Analyst II in the Fiscal Affairs Program at NCSL.

NCSL President-elect Senator Bruce Starr Tells House Subcommittee How MAP-21 is Faring At State Level

By Ben Husch

NCSL President-elect Senator Bruce Starr (R-Ore.) told a House subcommittee on Thursday how the implementation of Moving Ahead for Progress in the 21^st Century Act (MAP-21) is faring at the state level. MAP-21 was enacted in 2012 and governs the funding and authorization of federal surface and transportation spending.

Testifying before the House Transportation and Infrastructure Subcommittee on Highways and Transit, Starr discussed how states are being affected by a number of changes within MAP-21, including the development of national performance measures, program consolidation and the expansion of the Transportation Infrastructure Finance and Innovation Act (TIFIA).

He stressed the need for the federal government to establish a cooperative process through which the performance measures can be crafted. Starr urged the U.S. Department of Transportation to recognize and build off the extensive work states have already completed.

Reporting on states’ satisfaction with program consolidation, Starr explained how it’s allowing states to make it easier for users to acquire funding without having to submit multiple grant applications to multiple programs.  Regarding TIFIA, Starr highlighted how his home state of Oregon is working with the state of Washington to develop a proposal that would increase overall funding for the construction of the I-5 Columbia River Crossing.

During a question-and-answer session with subcommittee members following his testimony, Starr highlighted how states are engaged in numerous efforts to increase funding for transportation programs, ranging from increasing gasoline taxes to indexing current tax rates to implementing new sales taxes. He also urged the committee to look at other forms of funding, including the pilot projects Oregon has taken part in that charge users different amounts based on the number of miles they travel.

The future of transportation will be a major area of focus for the Energy, Transportation and Agriculture Committee next week at the NCSL Spring Forum in Denver, Colorado.

Ben Husch is the committee director of the NCSL Energy, Transportation and Agriculture Committee.

 

The Regular Order

By Karl Kurtz

In another excellent column in his "Comments on Congress" series, former Indiana Congressman Lee Hamilton laments the demise of the "regular order" of passing appropriations bills in the Congress. He points out:

The last time Congress passed a regular-order budget, not an omnibus spending bill, was 1997. Though it was far from a tidy process, its abandonment, I believe, is what has produced our current mess.

Few current members have any experience with the regular order:

Talking to a group of younger members recently, I realized they’d had no experience of following regular procedures to craft a budget. They’ve spent their congressional careers watching the leadership put it together in an ad-hoc, crisis-fueled manner. True budget-making skills on Capitol Hill are eroding. It’s in danger of becoming a lost art.

Then he goes on to explain what the regular order is:

The President submits a budget on time (not two months late, as President Obama has just done). Then congressional committees and subcommittees take it up, dividing their work according to the departments of government — agriculture, defense, transportation and the like. They hold hearings, call witnesses, explore what the executive branch has done with its money in the past, and consider its plans for the future. They debate and draft their own proposals, and allow amendments from both parties. Once the full committee acts, its measure goes to the floor for further debate, amendments, and a vote. Eventually, the bills arrived at separately by the House and the Senate get reconciled and go to the President to be signed.

Hmm...sounds like the process that most governors and state legislatures follow, doesn't it? The states vary as to whether they pass their budgets in a single or multiple appropriations bills, but the great majority of them follow the procedure that Hamilton outlines as the regular order. A few state legislatures may occasionally leave it to the top leaders to work out a deal in the governor's office on the thorniest issues while the other members twiddle their thumbs. But even when that  happens, the committees in those legislatures usually follow a meaningful process of public hearings, debate, negotiation and compromise that shapes the bulk of the budget decisions.

State Legislative Leaders Gather in Washington

By Jon Kuhl

New Jersey Senate President Stephen Sweeney (D) speaks with former Mississippi Governor and RNC Chairman Haley Barbour

State legislative leaders from across the country gathered in Washington last week for NCSL’s annual legislative leaders meeting. The meeting began with briefings on sequestration and immigration reform; hot topics in Washington and state capitols.

During lunch on Thursday, leaders heard from former Mississippi Governor and Chairman of the Republican National Committee Haley Barbour. Following Barbour’s talk, the leaders visited Capitol Hill for briefings from House Budget Chairman Paul Ryan (R-Wis.), Congressman Luke Messer (R-Ind.), U.S. Department of Health and Human Services Secretary Kathleen Sebelius, Congressman Xavier Becerra (D-Calif.) and House Minority Leader Nancy Pelosi (D-Calif.). In the evening on Thursday, legislative leaders heard about deficit reduction efforts in Canada from Tony Clement, President of the Canadian Treasury Board and Minister for the Federal Economic Development Initiative for Northern Ontario.  

Speaker William Howell (R-Va.) talking with U.S. Department of Transportation Secretary Ray LaHood

On Friday, legislative leaders began their day with a briefing from U.S. Department of Transportation Secretary Ray LaHood. Secretary LaHood was followed by former Vermont Governor and Democratic National Committee Chairman Howard Dean.

Up next was a discussion on technology and the economy with Michael Powell, former FCC Chairman and current President of the National Cable and Telecommunications Association. Following Chairman Powell was a question and answer session with David Agnew, White House Director of Intergovernmental Affairs.  

Wisconsin House Speaker Robin Vos (R) introduces Congressman Paul Ryan

 

Speaker Andy Tobin (R-Ariz.) chats with U.S. Department of Health and Human Services Secretary Kathleen Sebelius

Vermont House Majority Leader William Jewett (D) speaking with former Vermont Governor and DNC Chairman Howard Dean

Former FCC Chairman Michael Powell greets Senator Shawn-Michael Malone, President of the Senate, U.S. Virgin Islands (D)

Maine House Majority Leader Seth Berry (D) talking with David Agnew, White House Director of Intergovernmental Affairs

  

What's the Fastest Growing State? North Dakota

By Karmen Hanson

It may come as a surprise to some that North Dakota is now the fastest growing state, according to the Census Bureau state population estimates. From July 2011 to July 2012, North Dakota grew by 2.1 percent, nearly three times as fast as the United States as a whole.  The state has also ramped up improvements at the Capitol that couldn’t be missed during a recent visit.

As the NCSL liaison for the great state of North Dakota, I have the privilege of traveling to Bismarck to meet with the legislators and staff of the 39th state.  The stereotype is that “nothing ever changes in North Dakota,” but my recent visit produced an interesting list of new developments.

• Recent oil and natural gas development is still booming in the Bakken Formation (also known as the Williston Basin) in northwestern North Dakota.  The boom has transformed this once quiet ranching and farming region into one with truck traffic jams, overstretched local resources and infrastructure.  Legislators understand the impact of the boom and plan to address key concerns during this legislative session.
• North Dakota is currently the only state with a budget surplus.  Much of this surplus is due to oil and gas industry tax revenues, in addition to historical judicious biennial spending and saving habits.  This year’s biennium-budget surplus is estimated to be around $1.6B. Yes, that’s billion with a b.
• During my visit, new legislative leaders were busy moving into offices and making committee assignments. Representatives Kenton Onstad and Corey Mock are the new House minority leader and assistant leader, respectively, while Senators Mac Schneider and Joan Heckaman occupy the same positions in the Senate. Senator Schneider and Representative Mock, both in their early 30s or late 20s, are among some of the younger legislative leaders in the country.  Representative Kylie Oversen, from a district that represents the University of North Dakota, is also one of the youngest women legislators in the country at 23.  The Republican majority leadership positions remain the same—Representatives Al Carlson and Don Vigesaa in the House, and Senators Rich Wardner and Jerry Klein in the Senate. 
• A new wall sign featuring the state seal now greets visitors at the Legislative Council Office.  A handful of offices and work spaces were created and painted, and some staff have new, beautiful, state-made office furniture from Rough Rider Industries—welcome  improvements from the decades-old furniture that had graced some offices.
• One of the new offices is occupied by a new fiscal analyst in the Legislative Council. That’s unusual because the average tenure of Council staff is more than 20 years.  Jason Steckler, formerly information technology manager, heads up a new administrative services division that oversees the IT and other admin-related duties of the Legislative Council. An expanded IT crew is also on hand to set up legislators with new laptops, tablets, and handle audio-visual improvements in committee rooms.
• Flat-screen monitors have been added to most committee rooms to allow hearings and legislative sessions to be broadcast online and archived.  A long-awaited new bill-tracking system is up and running, in addition to a redesigned website.

While I’m sure that there are even more changes to come in the Peace Garden state, I hope that the North Dakota Capitol Cafe continues to serve the best traditional treats in the country, including made from scratch knoephla, scotcheroos and popcorn bars. Some things are just too good to change.

What Constitutes a Supermajority?

By Karen Shanton

Illustration from The Michigan Broadcaster

Following major gains by Democrats in California and Illinois and Republicans throughout the South and Midwest, many post-election headlines trumpeted the arrival of new legislative supermajorities. One thing that has been obscured in some of this coverage is that 'supermajority' is a nuanced concept. Despite the name, figuring out where Republicans and Democrats hold supermajorities isn't nearly as simple as counting where they're in the majority.

'Majority' always means 'more than half.' 'Supermajority,' on the other hand, can mean any number of things – from 'three-fifths' to 'two-thirds' to 'three-fourths.' To a Nebraska legislator looking to refer a constitutional amendment to the ballot, a supermajority is three-fifths. An Arkansan who wants to appropriate money for something other than education, highways or debt reduction needs a three-fourths supermajority. A legislature is 'veto-proof' (one party controls enough votes to override a gubernatorial veto) when a single party controls three-fifths of the vote in Illinois or two-thirds in Georgia; a simple majority will do the trick in Kentucky. Arizona legislatures can overturn most vetoes with a two-thirds supermajority but tax bill vetoes require three-fourths of the vote.

To make things even more complicated, supermajorities aren't always calculated from the same pool of votes. Vermont legislators can overturn a gubernatorial veto as long as two-thirds of the members present agree to the override. Legislators in North Dakota have to muster the votes of two-thirds of members elected while Michiganders need two-thirds of members elected and serving.

And, unlike majorities, supermajorities are context-dependent. You can tell me whether Florida Republicans hold a majority even if you don't know why I want to know. The same isn't true of supermajorities. If we're talking about referring a constitutional amendment to the ballot, Republicans hold a supermajority in Florida. If we're talking about overriding a veto, they don't. So, the answer to the question, "Do Republicans have a supermajority in Florida?" could be either yes or no, depending on the context.

What this suggests is that it doesn't really make sense to ask, "Does one party hold a supermajority in that state?" or "How many state legislatures have supermajorities?" Instead, we should focus on something more specific, such as "Does one party have the power to refer a constitutional amendment to the ballot in that state?" or "How many state legislatures are veto-proof?" This distinction might be worth keeping in mind when the next article about new legislative supermajorities pops up in your RSS reader.

DebateMania is a Mile High in Denver

By Mark Wolf

There’s no debate about it. Denver is the epicenter of DebateMania–at least for this week.

About seven miles up Interstate 25 from where the Denver Broncos throttled the Oakland Raiders on Sunday, President Barack Obama and Republican nominee Mitt Romney will clash in Debate I of the 2012 presidential campaign at 7 p.m. (MST) Wednesday in the University of Denver’s Magness Arena at the Daniel L. Ritchie Center for Sports and Wellness.

The swing-state capital has been deluged with political ads and commuters are scrambling to deal with major street closings before, during and after Wednesday’s debate.

Both candidates have made numerous appearances in Colorado. Obama will speak to a rally Thursday morning at Sloan’s Lake Park and a Romney rally that drew what his campaign estimated as about 5,500 supporters, was held Monday at Wings Over the Rockies Air and Space Museum next door to NCSL’s Denver headquarters.

NCSL staffers have become accustomed to similar events in our neighborhood. The museum, housed in a 150,000-square-foot hangar, has frequently hosted appearances by U.S. presidents and the expected heavy SWAT and Secret Service presence was on display. A few internal emails advised staffers to move cars from parking spots that could be blocked by barricades.

The line for admission stretched nearly around the block to NCSL’s back door but moved briskly while button vendors worked the crowd offering buttons (mostly $5 apiece, three for $10) ranging from the traditional (“Romney/Ryan 2012”) to the whimsical (“I only kiss Tea Partiers”). One vendor, asked if he was selling “official” merchandise, replied his wares were “officially sold by me to promote free enterprise.”

Once inside, supporters were greeted by giant letters spelling out “J O B S” across the back of the airplane hangar space. Warm-up speeches by Colorado politicians, music and the Romney video aired at the Republican National Convention preceded an appearance by John Elway, two time Super Bowl winner for the Broncos and now the team’s executive vice president of football operations. Elway, long the subject of speculation as a statewide GOP candidate, introduced Romney, who delivered an economics-themed speech.

After the rally, a long line queued for the fare at the adjacent Lowry Beer Garden and one man was moved to rise and offer a toast “to a Romney victory” in November.  

Michigan's Gary Olson, Past NCSL Staff Chair

by Karl Kurtz

Gary Olson, former director of the Michigan Senate Fiscal Agency and staff chair of NCSL in 2002-03, died last week after a four year battle with melanoma. Gary also served as president of the National Association of Legislative Fiscal Officers.

In recognition of Gary’s outstanding contributions to state fiscal policy and for his dedication to expanding training opportunities and services to legislative staff, he was honored with NCSL's Steven D. Gold award in 2010. “His work and contributions are definitely in the tradition of Steve Gold, who provided assistance to so many legislators and staff, and he is a worthy recipient of this award,” said NCSL Executive Director Bill Pound in a tribute to Gary published in State Legislatures magazine.

The article goes on to note the many similarities between Steve Gold and Gary Olson, including not only their professional ties but also their devotion to the University of Michigan. Now, unfortunately, there is another link between the two. Both died too young: Steve at 52 and Gary at 57.

“Gary has made solid contributions to the professionalization of legislative fiscal staffing during some very difficult budget times in Michigan,” Pound said. Like Steven D. Gold—former director of fiscal studies at NCSL and one of the country’s foremost state fiscal policy experts—Gary also found time to become a leader in the development of legislative staff programs nationally as an officer of NCSL.

Gary has many great friends among legislators and legislative staff around the nation and numerous NCSL staff who learned from him and benefited from his leadership. We miss him. We also send our best wishes to his lovely wife Teresa.

Gary's obituary appeared in the Lansing State-Journal. A more complete remembrance of Gary will be in the next edition of State Legislatures magazine.

Does Colorado Have a Republican Form of Government?

by Karen Shanton

Tucked into Article IV, §4 of the U.S. Constitution is the following promise: "The United States shall guarantee to every State in the Union a Republican Form of Government." This obscure and tricky-to-interpret promise – known as the Guarantee Clause – could upend a two-decade-old constitutional amendment in Colorado.

In 1992, Colorado voters added the Taxpayer's Bill of Rights (TABOR) to their state constitution via the initiative process. This amendment, which was sought by small government advocates as a check on government expansion, effectively shifted tax-levying powers from the state legislature to the electorate. Under TABOR, tax increases are limited to the rate of inflation plus population growth; heftier bumps must be okayed by voters.

TABOR's opponents argue that this shift has hamstrung Colorado's government. Without the ability to raise revenue, they argue, legislators can't fulfill their obligations to constituents – including a state constitutionally-mandated duty to provide a "thorough and uniform system of free public schools throughout the state."

This has prompted a bipartisan group of elected officials, educators and private citizens to bring suit against the measure. In their brief for Kerr v. Hickenlooper (2011), the plaintiffs contend that TABOR caused a "slow, inexorable slide into fiscal dysfunction" in the state. By preventing the legislature from functioning effectively, they argue, TABOR violates the Guarantee Clause and a closely-related clause in the Colorado Enabling Act of 1875. (The Colorado Enabling Act admitted Colorado to the Union on the condition that it form a constitution that was "republican in form.")

Photo credit: The Colorado Statesman, 5/27/2011

Historically, Guarantee Clause-based challenges have not fared well in the courts. In Luther v. Borden (1849), the U.S. Supreme Court dismissed a Guarantee Clause-based claim as a 'political question,' to be settled by Congress rather than the courts. With a few early exceptions [see, for example, Minor v. Happersett (1875)], this 'political question doctrine' has been the standard ever since. Justices routinely invoke the doctrine to rule Guarantee Clause cases 'nonjudiciable,' or not decidable by the courts.

Taxing Victory is in Question at State and Federal Levels

by Caitlin Rossiter

U.S. swimmer Michael Phelps displaying some of his many gold medals. Credit: Forbes.com

As you watched those spectacular athletes competing in the 2012 Olympic Games in London, were you thinking about the consequences of winning an Olympic medal? It turns out that there is a cost—and I don't mean the many hours of grueling and expensive training—for American athletes who win Olympic medals: they pay taxes on their awards. At least a few members of Congress and state legislatures think this is unfair and are trying to do something about it.

The United States Olympic Committee pays athletes cash awards of $25,000 for gold, $15,000 for silver and $10,000 for bronze. According to the United States Tax Code, athletes (just like Nobel or Pulitzer Prize winners) must add cash awards to their taxable income on Line 21 of Form 1040.

The United States is one of only a handful of countries, including the Philippines and Eritrea, that tax their Olympic athletes on medals won according to a recent British Broadcasting Corporation publication.

Athletes devote considerable time to training and may face difficulties in balancing jobs and their athletic endeavors. Most U.S. national sports organizations cover training and travel costs for those who make the national team. Some athletes accept endorsements to help compensate for expenses. But American athletes who accept endorsements are no longer eligible for scholarships through the National Collegiate Athlete Association because they are no longer classified as amateurs.

Given the sacrifices that athletes must make to win honor for themselves and their country, some legislators think their medals and proceeds should be tax exempt.

U.S. Senator Marco Rubio (R-Florida) proposed SB 3471, and Congressman Aaron Schock (R-Illinois) introduced HR 6267, both bills to amend the 1986 Internal Revenue Code and exempt Olympians from paying taxes on their winnings. The proposed bills have bipartisan support, including both President Barack Obama and Mitt Romney. The United States Olympic Committee has not stated their position.

Thirty-seven states, the District of Columbia and Puerto Rico base their income taxes on the federal income tax code. To date, no states exempt Olympic medals from state income tax. However, in 2012 legislators in at least three states have introduced bills to do so. A bipartisan Olympic coalition of five California legislators—two Democratic senators and three Republican Assembly members—introduced legislation that is working its way through the Senate after passing unanimously in the Assembly. New Jersey Senators Stephen Sweeney (D) and Thomas Kean (R) have introduced SB 1855. Ohio Representative Andrew Brenner (R) plans to introduce HB 583 when the General Assembly reconvenes next session.