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Wednesday, October 23, 2013

2014 State Legislatures Outlook from National Lt. Governor's Association

By Director Julia Hurst, National Lieutenant Governors Association (NLGA) (10-17-13)

As you know, I was invited to co-keynote to the Public Affairs Council (PAC) State and Local Government Relations group on the Intersection of Politics and Policy in 2014.  For the remarks, I surveyed more than 100 representatives of the National Lieutenant Governors Association (NLGA) Conference Associates Partners (CAPs) program on “What issues will dominate state sessions in 2014?”  NLGA CAPs have their ears to the ground and feet on the stairs in every Capitol across the nation.  Several members and CAPs asked me to share the data.  This is a summary and outline of remarks, which include my own observations about the intersection of politics and policy.  i hope you find this informative.
* CAPs – I clear this for use in any or all of this in any report(s) you may need to prepare.

Regardless of the industry a lobbyist represented, the answer to the question “What issue will dominate statehouse sessions?” was UNANIMOUS.  Health care will dominatethe sessions, followed by “Return on Investment” / technology, energy, and the economy (jobs and state budgets).  ‘Social issues’ will likely see floor time in nearly every state.  And while climates appear generally anti-tax or pro-tax reform, ‘sin’ taxes are likely still on the table.  Of course, 2014 state government elections will drive much of the statehouse floor activity and it’s possible, between primary challenges and recall elections, that states are on the verge of a nearly perpetual election cycle.  Details follow.          

Health Care
Within health care, the Affordable Care Act (ACA) was noted as the top issue.  This will materialize as further Medicaid debate, establishment and operation of exchanges, fixing “the bugs” which are inevitable in a change of this magnitude, and ongoing monitoring to ensure access.  I note that local issues always capture elected officials’ attention.  If a “bug” in ACA adversely impacts a local hospital in a state, for example, you can bet that issue will move quickly to the forefront in the statehouse.

“Right to Know” and privacy issues will take floor time in some states.  And ‘return on investment’ was noted as a priority issue within health care.  With reform, attention will be paid to monitoring and to trying to balance long term health care outcomes with cost efficiencies.  This may include bio-similar substitution legislation, pilot programs to manage chronic illness (THE cost driver), and the like.

The second most forecast 2014 statehouse issue revealed a theme:  return on investment (ROI), implementation of technology, improved outcomes, greater efficiencies, doing more with less … you get the point.  A quote from the CAP survey:

“The ya ya days of throwing money at problems are over, probably forever.”

Technology is a likely hot topic - technology to track or share or improve health, technology to aid the environment, technology to track outcomes, and technology which brings efficiency.  For example, Michigan and Illinois are partnering to purchase and share a Medicaid database thru the cloud – a first of its kind move in the nation which is said to save both states millions of dollars.

Energy and the environment will continue as lead issue.  Every aspect of the industry will be touched from fracking, natural gas, coal, and renewable energy, to nuclear energy, gas prices, and electricity pricing and reliability.  Interesting note on energy, though, was nearly all noted energy and the environment will likely become the same conversation.

The Economy
CAPs members collectively voted ‘the economy’ the fourth biggest issue to dominate states in 2014.  State budgets and ‘jobs, jobs, jobs’ were the most noted topics.  I note a public official is likely to agree health care will dominate the floor time in 2014, but state budgets would likely be what an official ranks as the top priority item for 2014.  Tax reform, ranging from elimination of the income tax to tax credits for companies were noted as issues likely to command floor time, largely, the poll indicates, because it is an election year in most states.

Economic Diversification
One issue not at all mentioned on the CAP survey, but which I add, is discussion to diversify the states’ economies.  Thru the recession, many state officials realized a need to grow the each state’s buffer and increase its shield from economic impacts.  Specifically, a state too reliant on one or two economic sectors – real estate, agriculture, gaming, etc. – needs to diversify.  While the issue may not get floor time in 2014, it will be discussed specifically and generally among leaders and continue to be a topic which captures officials’ thinking.

Other Issues
After the economy, issues dropped dramatically to being mentioned by just a few CAPs.  These are the top ‘trailer’ issues.  Education reform was noted, specifically, ‘Common Core,’ charter schools, and STEM issues.  Disaster response was noted as NEEDING attention, and as an issue which should be bipartisan.  This would include fire, flood, drought, hurricane, and superstorm response and preparation, as well as better coordination between the state and federal governments.  I note that while veterans’ issues were not mentioned by CAPs, this will continue as a priority issue of state officials’ attention.

Transportation and pension reform were noted almost identically in the survey of lobbyists.  Both are needed, perhaps essential, to the states’ long term economic futures, but they are not likely to get agreement or much floor time in 2014.        

Social Issues
I add to this list ‘social issues.’  I prognosticate topics including choice/life, marriage, and gun rights/security policies will get floor time in nearly every state.  Politics and the way core principles are being communicated, and therefore governance, continues to become more polarized.  It follows, then, that some statehouse floor time will be devoted to these issues, particularly in an election year.  One CAP put it this way:

“Lawmakers will appeal to their core supporters and try to head off primary challenges by solidifying their bona fides for the general election.”

A Perpetual Election Cycle?
After 20-years in state government affairs, I observed this year, for the first time, a significant lengthening of ‘the election cycle.’  Previously, the heavy focus of officials turned to re-election about 8 months – to one year prior to the election.  This cycle, officials’ attention turned fairly solidly to re-election roughly 18-months prior to re-election.  In many cases, primary opponents had emerged as many as 18-months out.  On the back end of the lengthened election cycle is the recall election.  States have seen use of the recall from Colorado to Wisconsin from state senator to governor.  The recent Colorado recalls were the first in the state’s history.  With primaries lengthening the election cycle on the front end and the possibility of recall facing those in office, my observation is the general election may become just ‘one of the elections’ to gain and retain office.  Whether a more perpetual election cycle becomes a new trend bears observing.

And then there’s ‘Sin’
My prognostication would be incomplete if I did not spend a moment on sin.  And by ‘sin,’ I mean the ‘sin’ issues, including alcohol, tobacco, vanity (ie. cosmetic procedures, tanning), gaming (including bingo and horse racing), and I’m going to add marijuana.  It’s likely the 2014 sessions will, generally, be anti-tax (a climate of tax reform and tax cuts), as noted earlier.  I forecast a few scenarios, though, where ‘sin’ taxes may be pursued, amended, or fairly quickly inserted and passed on statehouse floors.  For example, if a state finds a ‘bug’ in ACA which adversely impacts the local hospital and a revenue stream needs to be located rather quickly (particularly if it’s billed as protecting jobs), sin taxes may be considered.  My apologies to my friends in the ‘sin’ sector!

State government officials and lobbyists focused on health care or energy will be busy.
Social issues will be raised and get floor time – it’s an election year in most states.
The budgets will be passed.  I prognosticate most will be on time or not very late.  Officials want to get out to the voters, not be in special session.

There simply will not be much floor time left to drive other issues forward, so other proactive agendas may be limited or need to be presented faster and more efficiently.  
Windows of opportunity may exist if you are advancing an issue which can be framed to promote ROI, bring greater efficiencies, save money, or maintain-create-or attract JOBS.
NLGA exists to serve you and I would invite and appreciate any feedback or additional insight you can share.

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