Key ALEC Policy Ideas for 2021
Our entire policy department at ALEC is busy analyzing the best free market ideas to add to the important discussions taking place across the states and at the federal level In Washington. Throughout our nearly 50-year history, ALEC has always been at the forefront of producing and exchanging ideas and will continue to provide principled solutions that benefit all Americans.
We look forward to hearing from you as we continue to build our free market collection of policy ideas from the 50 “laboratories of democracy.” Please let us know whenever ALEC can be helpful to you.
Executive Vice President of Policy and Chief Economist
Policy ideas developed by our members can be found in ALEC Connect.
As many states look to re-evaluate their budgets to factor-in recent market trends, the ALEC State Budget Reform Toolkit is a great resource. The toolkit outlines 23 proven policy solutions for states to improve their budget process, while avoiding economically damaging tax increases. Retaining our national and state economic competitiveness during this period will be critical. This will ensure we exit this painful time with the best outlook for recovery and growth.
One way to stabilize budgets over time is to embrace Tax and Expenditure Limitations (TELs). The most effective TELs, like Colorado’s Taxpayer Bill of Rights (TABOR), require voter approval to raise taxes or issue debt. Policy reforms like TABOR give hardworking taxpayers more protection and ensure that state budget growth is stabilized at a reasonable level.
Restoring accountability to government spending is another way to mend state budgets. Since ALEC first adopted its model Taxpayer Transparency Act in 2007, nearly every state has launched a budget transparency website, allowing citizens to more easily find out how their tax dollars are spent. All levels of government, including school districts and municipalities, would do well to follow suit. More fundamentally, government should budget for outcomes. This means identifying the core functions of state government and measuring results. In 2003, Washington state used priority-based budgeting, on a bipartisan basis, to close a $2.4 billion deficit without raising taxes.
- State Pension Reform
If states are to keep their promises to retirees as well as current workers, pension reform is essential. Alaska, Michigan, Oklahoma, and Utah are examples of states that have enacted reforms to enhance the retirement security of current and former workers alike. In addition, the ALEC Task Force on Tax and Fiscal Policy has developed a variety of practical, nonpartisan solutions for state policymakers.
Unlike traditional pensions, 401(k)-style retirement plans offer government employees true retirement security, with the advantages of flexibility and mobility. With private retirement accounts, state employees would finally have real ownership and control, while protecting state taxpayers.
Despite one of the longest economic booms in American history—thanks in part to federal pro-growth tax relief and regulatory efforts—many states have continued to accumulate debt and unfunded public pension obligations. In fact, ALEC’s Center for State Fiscal Reform research reveals three sets of hidden state debt totaling more than $7 trillion dollars: $5 trillion in unfunded public pensions, over $1 trillion in state bonded debt and another unfunded $1 trillion in other post-employment benefits (OPEB).
As stated in the ALEC Principles of Taxation, “A tax system that allows citizens to keep more of what they earn spurs increased work, saving and investment.” Additionally, years of research contained in the annual report Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index reveals the economic benefits associated with states that keep tax burdens and spending at prudent levels. All taxes matter for economic growth, but taxes on capital, including business and individual income taxes, have the largest negative impact on economic outlook and growth.
Avoiding Discriminatory Taxes
In the same vein, imposing discriminatory taxes can negatively affect state economies. The ALEC Principles of Taxation are clear: “The government should not use the tax system to pick winners and losers in society, or unfairly shift the tax burden onto one class of citizens. The tax system should not… engage in discriminatory or multiple taxation, nor should it be used to bestow special favors on any particular group of taxpayers.”
Property Tax Transparency
Truth-in-Taxation is Utah’s most taxpayer-friendly property tax law. This law and the ALEC model policy, Truth in Taxation Act, aim to reduce the growth of property taxes through transparency and accountability. The measure was enacted in Utah in 1985 to provide a solution to taxpayer unrest from ever increasing assessments and property taxes. While Truth-in-Taxation does not technically limit property taxes, it makes local elected officials think twice about increasing property taxes because they know all citizens will be notified of the increase and its potential impact on their property. They also know that they will have to hold a broadly advertised public hearing and recorded vote, where citizens can communicate their concerns about a proposed tax and spending increase.
Fiscal Responsibility at the Federal Level
While some governors continue to advocate for a federal bailout of their state budgets, this would be harmful to both the federal and state governments. A federal bailout would not only increase the federal debt, it would lead to higher taxes and spending at the state level and cause an additional erosion of federalism. Instead, states should work to craft a priority-based budget. The American people are being forced to make difficult but fiscally responsible decisions during the pandemic, and states need to do the same.
The Janus v. AFSCME United States Supreme Court decision was ruled on June 27, 2018. The Janus decision recognized the right of public sector workers to choose whether or not to join or pay money to a union. This in effect gave all public sector workers right-to-work status meaning they could not be fired from their public sector job for not joining or paying money to a union. Following the Janus decision there are efforts through litigation, legal opinions and state legislation to enact the full scope of the decision and protect public sectors worker’s First Amendment rights.
In order to expedite the response to COVID-19, states and the federal government should reduce regulatory red tape. This includes reforming state occupational licensing requirements, and the ALEC model Interstate-Mobility and Universal-Recognition Occupational Licensing Act contains important provisions and principles for state officials to consider.
Occupational licensing recognition promotes geographic mobility by allowing people with licenses, private certifications and work experience to apply that experience to a license in a new state. Licensing recognition is particularly important during times of crisis, like the COVID-19 pandemic, because licensed professions may be disproportionately needed in a particular state and not others. By recognizing people’s experience, it allows workers that are trained and educated in a profession to work where they are most needed and not be limited by a new state’s license that has a similar scope of practice as the license they already have. States that are particularly hard hit by COVID-19 will want the flexibility of attracting healthcare workers from other states by easing the process of obtaining licensure in their state.
Flexible work arrangements advanced through independent contracting and other forms of self-employment provide the best economic opportunity for tens of millions of Americans. In order to meet the needs of all workers, job creators, and entrepreneurs in the 21st Century, government policies must maximize rather than eliminate this flexibility. Independent contractors, entrepreneurs, gig economy workers, and freelancers fill critical roles in the economy including in transportation, delivery, medical, construction, financial, tourism, hospitality, caregiving, journalism, sales, entertainment, IT, and other industries with potential for significant growth if policymakers embrace this dynamic employment path. ALEC members are working to support these principles which will help ensure a rise in rewarding career paths and new small businesses powered by independent contractors.
The COVID-19 pandemic has highlighted the need for all to have access to quality broadband. While most Americans enjoy access, those in rural areas and in some urban settings lack any meaningful ability to connect. Ensuring that all Americans have access to broadband for school, work, telehealth, and more is absolutely essential. Often, the largest barrier to deployment is the government itself—sometimes the state government but often local governments. The barriers result from local government not understanding what providers need or viewing providers as sources of revenue rather than partners delivering essential services to residents. The Telecommunications Deregulation Policy Statement makes it clear that eliminating barriers will increase connectivity and competition, both of which benefit consumers.
The best approach for closing the digital divide is an “all of the above” solution. This means promoting wireline, wireless, and satellite deployment and adoption along with promoting adoption and digital literacy efforts. As technologies increase, wireless and satellite will soon be viable substitutes for wireline, though it will still be needed to help handle backhaul. An ALEC Resolution supporting an Updated National Spectrum Policy, if adopted, would promote an all-of-the-above approach.
- Cybersecurity: Addressing Security Risks Online
With more people and devices online, cybersecurity is essential. And as the COVID-19 pandemic forces more people online, bad actors see their opportunities to exploit online weaknesses increases. As noted by the ALEC Statement of Principles for Cybersecurity, the internet “is a global and interconnected system of networks and users that spans geographic borders and traverses national jurisdictions” and is “full of innovation and dynamism.” The combination of these factors means that threats constantly change. The private sector and government should work hand-in-hand to educate people on how effectively to counter the risk, build resilience into businesses and their networks, and identify specific threats.
Cybersecurity is a mindset and requires constant innovation and vigilance. The government and businesses must constantly monitor and build their infrastructures to prevent attacks as well as to minimize potential damage when a penetration occurs.
- Ensuring that Dollars Follow Students
The Education Savings Account Act allows parents to use the funds that would have been allocated to their child at their resident school district for an education program of the parents’ choosing. To help parents mitigate the costs of providing their children with a quality education while taxpayer-funded schools are closed due to the coronavirus pandemic, states can extend existing ESAs to homeschoolers or include homeschoolers in new programs.
Similarly, scholarship tax credit programs empower families to choose the best educational options, regardless of where they live or how much they earn.
There has been a renewed focus on civics education across the states in the face of recent civil unrest, a movement to alter America’s historical record and an overall lack of civics knowledge among Americans. According to the Nation’s Report Card, just 24% of U.S. high schoolers are proficient in civics upon graduation. A separate surveyindicates that just 51% of Americans can correctly name all three branches of government and, as of 2018, just eight states and the District of Columbia required at least a year of US government or civics courses prior to high school graduation. ALEC’s model policy, the Civic Literacy Act, helps address these issues by requiring high schoolers to pass testing on their knowledge of the Declaration of Independence, the U.S. Constitution and the Federalist Papers prior to graduation. It also requires all statewide standardized testing to contain questioning related to these critical documents, ensuring that high schoolers are graduating with a basic knowledge of America’s most important founding documents and ideals.
PROTECTING INDIVIDUAL LIBERTY
Freedom of speech and inquiry are crucial in higher education. Universities exist to educate students and pursue knowledge. As a “marketplace of ideas,” the university offers a forum for ideas to compete. This intellectual competition produces a level of academic rigor that is impossible to produce without freedom of speech for both students and professors.
The first amendment’s preservation of free speech and assembly encourages open public debate, which is essential to the proper function of American democracy; violating the privacy of individuals who choose to donate to nonprofit 501(c)(3)-designated organizations has the potential to chill free speech for fear of retribution and stifle subsequent participation in the political process.
It is imperative to empower consumers by protecting their right to receive truthful commercial information, and the rights of businesses to engage in the free exchange of such truthful information.
Any exercise of emergency powers by state or local officials should be narrowly tailored to serve a compelling public health or safety purpose, with expedited judicial review of these requirements. It also provides that all state-wide emergency orders infringing constitutional rights will expire automatically after a short period of time unless the Legislature ratifies them in existing or special sessions. State and local officials, including the governor, may only exercise such police powers as the Constitution and Legislature confers upon them by law. Since the issuance of emergency orders by state and local officials often infringe upon liberty and constitute an exception to legislators’ exclusive power to enact binding rules of behavior on citizens, such emergency orders should be limited in scope and duration to the maximum extent possible.
Policies that reform draconian criminal sentences, bolster reentry programs and community corrections supervision, and reduce the number of collateral consequences of a conviction help those with a criminal history the chance to be redeemed and live a better life. The model Justice Safety Valve Act and Resolution on Improving Community Supervision Policies and Practices will likely see significant traction this year in addition to the model Resolution in Support of Reentry Programs. These policies are also linked to our work on occupational licensing reform. For instance, The Collateral Consequences Reduction Act limits the instances in which an occupational licensing board may deny or revoke someone from being able to obtain a license.
LIABILITY PROTECTION AND HEALTH CARE
The Liability Protection for Employers in a Declared Disaster or Public Emergency Act allows a person (broadly defined to include a person, business, association, or governmental entity, or any of their employees or agents) to operate during a declared disaster or public emergency and beyond without the threat of civil liability or professional disciplinary action if the person complied with or made a good faith effort to comply with applicable federal, state, or local regulations, executive orders, or guidance or complied with applicable federal or state statutes passed or issued in response to the disaster or public emergency. Where competing but inconsistent statutes, regulations, executive orders or guides apply to a person’s activity, liability can be avoided through compliance with or a good faith effort to comply with any applicable federal, state, or local regulations, executive orders, or guidance or through compliance with any applicable federal or state statutes passed or issued in response to the disaster or public emergency.
Health care providers should be allowed to practice to the full extent of their professional training through telehealth. Laws and regulations should allow telehealth innovations such as real-time video consultations, remote patient monitoring, and store-and-forward technology. Telehealth services ought to be available to patients who want to access their healthcare provider if their provider is in another state so long as the provider is fully licensed and trained.
Certain laws and regulations prevent healthcare workers from helping their patients. There should be no laws or regulations which dictate the settings of telehealth visits, require patients to reimburse telehealth services at a prescribed rate, or add information compliance burdens beyond those required by federal laws such as the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Laws and regulations should authorize Medicaid and other public health programs to reimburse providers when they deliver telehealth services to program recipients.
- Vaccine Distribution
As Americans are hoping to return to life as normal, based on the evidence, COVID-19 vaccines play a major role in preventing cases in general and, at the very least, reducing the severity of them. Vaccines give many Americans confidence to resume activities that had been halted in 2020, as states locked down their communities. How the COVID vaccines are being allocated and administered is important in each state. Federalism and public-private partnerships are more important than ever, and it is easy to see in the public-private partnerships that have made Operation Warp Speed possible.
The Electoral College respects and protects states within our constitutional republic. It has balanced the interests of rural and urban states, requiring serious presidential candidates and political parties to attract support from a genuine cross-section of the American public. As more states consider the National Popular Vote Interstate Compact, education on the importance of the Electoral College to our republic will be essential.
As an increasing number of federal lawmakers signal support for “packing” the U.S. Supreme Court, state legislators on the ALEC Federalism and International Relations Task Force recently approved new model policies to limit the number of justices that can serve concurrently on the Supreme Court to nine.
The Biden Administration’s Executive Order (EO) 14008, “Tackling the Climate Crisis at Home and Abroad,” halts new oil and gas leases on federal lands and will undoubtedly have a negative economic impact on several states, most notably New Mexico and Wyoming. However, the EO simply points to a larger, long-simmering federalism problem more than a century in the making. The federal government controls a disproportionate swathe of the American West (ranging from a low of just over 30% in Montana to a high of just over 80% in Nevada), and federal mismanagement has had serious environmental and economic implications for the states from Colorado westward. The solution to this problem is to transfer select portions of federal lands (excluding national parks, tribal lands and military installations) to state control. There is ample evidence that the states would serve as superior stewards of the territory within their borders. Several states have established commissions and published lengthy reports to facilitate a seamless transfer of territory. Doing so would likely reduce wildfires while leading to greater economic viability.