Press Release

A Look into the 2011 Legislative Cycle: Policy Initiatives in the States

WASHINGTON, D.C. – The American people spoke loudly through their votes on November 2 with unprecedented changes in federal and state legislatures.  With this change comes an incredible opportunity to look at policies and agendas with a fresh new outlook.  Voters sent a clear message that they didn’t like the way the federal or state governments were operating.

With the U.S. House committed to getting spending under control, this also presents an atmosphere for the country to return to the principles of Federalism and have a proper balance between the federal and state governments.  There will be opportunities for more decisions to be made closer to the people and institute real reform and solutions through the state legislatures.

The following is a compilation of ALEC policy solutions for budget crises, education, health care, and other issues that are affected by and significantly affect budgetary spending in addition to improving the economy.

State Fiscal Policy:
• ALEC’s publication Rich States, Poor States provides fiscal solutions for the states.
• With the focus on prioritizing spending and creating jobs, this guide to fiscal solutions will help state legislators balance their budgets, while keeping their states competitive.
• Switching to defined contribution (401k) pension plans for new state workers is going to get lots of traction. Spending caps and priority-based budgeting will be on the rise.
• In the past several years many states have realized the value of budget transparency and have created searchable online budget databases based on ALEC model legislation. Transparency is a vital tool to build greater accountability in state budgets and addresses the growing public desire for fiscal responsibility.

Health Care:
• Among the many historic election results on Nov. 2, two of three Freedom of Choice in Health Care Act ballot measures — in Oklahoma and Arizona — were resoundingly approved by the American people.
• In a huge push for health care freedom, this year 42 states have either introduced or announced that they will introduce ALEC’s Freedom of Choice in Health Care Act. Six states (Virginia, Idaho, Arizona, Georgia, Louisiana, and Missouri) passed the ALEC model as a statute, and two states (Arizona and Oklahoma) passed the model as a constitutional amendment. An active citizen initiative is also underway in Mississippi.
• As the federal individual mandate doesn’t take effect until 2014, we expect that ALEC’s Freedom of Choice in Health Care Act will continue to be an essential state legislative tool in 2011 and beyond.

• ALEC recently released its Report Card on American Education, which provides many solutions for education reform that have been successful in the states.
• Studies show that increasing education budgets is not enough for successful change.
• Many of the suggested solutions do not utilize funds or do not have an effect on state budgets.
— For example: Create scholarship tax credits, which allow individuals or corporations to receive tax credits for funds they donate to scholarship-granting organizations. Typically, these scholarships are set at a level well below what it costs a district to teach each student—saving both the district and taxpayers money, while allowing parents to decide which school best suits their child.
— Allow for more charter schools. This is especially true for those 11 states that currently don’t have any. Charter schools are funded in a way consistent with traditional public schools, but have the freedom to innovate in ways not available to those schools, such as allowing for longer school days, or by utilizing targeted curriculum like science and technology.

Cap & Trade / EPA Regulation of Greenhouse Gas Emissions:
• We are likely to see coordinated legislative pushback on EPA efforts to regulate greenhouse gas emissions and future efforts at a national cap-and-trade program.
• Texas, Arizona, Wyoming, and other states have already staked out ground in opposition to EPA for legal and statutory reasons.
• There is a good chance that, as soon as EPA releases their policy guidance, state legislatures will begin questioning their interpretation of what constitutes “Best Available Control Technology” for limiting greenhouse gas emissions under the Clean Air Act.

Regional Climate Initiatives:
• Member-states of the Regional Greenhouse Gas Initiative, the Midwestern Greenhouse Gas Reduction Accord, and the Western Climate Initiative will likely question their states involvement in a regional cap-and-trade scheme that reduces competitiveness and risks sending industry to other states or nations.
• Utah and Arizona have already taken steps on this front, and several states have failed to pass implementing legislation to carryout the existing regional climate initiatives.

Positive Environmental Actions:
• States will likely seek out ways to reform and streamline the regulatory processes for existing and future environmental programs.  This may include requirements of economic impact statements, applying cost-benefit analysis to climate expenditures, and eliminating duplicative state, regional, and federal programs.
• Additionally, states seem likely to try to incentivize private environmental action, including reducing liability for voluntary reclamation of environmentally-hazardous areas or carbon sequestration projects.

Tort Reform:  Reforming medical liability laws in particular to quell the practice of defensive medicine will be a key component to tort reform.  Outside of medical liability, tort reform seeking to lessen burdens on businesses will also be popular. We may see a trend of legislation being introduced to keep excessive and frivolous lawsuits from shifting funds out of the business economy.

Union Transparency: State legislators may increase the transparency of union negotiations in their state with the following solutions: include the employee’s right to vote by private, secret ballot elections in state constitutions and law and support policies that call for public-sector collective bargaining sessions and documents to be made open to the public. (i.e. ALEC’s model bills: “Resolution to Support State Efforts to Protect Secret Ballot Elections” and “Public Employee Bargaining Transparency Act.”)

Justice Reinvestment: Corrections is the second fastest growing budget item behind only Medicaid at more than $50 billion a year nationally. Cut costs in your state and maintain public safety by supporting policies that save money, and then reinvest a portion of those funds into targeted services such as intervention, treatment, education, and intense supervision. Four ALEC model bills work together to reduce recidivism, lower costs, reinvest costs, and focus resources on high-risk offenders (i.e. ALEC’s model bills: “Recidivism Reduction Act,” “Swift and Certain Sanctions Act,” “Community Performance Incentive Act,” and “Community Performance Measurement Act”).

Private Sector Bail Operations: Reduce recidivism and cut costs for your state by trusting in the proven-effective private sector bail operation. Rather than releasing offenders through taxpayer-funded pretrial release agencies, rely on the private-sector solution. Support policies that limit the offenses that may be released without commercial bail and policies that place newly-released offenders under the supervision of commercial bail agents who have the incentive to ensure those released maintain employment, receive treatment, and show up for court (i.e. ALEC’s model bills: “Crimes with Bail Restrictions Act,” and “Conditional Early Release Bond Act”).

Reducing Prison Populations & Increasing Community Safety: ALEC supports smart-on-crime policy that effectively reduces prison populations and keeps communities safe. Rather than building new prisons, legislators may lead the fight to invest funds in community treatment for alcoholism, drug addiction, and mental health treatment. Policies should focus on reducing prison populations, rehabilitating offenders, and reducing recidivism.

Economy & Trade:  Ninety-five percent of the world’s consumers live outside U.S. borders.  The most effective way to increase American exports is through free trade agreements (FTAs).  According to the Chamber of Commerce, total trade of U.S. exports worldwide were $462.7 billion higher than they otherwise would have been because of the FTAs we currently have in place.  The current FTAs support 5.4 million jobs and U.S. merchandise exports to FTA partners grew nearly three times as rapidly as did our exports to the rest of the world between 1998 and 2008.  Free trade agreements disproportionately benefit small to medium sized companies the traditional incubators for U.S. job creation.

ALEC has resolutions supporting free trade frameworks with: Colombia, Panama, Trans-Pacific Partnership (New Zealand, Australia, Brunei, Singapore, Chile, Peru, Vietnam), Taiwan, Georgia and Indonesia.  In December we are likely to have one supporting the Korea-U.S. FTA.  Statistics show that states do benefit from FTAs.

• Arkansas, where exports increased 103% from 2000 to 2009, sends nearly 40% of its exports to countries with which we have free trade agreements [U.S. Trade Representative Report].
• In North Dakota, exports sustain one-seventh of all manufacturing jobs, and foreign companies employ 8,300 people in the state [Boston Globe article by Jeff Jacoby 1/10/2010].
• In Georgia, companies that engage in international trade grow on average 18% faster than those that do not [Georgia Department of Economic Development Website].
• Kansas’s export shipments of merchandise in 2009 totaled $8.9 billion.  Of Kansas’s total exports, $5.3 billion, or 60 percent, went to markets in the Asia-Pacific region.  The top three product categories to TPP member economies exported in 2009 were transportation equipment, machinery manufactures, and computers and electronics equipment.  Kansas exported $5.3 billion in goods to Asia-Pacific Countries in 2009.

The American Legislative Exchange Council (ALEC) is the nation’s largest nonpartisan, individual membership organization of state legislators.