Capitol Ideas | 2012 | Issue 6 | Year in Review by The Council of State Governments

NOV | DEC 2012

HOT TOPIC : Year in Review

The Bitter Pill of Sequestration Journeys from the State House to Capitol Hill Governors at National Political Conventions P LU S : M e et the 2012 H enr y Toll Fellowship Class

“ When states outbid each other using incentives, there really isn't a net gain—jobs just move from one state to another and the pie doesn't grow.” —Kansas Sen. Jay Scott Emler, 2012 CSG National Chair

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CAPITOL IDEAS CAPITOL IDEAS|| contents contents © Corbis/Steve Kropp

ON THE COVER Kansas Senate Majority Leader Jay Scott Emler, The Council of State Governments’ 2012 chair, believes states can grow more jobs by working together. He formed a working group as part of his Chair’s Initiative to explore reasons companies decide to relocate from one state to another. “We want to get down to how states can work together to grow the overall pie, rather than fighting about how we are going to divide up the slices,” Emler said. Photo by Mark Weber

NOVEMBER/DECEMBER 2012

While Congress passed the Budget Control Act in 2011, states are still awaiting details of what cuts will be made—or even if a last-minute deal might prevent those cuts. Still, they’re trying to make plans to deal with the loss of funds in their coffers.

Former New York Lt. Gov. Richard Ravitch, who chaired the State Budget Crisis Task Force with former Fed Chairman Paul Volcker, says state budgets are on an unsustainable course.

Kansas Senate Majority Leader Jay Scott Emler, The Council of State Governments’ 2012 chair, believes states can work together to grow jobs instead of getting into the bidding war with incentives to draw companies from one state to another.

Meet the 2012 class of the Henry Toll Fellowship Program.

HOT TOPIC— SEQUESTRATION

10 QUESTIONS— RICHARD RAVITCH

HOT TOPIC— ECONOMIC DEVELOPMENT

HOT TOPIC— TOLL FELLOWS

NOV / DEC 2012

CAPITOL IDEAS

contents | CAPITOL IDEAS

hot topic | 14 SEQUESTRATION While Congress passed the Budget Control Act in 2011, states are still awaiting details of what cuts will be made— or even if a last-minute deal might prevent those cuts. Still, they’re trying to make plans to deal with the loss of funds in their coffers. 17 STATE HOUSE TO CAPITOL HILL Three freshmen congressmen—all former state officials and Henry Toll Fellows alumni—share their insights into lawmaking at the federal level and how their experiences at the state level helped them. 21 LAME-DUCK CONGRESS Congress will return to work after the elections with some major challenges to address during its lame-duck session. No matter what happens on Election Day, December will be a wild ride.

28 BALLOT INITIATIVES In an effort to address budget challenges, some states are asking voters to decide on tax issues at the ballot box this November. 32 CHAIRMAN’S INITIATIVE Kansas Senate Majority Leader Jay Scott Emler, The Council of State Governments’ 2012 chair, believes states can work together to grow jobs instead of getting into a bidding war with incentives to draw companies from one state to another.

CAPITOL IDEAS

NOV / DEC 2012

34 THE VALUE OF CSG The Council of State Governments offers a multitude of benefits to its members. 2012 Chair Kansas Sen. Jay Emler shares what he believes are among those benefits. 36 DISTINGUISHED SERVICE The Council of State Governments Distinguished Service to the States Award, CSG’s highest honor, is awarded to outstanding individuals and organizations who have demonstrated a sustained commitment to advancing excellence in state government. Meet this year’s recipients. 38 2012 TOLL FELLOWS Meet the 2012 class of the Henry Toll Fellowship Program.

they said it | regional roundup |

5 FISCAL CLIFF 6 EAST 7 SOUTH 8 MIDWEST 9 WEST by the book | 10 COURT BUDGET WOES State budget woes have hit the state court systems and many states are taking action by freezing salaries and delaying filling vacancies in staffing and judgeships.

in the know | 12 SUPREME COURT PREVIEW While the U.S. Supreme Court dealt with high

profile issues like health care and immigration laws in 2012, the 2013 session will include state-related cases that address stormwater runoff, according to Lisa Soronen, executive director of the State and Local Legal Center.

24 PARTY CONVENTIONS Governors on both sides of the aisle showcased their states and their beliefs during the Republican and Democratic National Conventions.

10 questions | 22 RICHARD RAVITCH

Former New York Lt. Gov. Richard Ravitch, who chaired the State Budget Crisis Task Force with former Fed Chairman Paul Volcker, says state budgets are on an unsustainable course.

straight talk | 42 IN THE FIRST TERM

Five newer legislators share some of the biggest lessons they learned in their first terms in state government.

stated briefly | 44 AFFILIATE & ASSOCIATION NEWS

News from The Council of State Governments and its affiliates

how to | 46 POLL CONSTITUENTS on the road | 47 UPCOMING MEETINGS shout out | 48 ILLINOIS REP. ELAINE NEKRITZ Illinois Rep. Elaine Nekritz has her focus

squarely on her constituents in the northern part of Chicago. But she has the interests of her entire state in mind while serving in the Illinois House of Representatives.

CSG'S EXECUTIVE DIRECTOR | notes

An Attitude of Gratitude The votes are all counted; the results are in; the debates, mudslinging and fundraising are over. There are winners and losers. The people have spoken. Elections are bittersweet occasions for all of us at CSG. As a nonpartisan organization of all state leaders, we never get involved in elections, but, as we all know, elections have consequences. With each election cycle we are excited to welcome new blood to our association, and we thrive on the energy of new ideas and the opportunity to meet new friends. Elections also mean good friends and trusted leaders will be leaving our ranks. In this issue of Capitol Ideas, we salute a few of our members who have made a lasting contribution to the enduring strength of CSG. They represent the hundreds of dedicated public servants who will leave public office at the conclusion of their current term. We are a stronger organization because of their participation and we are a stronger nation because of their leadership. In this season of thanksgiving, I simply want to pause and offer my profound and heartfelt gratitude to those citizens who offered themselves as candidates and those who have served as state officials with honor. The candidates who ran and were unsuccessful played a valuable role. They helped hold their opponents accountable, they allowed voters to have choices, they sparked meaningful discussions on the issues facing states, and they made their opponents better prepared to govern for having been challenged in the public square. With the start of new terms, some governors will turn the reins of state government over to political opponents; where a chamber has changed party control, one speaker will hand the gavel to the new speaker of a different party. Such is the pulse of politics in our state capitols. Such also is the incredible tradition of self-government in the states. We can never take the orderly transfer of power for granted and I am grateful for the traditions that shape these peaceful transitions. During my years in politics, my name appeared on a ballot 11 times. Some campaigns were hard fought; others were cakewalks. Each campaign represented a significant commitment of time and resources, a huge amount of stress and worry, a good share of wonderful memories and valued lessons only learned in the arena. The campaign means sacrificing income, spending time away from loved ones, enduring the personal attacks that are a part of most campaigns and fighting hard to share a vision for the future. Once the votes are counted, the winners go on to govern, usually committing long hours to the job for very modest pay. Elections echo Lincoln’s words, reminding us of the noble essence of a government of the people, by the people and for the people. We are truly blessed to have thousands of dedicated men and women step forward and offer themselves as candidates for state office. By stepping into the arena, they take great risk and make great sacrifices, but ultimately each offers a great service to our states. Elections are also ultimately about ideas. At The Council of State Governments we are all about ideas. We work tirelessly to bring state leaders together, allowing them to learn from each other, to explore solutions and to pursue excellence. We know the first days, weeks and months as a state leader can be overwhelming. So much to learn, so many people to meet, so much to do and so little time in a busy day to catch a breath. The Council of State Governments, for eight decades, has been dedicated to one mission—helping state leaders achieve great things. We hope you will look to us as a resource for information, as a source of empowerment to help you tackle complex challenges, as a source of wisdom on how to be an even more effective leader, and perhaps most important, as a resource to meet new friends and trusted colleagues from throughout the nation.

3 CAPITOL IDEAS

I am grateful for every member of CSG—the elected and appointed leaders of the states—for all they do to create a better future for all of us. We value the role state leaders have entrusted to us and we are grateful the states created CSG and remain actively involved in guiding this association. Our priorities will always reflect those of our members. The most eloquent expression of our gratitude is shown in our dedication to work every day to create resources, insights and innovations that inform and empower state leaders to achieve excellence. Together, we know state leaders can build stronger states and a stronger nation. That’s something we can all vote for.

NOV / DEC 2012

credits | CAPITOL IDEAS

publisher DAVID ADKINS

dadkins@csg.org

general manager KELLEY ARNOLD karnold@csg.org

managing editor MARY BRANHAM

mbranham@csg.org

associate editor JENNIFER GINN

technical editor CHRIS PRYOR

jginn@csg.org

cpryor@csg.org

graphic designers REBECCA FIELD

rfield@csg.org

JESSICA HUGHES jhughes@csg.org

CHRIS PRYOR

email capitolideas@csg.org internet capitolideas.csg.org

staff writer HEATHER PERKINS

CSG Membership Coordinator hperkins@csg.org

contributing writers JENNIFER BURNETT

CSG Program Manager, Research Services and Special Projects jburnett@csg.org

CAPITOL IDEAS, ISSN 2152-8489, NOV/DEC 2012, Vol. 55, No. 6—Published bi-monthly by

The Council of State Governments, 2760 Research Park Dr., Lexington, KY 40511-8482. Opinions expressed in this magazine do not necessarily reflect the policies of The Council of State Governments nor the views of the editorial staff. Readers’ comments are welcome. Subscription rates: in the U.S., $42 per year. Single issues are available at $7 per copy. POSTMASTER: Send address changes to Capitol Ideas, Sales Department, P.O. Box 11910, Lexington, KY 40578-1910. Periodicals postage paid at Lexington, Ky., and additional mailing offices. Mailing lists are available for rent upon approval of a sample mailing. Contact the sales department at (800) 800-1910. Copyright 2012 by The Council of State Governments. Periodicals postage paid at Lexington, Ky., and at additional mailing offices.

Statement of Ownership, Management and Circulation

JENNIFER HORNE

CSG Associate Director of Policy and Special Libraries jhorne@csg.org CHRIS WHATLEY CSG Washington, D.C., Office Director cwhatley@csg.org

cpryor@csg.org

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Published in compliance with U.S. Postal Service regulations; 1) Title: Capitol Ideas. 2) Pub. No. 2152-8489. 3) Filing Date: 10/01/12. 4) Frequency: Bimonthly. 5) No. published annually: 6. 6) Annual subscription price: $55. 7/8) Mailing address of publication/ publisher: 2760 Research Park Drive, P.O. Box 11910, Lexington, KY 40578-1910. 10) Owner: The Council of State Governments; Publisher, David Adkins; Managing Editor, Mary Branham, P.O. Box 11910, Lexington, KY 40578-1910. 11) None. 12) Has not changed during preceding 12 months. 13) Capitol Ideas. 14) September/October 2012. 15) Avg. no. copies of each issue during preceding 12 months/No. copies of single issue published nearest to filing date: A. 15,290/14,940. B. (1) Paid/requested copies outside county mail subscriptions: 14,604/14,272. C. Total paid and requested circulation: 14,644/14,292. D. (3) Other classes mailed through the USPS: 0/0. (4) Free distribution outside mail: 400/500. E. Total free distribution: 400/500. F. Total distribution: 15,044/14,792. G. Copies not distributed: 246/148. H. Total: 15,290/14,940. I. Percent paid/and or requested circulation: 97.3/96.6. 16) November/December 2012. 17) Signature/title of editor: Mary Branham, Managing Editor, Oct. 1, 2012.

The Council of State Governments president GOV. LUIS FORTUÑO, Puerto Rico | chair SENATE MAJORITY LEADER JAY SCOTT EMLER, Kansas vice chair SENATE PRESIDENT GARY STEVENS, Alaska | immediate past chair DEPUTY SPEAKER BOB GODFREY, Connecticut executive director/ceo DAVID ADKINS (dadkins@csg.org) | washington, d.c., director CHRIS WHATLEY (cwhatley@csg.org) east director WENDELL M. HANNAFORD (whannaford@csg.org) | south director COLLEEN COUSINEAU (fitzgerald@csg.org) midwest director MICHAEL H. McCABE (mmccabe@csg.org) | west director EDGAR RUIZ (eruiz@csg.org)

CAPITOL IDEAS

NOV / DEC 2012

GOV. LUIS FORTUÑO PUERTO RICO CSG National President

SENATE MAJORITY LEADER JAY SCOTT EMLER KANSAS CSG National Chair

ASSEMBLYMAN JOHN S. WISNIEWSKI NEW JERSEY CSG East Co-Chair

SEN.  JIM WHELAN NEW JERSEY CSG East Co-Chair

HOUSE SPEAKER MIKE HUBBARD ALABAMA CSG South Chair

REP. ARMOND BUDISH OHIO CSG Midwest Chair

REP. ROSIE BERGER WYOMING CSG West Chair 2007 Toll Fellow

FISCAL CLIFF | they said it “(The current levels of federal deficits) are like a cancer, and they will destroy this country from within.” —Erskine Bowles, chief of staff for former President Bill Clinton and chair of the Simpson-Bowles Commission, as quoted in Real Estate Weekly

“(Congress’) hesitation adds insult to injury to an economy already flirting with a stall rate.” —Diane Swonk, chief economist of Mesirow Financial, referring to the slow pace of economic growth so far this year, in a Sept. 12 Wall Street

“We can lead, but we can’t lead by not making decisions.” —Former Michigan Gov. John Engler, president of the Business Roundtable, about

Journal article

the fiscal cliff, as quoted in Money Morning

”I don‘t think our tools are strong enough to offset the effects of a major fiscal shock.”

“This economy really doesn’t need another self-inflicted wound, and that’s what this would be.” —Jared Bernstein, senior fellow at the Center on Budget and Policy Priorities, about sequestration and the fiscal cliff,

—Fed Chairman Ben Bernanke at a Sept. 14 press conference, as

as quoted in Stateline

quoted by Reuters news service

» NOV / DEC 2012

—Former President Bill Clinton on the impending fiscal cliff, on CBS’s “Face the Nation” in September

CAPITOL IDEAS

“I think as soon as this election’s over, the incentives for gridlock will go way down and the incentives for action will go way up.”

regional roundup | EAST

DE • MA • MD • ME • NH • NJ • NY • PA • RI • VT • NB • NL • NS • ON • PE • PR • QC • VI

The East LEADERSHIP

BLACK CAUCUS

Two new faculty members this year joined the CSG/ERC Robert J. Thompson Eastern Leadership Academy, known as ELA, in partnership with the Fels Institute of Government. The 25 ELA graduates discussed case studies on policy development, participated in a workshop on applying the principles of strategic persuasion to better communicate and sell their ideas, and participated in workshops on media and public relations strategies, and Canada/U.S. relations. The program was held Aug. 26–30 in Philadelphia. David Mathe, deputy director of international trade, Delaware, was elected ELA class president.

CSG/ERC convened its Black Caucus at the 52nd Annual Meeting in July. For AfricanAmericans in the Northeast, the need to have their issues heard and acknowledged is key, caucus members said. They discussed issues including children of color in the foster care system, police stop-andfrisk procedures, economic development, and funding of higher education for high school students and opportunities for youth development.

SEVERE WEATHER

The Eastern Regional Conference’s Innovations Screening Panel selected programs in Connecticut and Pennsylvania as winners of The Council of State Governments’ Innovations Awards for the East region. Connecticut’s Oasis Center helps National Guardsmen and Reserve forces transition to an academic setting after uniformed service. Pennsylvania’s Enterprise Program Integrity was created by the Department of Public Welfare to target and prevent waste and fraud.

U.S.-CANADA RELATIONS The U.S.-Canada Relations Committee adopted three resolutions to reduce regulatory barriers to cross-border trade. One resolution encouraged the U.S. to open a customs office at the train station in Montreal to make tourist and business travel between Quebec, New England and New York more affordable. Another resolution urged federal and state policymakers to consider the impacts of restrictive procurement policies on the U.S.-Canada trade relationship.

CAPITOL IDEAS

NOV / DEC 2012

The CSG/ERC Energy & Environment Program began developing a new project to help states better prepare for severe weather events. Many states in the region suffered extensive damage to buildings and infrastructure, as well as loss of life, from recent severe weather events, including last year’s Tropical Storm Irene, Tropical Storm Lee and the record-breaking October 2011 Nor’easter that dumped more than 2 feet of snow in some parts of the Northeast. ERC is developing a series of multimedia case studies aimed at facilitating communication across states in the region and between the executive and legislative branches, with the goals of sharing information and ideas that are often siloed, and highlighting resources and policies that may be regionally beneficial.

INNOVATIONS

learn more about these and other in the Eastern Region, visit:  Todevelopments capitolideas.csg.org and www.csgeast.org.

Eastern Leadership Academy 2012 Class

New Jersey Hosts ERC Annual Meeting New Jersey was delighted to have the opportunity to host the ERC’s 52nd Annual Meeting and Regional Policy Forum this year in Atlantic City. The theme of the conference, “Regional ChalWHELAN lenges and Shared Opportunities,” was appropriate as New Jersey, like most of the Northeastern states, continues to experience higher than average unemployment rates. “We are eager to share our experiWISNIEWSKI ences and learn from our colleagues in the other ERC member states and Canadian provinces as to the most effective ways to spur the creation of new jobs and improve our state’s economy,” ERC Co-Chair Sen. Jim Whelan said. “For example, ERC’s ongoing effort to look at the green energy economy, and wind energy in particular, has been of keen interest to us in New Jersey, as a way to create jobs and stimulate manufacturing.” ERC Co-Chair, Deputy Speaker John Wisniewski, noted in his opening remarks at the conference that New Jersey is a leader in renewable energy. “I suspect many of you have noticed the large wind turbines that tower above the

skyline in Atlantic City,” Wisniewski said. “They stand as symbols of New Jersey’s commitment to renewable energy. They should soon be joined by offshore wind farms generating electricity along our coast. “For a number of years now, New Jersey has also ranked second among states for our solar generation, with over 15,000 solar installations and nearly 800 megawatts of solar-generated energy.” After the ERC co-chairs welcomed delegates to Atlantic City, New Jersey Senate President Stephen Sweeney introduced the opening panelists, which included author and national correspondent for The Atlantic, James Fallows, Delaware Gov. Jack Markell and former Pennsylvania Gov. Ed Rendell. Neil Borowski, the executive editor of the Press of Atlantic City, moderated the session. Both Markell and Rendell said state governments need to invest in infrastructure to increase growth. “The American infrastructure is falling apart and we are falling behind competitively because of it,” Rendell said. “If we are going to be competitive, we’ve got to be ready, we’ve got to repair our port infrastructure.” The New Jersey Farm Bureau cosponsored the South Jersey/Pinelands farm tour with the ERC. Legislators met the operators of a cranberry farm (Pine Island Cranberry), farm winery (Tomasello Winery) and blueberry farm (Atlantic Blueberry). “Although we are the most densely populated state in the country, New Jersey— nicknamed the Garden State—still relies on agriculture for a large part of the state’s economy,” Wisniewski reminded delegates.

AL • AR • FL • GA • KY • LA • MO • MS • NC • OK • SC • TN • TX • VA • WV

SOUTH | regional roundup

The South

Center for the Advancement of Leadership Skills (CALS) 2012 Class

Keys to Serving Membership By West Virginia House Speaker Rick Thompson, 2012 CSG/SLC Chair

FLY-INS Between annual meetings, the SLC coordinates fly-ins on specific issues to present state interests from a Southern perspective to federal policymakers in Washington, D.C. Full travel scholarships are provided to legislative participants. In June, Southern Office and other CSG staff arranged legislative participation of transportation committee chairs at the Transportation Policy Academy in Washington, D.C.

RESEARCH

ANNUAL MEETING This year’s 66th annual meeting of the Southern Legislative Conference, hosted by the West Virginia Legislature, responded to its members’ directives to focus on the South’s unique strengths and competitive advantage. From education to energy, agriculture to economic development, health care to investing strategies, policy leaders spent valuable time listening to policy experts, engaging in deliberation and seeking solutions to the region’s challenges.

learn more about these and other in the Southern Region, visit:  Todevelopments capitolideas.csg.org and www.slcatlanta.org.

NOV / DEC 2012

The SLC staff assists policymakers and legislative staff with spot research requests, as well as succinct policy briefs and in-depth reports on an array of issues. During the past year, publications included ”Business License Regulations in Selected SLC Member States”; ”Healthcare Reform: Exchanges and the Expansion of Medicaid”; ”Public Pensions: Emerging Trends”; ”The Stafford Loan Crisis in Perspective”; ”Tuition Deregulation in Higher Education”; ”Latest State Unemployment Rates”; and ”Exports Soar in 2011 to Record Heights, West Virginia Leads the Nation.”

LEADERSHIP The Center for the Advancement of Leadership Skills (CALS), in partnership with the Andrew Young School of Public Policy at Georgia State University, provided leadership training focusing on communication, conflict resolution, consensus building and critical decisionmaking skills, in Atlanta, Ga., Sept. 22–26. Unique among leadership programs, CALS offers full scholarships for candidates from the legislative, executive and judicial branches of state government.

this program provides policymakers the opportunity to expand and broaden their knowledge on a number of complex issues that are germane to their state’s economic prosperity. Through the use of our website, we are able to provide to our members the latest research and publications produced by the staff of the Southern Office. Additionally, through our “Question of the Month” feature, many of the responses to inquiries from members of both the legislative and executive branches—a service provided to all member states—may be viewed on the website. The website offers a host of archival information as well and is easily accessed without the cumbersome feature of login credentials. Increasingly, webinars have become an important tool for policymakers at all levels of state government. With programs specific to the region, SLC webinars serve as a valuable resource for gathering additional information on innovative approaches to creating practical solutions. Leadership development opportunities continue to be a hallmark of the CSG family. The Center for the Advancement of Leadership Skills—CALS—program and the Legislative Staff Exchange Program— LSEP—serve as conduits for policymakers and legislative staff to enhance their professional and personal lives. The Southern Office/SLC is able to offer full scholarships to all participants selected for these programs.

WEBINARS The SLC and the national office host webinars on a wide range of policy issues, providing policymakers with an opportunity to hear from national experts and other policymakers without leaving town. Available free to legislators and their staff, webinars offer an opportunity to engage in discussions on pressing topics and emerging concerns and connect with state policy leaders throughout the year. In October and December, webinars focused on Higher Education Finance Reform and Pension Reforms in the South.

CAPITOL IDEAS

During the course of the year, the Southern Office/ Southern Legislative Conference, SLC, has examined myriad challenges facing the region and sought innovative strategies to inform and educate THOMPSON its members about solutions. With budgets stretched and economic recovery advancing slowly, the resources provided by the Southern Office/SLC to its members reach far beyond the traditional annual meeting. In an effort to provide members with firsthand knowledge and experience on issues of importance to the region, targeted committee chairs and legislative leaders from the 15-member region have participated in our Public Officials Educational Initiative Program, a program fully funded by the SLC and at no cost to the member states. From fly-ins to Washington, D.C., to collaborate with their regional CSG counterparts on federal issues impacting the South, to partnering with the Canadian government on technical tours to the oil sands in Alberta, Canada, to briefings in Panama on the economic impact the expansion of the Panama Canal will have on Eastern seaboard and Gulf Coast ports,

DELEGATIONS In May, chairs of energy committees from select states traveled to Edmonton, Alberta, Canada, to explore and examine the oil sands and the integral relationship with Canada with regard to improving energy independence. In September, transportation committee chairs visited the Panama Canal and held briefings with government officials regarding the expansion of the Panama Canal and its economic impact on Southern states.

regional roundup | MIDWEST

IA • IL • IN • KS • MI • MN • NE • ND • OH • SD • WI • AB • MB • ON • SK

The Midwest ANNUAL MEETING

GREAT LAKES

The Midwestern Legislative Conference held its 67th Annual Meeting July 15–18 in Cleveland. The meeting included sessions on economic reinvention, higher education reform, health care, infrastructure, the fiscal state of the states and a lively preview of the 2012 elections. Hosted and led by Ohio Rep. Armond Budish, MLC chair, the conference also featured policy roundtable discussions on such topics as the creation of rural wealth, the prevention of prescription drug abuse, teacher evaluation and mental health in prisons.

The Great Lakes Legislative Caucus, a network of state and provincial legislators representing the eight states and two provinces in the Great Lakes region, held its 2012 annual meeting July 13–14 in Cleveland. Chaired by Minnesota Sen. Ann Rest, the caucus is working to strengthen the role of legislators in the Great Lakesrelated policymaking process while promoting the protection and restoration of the lakes. The agenda included topics such as invasive species, the Great Lakes Restoration Initiative and green infrastructure.

PASSENGER RAIL

BILLD PROGRAM

Attendees at the Midwest Interstate Passenger Rail Commission annual meeting had an opportunity to ride on the first 110 mph route outside the northwest corridor. The train ride was from Chicago to Kalamazoo, Mich., and back. Established pursuant to a regional interstate compact developed by CSG Midwest, the commission is working to improve passenger rail service in the Midwest.

In August, 37 lawmakers representing 11 Midwestern states and four Canadian provinces gathered in Madison, Wis., for the 18th annual Bowhay Institute for Legislative Leadership Development. The BILLD program, produced by the Midwestern Legislative Conference in partnership with the Robert M. La Follette School of Public Affairs at the University of Wisconsin, provides professional development and leadership training for legislators in their first four years of service.

RADIOACTIVE MATERIALS

CAPITOL IDEAS

NOV / DEC 2012

The Midwestern Radioactive Materials Transportation Committee met in conjunction with the U.S. Department of Energy's National Transportation Stakeholders Forum last spring in Knoxville, Tenn. The committee, which facilitates the regional exchange of information and ideas related to the storage and transportation of radioactive materials through Midwestern states, also was scheduled to meet in Omaha in November.

learn more about these and other in the Midwestern Region, visit:  Todevelopments capitolideas.csg.org and www.csgmidwest.org.

2012 Bowhay Institute for Legislative Leadership Development (BILLD)

Growing, Strengthening the Economy By Ohio Rep. Armond Budish, 2012 CSG Midwest Chair Again this year, the Midwestern Legislative Conference, MLC, focused its attention on efforts to grow and strengthen the regional economy. The MLC’s Economic Development Committee, BUDISH co-chaired by South Dakota Sen. Mike Vehle and Ohio Rep. Ted Celeste, established a subcommittee on Growth through Regional Collaboration charged with exploring alternative models for the potential development of a collaborative policy network that would foster regional economic development in the Midwest. The subcommittee, which is chaired by Nebraska Sen. Heath Mello, is developing a set of recommendations to help shape the MLC’s efforts to promote regional economic growth. Subcommittee members

have enlisted the help of outside experts and key stakeholders from around the region and have examined various approaches. Consistent with these efforts, I designated “Economic Reinvention” as the theme for the MLC’s 67th Annual Meeting, which was held July 15–18 in Cleveland. Our keynote speaker, author and economist Charles Wheelan, reminded us that the Midwest already enjoys numerous competitive advantages—clean air, fertile land, a world-class educational system— and he challenged MLC attendees to focus on addressing the skills gaps in our workforce instead of worrying only about job losses. It was a theme that he and others sounded throughout the conference and that the MLC has highlighted during my tenure as chair. By focusing on our people, and by continuing to work together as states and provinces, we can reinvent our regional economy and build a brighter future for all Midwesterners.

WEST | regional roundup

AK • AZ • CA • CO • HI • ID • MT • NM • NV • OR • UT • WA • WY • AB • AS • BC • GU • MP

The West LEADERSHIP

BORDER LEGISLATORS

The 13th annual Western Legislative Academy will convene in Colorado Springs, Colo., Nov. 13–16 for intense legislative skill-building in governance, ethics, communications, negotiations and time management. Thirty-nine newer legislative “students” have been selected for the Academy.

More than 50 legislators from the 10 U.S.-Mexico border states convened March 28–30 in Sacramento, Calif., for the 25th Border Legislative Conference. In celebration of its 10th anniversary, the BLC highlighted the forum’s achievements and recognized former BLC chairs. Speaker John A. Perez and Senate President Pro Tempore Darrell Steinberg recognized past BLC chairs with resolutions and recognized all attending legislators.

WESTRAIN

2012 CSG West Officers

Forging Stronger Ties with Western Canada By Wyoming Rep. Rosie Berger, 2012 CSG West Chair

65TH ANNUAL MEETING The CSG West 65th Annual Meeting convened in Edmonton, Alberta, Canada, July 20–23. With the theme of “Western Frontiers—On the Edge of Innovation,” the meeting allowed Western legislators to collaborate on regional and international issues of common interest, and learn about the innovative approaches developed by Alberta in energy, health and economic development.

LSA TRAINING

learn more about these and other in the Western Region, visit:  Todevelopments capitolideas.csg.org and www.csgwest.org.

NOV / DEC 2012

Nonpartisan legislative staff directors from the Western region met in their annual Legislative Service Agency/ Research Directors Fall Training Seminar in early October in Park City, Utah. Members of the LSA/ RD Committee participated in both “outside” management training and “inside” sharing of best legislative management practices.

WORLD WATER FORUM Washington Sen. Karen Fraser and Montana Senate President Jim Peterson participated in the Sixth World Water Forum in Marseille, France, in March. The forum is the largest gathering of international stakeholders aimed at sharing ideas and solutions for global water concerns. Fraser and Peterson discussed water concerns with leaders from around the world and shared their perspectives and insights on the development of water management in the American West.

that many of the goods sold in our local supermarkets were manufactured in a process that included components, labor, packaging and shipping across the three North American countries. As state leaders, we must continue to expand the knowledge base of the interdependent linkages between the Western U.S. and Canada. The fact of the matter is that our futures overlap. We are a community of shared interests, common dreams and coordinated responses to problems that have no regard to borders. We recently approved the establishment of a CSG West–Canada Committee. The purpose of the committee is to strengthen ties and cooperation between lawmakers of the 13 U.S. Western states and the Canadian Provinces of Alberta and British Columbia, which are valued associate members of CSG West. The establishment of such a committee will provide a distinct focus and a forum for the exchange of information on issues of common interest, such as border crossings, energy, water and the environment. We also envision that the committee would serve as a vehicle for strategic collaboration with key federal stakeholders in both Canada and United States to ensure that the interests of our shared border region are promoted. Moreover, as an organization that has the distinct geographical and programmatic linkages to both Canada and Mexico, the committee would be an important conduit to engage with lawmakers that comprise the Border Legislative Conference along the southern border as part of the North American Summit.

RIVER GOVERNANCE State legislators from Idaho, Montana, Oregon and Washington met Aug. 20–21 in Boise, Idaho, for a meeting of the Legislative Council on River Governance, a CSG West program that facilitates cooperation and exchange of information on water management issues along the Columbia River Basin. Issues included water quality challenges, federal biological opinion for the Columbia and Snake rivers, water rights adjudication, spring runoff and water flows, water infrastructure needs, the Clean Water Act and agriculture land irrigation.

CAPITOL IDEAS

The CSG West 65th Annual Meeting in Edmonton provided a unique opportunity for Western policymakers to grasp a better understanding of the political, economic and social linkages beBERGER tween the Western U.S. and Canada, particularly the Province of Alberta. We learned of Alberta’s unique spirit of individualism, opportunity and connection with the land and its resources that are driving its growth and competitiveness. Based on the development of western Canada’s energy resources, particularly of the oil sands in Alberta, there are emerging economic and political power shifts from central Canada to western Canada. These shifts, along with demographic trends, were the focus of the Westrends Board meeting during the annual meeting, as well as the North American Summit, a forum within the annual meeting that brings together state and provincial leaders from the U.S., Canada and Mexico to discuss issues of common interest. Despite emerging political and economic trends—as well as the fact that Canada is the first ranked foreign supplier of petroleum to the U.S. and a significant trading partner—most Americans have a limited understanding about our neighbors to the north. In many of our communities, there is a limited understanding

CSG West last summer launched WESTRAIN, a pilot speaker’s bureau project to bring legislative effectiveness training directly to state capitols. California, Colorado, Idaho, Montana and Nevada were selected as pilot states. WESTRAIN offered training in communications/public speaking, time management and ethics.

by the book | STATE COURT SYSTEMS

COURT BUDGET WOES State budget woes haven’t been limited to the executive and legislative branches of state government. In most states, the court system has had to make cuts. The most popular remedy for court systems is a freezing of salaries—43 states used that mechanism. Thirty-seven states have delayed filling vacancies in judicial support positions; 35 states have delayed filling vacancies in clerks’ offices; 33 states have delayed filling judicial vacancies; and 31 states have laid off staff. Only North Dakota has not taken any of the 15 measures other states have used, while Illinois, West Virginia and Wyoming have just used one of the methods to reduce costs. THE BOOK OF THE STATES

Since 1935, The Council of State Governments’ The Book of the States has been the leading authority on information about the 50 states and territories. » www.csg.org/bookofthestates

Costs of Justice } Ten states and Puerto Rico did not report judicial branch budget shortfalls for the 2009 and 2010 fiscal years, according to the National Center for State Courts. SACRAMENTO, CALIF.—California Supreme Court Chief Justice Tani Cantile-Sakauye, left in photo, in April warned that state budget cuts to the court system are making justice inaccessible for average people. © AP Photo/Rich Pedroncelli

THE BOOK OF THE STATES

Since 1935, The Council of State Governments’ The Book of the States ha the leading authority on information about the 50 states and territorie » www.csg.org/bookofthestates

PICKING THE COURT

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Justices on a state’s highest court are picked using a variety of methods— gubernatorial appointment with or without a nominating committee, legislative elections, partisan elections or nonpartisan elections. Source: American Judicature Society, Judicial Selection in the States; http://www.judicialselection.us

n Gubernatorial Appointment

n Legislative Election

n Nonpartisan Election

n Partisan Election

n Partisan Primary, Nonpartisan General

as been es.

STATE COURT SYSTEMS | by the book

TOP 5 WAYS COURTS ARE MANAGING BUDGETS Percentage of States Taking These Actions

82%

Salary Freeze

70%

Alabama Alaska Arizona California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Iowa Kansas Kentucky Louisiana Maine Maryland Michigan Minnesota Missouri Montana Nebraska Nevada New Jersey New Mexico New York North Carolina Oklahoma Oregon Rhode Island South Carolina South Dakota Tennessee Texas Utah Washington Wisconsin

Alabama Alaska Arizona California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Iowa Kansas Kentucky Louisiana Maine Maryland Michigan Minnesota Missouri Nebraska Nevada New Hampshire New Jersey New Mexico Oklahoma Oregon Rhode Island South Carolina Texas Utah Vermont Virginia Washington Wisconsin

Delay in Filling Judicial Vacancies Alaska Arizona California Colorado Connecticut Delaware Georgia Idaho Iowa Kansas Kentucky Maine Minnesota Mississippi Missouri Nebraska New Hampshire New Jersey New Mexico New York North Carolina Oklahoma Oregon Pennsylvania Rhode Island South Carolina Tennessee Texas Utah Vermont Virginia Washington Wisconsin

Staff Layoffs Alabama Arizona California Colorado Connecticut Delaware Florida Georgia Hawaii Indiana Iowa Kansas Kentucky Michigan Minnesota Missouri New Hampshire New Jersey New Mexico New York North Carolina Ohio Oklahoma Oregon Rhode Island South Carolina Tennessee Texas Utah Virginia Wisconsin

Source: American Judicature Society, Budget Resource Center, Cost-saving Measures by State http://www.ncsc.org/Information-and-Resources/Budget-Resource-Center.aspx

NOV / DEC 2012

Delay in Filling Vacancies in Clerksâ&#x20AC;&#x2122; Offices

62%

Âť

Delay in Filling Vacancies in Judicial Support Positions

66%

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Alabama Arizona Arkansas California Colorado Connecticut Florida Georgia Hawaii Idaho Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nevada New Jersey New Mexico New York North Carolina Ohio Oklahoma Oregon Rhode Island South Carolina South Dakota Tennessee Texas Utah Virginia Washington Wisconsin Wyoming

74%

in the know | SUPREME COURT PREVIEW

IT’S A BIG YEAR FOR STORMWATER RUNOFF After deciding two blockbuster cases affecting state governments last term, the U.S. Supreme Court is back on the radar of state policymakers with stormwater runoff. While not as publicized as the Affordable Care Act and Arizona immigration cases, these stormwater cases carry implications for state governments. The Council of State Governments has signed on to the State and Local Legal Center amicus curiae briefs in both cases. Both cases really involve the same question: Who should regulate stormwater runoff—state and local governments or the federal government?

LISA SORONEN Executive Director State and Local Legal Center

The most significant issue for states in the consolidated cases of Decker v. Northwest Environmental Defense Center and Georgia-Pacific West Inc. v. Northwest Environmental Defense Center is whether the lower court should have deferred to the Environmental Protection Agency’s longstanding position that channeled stormwater runoff from logging roads doesn’t require an EPA permit. The Clean Water Act requires EPA permits for the “discharge of any pollutant” from a “point source,” which includes ditches and channels, into “navigable waters of the United States.” Since 1973, one year after the Clean Water Act was passed, the EPA has issued regulations exempting silvicultural (logging) activity from federal permitting requirements. Yet, the Ninth Circuit held that state forest agencies and a county were required to obtain EPA permits for stormwater runoff flowing from logging roads into ditches, culverts and channels. The Ninth Circuit reasoned that Congress didn’t exclude silvicultural activity from the definition of a “point source” and that the EPA could not exclude it through regulations. The State and Local Legal Center’s brief argues that the Ninth Circuit was wrong in concluding that an EPA permit is required for channeled stormwater runoff from logging roads. The brief points out that obtaining EPA permits for every ditch and channel on every logging road in the U.S. would be extremely costly and burdensome for state and local governments that are already regulating such stormwater runoff. The controversy in Los Angeles County Flood Control District v. Natural Resources Defense Council is over whether the Los Angeles County Flood Control District has violated a federal permit because of the level of pollutants from stormwater that it gathers in municipal separate storm sewer systems located in two California rivers. The State and Local Legal Center’s brief argues that instead of being prohibited from discharging a certain amount of pollutants, municipal separate storm sewer systems are only required to adopt best management practices to “reduce” the discharge of pollutants “to the maximum extent practicable” because these systems have limited control over the pollutants contained in the stormwater runoff they collect. The technical legal question the Court will decide in this case is whether the transfer of water within a single body of water through a municipal separate storm sewer system constitutes an addition of any pollutant under the Clean Water Act. In 2004, in South Florida Water Management District v. Miccosukee Tribe, the Supreme Court held that an addition of a pollutant only occurs if a pollutant is transferred from one “meaningfully distinct” water body into another. The State and Local Legal Center’s brief argues that the segments of the rivers above and below the municipal separate storm sewer systems in this case aren’t “meaningfully distinct,” so no addition of a pollutant has occurred. This seems like a foregone conclusion; the sewer systems are parts of both rivers.

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The Supreme Court will issue an opinion in both of these cases by June 30, 2013. Download the State and Local Legal Center’s amicus briefs at www.statelocallc.org. Visit the CSG Knowledge Center to read Soronen's summary of issues before the Supreme Court in the previous term. } knowledgecenter.csg.org

YEAR IN REVIEW | hot topic

THE LASTING EFFECTS OF

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The actions in Washington, D.C., over the past year continue to impact state governments across the country. While Congress passed the Budget Control Act in 2011, states are still awaiting details of what cuts will be madeâ&#x20AC;&#x201D;or even if a last-minute deal might prevent those cuts. The looming threat of sequestration is just the latest hit to state budgets, and a new report by the State Budget Crisis Task Force illustrates the problems states face in meeting obligations to their employees, constituents and creditors. In an effort to address some of those problems, some states are asking voters to decide on tax issues at the ballot box. These and other changes will have an impact on states long after 2012 is just a memory.

hot topic | SEQUESTRATION

THE BITTER PILL OF SEQUESTRATION

Jolt to Economy, Lack of Details and Flexibility Create Problems for States by Mary Branham Stephen Fuller likens the pending budget cuts from sequestration to crash dieting. “There’s a couple of ways to lose 40 pounds,” he said. “Going on a starvation diet is one of them. That’s sequestration. (Then there’s) working out and cutting out dessert and not eating so much bread and reducing the portion size—you’re actually stronger and healthier when you get done and you’ve accomplished the same thing.” Fuller, director of the Center for Regional Analysis at George Mason University’s School of Public Policy, has conducted several studies of the economic impact of the federal Budget Control Act of 2011. That act, commonly referred to as sequestration, requires a reduction in federal spending over a 10-year-period from selected federal programs if Congress cannot agree on how to reduce the nation’s debt by $1.2 trillion by Jan. 1. “Federal spending is going to be deeply and abruptly cut and it will come from discretionary programs,” said Fuller. Both sides of the cuts—defense spending and nondefense spending—will have an impact on states. The problem, said South Dakota Chief Financial Officer Jason Dilges, 2012 president of the National Association of State Budget Officers, is that states can’t really plan for cuts without more specifics. “If we knew how big the pill was we had to swallow and what it looked like, we’d do our best to be able to make sure we were able to take it,” he said. “Not knowing how big or small or what color it is or what it’s going to taste like, that’s a real tough thing for us, and, like anybody else, the fear of the unknown is really a very powerful thing.” Add to that the possibility, which many are

predicting, that Congress will reach a deal after the elections and the uncertainty grows. “Most states seem to be approaching it as if something will change the sequester,” said Scott Pattison, NASBO executive director. “The assumption is that Congress and the president will make some change to the sequester.”

Immediate Impacts

Nevertheless, budget officers are making contingency plans for the effects of sequestration as best they can, said Pattison. In Vermont, for instance, state officials are approaching federal reductions from a broad perspective, looking at it as more than what could happen because of the Budget Control Act, said Matt Riven, director of Budget and Management in the Vermont Department of Finance and Management. “The issue is more than just one bill or one law,” he said, “and we’re taking the longer view of how do we approach an environment that, it’s likely, over the next decade, the federal funds that we receive are going to be diminished.” Vermont set up an informal process with regular meetings of the budget team to conduct a thorough review of all the programs for which the state receives federal funds. The team looks at the climate in Washington and the effect any potential federal action would have on those programs. The fiscal offices of both the executive and legislative branches also conduct a semi-annual review of that initial review to develop a consensus analysis. “The value of that is that it allows us to focus on how to prepare and react to the

federal reductions that might be coming rather than fighting about what the real number is,” Riven said. Vermont also has set aside a one-time reserve to prepare for federal reductions. “By no means is it big enough to absorb the entire potential (Budget Control Act) reduction, but it would at least help us to absorb a portion of it,” he said. But absent information about specifics of cuts, Riven said, the state can’t determine which ones it might backfill. So, like other states, Vermont is telling agencies they should not assume the state would make up cuts, Riven said. South Dakota, Dilges said, is assuming the cuts will be real and effective Jan. 2, 2013. The budget office has asked departments to look at the proposed programs covered under sequestration and ascertain whether they are pass-through grants to local governments or dollars that can be used for funding staff salaries, benefits and other operating costs. “Obviously, I think we would try to look at the areas that are most flexible and would allow for us to retain as much staff as we could,” he said. Then, the state would decide whether it would replace lost federal funds, leave it to the local governments to decide what to do about the program or just eliminate a federal program due to lack of funding, Dilges said. Chris Whatley, director of The Council of State Governments’ Washington, D.C., office, said 28 of the 42 streams of federal funding to the states would face cuts. The programs facing cuts are found across a range of departments and services, from special education and low-income heating assistance to veterans’

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“At some point, we just have to be prepared and to make the tough decisions that are necessary and not be afraid of them, because we all know that more of the same is not sustainable.” —Jason Dilges, South Dakota Chief Financial Officer

SEQUESTRATION | hot topic

employment and training. Whatley said states, for the most part, will be able to pass those cuts along to direct beneficiaries—either the people receiving the benefits or local governments that might administer programs. The exception, he said, is in some education funding. “Cutting education funding is one of the most difficult things for a state to do,” Whatley said, “in part because of protections in state constitutions and state common law.” Those education cuts are targeted, and some educators believe they would be harmful, not just in the short-term but also in the long-term “We know that if sequestration does occur that it will affect our special education, our students with special needs, career-technical education,” said June Atkinson, North Carolina’s superintendent of public instruction. “It will have an impact on our schools that receive Title 1 funding and that will certainly hurt our work in remodeling education and giving the necessary support for us to move forward to nearly a 100 percent graduation rate.” In fact, the graduation rate of North Carolina students who were involved in careertechnical education was 90 percent last year. Cuts would affect from 53,000 to 56,000 students, based on various projections, Atkinson said. And, she said, with the unemployment rate above 9 percent, more students in North Carolina are living in poverty, making the need for Title 1 funding even greater. Federal Title 1 funds target schools with high numbers of students living in poverty.

ty Images © Photo by Chip Somodevilla/Get

SEQUESTRATION Immediate cuts in federal spending due to sequestration will hit programs across the board. Mary Ware of Chicago, top photo, is one of the low-income Americans who lost federal assistance with electricity this summer. Defense contractors, including Lockheed Martin Chairman and CEO Robert Stevens, above left, and EADS NorthAmerica Chairman and CEO Sean O’Keefe testified before Congress in July against automatic cuts in defense. They likened sequestration to “cosmetic surgery with a chainsaw.”

» NOV / DEC 2012

—Stephen Fuller, director, Center for Regional Analysis , George Mason University’s School of Public Policy

CAPITOL IDEAS

“The economy is very fragile and this (sequestration) is enough to put it flat on its back.”

hot topic | SEQUESTRATION She hopes Congress will make changes to sequestration. While cuts to federal education spending may be imminent, Atkinson would like the decisions on spending to be left at the state level. “We would like, at the state level, to have the flexibility of determining where we would take cuts based on what our data show as far as what programs are yielding positive results for students,” she said.

Long-Term Impacts

Education isn’t the only area in which the effects of sequestration will be felt long-term. The immediate impact of sequestration will eliminate some services and jobs, pushing the stagnant unemployment rate of around 8 percent to 9.5 or 9.6 percent, Fuller said. The 228,000 federal jobs lost in nondefense cuts and 48,000 federal jobs lost in defense cuts are just the beginning. Fuller estimated in a July study that a total of 2.1 million jobs would be lost, with about 1.59 million of them coming from small business. Those losses would be direct, indirect or induced—those jobs that depend on spending in other areas of the economy—according to the study.

CAPITOL IDEAS

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His July study didn’t include the collateral effects—what happens when the federal government isn’t doing what it always has, things such as food inspection, border control, regulation of motor vehicles or port control. The FAA wouldn’t have as many inspectors, so airplanes wouldn’t fly as often, he said. “You would have an enormous disruptive effect … that would cost jobs and cost economic activity,” he said. The argument, he said, is that the economy can’t absorb those kinds of losses. The jolt of sequestration, bringing with it the end of government borrowing that makes it difficult for private sector borrowing, will make it difficult for the private sector to grow faster, Fuller said. “It takes a long time to shift an economy from government dependence to private sector growth,” he said. “That’s a 10-year proposition, not a one-day proposition.” In a growing economy, he said, as government pulls back, the stimulus generated from government spending shifts to the private sector, which grows as people invest. “In a weak global economy, it’s going to take even longer, so that these cutbacks will

actually strengthen the overall economy in the long run,” Fuller said. “In the short run, the medicine is pretty severe.”

The Need for Cuts

Few people dispute that federal cuts will eventually be made and states will have to make decisions on those cuts. “At some point, we just have to be prepared and to make the tough decisions that are necessary and not be afraid of them, because we all know that more of the same is not sustainable,” Dilges said. “The federal deficit is just so large that at some point, I think they’re going to start to have to do something, so we are going to see cuts over the long term whether they do it through sequester or not,” said Pattison. How cuts will be made is the big question that remains as Congress is in recess until after the election. “There’s numerous ways to do this and sequestration is the most severe and (will) have enormous negative impacts on the economy,” said Fuller. “The economy is very fragile and this is enough to put it flat on its back.”

STATE HOUSE TO CAPITOL HILL | hot topic

From the State House to Capitol Hill It’s no secret that state leaders make good national leaders. Numerous presidents and members of the U.S. House of Representatives and Senate have served in governor’s offices and state legislatures, as well as other executive branch offices, before moving on to Capitol Hill. Three former state leaders—all of whom are alumni of The Council of State Governments’ Henry Toll Fellowship Program and who are completing their freshmen terms in Congress—share lessons they took with them from their service in state capitols and what they are learning in the halls of the U.S. Capitol.

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hot topic | STATE HOUSE TO CAPITOL HILL

U.S. REP. JOHN CARNEY Delaware | Former Delaware Lieutenant Governor | 2002 Toll Fellow

LESSONS FROM THE STATEHOUSE

BIPARTISANSHIP HAS TO START SOMEWHERE

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In Delaware, we have a tradition called Return Day. The Democratic and Republican candidates for statewide office—the winners and the losers— gather together on the Thursday after Election Day. They ride together in carriages through the streets of Georgetown, Del., and at the end of the day, officially end the campaign season by literally burying a hatchet in the sand. Delaware’s Democrats and Republicans have their different points of view and often disagree about how to address the challenges facing the state. But Return Day signifies that it’s time to move on from the campaigns and continue with the business of serving Delawareans. Having spent most of my career in state and local government, including two terms as Delaware’s lieutenant governor, this model of bipartisanship and cooperation is how I learned to conduct business. This approach was also the foundation of my campaign in 2010 to become Delaware’s lone member of the U.S. House of Representatives. I campaigned hard on the issues and promised Delawareans I would represent them by working in a bipartisan way to strengthen the economy, create jobs and put the country back on the right track. I went to Capitol Hill nearly two years ago to work with Democrats and Republicans on the important issues affecting our nation. I soon found out that the partisanship in Washington is overwhelming. Both parties speaking in talking points. Each side

working only with themselves. Equating compromise with selling out. After several frustrating months, I found colleagues from both parties who, like me, were interested in moving beyond politics to solve the tremendous challenges facing the nation. We began meeting over breakfast a few times a month, and we quickly learned that while we disagree on many issues, we agree on a host of others. Over time, the group has grown to include 14 members divided equally between Democrats and Republicans. We hold regular meetings to catch up, talk policy and develop legislation. In the 112th Congress, the group has proposed bills that address issues critical to the nation’s economic recovery— incentivizing domestic business expansion, getting people back to work, and finding a productive and responsible way to work through the housing crisis. A group of 14 members out of 435 is small. But as I learned throughout my 20-year career of public service in Delaware, whether it’s sitting down for a meeting with someone or riding in a parade with them, bipartisanship has to start somewhere. Members of Congress can disagree on the issues. In fact, American greatness is rooted in the idea that disagreement is the foundation of a strong and robust political system. But at the end of the day, we must all agree that progress is more important than politics. It’s time to bury the hatchet and come together as Americans to put forth smart solutions that move our nation forward.

STATE HOUSE TO CAPITOL HILL | hot topic

U.S. REP. COLLEEN HANABUSA Hawaii | Former Hawaii Senate President | 2000 Toll Fellow

LESSONS ON LEGISLATIVE SKILLS

WHAT WORKS IN STATE SENATE CAN WORK IN CONGRESS and women considering legal careers that, in my opinion, the value of law school is that it does not claim to teach you all the answers; it teaches you how to think, how to analyze and how to discern the answers yourself. Similarly, anyone who has been fortunate enough to have served as a state legislator—and has used that experience wisely—will have had the opportunity to develop a set of skills that will assist in analyzing the most complex of issues. Whether a member of Congress wishes to take on those complex issues in-depth, however, remains an individual choice. This is not to imply that the issues a legislator faces on the state level are any less important than those we encounter in Congress. To our constituents, the final arbiters of our performance, it may be that the issues facing a state legislator are more relevant and more immediate. For most, local bread-and-butter issues are the most pressing. The privilege of serving in the United States Congress has provided me with an opportunity to consider issues with worldwide consequences, but I never forget that I serve people in Hawaii, just as I did in the Hawaii State Senate. I must continually win their trust and earn the belief that I am truly representing them. Being a good legislator should not depend on the body one is honored to serve in. It is instead the product of solid experience, good skills and effective service.

19 CAPITOL IDEAS

I was in my second year as a Hawaii state senator when I was selected to represent Hawaii as a Toll Fellow. Today, I am in my second year as a member of Congress representing Hawaii’s First Congressional District. During the intervening 10 years, I served as the vice president of the Hawaii State Senate, vice-chair of its Ways and Means Committee, chair of the Judiciary and Hawaiian Affairs Committee, majority leader of the Senate and, for my last four years in state office, as president of the Senate. I was honored to be the first woman to lead either chamber of the Hawaii State Legislature and the first AsianAmerican woman in the nation to preside over a state legislative body. Based on these experiences, I can say that I have found few significant differences between serving in the Hawaii State Capitol and the Halls of Congress. The Congress of the United States is the ultimate legislature in the world. The issues we vote on and the policies we set impact everyone and everything. It is a daunting responsibility. Yet, it is the experience I gained as a state legislator that has been the foundation that prepared me for this task. I believe it is up to each elected official to define what kind of legislator she or he becomes. How one studies, addresses and decides on issues is fundamental to each individual. As a former practicing attorney, the best analogy I can come up with is a law degree. I have told many young men

» NOV / DEC 2012

hot topic | STATE HOUSE TO CAPITOL HILL

U.S. REP. TODD ROKITA Indiana | Former Indiana Secretary of State | 2005 Toll Fellow

LESSONS FROM A FIRST TERM IN CONGRESS

PARTISANSHIP AND GRIDLOCK MAY BE WHAT FOUNDERS INTENDED

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When I was elected to Congress in 2010 after serving eight years as Indiana’s secretary of state, I knew I was in for a big change. But I didn’t realize how big that change would be. Here are a few observations I’ve made in my time here, and what I think these things mean for our republic: » As secretary of state, I was head of several executive branch agencies. Whenever we needed something done, it was easy to just direct people to act. Now, when I go to the House floor and persuade and cajole fellow members, someone else stands up right after me and does the same thing. It’s a lot of theater, and consequently, not much gets done by direct order. Perhaps I’m observing no more than what the Founders intended when they established our different branches of government. » There is a great deal of partisanship and gridlock in Congress, which is frustrating to many Americans outside of Washington. In many ways, this is a reflection of the way our Founders intended our system to work—slowly and sloppily, with each member representing the concerns of his or her district. But it’s also true that many people here are living for partisan fights, and not for the future of our republic. Ultimately, Congress reflects the American people, and we won’t be able to reach meaningful compromise in Washington until we decide what we’re going to be as a country. » Perhaps even more frightening than the $16 trillion debt we’re passing on to our children and grandchildren is a federal government that

has outgrown the limits our Founders intended. Through our Red Tape Rollback program, my office is working to help businesses and individuals fight back against harmful government regulations. I’ve learned every day just how exhausting it is to do battle with an army of bureaucrats. Too much lawmaking authority has been given to folks who have not been directly elected by the people. » In the past, statesmanship was defined as leaders from both parties agreeing to pass legislation that included both sides’ preferred policies, and then passing the bill on to our kids. But we can no longer afford that old definition. Keeping the republic our Founders entrusted to us will require a new definition of what a statesman is—not someone who looks merely across the aisle, but across the generations. » Because of the year-to-year budgeting process, things move way too fast. The federal government simply isn’t that important. We should slow things down by moving to a two-year budgeting system, with appropriations in the off years. When I was secretary of state, Indiana had a two-year cycle, and we were able to live within our means for two years at a time. » Capitol Hill really does seem like it’s run by 26-yearolds, with so many young staffers in positions of influence. They bring a great deal of energy to the process and, for the most part, give me many reasons to be optimistic about the future of our republic.

LAME-DUCK CONGRESS | hot topic

A Wild Ride in the

LAME-DUCK CONGRESS

» NOV / DEC 2012

No matter what happens on Election Day, December will be a wild ride.

21 CAPITOL IDEAS

After spending the fall on the campaign circuit, Congress will return to work with an economykilling challenge before it. Priority one for the lame-duck Congress will be to avoid the so-called fiscal cliff, a set of eight statutory tax increases and spending cuts that collectively would shrink the economy by $600 billion and could tip the country back into recession. While the strategies Congress will pursue to meet this challenge won’t be clear until the dust settles from the election, some common themes are already coming into view. While the extreme ends of both parties have flirted with the idea of letting the country go over the cliff, both leadership and the vast majority of BY CHRIS WHATLEY members appear committed to forestalling at least CSG Washington, D.C. the worst elements of the cliff, most notably the Office Director expiration of Bush-era tax cuts and the imposition of $550 billion in sequester-driven defense cuts. The real question is this: Will Congress punt the ball on first down or attempt a Hail Mary pass? The most likely scenario is that the lame-duck Congress will pass a short-term extension of the Bush-era tax rates and delay the sequestration cuts. That would give the new Congress a few extra months to come up with a new long-term fiscal solution encompassing both revenue-generating tax reform and a set of spending cuts more evenly divided between discretionary spending programs, like defense and education, and entitlement programs, like Medicaid and food stamps. Some other elements of the fiscal cliff—such as scheduled reductions of Medicare doctors’ payments and an extension of higher minimum income levels for the Alternative Minimum Tax—also could be folded into a short-term deal. But there appears to be a consensus on both sides of the aisle to allow the 2010 payroll tax cut to expire. The short-term punt scenario is favored by leadership and offers the clearest pathway around the cliff in the few short weeks Congress will have to act. Montana Sen. Max Baucus, however, has been working behind the scenes with a small group of fellow senators to explore scenarios for passing comprehensive legislation to deal with both tax reform and long-term fiscal challenges. Such a deal would likely incorporate many of the ideas for tax reform discussed by both parties on the campaign trail, such as reducing corporate tax rates, with a new set of more palatable spending cuts. While the failure of the supercommittee last fall demonstrates the limits of this type of approach, Baucus appears to be banking on both his personal track record of working across party lines and on the unique dynamics of a lame-duck session where many of the members casting votes will be weeks away from leaving office and arguably more free to cross party lines. Whether Baucus succeeds in his Hail Mary pass or Congress chooses to punt, the decisions made in the lame-duck session will have a direct impact on state budgets for years to come. If sequestration is triggered, it’s not just defense spending that will be on the chopping block; 28 separate state grant-in-aid accounts, covering everything from education to low-income heating assistance, will be cut by about 8 percent. At the same time, any effort to foster a grand compromise to achieve long-term savings and forestall the cuts likely would involve shaving as much as $100 billion off Medicaid over the next 10 years by blending and reducing the reimbursement percentages for Medicaid and the Children’s Health Insurance Program, or CHIP. Finally, the team of insiders working with Baucus already has begun putting out feelers to the state community to gauge what the reaction might be if the state income and sales tax exemptions, which cost the federal government $70 billion per year, were reduced or eliminated.

10 questions | RICHARD RAVITCH

STATE BUDGETS ON UNSUSTAINABLE COURSE »

‘It’s Like Paying for Dinner by Selling A Piece of Furniture’ by Mary Branham

What was the interest and impetus to starting the State Budget Crisis Task Force?

What challenges will states face with federal deficit reform?

“(As lieutenant governor), I became aware of the fact that the budget of the state of New York was not what it appeared to be. … When I looked at the law that requires that New York have a balanced budget, I asked, ‘How could that be?’ and the answer was, ‘Revenue is not a defined term. ’Therefore, you could use anything to balance the budget, including money that you borrowed or money that you got from selling assets. To make a long story short, I found out most states had similar practices.”

“There’s a real disconnect between the congressional delegation in a state and the state itself. This is a function of many things, including the collapse of political party. … If you look at the re-election of a member of Congress, … that contest is not filled with discussion about how many police or teachers are going to be employed. … People lose sight of the fact that state and local governments have major responsibility for education, public safety, public infrastructure, health care, … those are not the responsibility of federal government under our constitution. Of all the reform plans I’ve heard of for the federal deficit, not one of those people have done a calculation on the exact impact on state and local budgets.”

What are the problems with those methods? “That’s not a sustainable course. It’s like saying you pay for your dinner by selling a piece of your furniture. Eventually, you’re going to run out of furniture.”

What is different about this report and others addressing state budget shortfalls?

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“It pointed out that we were, on the whole in most states, on an unsustainable course because Medicaid expenditures and retirement expenditures were growing faster than revenues. It pointed out that most states were using gimmicks to balance their budget. It pointed out that all of the proposals to reduce the federal budget deficit had catastrophic implications to state budgets.”

Is the report getting the attention and doing what you hoped it would do? “It’s hard to tell because we’re in the middle of an election season and people aren’t focused on substance; they’re focused on perceptions at this point in the political cycle. I think the real measure will be after this election, when hopefully the Congress gets around to trying to address the deficit problems at one extent or the other. At what point are they going to look at the deficit reduction?”

With all the discussion about decreasing the federal deficit and sequestration, states are facing some major challenges. How can they prepare? “Multi-year budgeting, more disclosure, stop using borrowing to balance your budget, more transparency. Here’s an illustration: There are over a trillion dollars of OPEB (retirement benefits such as health care) liabilities on the part of states and instrumentalities in the states, i.e. cities. A totally unfunded set of obligations. Who knows that? Second of all, some states like New Jersey and Illinois don’t even require that the pension contributions be made to meet the actuarial determinations, so they’ve gone unpaid year after year, plus they’re dramatically underfunded. In New York, we passed a law—stupidly—to permit the pension fund of the state and pension funds of the cities in the state to borrow the money from the pension fund. They need to pay the premiums (that are) required. … We have become masters of kicking the can down the road.”

RICHARD RAVITCH | 10 questions

Former New York Lt. Gov. Richard Ravitch, along with former Fed Chairman Paul Volcker, formed the State Budget Crisis Task Force in June 2011 in an effort to understand the fiscal problems faced by the states in the aftermath of the global financial crisis. The task force found states’ abilities to meet their obligations to public employees, to creditors, and to the education and well-being of people who live in those states are threatened. the full interview with Richard Ravitch at capitolideas.csg.org.  Read

What would you tell policymakers about the urgency and need to act? “I would say that they have an enormous responsibility for all the consequences of what they do, and not just what they do in the short term. That’s why you need multi-year budgeting and need an independent body to verify the calculations of what it should be. You have to look at this in the context of time. If you believe that our economy is going to be rebounding next year, you just have to get through this year. … That’s the way they’ve been budgeting. You have to look at the long-term trends.”

Are there some recommendations that would be a good starting point? “I think the most important are more transparency (in budgeting), multi-year budgeting, make recurring revenues be matched by recurring expenditures, stop using the old-fashioned system of making budgets, … make them intelligently. A lot of people come into state office without any depth of understanding of all of the consequences of what they do. They feel if they can get through the next year or the budget cycle they’re about to embark upon, they believe that will solve the money problems. I don’t think it necessarily will.”

6 Major Threats to Fiscal Sustainability The State Budget Crisis Task Force report listed six major threats to fiscal sustainability.

1 Medicaid Spending Growth is Crowding Out Other Needs

2 Federal Deficit Reduction Threatens State Economies and Budgets

3 Underfunded Retirement Promises Create Risks for Future Budgets

4 Narrow, Eroding Tax Bases and Volatile Tax Revenues Undermine State Finances

5 Local Government Fiscal Stress Poses Challenges for States

6 State Budget Laws and Practices Hinder

For the full State Budget Crisis Task Force Report visit http://www.statebudgetcrisis.org/wpcms/report-1.

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“No. It’s very tough. It’s going to require politicians with a lot stiffer spines. We have a serious problem is all I can say, and that our politics are not very good at dealing with adversity and now we have a real test. We have a test in Washington as to what we’re going to do about the federal deficit. We have a test in the states. In a democracy it all comes down to politics. … I think the only way we’re going to solve this problem is if the political leadership gets everybody at the table and everybody is going to have to make the system whole again. That’s really the single most important thing I can say.”

“I think the United States, a country I love, has overcome some pretty serious problems over the years. We solved the racial divide that some people thought we could never get over, and we have maintained our democracy unimpaired despite world wars, a cold war, recessions. We’ve done pretty remarkable things. We led the world to greater and greater freedom and democracy. I think we can resolve this problem. It’s a question of some people paying more taxes and some people getting less in benefits. It requires leadership.”

CAPITOL IDEAS

Is there the political will to address these problems?

Are you optimistic the problems can be resolved?

Fiscal Stability and Mask Imbalance

hot topic | PARTY CONVENTIONS CSG TAKES A LOOK AT THE POLITICAL PARTY CONVENTIONS ...

ELECTION 2012: THE DEMOCRATS The Democratic National Convention in Charlotte, N.C., in September may have put the spotlight on President Barack Obama, but Democrats who hold or have held the governor’s office had the opportunity to share something about their states and their beliefs.

Former Ohio Gov. Ted Strickland “It’s been a long slog back, and we’ve still got a long way to go. But all over Ohio—all over America—men and women are going back to work with the pride of building something stamped ‘Made in America.’ Before Barack Obama took office, it looked like that pride could have vanished forever, but today, from the staggering depths of the Great Recession, the nation has had 29 straight months of job growth. Workers across my state and across the country are getting back the dignity of a good job and a good salary.”

Massachusetts Gov. Deval Patrick

©AP Photo/Lynne Sladky

Montana Gov. Brian Schweitzer, 2011 CSG President “Let me tell you how we get ’er done in Montana. We’ve had record budget surpluses every year I’ve been governor, averaging over $400 million in surplus even during the Great Recession. We’ve invested more new money for education than ever before, frozen tuition at our colleges for the longest period ever, and get this: We increased the percentage of adults with college degrees faster than any other state. We cut more taxes, for more people, than any governor in Montana history and our bond rating was upgraded. Montana is moving in the right direction. So is America.

“When I came to office, we set out on a different course: investing in ourselves and our future. And today Massachusetts leads the nation in economic competitiveness, student achievement, health care coverage, life sciences and biotech, energy efficiency and veterans’ services. Today, with the help of the Obama administration, we are rebuilding our roads and bridges and expanding broadband access. Today we’re out of the deficit hole Mr. Romney left, and we’ve achieved the highest bond rating in our history. Today—with labor at the table—we’ve made the reforms in our pension and benefits systems, our schools, our transportation system and more that Mr. Romney only talked about. And today in Massachusetts, you can also marry whomever you love. We have much more still to do. But we are on a better track because we placed our faith not in trickle-down fantasies and divisive rhetoric, but in our values and common sense.”

“When President Obama took office, the economy was in free fall, losing more than 800,000 jobs a month. Since then he’s helped create 4.5 million private sector jobs, 29 straight months of job growth.”

Illinois Gov. Pat Quinn “In Illinois, we know President Barack Obama. We know his record. And we know that President Obama has made sure that work is always part of welfare. As an Illinois state senator, Barack Obama spearheaded welfare reform in the Land of Lincoln. And the fact is, under President Obama, states can get flexibility only if they move 20 percent more people to work.

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©AP Photo/J. Scott Applewhite

“From day one, President Obama has told you where he stands, what he believes and what he is doing to make our middle class strong again. America is moving forward under President Obama’s leadership—and that’s a fact.”

©AP Photo/J. Scott Applewhite

Former Michigan Gov. Jennifer Granholm “With the auto rescue, (Obama) saved more than 1 million middle class jobs all across America. In Colorado, the auto rescue saved more than 9,800 jobs. In Virginia, more than 19,000 jobs. In North Carolina, more than 25,000. Wisconsin, more than 28,000 jobs. Pennsylvania, more than 34,000. Florida, more than 35,000. Ohio, more than 150,000. And in the great state of Michigan? President Obama helped save 211,000 good American jobs. All across America, autos are back! Manufacturing is rebounding.”

PARTY CONVENTIONS | hot topic

Colorado Gov. John Hickenlooper “In Colorado, we know that Western history is not just about rugged individuals; it’s also about communities coming together to raise barns, build schools and, yes, to help one another. Colorado and the United States are places that will be defined more by their future than by their past. The president knows that to move our country forward, it takes ‘we’ and not just ‘me.’ … President Obama inherited many crises, among the worst any president has faced, and in every case he’s responded with optimism, compassion and courage. He provided hope when there was none. And he transformed that hope into a plan rooted in reality.”

North Carolina Gov. Bev Perdue

©AP Photo/J. Scott Applewhite

Maryland Gov. Martin O’Malley “In times of adversity—for the country we love—Maryland always chooses to move forward. Progress is a choice. Job creation is a choice. Whether we move forward or back: This too is a choice. This is what this election is all about! “Democratic governors, with the support of our president, are leading their states forward—putting job creation first, balancing budgets, protecting priorities, making the tough decisions, right now, to create jobs and expand opportunity. Together with President Obama, we are moving America forward, not back.”

Connecticut Gov. Dannel Malloy “We Democrats have nothing against people who’ve earned their wealth. We salute their hard work and good fortune. But slashing what we invest in schools, in roads, in research and development, in clean energy and in the things that protect our most vulnerable just to cut taxes for those at the top—is ridiculous and wrong. “… President Obama and we Democratic governors believe something very different. We believe that a budget is more than just a bunch of numbers: It’s a document that reflects our values. We believe we can—and should—make government leaner, cheaper, and more effective—cutting waste and trimming fat where we can.”

Delaware Gov. Jack Markell

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“When you are a governor, or the president, it’s different. Your shareholders are teachers, construction workers and hardware store owners. And your bottom line is not what goes into your pocket—but what goes into theirs. That’s the difference. When your constituents are your financial shareholders, perhaps it makes sense to take control of a company, suffocate it with debt and get rid of the workers’ pensions. That kind of thing worked for Mitt Romney when he sat in his corporate office. But it won’t work for the country if Mitt Romney’s sitting in the Oval Office.”

“You know, I used to play quarterback just down the road from here at Wake Forest. My dad always told me, ‘Charlie, it takes a cool head to win a hot game.’ Our country is in the middle of a hot game. We face serious challenges, both at home and abroad. Meanwhile, our politics are defined by discord and discontent. Never has it been harder for a president to keep a cool head. … When I look at President Obama, I see a leader with a cool head, a caring heart and an open mind, a president who has demonstrated through his demeanor and through his deeds that he is uniquely qualified to heal our divisions, rebuild our nation and lead us to a brighter future together.”

“We must re-elect the president because he’s standing up for middle-class families and growing an economy that’s built to last. And he’s doing it right here in North Carolina. It starts with education. The president has made schools a top priority. He knows that all parents want their children to have even better opportunities than they had. The president’s education initiatives are helping North Carolina’s schools soar. These investments are spurring education reform and innovation, and strengthening our nationally recognized early childhood education programs. This president gets it on education. He knows that a good education is the difference-maker for every child and is the pathway to success in the global economy.”

CAPITOL IDEAS

Former Republican Florida Gov. Charlie Crist

©AP Photo/J. Scott Applewhite

hot topic | PARTY CONVENTIONS CSG TAKES A LOOK AT THE POLITICAL PARTY CONVENTIONS ...

ELECTION 2012: THE REPUBLICANS Republican governors had the opportunity to put their states and their beliefs in the spotlight at the Republican National Convention to nominate former Massachusetts Gov. Mitt Romney in Tampa, Fla., in August.

New Jersey Gov. Chris Christie

Puerto Rico Gov. Luis Fortuño, 2012 CSG President

“Mitt Romney will tell us the hard truths we need to hear to put us back on the path to growth and create good paying private sector jobs again in America.

“When I took office, I inherited a $3.3 billion budget deficit, the largest of anywhere in the nation. We could not even meet our payroll. We were on the brink of bankruptcy but we did not shy away from our responsibility to lead. We cut government expenses by 20 percent, starting with my own salary. We reduced our deficit 90 percent while continuing to invest in our schools, hospitals and highways. At the same time, we slashed taxes 50 percent on individuals and 30 percent on businesses, the largest tax cuts in Puerto Rico history.

“Mitt Romney will tell us the hard truths we need to hear to end the torrent of debt that is compromising our future and burying our economy. “Mitt Romney will tell us the hard truths we need to hear to end the debacle of putting the world’s greatest health care system in the hands of federal bureaucrats and putting those bureaucrats between an American citizen and her doctor.”

“Guess what? Our private sector, the real economy, began to create jobs again. Imagine if we had national policies that support rather than prevent growth, we’d then be able to truly unleash the engine of prosperity that our country and our people deserve. That’s what Mitt Romney and Paul Ryan will do for America.”

Virginia Gov. Bob McDonnell “Look at the results of Republican policies in the states. “In states with Republican governors, the average unemployment rate is a full point lower than in states with Democratic governors. “Republican governors lead seven of the 10 states with the lowest unemployment rates, and 12 of the 15 states ranked best for business. “While the Obama administration borrows over $3 billion a day just to keep the lights on, Republican governors have closed $65 billion in budget shortfalls, without raising taxes.”

New Mexico Gov. Susana Martinez Oklahoma Gov. Mary Fallin

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“President Ronald Reagan once said that ‘there are no great limits to growth, because there are no limits of human intelligence, imagination and wonder.’ “He believed, like I believe—like Mitt Romney and Paul Ryan believe—that the potential for America is limitless. “We can—and we will—overcome any economic challenge IF government lets go of the regulatory chokehold zapping the air out of the economy and deflating the spirits of our entrepreneurs. “We need a president who will applaud and encourage those who work hard to pursue their dreams … to reach their potential … and, in doing so, make themselves and America better and stronger. “That man is Mitt Romney.”

“This election should not be about political parties. Too many Americans are out of work, and our debt is out of control. This election needs to be about those issues (like welfare, the size of government and taxes) and it is the responsibility of both parties to offer up real solutions and have an honest debate. “In New Mexico, I inherited the largest structural deficit in state history, and our legislature is controlled by Democrats. We don't always agree, but we came together in a bipartisan manner and turned that deficit into a surplus. And we did it without raising taxes.”

Former Florida Gov. Jeb Bush “Because he is a former governor, Mitt Romney understands that states must lead this national movement (on education). In Massachusetts, Gov. Romney narrowed the gap between students of different races, raised testing standards, and put into place a merit scholarship, the John and Abigail Adams Scholarship, that gives students four tuitionfree years at any Massachusetts public institution of higher learning. He's a champion for bringing hope to education.”

PARTY CONVENTIONS | hot topic

Wisconsin Gov. Scott Walker

Nevada Gov. Brian Sandoval

“Like many places across the country, Wisconsin lost more than 100,000 jobs from 2008 to 2010. Unemployment during that time topped out at over 9 percent. But because of our reforms, Wisconsin has added thousands of new jobs and our unemployment rate is down from when I first took office.

“So I stepped down from a lifetime appointment to make a difference. I ran for governor, was elected and, like Republican governors all across this nation, I chose to make the tough decisions:

“Equally as important, we improved the economic climate for job creators. Today, 94 percent of our employers believe Wisconsin is headed in the right direction. That compares to just 10 percent who thought the same thing two years ago. Elections have consequences!

“On issues like economic development, education reform and redesigning how state government operates.

“What makes America amazing is that there have always been men and women of courage who were willing to think more about the future of their children and grandchildren than they did about their own political careers. Let this be one of those moments.”

“On job creation, and reducing state spending, and eliminating red tape. It hasn't been easy. And we're not through it yet. “But I have put my faith in the people of my great state—because they are the ones who will grow our economy.” © AP Photo/J. Scott Applewhite

“We build things in the Palmetto State. We build planes. We build cars. “We have three of the four largest tire producers in the world and are about to become the number one tire-producing state in the country.

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“But like so many states, we have our challenges, whether they be unemployment or education or poverty. And like so many of my fellow governors, I work day in and day out to try and improve the lives of the people of my state.”

“And ladies and gentlemen, tonight, the greatest moral issue in America today is job creation. We had lost 400,000 jobs. Our people were hurting and our families were hurting as a result of the recession. In Ohio, we were following a policy of tax, spend and duck. And that’s too much of what politicians do. They want to avoid the tough issues. But when we came into power, with my colleagues in the legislature, we took our problems head on. We balanced our budget; that $8 billion deficit was eliminated without a tax increase in the state of Ohio.”

“And not too long ago, The Wall Street Journal said, ‘Anyone still thinking the U.S. has lost its manufacturing chops hasn't been to South Carolina.’ We have so much potential and so much to be proud of.

“I took office in 2011. And when I came into office, we were 48th in the nation in job creation—48th. We had an $8 billion budget deficit, the largest in the history of the great state of Ohio, and we had 89 cents in our rainy day fund. Most toddlers have more than 89 cents in their little piggy banks, let alone what was in our Treasury. Our credit rating was headed down the drain. And we were—we had suffered a loss of 400,000 jobs.

CAPITOL IDEAS

South Carolina Gov. Nikki Haley

Ohio Gov. John Kasich

hot topic | BALLOT INITIATIVES

Taxing by Ballot More than three decades after California voters approved Proposition 13 to limit property taxes in the state, voters in North Dakota had the opportunity to take that concept a step further and eliminate their property taxes altogether. “There were a lot of property owners that were upset about the growth of their property tax rates and the size of government,” said North Dakota House Speaker David Drovdal. That led to a ballot initiative in June that would remove the property tax entirely in North Dakota; it would have been the first state in the country to do so. As it turns out, North Dakotans were more worried about the potential consequences of such a move than their bottom lines—more than 76 percent voted against the measure. The use of ballot initiatives to decide big fiscal issues—like placing limits on tax rates

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or raising them—has been a popular strategy in recent years, for both legislators who would not have to make possibly unpopular votes and for advocacy groups that see an opportunity to convince voters directly.

Letting Voters Decide

In Arkansas, Rep. Jonathan Barnett cites the “anti-tax mood” of the public to explain why he pushed for a transportation funding initiative to be placed on the November ballot rather than asking legislators to vote for a tax increase in such a politically volatile atmosphere. “Legislators aren’t willing to make these major tax increase decisions out of a fear of too much fallout at the ballot box,” said Barnett. Barnett said the need to increase funding for infrastructure improvements outweighed the difficulty of breaching the topic

by Jennifer Horne and Jennifer Burnett of a tax increase. “Existing methods of financing highways—the gas tax—are not working anymore. At the same time, the cost of building and maintaining roads has increased,” he said. The Arkansas measure would raise the sales tax by half a cent, with the revenue used to issue bonds to fund up to $1.8 billion in road construction and improvements, including the creation of a four-lane highway system throughout the state. The measure is projected to raise $160 million annually for state highways and $34 million each for cities and counties. Barnett worked hard to convince legislators, including his fellow Republicans, to let the people decide whether to increase the tax. “What’s more American than letting people decide?” he said.

BALLOT INITIATIVES | hot topic

The California Conundrum It’s not just legislators who see the value in asking the public to vote on fiscal and tax measures. After the South Dakota legislature made significant cuts to both education and Medicaid in 2011, advocates drafted an initiative to raise the sales tax by 1 cent, with the additional revenue going to K–12 education and Medicaid providers. Supporters estimate the tax increase would raise $175 million annually. Andy Wiese, campaign director for Moving South Dakota Forward, the coalition that sponsored the measure, believes the accountability built into the ballot measure will help to increase support among voters. The new revenue is not mingled with the general fund. “They realize that this revenue is going to go where we intend it to go—to education and Medicaid providers,” said Wiese. “The education money will go directly to school districts on a quarterly basis. The Medicaid money will be distributed directly to providers. This should give voters comfort that the money will only be used for education and Medicaid.”

Starting a Conversation

A positive byproduct of taking budget concerns to the ballot is increased discussion between the public and legislators on fiscal issues. In North Dakota, although the property tax initiative failed, the process started a bigger conversation with the public about property tax issues. When an initiative is approved to appear on the ballot in North Dakota, the legislature is required to hold hearings and issue a report analyzing the potential impact of the measure. “We learned from the hearings that one of the reasons that the initiative made it on the ballot in the first place is that people felt

that big businesses were getting an unfair advantage over the mom and pop stores from property tax breaks given out at the local level,” said Drovdal. “Based on the feedback from those hearings, we ended up passing legislation to limit some of those tax breaks.” Reports issued by the legislature also showed that local governments rely heavily on property taxes. If the property taxes were removed, the state would have to step in with funds to replace the lost tax revenue so schools and police departments could continue to function—a fact that ultimately led to the ballot’s failure. “A large coalition of businesses and residents mobilized to make sure people realized that eliminating the property tax meant taking away a lot of control from local governments and giving it to the state,” said Drovdal. In Arkansas, Barnett hopes the effort to educate the public on the need for increased transportation funding will spark a greater understanding of the challenges facing the state. “If the campaign explains what the program does and why it’s important, voters will use that knowledge and get to choose,” he said. “If they choose not to do it, it’s OK, but it’s going to set us back years on highway maintenance and construction, things that desperately need to be done.” Wiese agrees the ballot process can be used as a platform not just for making decisions, but also for educating the public. “There is value in taking our message directly to voters and having the opportunity to really talk about the need for increased revenue with the entire state,” he said.

Learn more about other states’ ballot measures at the Capitol Ideas website.

TAXES ON THE BALLOT Andy Peterson, president of the North Dakota Chamber of Commerce, left, spoke at a February news conference held by opponents of a proposed constitutional amendment that would 29 abolish property taxes in North Dakota at the chamber’s headquarters in Bismarck. Peterson was a spokesman for a group of organizations that believed the amendment, called Measure 2, would strip local governments of control over their finances. The measure failed at the ballot box. California Gov. Jerry Brown, above, spoke in August to supporters at City College in San Diego on the first day of school to lobby for Proposition 30, which will be on the November ballot and asks for a small tax on wealthy individuals to help finance education spending.

» NOV / DEC 2012

—Arkansas Rep. Jonathan Barnet t

California voters will decide two competing ballot measures that focus on taxes. How Californians vote on the measures will create a number of different scenarios. Proposition 30 would temporarily increase the state sales tax and the personal income tax rate on individuals earning more than $250,000 a year and couples earning more than $500,000 a year. The money generated, estimated from $6 billion to $9 billion annually, would be spent on general state services, including public education. Rejection of the initiative would trigger $6 billion in spending cuts, including $5.3 billion cut from public schools. A competing measure, Proposition 38, would temporarily raise state income tax rates, increasing revenues by approximately $10 billion annually. The majority of the revenue would be earmarked for public schools and early childhood development programs. If both measures pass, the measure that receives more votes would take effect. If Proposition 38 passes and Proposition 30 fails, the automatic spending cuts would still take effect.

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“What’s more American than letting people decide?”

CSG YEAR IN REVIEW | hot topic © Laughing Stock/Corbis

INSIGHTS AND INNOVATIONS 31 CAPITOL IDEAS

» NOV / DEC 2012

Kansas Senate Majority Leader Jay Scott Emler, the 2012 chair of The Council of State Governments, believes states should work together on economic development. His Chair’s Initiative this year focuses on business incentives that may help one state, but really don’t help the overall U.S. economy. “We want to get down to how states can work together to grow the overall pie, rather than fighting about how we are going to divide up the slices,” he said. CSG also recognized distinguished service to the states and brought new leaders together for the 2012 Henry Toll Fellowship Program.

hot topic | CHAIRMAN’S INITIATIVE © Images.com/Corbis

GROWING THE PIE INSTEAD OF SLICING IT Working Group Explores State Incentives to Attract Business by Jennifer Burnett

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omic development on ec e at st st be e th at th be l “It may wel on climate ti ea cr b jo l al er ov s it g in ov program is impr own new jobs rather its ow gr d an s ha it bs jo e th to keep aking.” than relying on ad hoc deal-m in Schimminger —New York Assemblyman Rob

CHAIRMAN’S INITIATIVE | hot topic

In January 2012, aerospace manufacturing giant Boeing announced it would be closing its facilities in Wichita, Kan., which meant the loss of at least 2,000 jobs in the state. “That’s a big blow to our state,” said Kansas Senate Majority Leader Jay Scott Emler. “Especially now, when unemployment is such a critical issue, losing that many jobs really hurts.” Closing the Boeing plant could mean $1.5 billion in wages won’t be going to Kansas workers over the next 10 years, according to Jeremy Hill, director of the Wichita State University Center for Economic Development and Business Research. Instead, some of those jobs will be moved to Boeing facilities in other states, like Oklahoma, Washington and Texas. The decision to leave Kansas after 80 years could be traced to one simple reason. “It came down to the cost of doing business,” Hill said. Although tax and financial incentives— like tax credits for job creation and loans to build new facilities—are sometimes used to lure a company from one state to another, Boeing was not motivated by such an offer in this case. “It appears that tax and financial incentives didn’t really play a role in Boeing’s decision to move out of Wichita,” Hill said.

The Business Decision

—Kansas Sen. Jay Scott Emler, 2012 CSG Chair approaching economic development. “By no means do we expect to find a magic bullet,” said New Jersey Deputy Majority Leader Reed Gusciora, a member of the working group, “however, we all want to go home motivated to find new ways to foster economic growth.” A crucial issue being addressed by the working group, and one of the chief reasons behind its establishment, is the use of tax and financial incentives by states. Traditionally, many state economic development programs have relied heavily on incentives as a key policy lever to induce job creation. In some cases, that strategy has led to bidding wars among states, each offering increasingly more lucrative tax and financial deals for companies to relocate. “When states outbid each other using incentives, there really isn’t a net gain—jobs just move from one state to another and the pie doesn’t grow,” said Emler. “We want to get down to how states can work together to grow the overall pie, rather than fighting about how we are going to divide up the slices.” That is, specialized incentives may benefit one state, but the group’s goal is to find ways for states to collaborate for the benefit of all involved.

The Role of Incentives

Although competition among states spurred by specialized incentives may produce big headlines, as Boeing’s move out of Kansas shows, incentives may not play as big of a role in siting decisions as state policymakers think. “While we take business incentives into consideration when making location or expansion decisions and we need to leverage those existing incentives to remain competitive, there are a lot of other factors that also go into

the decision-making process,” said working group member Dan Garry, director of public issues management for 3M Company. For example, Garry said the capacity and availability of a state’s workforce is one of the factors 3M looks at when evaluating a particular location’s desirability. “That is becoming more and more of an issue for us,” he said. Ultimately, Garry said, whether a company grows and creates more jobs comes down to whether there is demand for the product or service that a company produces. “For 3M, market demands and business needs are the primary drivers for our investment decisions,” said Garry. “It’s important to remember that job creation is an outcome of business growth. If we are successful and we are growing, we will be retaining and growing jobs.” The group agrees the path forward will include a combination of tactics, but focusing on job growth and retention in areas where a state has a particular competitive advantage is likely a more solid bet than creating incentives to entice companies from other states in unrelated fields. “It may well be that the best state economic development program is improving its overall job creation climate to keep the jobs it has and grow its own new jobs rather than relying on ad hoc deal-making,” said New York Assemblyman Robin Schimminger, a working group member. Whatever the group ultimately recommends, one theme already has emerged from the discussion: Collaboration and cooperation among states is paramount to success. “It’s crucial that we work together to find solutions so that we can remain competitive in the global economy,” said Emler.

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—Dan Garry, Director of Public Issu es Management for 3M

”Job creation is an outcome of business growth. If we ar e successful and we are grow ing, we will be retaining an d growing jobs.”

33 CAPITOL IDEAS

Getting to the bottom of why companies like Boeing decide to relocate from one state to another is one of the key questions being explored by a new working group led by Emler, The Council of State Governments’ 2012 chair, as part of his Chairman’s Initiative. “We want to understand more clearly what goes into a business’s decision to relocate or expand so that we can establish more effective economic development policies,” said Emler. “Because right now, creating jobs—and making sure we are using our resources wisely in doing so—is our number one priority as state policymakers.” The 18-member working group is comprised of state legislators, state economic development agency officials and private sector members from across the country. The group is designed to bring together a number of key stakeholders that represent a diverse set of perspectives to investigate new ways of

”We want to get down to how states can work together to grow the overall pie, rather than fighting about how we are going to divide up the slices.”

hot topic | A MESSAGE FROM THE CSG CHAIR

By Kansas Senate Majority Leader Jay Scott Emler 2012 CSG National Chair

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Photo by Aaron Barna

President Harry Truman once said, “If you want a friend in Washington, get a dog.” But for 80 years, leaders in state capitols have known if you want a friend, call on The Council of State Governments. For me, CSG is all about friendship. Through my involvement in both CSG’s Midwestern Legislative Conference and CSG’s national policy work, I have come to think of CSG as family. As the 2012 national chair, my pride in the work of CSG and its members has only grown. Today, CSG is stronger than ever and I am convinced CSG remains one of the most cost-effective tools state leaders have to create meaningful change and lasting solutions. Each state, commonwealth and territory supports CSG through the payment of state dues. The amount of these dues is established by a formula approved by the states. Since its founding, CSG has always been a community of the states. CSG isn’t an organization separate from the states; it is where the states come together. CSG’s scope of activities and services is broad, but its mission is simple: To help today’s state leaders successfully navigate the future. We do that by creating forums where regional and national issues can be explored, by discovering and sharing proven solutions that work, by working across party and state lines and with all three branches of state government, by building leadership skills, and by engaging with international and private sector partners to expand our capacity to make a difference. We also advocate for the states in Washington, D.C. CSG is built on the belief that when state leaders come together, good things happen. Whether it is creating interstate compacts, regional solutions or interstate cooperation, CSG is an active forum for states to address policy concerns that overlap state boundaries. States working together are often better able than the federal government to address a challenge. CSG is the only association that includes all three branches of state government. This unique structure allows

A MESSAGE FROM THE CSG CHAIR | hot topic

CSG isn’t an organization separate from the states; it is where the states come together. CSG to convene the expertise of the executive, legislative and judicial branches to help states solve problems.

Regional Focus

An enduring strength of CSG is its regional focus. The council maintains four regional offices. The Midwestern Legislative Conference office is located outside Chicago, the Eastern Regional Conference is in New York City, CSG West is in Sacramento and the Southern Legislative Conference is headquartered in Atlanta. Each region maintains its own staff and leadership structure to assure a memberdriven agenda in each region. CSG is rightfully proud of its regional focus—and it puts its money where its mouth is because 60 cents of every dollar collected from states is sent to the regional organization to support programs and services for that region. By supporting four active regions, only CSG brings state leaders with similar priorities and challenges together. Each CSG region also has the ability to adopt resolutions that express the position of that region. CSG does not have a “one size fits all” approach to addressing issues, but instead has the ability to advance unique regional interests.

Solid Information

In our highly polarized world, “facts” are often whatever someone says they are. While that may be convenient, it is a dangerous way to govern. CSG prides itself on providing solid, trusted research and information to state leaders. The Book of the States, the most comprehensive compendium of state informa-

tion, is published annually by CSG. This year we have made previous editions of The Book of the States available online as part of CSG’s Knowledge Center, found at www.csg.org. Members of CSG each year review new state legislation and produce a volume of CSG Suggested State Legislation. This resource provides legislators and staff with useful templates for drafting legislation. Because we are a nonpartisan organization, we don’t recommend model legislation or advocate for its passage. Instead, through Suggested State Legislation, we offer a library of statutory language reviewed by CSG members as a resource to the states. CSG also functions as a technical assistance provider on topics as diverse as education policy, criminal justice and issues relevant to states that share a border with Mexico. These valuable programs, combined with CSG’s commitment to provide direct outreach to the states, enhance CSG’s impact. Developing leadership skills of state leaders is also a hallmark of CSG. The prestigious CSG Henry Toll Fellowship and the regionally based leadership programs remain among CSG’s most popular offerings. I would encourage anyone looking to enhance their leadership ability to apply for these programs. The role of the states in governing is embedded in the DNA of our nation. We do not have a national government; we have a federal government. CSG takes as one of its most important responsibilities the duty to defend and advance the interests of the states in Washington, D.C. The CSG office in Washington stands

ready to assist state leaders in navigating the labyrinths of the federal government.

The Place to Be

During my tenure as CSG national chair, I have championed the meaningful work of a great organization. CSG, as America’s leading association of state leaders, is making a difference. I am proud of my participation in CSG; I know that because CSG exists, the states are able to accomplish more together than they would if each state acted on its own. CSG works. As a legislative leader, a former judge and my state’s deputy director of homeland security, I know firsthand how the work of CSG, its regions and affiliated organizations is advancing the interests of the states. That fact was brought into sharp focus during super storm Sandy. State emergency management directors, trained and empowered, in part, through their work as members of the National Emergency Management Association, linked through an interstate compact, the Emergency Management Assistance Compact, and in many cases, overseeing programs accredited by the Emergency Management Accreditation Program, were prepared to respond. These organizations are all CSG affiliates and housed in CSG’s headquarters. I am proud of all CSG does to fulfill its mission of empowering all of us to achieve excellence. In its 80-year history, CSG has never been stronger or more needed. That is a testament to the leadership of so many who see CSG as the place to be. I have appreciated being able to serve my state, my region, my country and even Canada as CSG’s national chair.

» NOV / DEC 2012

Photo by 346Photography

35 CAPITOL IDEAS

WREATH OF HONOR WASHINGTON, D.C.—Kansas Senate Majority Leader Jay Scott Emler, the 2012 national chair of The Council of State Governments, laid a wreath at the Tomb of the Unknown Soldier at Arlington National Cemetery in Washington, D.C., Sept. 19, 2012. He was accompanied by CSG Executive Director David Adkins, at left in the center photo. The Tomb is guarded 24 hours a day, 365 days a year by specially trained members of the 3rd United States Infantry—The Old Guard.

hot topic | DISTINGUISHED SERVICE AWARDS

Recognizing Distinguished Service to the States The Council of State Governments Distinguished Service to the States Award, the Council’s highest honor, is awarded to outstanding individuals and organizations who have demonstrated a sustained commitment to advancing excellence in state government. The Council of State Governments, founded in 1933, is a not-for-profit, nonpartisan organization of all elected and appointed state and territorial leaders. CSG is dedicated to the mission of enhancing public policy by connecting, informing and empowering state leaders. This mission is realized through a strong regional structure, the involvement of leaders from all three branches of state government, and a valued network of affiliated organizations, partners and private sector associates. The award recipient is presented with a gold medallion featuring a red, white and blue shield, representing our nation, comprised of four stripes, representing the four CSG regions (East, South, Midwest and West) and three stars, representing the three branches of state government.

CSG is proud to recognize with this award those whose distinguished service has made a meaningful and lasting contribution to the community of states.

Texas Rep. Jerry Madden

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t 67 since Has represented Distric al term fin d 2003; in his 10th an Committee Chairman of the House on Corrections g Member of Redistrictin ry and Committee and Judicia ittee mm Co ce en Civil Jurisprud e Center Member of CSG Justic Board of Directors

dge of With his extensive knowle ctices and able pra t bes ice just l ina crim n has developed negotiating skills, Madde and parole ion and passed key probat improved has also He s. icie reform pol ess to acc sing rea public safety by inc expanding nt, tme trea hol alco and drug k into their communities reintegrate offenders bac lly sfu ces oing suc to ties uni opport has participated in ong transitional housing, and through such means as enile justice system. efforts to fix the state’s juv e that would later becom process and legislation t that would jec pro a As a champion behind a for l trai a ze stment, he helped bla and known as Justice Reinve throughout the country of criminal justice policy e fac the nge cha CSG Justice the ped go on to hel has n dde Ma lars over time. save states billions of dol y that few others could. e and programs in a wa pos pur its ne refi ter Cen our first into three segments. In in the Texas legislature focused y aril prim I s. “I can divide my career law n ctio n reform in general ele ctio ele dmark jor lan ma as’ did Tex s we rs, pas yea helped ties for military voters and School ual Virt on improving opportuni as Tex the p elo law. I helped dev judicial campaign finance offender registration ’s laws, setting up a sex ley Ash s pas ped hel rk, Netwo Family Partnership in rse Nu the for g ured fundin mittee on Corrections, program in Texas and sec Com use rs as chairman of the Ho Texas. And in recent yea Whitmire and others to manner with Sen. John I worked in a bipartisan reforms in Texas.” ice just cessful criminal implement our highly suc

H.C. "Pete" Poynter Jr. Government Affairs Retired from AT&T Services Inc. in August after 37 years Member of CSG’s 21st Century Foundation, National Conference Committee and the IGA Committee until his retirement Poynter represented AT&T in regional and national meetings of state government officials where he advocated regulatory and tax reform. He had responsibility for policy initiatives before the National Governors Association, the Southern Governors Association, The Council of State Governments, the National Conference of State Legislatures, the American Legislative Exchange Council and other political groups. A strong advocate for ethics and responsible government, he was one of the founders of NCSL's Center for Ethics in Government. That center is one of his proudest professional accomplishments. Poynter chaired the American Advocacy Project, a collaboration among CSG, NCSL, ALEC, State Legislative Leaders Foundation, Governors' Policy Advisors, American League of Lobbyists and other interested parties. Representatives met to address the issue of the public's lack of confidence in government and several ethics scandals across the country. The discussions resulted in the creation of the Center for Ethics in Government, located on NCSL's campus in Denver. “The Center, led by Peggy Kerns—former minority leader in the Colorado House and member of the Clinton administration's Education Departm ent, is now able to address in an impartial manner the impact of ethics laws, lobbying rules and the role of leadership to prevent or minimize scandals within the system of government,” Poynter said.

DISTINGUISHED SERVICE AWARDS | hot topic North Dakota Sen. Dave Nething Has represented District 12 since

Member of Judiciary and Transpo

1966

rtation committees Member of CSG’s Executive Committ ee and Governing Board

Past president of National Conferen ce of State Legislatures, National Repu blican Legislators Association and Foundation for State Legislatures; past chair and executive committee member of the Western Interstate Commission of Higher Education; Uniform Law Com missioner. Nething has a long tenure in the Nort h Dakota Senate. Less than a deca de after his first election, he was selected to serve as Senate lead er, from 1974 to 1986, and as presiden t pro-tem in 1997–98. His most rewarding service in the Senate has been in enacting appropria te laws to permit development of the state’s natural resources. “These laws involved protection of the environment, setting appropria te tax levels and providing a regulator y framework, which wou ld be fair to both the energy industry and our North Dakota citizens,” he said. “Such legislation continue s to be a work in progress, but over all has led to an expanded economy beneficial to our workforce and our state's financial resources.”

Kansas Senate President Stephen R. Morris

Texas Rep. Jerry Madden Has represented 39th District since 1993

Chair of the Organization, Calendar and Rules Committee; member of Interstate Cooperation, Federal and State Affairs, and Agriculture committees; as well as the Joint Committee on Pensions, Investments and Benefits Member of CSG’s 21st Century Foundation and CSG Governing Board; 1993 Toll Fellow Past president of the National Conference of State Legislatures

Has represented District 25 since 1992; in his seventh term Chairs the Senate Select Committee on Open Government, and serves on the Select Committee on Redistricting; Higher Education; Administration; Transportation and Homeland Security; and Intergovernmental Relations committees Chair of CSG’s 21st Century Foundation; member of CSG Executive Committee and Governing Board; 1998 Toll Fellow

Of the 19 Republican members of the Texas Senate, Wentworth ranks third in seniority. A fourth-generation Texan, he was first elected to the Texas Sena te in 1992 after serving nearly five years in the Texas House of Representatives and nearly six years as a Bexar County Com missioner. Throughout his public service, Wentwor th has been a champion of open government.

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In his mind, his greatest accomplishme nt has been helping young Texans with higher education. The state had a program—the Texas Tuition Assistance grant program—to help young peop le with the cost of higher education when Wentworth joined the Senate 20 years ago. “But it wasn't helping anybody, beca use the legislature had never appropriated any money to fund the program,” he said. He was inspired by a speech about a similar program in Louisiana that had been funded to try to accomplish the same goal in the Lone Star State. “It took three regular legislative sessi ons over a period of six years, a lot of persuading, and bipartisan cooperati on with Sen. Rodney Ellis and Rep. Henr y Cuellar, but we managed to restructu re and then fund the TEXAS—Towar d EXcellence, Access and Success—gran t program,” he said. Today more than 350,000 Texas stud ents have received more than $2.3 billio n in tuition and required fees. A recen t San Antonio Express-News editorial praised it as “one of the most important moves lawmakers have made in recent decades.”

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large natural gas field with some Morris’ Senate district is home to a e tax in the early 1980s to capture oil. The state established a severanc ral deposits in Kansas. Although mine r othe and field revenues from that depleted. Morris authored been has it the Hugoton field is still viable, rance tax into a trust fund for the a bill to place a portion of that seve . The money is intended to help rated gene is county in which the tax high valuation after the minerals are with the transition from a relative an engineering initiative among his and that s rank is fully depleted. Morr lature. legis the greatest accomplishments in , tive because a number of technical He sponsored an engineering initia uates. grad as Kans by filled g bein not high-paying Kansas jobs were the East and West coasts who, after “Job offers were going to people from said. “My thought was if we could he on,” ed mov s, working here a few year pursuing engineering and ents stud increase the number of our Kansas would fill these goodans Kans of ber num ter grea a science degrees, paying jobs.” good job of training engineering While Kansas schools were doing a gh of them. “With the assistance enou students, the state didn’t have ing deans at our state’s top research and counsel of the three engineer ersity of Kansas and Wichita State Univ the , State universities—Kansas plan that would not only expand University—we focused on a 10-year a greater emphasis on science and place also but s, uate engineering grad said. he technology in K–12 schools,”

Texas Sen. Jeff Wentworth

hot topic | 2012 CSG HENRY TOLL FELLOWS

MEET THE 2012 CSG HENRY TOLL FELLOWS

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The Henry Toll Fellowship Program, named in honor of CSG’s founder, is the nation’s premier leadership development program for state officials. Every year, the program convenes in Lexington, Ky., home of CSG’s national headquarters, for one inspiring week of introspection, group dynamics and adaptive leadership training. Designed to help state officials from all three branches learn more about themselves as leaders, how teams function, how to communicate more effectively and how to reignite their passion to govern, the CSG Toll Fellows program brings individual state leaders together in a way that no other program can. Photos on pages 38–39 by Kirk Schlea Photography.

2012 CSG HENRY TOLL FELLOWS | hot topic

FRONT ROW

New York Deputy Comptroller Elliot Pagliaccio SECOND ROW

Connecticut Rep. Lonnie Reed Vermont Rep. Ann Manwaring Connecticut Office of Fiscal Analysis Director Alan Calandro Puerto Rico Speaker’s Office Director Ivan Rodriguez-Seda

West Virginia Sen. Jack Yost Alabama Rep. Jack Williams North Carolina Court of Appeals Judge Cheri Beasley Georgia Rep. Karla Drenner Arkansas Sen. Larry Teague Florida Rep. Alan Williams

Kentucky Administrative Office of the Courts Director Laurie Dudgeon Virginia Department of General Services Director Richard Sliwoski Virginia Secretary of Transportation Sean Connaughton Kentucky Commissioner of Juvenile Justice Hasan Davis Oklahoma Public Safety Commissioner Michael Thompson

Ohio Municipal Court Judge Joyce Campbell Kansas African-American Affairs Commission Executive Director Mildred Edwards Iowa Rep. Dan Kelley Kansas Rep. Gail Finney North Dakota Rep. Karen Rohr Wisconsin Sen. Lena Taylor SECOND ROW

Michigan Governor’s Office Strategic Adviser Gregory Tedder

CSG WEST

Alaska Rep. Dan Saddler Arizona Chief of Staff Scott Smith Nevada District Court Judge Michael Montero

Indiana Secretary of State Chief Legal Counsel Jerry Bonnet Minnesota Department of Management & Budget Commissioner James Schowalter South Dakota Sen. Craig Tieszen Minnesota Commissioner of Administration Spencer Cronk

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Montana Rep. Liz Bangerter

THIRD ROW

SECOND ROW

Nevada Assemblyman Jason Frierson Montana Department of Environmental Quality Director Richard Opper New Mexico Legislative Council Service Director Raul Burciaga

South Dakota Governor’s Office Chief of Staff Dustin Johnson Nebraska Supreme Court Chief Justice Michael Heavican

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Hawaii Rep. Kyle Yamashita Oregon Sen. Jackie Winters Utah Rep. Rebecca Chavez-Houck Arizona Rep. Russ Jones Washington House Deputy Chief Clerk Bernard Dean

Delaware Deputy Secretary of State James Collins Massachusetts Sen. Michael Moore Maryland Delegate Michael Summers Delaware Deputy Attorney General Owen Lefkon

SECOND ROW

FRONT ROW

THIRD ROW

CSG MIDWEST

CSG SOUTH

FRONT ROW

Maine Emergency Management Agency Deputy Director Bruce Fitzgerald Pennsylvania Sen. Mike Brubaker

CSG EAST

Members of the 2012 Toll Fellowship Class by Region; members listed by order in photo.

hot topic | 2012 CSG HENRY TOLL FELLOWS

Favorite Leadership Quote

Leadership Advice from Selected Toll Fellows

Florida Rep. Alan Williams

“An effective leader is one who emphasizes honesty and integrity, listens with sincerity, openly communicates and is not afraid to stand up for the people they represent or for what they believe is right.”

“The ultimate measure of a man is not where he stands in moments of comfort but where he stands at times of challenge and controversy.” —The Rev. Martin Luther King Jr. Kansas African-American Affairs Commission Executive Director Mildred Edwards

—Kansas Rep. Gail Finney

“Leadership develops daily, not in a day.” —John Maxwell Connecticut Rep. Lonnie Reed

“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.”

“Treating everyone, no matter what their station in life, with dignity and respect.” —Virginia Department of General Services Director Richard Sliwoski

—Winston Churchill Minnesota Commissioner of Administration Spencer Cronk

“It is amazing what you can accomplish if you do not care who gets the credit.” —Harry S. Truman

“Effective communication—you can’t expect people to meet your expectations if they don’t know what your expectations are.” —Oklahoma Commissioner of Public Policy Michael Thompson

Ohio Municipal Court Judge Joyce Campbell

“If your actions inspire others to dream more, learn more, do more and become more, you are a leader.” —John Quincy Adams

“When you expect the best from people, you're more likely to get it.” —Pennsylvania Sen. Mike Brubaker

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“The key is to be an example.” —Montana Rep. Liz Bangerter

“No matter what you have been tasked with doing, do it better than it's ever been done before. Strive to go beyond expectations.” — Maryland Delegate Michael Summers

2012 CSG HENRY TOLL FELLOWS | hot topic

“Dare to be different.”

—Vermont Rep. Ann Manwaring

“The key to effective leadership is threefold: establishing positive relationships, knowing your resources and maintaining a sense of humor.” —North Dakota Rep. Karen Rohr

“Lead by example. Hypocrisy erodes credibility. Therefore, it is important to set expectations high and live by those same rules and expectations on a daily basis.” —Washington Deputy Chief Clerk of the House Bernard Dean

“Listening, listening, listening; re alizing that one’s own perspective is just that: your own.” —Utah Rep. Rebecca Chavez-Houck A very special THANK YOU to our 2012 sponsors for generously supporting CSG’s Leadership Development Programs Exxon Mobil— Presenting Sponsor

Kentucky Legislative Research Commission

GlaxoSmithKline

Mylan

Golden Living

Novo Nordisk

Hyatt Regency Lexington

The Procter & Gamble Company

CSG Toll Fellows Graduation Ceremony You’re cordially invited to attend the 2012 Toll Fellows Graduation Ceremony at the CSG National Conference in Austin, Texas.

“Houston, We’ve Had a Problem— Apollo 13: A Successful Failure” Noon–2 p.m. | Sunday, Dec. 2

CSG will begin taking applications for next year’s class Jan. 7, 2013. Stay tuned to www.csg.org for more information!

WWW.CSG.ORG/LEADERSHIPCENTER

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—Virginia Secretary of Transportation Sean Connaughton

CSG 2013 Toll Fellows Program

“Golden rule all the way—treat others the way you want to be treated.”

41 CAPITOL IDEAS

Keynote Speaker: Capt. James Lovell Jr.

straight talk | IN THE FIRST TERM

Straight WHAT WAS ONE THING ABOUT SERVING IN THE LEGISLATURE THAT SURPRISED YOU THE MOST?

RITA SM AR T

Representative, Kentucky

Senator, Arizona

Former County Extension Agent

Elected in 2010

Member of Agriculture and Small nt, Business, Education, Local Governme ic Publ and rs Affai ary Milit , rans Vete Safety committees

THE VAST NUMBER OF ISSUES

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different issues. I had “For me, it was the vast number of … we had revenue and served on the city commission In state government, rs. othe issues and just three or four along with that, go To gs. you have all these many thin rmation. … In the info this all you’re just bombarded with top issues—the the ut abo r media, most people will hea r firsthand in your hea You ons. budget, retirement, correcti not in a committee, then committee meetings. But if you’re mittee meetings or com of you’ve got to read the minutes on issues that date to up you ask fellow legislators to get are going on.”

DON SHOOTER

Elected in 2010

Farmer Chair, Senate Appropriations Committe e; vice chair, Water, Land Use and Rura l Development Committee; member of Natural Resources and Transportatio n, and Water, Land Use and Rural Development committees

THINGS ARE AS THEY SEEM “The thing that surprised me the mos t is that things are as they seem. Pretty much the situation is wha t you would think it would be and people behave as you would think they would behave. … A lot of it didn’t surprise me. There are people who are doing it for the right reason. Ther e are people up here doing it for the wrong reason. … . I thought there would be a lot of Machiavellian stuff and this and that. Mostly, it’s just people up here trying to do what they think is right.”

IN THE FIRST TERM | straight talk

GR EG HA DDAD

Representative, Connecticut Elected in 2010 Former Senate legislative aide

Vice chair, House Commerce Committee; Member of Appropriations and Higher Education committees

CONSTITUENTS RESPECT PLAIN TALK “Soon after taking office, what stru ck me was how realistic and thoughtf ul my constituents have been about the toug h decisions that I had to make as a member of the Connecticut General Assembly. When I had difficult new s to share, whether about programmatic cuts or tax increases, my constituents cons istently encouraged me to focus on solving the budget problems for the long term . Though politicians may not be seen in the highest regard, I found that peo ple respect elected officials who speak plainly and truthfully about the chal lenges we face and prefer real pragmatic solu tions over feel-good substitutes.”

DAN KELLE Y Representative, Iowa Elected in 2010 Realtor and small-business owner 2012 Toll Fellow; BILLD Fellow Member of the Ethics, Agriculture, Natural Resources, Environmental Protection, Education and ranking member on the Administration and Regulations Budget Subcommittee

OPPORTUNITIES TO LEARN ARE AVAILABLE

Elected in 2010 to fill an unexpired term Chevrolet dealer Member of Commerce, Financial Institutions and Insuran ce, Federal and State Affairs committees and the KPERS Select Committee

THE ISSUES ARE COMPLEX

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“The thing that surprised me the most was the com plexity of some of the issues tha t we deal with and the res ear ch that has to be done to ma ke sure we don’t have un int end ed consequences to the leg islation that passes. Oft entimes, (legislation) seems very straightforward on the surface, but when you dig deeper … or you start looking at ho w that legislation is going to int eract with other pieces of legislation or what effects it’s going to have on different con stit uencies, that’s where the real wo rk is. It takes a lot of resear ch and a lot of discussion and a lot of looking at things at diff ere nt angles to really understand the complexity of something tha t may appear to be a very sim ple issue.”

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“I was pleasantly surprised at how many opportunities there are to develop leadership skills and develop your ability to navigate the legislative process offered by organizations such as CSG. … There are a lot of opportunities to learn about the campaign process, but … serving as a legislator is a completely different job than running a campaign. … Another thing that surprised me (was that) it was possible to build good friendships and relationships with fellow representatives in the other party. We hear about partisan bickering and we hear about how the parties don’t know how to work together constantly. I expected my legislative experience to be in line with that thinking.”

JEFF LONGBINE

Senator, Kansas

stated briefly | AFFILIATE & ASSOCIATION NEWS

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AFFILIATE & ASSOCIATION NEWS | stated briefly

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how to | POLL CONSTITUENTS

DEVELOP A PLAN AND MAKE ISSUES RELEVANT John Della Volpe, the director of polling for Harvard’s Institute of Politics, says state leaders should assess the opinions of constituents regularly through a variety of research tools. That information can help policymakers truly serve the needs of their districts, he said, but it’s important to ensure the data collected is representative of all constituents.

PLAN GOOD DATA COLLECTION. While traditional data collection—like focus groups and surveys or telephone polls—still work well, Della Volpe said those two methods are insufficient in the new age of social media. Social media, he said, allow policymakers “to have a constant pulse on what’s happening in their district and throughout the rest of the country. My advice would be to use the traditional tools, but also use the benefit of the data that you can see on the Internet to understand what’s happening within your district.”

HAVE A YEARLY RESEARCH PLAN. Della Volpe said lawmakers should have a plan that includes three elements—annual formal focus groups or informal town meetings; surveys of constituents; and regular monitoring of the most relevant online conversations in the community. Professionally run focus groups can provide better information than informal groups and can combine with surveys to give a qualitative assessment of what is happening in the community, which he says is incredibly important. News feeds and other topic related news strings on the Internet can allow policymakers to “follow the conversation on what is happening in the local news, as well as on the blogs and websites and Twitter, etc.”

IDENTIFY KEY CONSTITUENCY GROUPS. Della Volpe said policymakers should strive to ensure they are listening to more than just the most vocal members of their community. He suggests mapping the different stakeholders within a community or district. For instance, depending on the issue, policymakers may want to talk to small-business owners, senior citizens, parents with young children getting into the education system, parents of older children dealing with high school or college issues, and local activists. He adds policymakers should always seek the advice of young members of the community. “That’s a constituency that kind of falls through the cracks and I think it’s incredibly important that folks engage with that group as well.”

CREATE A GOOD SURVEY. The apparatuses for conducting surveys online are easier and cheaper than ever to use. But Della Volpe said if policymakers have never created a survey, they should review other publicly available surveys to learn about question design. “Make sure the questions aren’t loaded,” he said. The questions should have choices—yes or no, approve or disapprove type answers. “There’s certainly a lot of science to polling in terms of the methodology related to sampling, but there’s also a lot of art in terms of the way the question is worded.”

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PUT ISSUES INTO CONTEXT. Too often, Della Volpe said, pollsters will interrupt someone’s dinner and expect them to talk for 15 minutes about a variety of public policy issues the average person may not have considered. “Respect the constituent; ask relevant questions in a way that frames the issue into context of their overall lives,” he said. “If you can do that, not only are you collecting solid public opinion data, but you’re also learning a lot about your constituents that can help you become a better representative.”

UPCOMING MEETINGS | on the road

National and Regional Meetings Registration and application deadlines may apply. Visit www.csg.org/events for complete details.

more information, visit: www.csg.org/events.  For

NEMA—2013 Mid-Year Emergency Management Policy and Leadership Forum March 18–23, 2013 | Alexandria, Va.

CSG West— 13th Western Legislative Academy Nov. 13–16 | Colorado Springs, Colo. CSG West—66th Annual Meeting July 30–Aug. 2, 2013 | Las Vegas, Nev.

NASPE—2013 Mid-Year Meeting Jan. 25–27, 2013 | Washington, D.C. APPA—2013 Winter Training Institute Jan. 13–16, 2013 | Phoenix, Ariz.

NASFA—2013 National Conference and Resource Expo June 9–12, 2013 | San Diego, Calif.

CSG Southern Legislative Conference— 67th Annual Meeting July 27–31, 2013 | Mobile, Ala.

CSG Eastern Regional Conference— Annual Meeting Dec. 6–9, 2013 | San Juan, PR CSG AFFILIATES APPA (American Probation and Parole Association) | www.appa-net.org/eweb/ NASPE (National Association of State Personnel Executives | naspe.net NEMA (National Emergency Management Association) | nemaweb.org NASFA (National Association of State Facilities Administrators) | www.nasfa.net/

Learn the Implications Of the 2012 Elections

» NOV / DEC 2012

Time magazine named Allen one of the top 140 Twitter feeds shaping the day’s debate, calling him “the Virgil of the beltway, leading the rest of us hapless Dantes through the inferno of America's political universe.” The New York Times Sunday magazine cover story in April 2010 dubbed Allen, “The Man the White House Wakes Up To.” Allen is also the creator of the daily newsletter, Morning Money, which gives readers the political intelligence on the intersection of Washington and Wall Street; it's a must read for everyone from cabinet secretaries to CEOs of the Fortune 500 companies.

With the nation’s state government workforce still feeling the effects of the fiscal crises, the National Association of State Personnel Executives Mid-Year Meeting will bring together the states’ top human resource management officials for peer-to-peer discussion on the tough challenges facing state government’s most important asset—its employees. Top discussion items will include employee engagement and morale, HR training and development, civil service reform, classification and compensation strategies, and employee benefits. The meeting is scheduled for Jan. 25–27, 2013, in Washington, D.C. For more information, visit www.naspe.net.

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Mike Allen, the chief political correspondent for Politico, will discuss the implications of the 2012 elections from noon to 2 p.m. Saturday, Dec. 1, during The Council of State Governments National Conference in Austin, Texas.

NASPE Members to Discuss Challenges Facing State Government

shout out | ILLINOIS REP. ELAINE NEKRITZ

ELAINE NEKRITZ Illinois State Representative

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Elaine Nekritz has represented the northern part of Chicago in the Illinois House of Representatives for a decade. While her focus is squarely on her constituents, Nekritz, a 2004 BILLD Fellow, has the interests of her entire state in mind when she’s in the House chambers. She is dedicated to changing the way the state does business and strengthening state finances, both of which would help all Illinois residents. But Nekritz knows change doesn’t always come easy. “The largest obstacle facing state legislators over the past few years has been learning how to transition from the ‘business as usual’ mindset into finding new, efficient ways to move Illinois forward,” she said. She offers this advice to incoming legislators: “Listen. Learn. Be true to your principles. But most of all, be bold.”

Do you know someone in state government who deserves a shout out? Email Mary Branham at mbranham@csg.org.

more on Elaine Nekritz,  For visit: capitolideas.csg.org.

CSG ASSOCIATES

Make Great Things Happen CSG appreciates the following companies and organizations for their membership in the CSG Associates Program: 1-800 Contacts, Inc.*

Bank of America

Genentech

Medtronic, Inc.

QuadMed

3M Company

Bayer HealthCare

General Electric Company

Merck & Company, Inc.

Reckitt Benckiser Pharmaceuticals

Abbott Laboratories

Biogen Idec

General Motors

Microsoft Corporation

Air-Conditioning, Heating, and Refridgeration Institute (AHRI)

Biotechnology Industry Organization (BIO)

GlaxoSmithKline*

Molina Healthcare

Allergan, Inc.

Blue Cross and Blue Shield Association

Global Automakers

MultiState Associates, Inc.

Global Intellectual Property Center— U.S. Chamber of Commerce

Mylan

Alpha Natural Resources Altria Client Services, Inc.* Alzheimer’s Association American Bankers Association American Beverage Association American Chemistry Council American Coalition for Clean Coal Electricity (ACCCE) American Dental Association American Diabetes Association American Electric Power American Forest & Paper Association American Fuel & Petroleum Manufacturers (AFPM)

Boehringer Ingelheim Pharmaceuticals, Inc. Bridgepoint Education Capital One

Grocery Manufacturers Association

Cargill

GTECH Corporation

Chevron Corporation

Healthcare Distribution Management Association

Citigroup Inc. Comcast Consumer Healthcare Products Association Coventry Health Care CropLife America CSL Behring CTIA—The Wireless Association

American Nurses Association

CVS Caremark

American Petroleum Institute

Daiichi Sankyo

American Society of Civil Engineers

Dell Incorporated

AMERIGROUP Corporation Amway Global

Google

Cardinal Health

American Gas Association

American Specialty Health, Inc.

Golden Living*

Dow AgroSciences, LLC DuPont Edison Electric Institute

AOL, LLC

Eisai Corporation of North America

Archer Daniels Midland (ADM)

Endo Pharmaceuticals, Inc.

Ash Grove Cement Company

Esri*

Astellas US LLC**

Express Scripts Inc.

AstraZeneca LP*

Exxon Mobil Corporation

AT&T*

Feld Entertainment

Avon Products, Inc.

Forest Laboratories

Hospital Corporation of America Illinois Tool Works, Inc. Institue for Building Technology and Safety (IBTS) Institute of Scrap Recycling Industries, Inc. (ISRI) International Bottled Water Association (IBWA)

National Association of Home Builders (NAHB) National Beer Wholesalers Association National Cable & Telecommunications Association

Reed Elsevier Reynolds American* Salt River Project Securities Industry and Financial Markets Association (SIFMA) State and Federal Communications, Inc. State Farm Mutual Auto Insurance Companies Stateside Associates

National Community Pharmacists Association

Sunovion Pharmaceuticals, Inc.

National Council of State Boards of Nursing, Inc.

Takeda Pharmaceuticals North America, Inc.

National Education Association*

The American Institute of Architects

National Electrical Manufacturers Association (NEMA)

The Carpet & Rug Institute

National Restaurant Association

The Home Depot The Procter & Gamble Company* Toyota Motor Sales, U.S.A., Inc.

International Paper

National Rural Electric Cooperative Association

Intuit*

Nissan North America, Inc.

Unilever United States, Inc.

Johnson & Johnson

Norfolk Southern Corporation

United Parcel Service (UPS)*

Koch Companies Public Sector, LLC

Northeast Utilities

Visa

Kraft Foods Global

Novartis Pharmaceuticals Corporation

LifePoint Hospitals

Novo Nordisk Inc.*

Lilly USA LLC

Nuclear Energy Institute

MAXIMUS, Inc.

Oasis Legal Finance

McDonald’s Corporation

Onyx Pharmaceuticals

McLane Company, Inc.

Philips Electronics North America

Mead Johnson Nutrition MedImmune, Inc.

PhRMA* Purdue Pharma L.P.

THANK YOU !

Toy Industry Association, Inc.

Walgreen Co. Wal-Mart Stores, Inc. Wellcare Health Plans, Inc. Wells Fargo & Company Williams Yahoo! 21st Century Foundation Trustee* Global Development Fund Member **

The Council of State Governments 2760 Research Park Drive P.O. Box 11910 Lexington, KY 40578-1910

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Capitol Ideas | 2012 | Issue 6 | Year in Review

Articles inside

POLL CONSTITUENTS

IN THE FIRST TERM

DISTINGUISHED SERVICE

PARTY CONVENTIONS

THE VALUE OF CSG

CHAIRMAN’S INITIATIVE

BALLOT INITIATIVES

While the U.S. Supreme Court dealt with highprofile issues like health care and immigration laws in 2012, the 2013 session will include state-related cases that address stormwater runoff, according to Lisa Soronen, executive director of the State and Local Legal Center

LAME-DUCK CONGRESS

STATE HOUSE TO CAPITOL HILL

SOUTH

SEQUESTRATION

SUPREME COURT PREVIEW

WEST

MIDWEST

FISCAL CLIFF

EAST