Surpluses, Social Issues Mark 2006

By: - December 26, 2006 12:00 am highlights significant state policy developments and trends each year in its State of the States report, which will be available in early January. In the first of a series of excerpts from the publication, we look at state politics.

Statehouses awash in surpluses ventured into new projects in 2006, from first-in-the-nation preschool for all 3-year-olds in Illinois to a space pad in New Mexico. States also made strides on issues that stymied Congress, including health care, immigration, the minimum wage and global warming.

Most in vogue in the 44 states that held regular legislative sessions were measures to hike the minimum wage, condone use of deadly force in self-defense and restrict local government’s power to condemn private property. Legislatures in more than half the states also hustled through a ban on anti-gay picketers stalking U.S. soldiers’ funerals.
But some of the headlines from state capitols didn’t center on policy-making. In an election year that heightened the usual partisan tensions, ethics issues were raised about governors in Illinois, Kentucky and Wisconsin, and the FBI raided legislative offices in Juneau, Alaska.
All but a few states faced the happy dilemma of how to spend unexpected sums of money as a healthier U.S. economy pumped up revenues to their highest level in six years.
Utah, Washington state and Wyoming grappled with projected surpluses of at least $1 billion.
Uses of unexpected revenues

1. K-12 education 24 states
2. Higher education 20 states
3. Replenish rainy day funds 19 states
4. Medicaid 14 states
5. State employee salaries
and benefits
14 states
6. Other capital projects 14 states
7. Corrections 11 states
8. Highway projects 10 states
9. Unfunded pension
8 states
10. State aid to local govern 6 states

With extra money in their coffers:

• Florida slashed taxes by nearly $300 million.
• Illinois spent $135 million to create the nation’s first statewide preschool program for both 3- and 4-year-olds.
• Minnesota approved measures to build a $522 million baseball stadium for the Minnesota Twins and a $248 million football stadium for the University of Minnesota.
• New Mexico earmarked $762 million for construction projects, including $100 million to build a commercial spaceport that one day could offer space tourism.
• New York agreed to nearly $1 billion in grants and tax breaks for a computer chip manufacturing plant in the northeastern part of the state.
• Wyoming cut $100 million in taxes by eliminating the sales tax on groceries and approved $2.1 billion in new education funding – a 24 percent increase that could boost it to first or second in the nation in per-pupil spending.

Where Congress Gridlocked

While Congress failed to raise the minimum wage above the $5.15 hourly rate set in 1997, 11 legislatures and voters in six states in 2006 boosted wage floors above the federal minimum. Twenty-nine states now require businesses to pay workers more than $5.15 an hour. The new Democratic leadership in Congress has pledged to raise the minimum wage in the rest of the country.
With the number of Americans without health insurance nearing 47 million, states also took groundbreaking steps to address the nation’s broken health care system.
Moving toward universal coverage, Massachusetts became the first state to require residents to buy insurance and threatened companies with fines of $295 for each worker not offered coverage. Vermont followed with a plan requiring private insurers to offer health coverage for primary and preventive care under the oversight of a state commission.
California Gov. Arnold Schwarzenegger (R) vetoed what would have been the nation’s first publicly financed universal health care system but vowed to make covering the uninsured a major priority in his second term.
In a state-led backlash to illegal immigration, 33 states enacted a record 78 immigration-related laws, according to the National Conference of State Legislatures (NCSL). Arizona, Colorado and Georgia passed the toughest measures while Congress shelved President Bush’s proposal to overhaul U.S. immigration policy and instead opted to build a 700-mile fence on the U.S.-Mexico border.
Georgia cut off illegal immigrants’ access to public services and will impose strict sanctions on employers who hire illegal aliens in 2008. In a special session on immigration, Colorado legislators voted to require proof of residency for state services and to target employers who hire illegal aliens. Colorado voters approved two additional anti-immigration measures on Election Day.
In Arizona, which sees the largest volume of illegal crossings from Mexico, Gov. Janet Napolitano (D) vetoed a host of anti-immigration bills. But the Republican-controlled
Legislature retaliated by placing four measures on the November ballot; all were approved. The most controversial builds on a 2004 voter-approved law cutting off state social services for illegal aliens, additionally barring day-care funding and in-state college tuition.
Nebraska lawmakers, however, went the other direction and, over the objections of Gov. Dave Heineman (R), became the 10th state to allow illegal immigrants to pay in-state college tuition rates.
On the environment, California took the nation’s lead in fighting global warming with a plan to force industries to cut greenhouse gas emissions, including carbon dioxide, 25 percent by 2020. Seven Northeastern states also have a pact to curb pollutants blamed for global warming, aiming to cut power-plant emissions 10 percent by 2019. The Bush administration has resisted mandatory reductions of gases blamed for climate change.
Abortion, Gay Marriage
Abortion and gay marriage attracted controversy in several legislatures, but voters had the final say.
South Dakota lawmakers touched off a national tempest by passing a strict abortion ban aimed at setting up a legal challenge to Roe v. Wade , the 1973 U.S. Supreme Court ruling legalizing abortion. South Dakota voters, however, threw out the law, which would have made it a felony to help a woman end her pregnancy, except to save her life.
In California and Oregon, voters rejected abortion measures similar to those on the books in 35 states requiring parents to be involved if a minor seeks an abortion.
For the first time, a state also rejected a ballot initiative to ban same-sex marriage. Arizona voters refused to add a prohibition against gay marriage to their state constitution, even as seven other states- for a total of 27 nationwide – adopted constitutional bans on Election Day.
New Jersey lawmakers in December adopted civil unions as an alternative to same-sex marriage. The action was a quick response to an Oct. 25 state Supreme Court order to provide equal legal rights for gay couples, either through civil unions as in Vermont and Connecticut or through same-sex marriage as in Massachusetts.
In Massachusetts, the only state where same-sex weddings now are permitted, outgoing Gov. Mitt Romney (R) in November asked the state’s highest court to intervene to force the Legislature to put a gay marriage ban on the 2008 ballot. Lawmakers had used parliamentary maneuvers to avoid putting the ban to a statewide vote.

Pro-Gun Laws and Other Trends

A groundswell of 14 states copied a year-old Florida law, advocated by the National Rifle Association, that expands the rights of crime victims to fight back with deadly force without threat of later prosecution or lawsuits. Ten states enacted another pro-gun law, inspired by the aftermath of Hurricane Katrina, that bars law enforcers from confiscating weapons during declared emergencies or natural disasters.
News of sensitive personal data being lost or stolen led Delaware, Iowa and Maryland to create “identity theft passport programs” to help consumers whose credit cards and other information were stolen and used illegally. In addition, at least 15 states enacted laws allowing consumers to put security freezes on their credit reports, bringing to 26 the total of states with laws to prevent credit-reporting companies from releasing information without consumers’ consent, according to NCSL.
In first-of-its-kind legislation, California took steps to protect children in foster care from having their identities purloined by con artists using the youngsters’ names to take out credit and phone cards.
While the housing market may have cooled, the decade’s spike in real estate values added to the sting of property tax bills. Arizona, New York, Pennsylvania and Rhode Island responded by cutting property taxes. A few others swapped lower property taxes for increases in sales or other state taxes.
A “property tax swap” was the solution to a six-day shutdown of New Jersey state government last July. The nation watched the drama as Gov. Jon S. Corzine (D), in his first year after quitting the U.S. Senate, shuttered Atlantic City casinos, closed state parks and furloughed 45,000 state employees as legislators argued over how to balance the budget and cut property taxes, the highest in the country. Corzine secured a 1 percent sales tax increase, with half the new revenue earmarked for property relief.
Heightening tensions in a year in which 36 governors’ seats and 6,119 legislative posts were on the ballot, moves to beef up voter identification stirred legal controversy. New laws in Georgia and Missouri requiring voters to show a government-issued photo ID were struck down before Election Day. But the U.S. Supreme Court intervened a week before the election to reinstate Arizona’s 2004 voter-approved ID requirements. And Indiana piloted its 2005 law – the toughest in the country – requiring voters to show a government issued photo ID with their address and signature.
Precedents and Popular Policy
In other significant 2006 developments:
• Thirty-one states – by legislation or ballot measures – sharply limited government’s powers to take private land through eminent domain for economic development, according to NCSL. States were reacting to a 2005 U.S. Supreme Court ruling that let a Connecticut town raze homes to build a shopping center. Ironically, Connecticut created an eminent domain ombudsman, but failed to enact sweeping legislation.
• Indiana raised $3.8 billion for new road projects by leasing its 157-mile state-run Indiana Toll Road to a Spanish-Australian consortium.
• Illinois lawmakers cleared the way for Chicago to lease downtown Midway Airport to private investors.
• Hawaii dumped the nation’s only cap on wholesale gasoline prices, eight months after the Legislature’s futile attempt to control price spikes spawned by the Gulf Coast hurricanes.
• North Carolina created the country’s first judicial panel to investigate credible claims of innocence by convicted felons, with the possibility of overturning convictions.
• Maryland’s General Assembly, in a move aimed at Wal-Mart, overrode Republican Gov. Robert Ehrlich’s veto to enact the first state law to require large employers to bolster employee health benefits, but a federal court overturned it.
• Alaska re-criminalized marijuana, but the measure faces legal challenge.
• Georgia let public schools offer courses on the Bible, while South Carolina said its schools could offer credit for religious courses taken off campus.
• Maine banned the sale of wireless phone records after Internet brokers in several states violated privacy standards.
• Nebraska divided Omaha’s largest public school district into what critics say are three new, racially distinct districts that revive the specter of segregated schools.
• West Virginia’s new underground coal mine safety law, enacted soon after the Sago Mine explosion that killed 12 miners, served as the blueprint for federal legislation that
President Bush signed June 15.
• Connecticut will require new cars by 2009 to have labels showing their greenhouse gas “scores” based on federal ratings on environmental friendliness. Motorists will pay an additional $5 registration fee.
• A free-speech legal case is springing out of laws passed by 27 states, according to NCSL, to ban anti-gay picketers at memorial services for U.S. soldiers killed in Iraq or
Afghanistan. The protesters, primarily from a Topeka, Kan., church, say the deaths of U.S. troops are God’s wrath for the country’s sanctioning of homosexuality.
Post-Katrina Action
The nation got a break from Mother Nature. No hurricanes struck the United States in 2006, but the Gulf Coast still was recovering from devastating Hurricane Katrina in
August 2005.
Louisiana devoted a special session to storm recovery. Gov. Kathleen Blanco (D) pushed through a measure merging southeast Louisiana’s hodgepodge network of levee boards into two boards, one for each bank of the Mississippi River, and won permission to streamline the government of New Orleans. In response to the death of thousands of pets after Katrina, the state ordered creation of a unique identification system so pets and owners can be reunited after emergencies.
Louisiana voters weighed in, too, amending the state constitution to devote any increase in federal royalty payments from offshore oil drilling to post-Katrina coastal restoration and levee projects.
The Mississippi Legislature continued Katrina recovery efforts by rebuilding public utilities, offering grants to homeowners and cracking down on home-repair fraud. In a
September special session that lasted only two hours, lawmakers cut the sales tax on modular homes – sometimes called Katrina cottages – from 7 percent to 3 percent to help
Katrina victims resettle.
Election-Year Ethics
Ethical issues heightened the drama in state capitals. In Alaska, the FBI raided the Juneau offices of several legislators, looking for ties to a large oil-field services company.
Kentucky Gov. Ernie Fletcher (R), who faces re-election this year, was indicted last May on state misdemeanor charges over hiring practices. Attorney General Greg Stumbo (D) dismissed the charges three months later, but continued a probe of Fletcher’s administration.
Illinois Gov. Rod Blagojevich (D) won his re-election bid in 2006 despite being dogged by federal and state corruption probes of his administration. Wisconsin Gov. Jim Doyle (D) likewise won, after a state ethics board cleared him and a former deputy of allegations they helped a major campaign donor get state work.
In Tennessee, Gov. Phil Bredesen (D) called a special session last January on ethics reform, a response to the “Tennessee Waltz” sting operation that resulted in the conviction of two former legislators for taking bribes from government agent posing as lobbyists. Three more current and former lawmakers were awaiting trial. The special session yielded a new law that limits cash contributions, prohibits lobbyists from giving to campaigns, and strengthens requirements for lobbyistdisclosures.
Pennsylvania in November finally shed its distinction as the only state not to require lobbyists to report how much they spend wooing state lawmakers. North Carolina lawmakers enacted the biggest changes to ethics and lobbying rules in 30 years by denying themselves unlimited access to campaign contributions, gifts and other perks from lobbyists. In particular, the University of North Carolina, home of the Tar Heels, was barred from giving athletic tickets to legislators or officials working for the governor.
Notable Inaction
The year also will be remembered for some things states didn’t do.
In California, Schwarzenegger sought to overhaul the state’s overcrowded prison system during a special session, but came away empty-handed.
Alaska Gov. Frank Murkowski (R), defeated in the Republican primary, failed to push through a deal he negotiated with major oil companies to build a $25 billion gas pipeline through Canada. The Alaska Supreme Court ruled in late November that Murkowski could not sign the contract without approval from the Legislature. 

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