Capitol Comments

First Offshore Wind Farm Gets Green Light

2010-04-29T19:55:23-04:00

By Mikel Chavers, CSG Associate Editor

After nine years of being put in a holding pattern by the federal government, regulators approved the first wind farm in the U.S. called Cape Wind, off the coast of Massachusetts, according to The New York Times. The offshore wind farm will use giant wind turbines placed in the water off the coast of Cape Cod. The turbines will use the stronger wind off the coast to generate electricity.

Offshore wind farms must wait to get the OK from the federal government because they are technically on federal property offshore and do not fall under state jurisdictions.

Cape Wind suffered from its share of critics when local Native Americans complained the turbines would harm areas of cultural significance to them and residents in Massachusetts complained the wind turbines off the coast would block the view.

U.S. Interior Secretary Ken Salazar announced at a press conference in Massachusetts his approval of the offshore wind farm.

State officials all up and down the Eastern seaboard are trying to attract offshore wind farm projects to their coastlines but told Capitol Ideas magazine it was taking way too long for the projects to be approved by the federal government for permitting.

See the May/June issue of Capitol Ideas magazine for more.

States Opt Out of First Phase of Federal Health Reform

2010-04-28T14:57:51-04:00

By Mikel Chavers, CSG Associate Editor

Some states won’t have anything to do with the first wave of federal health care reform—here comes a new round of challenges to the new federal law.

Under the first phase of the new law, states must decide if they will form new high-risk insurance pools for people with pre-existing medical conditions who are unable to get private health insurance—most have been denied coverage because of expensive medical conditions. The pools would allow these folks to get health insurance coverage and would be subsidized by the federal government. So far, Georgia and Nebraska said they won’t operate the new high-risk pools, according to the Atlanta Journal-Constitution and Forbes magazine.

States can choose to operate their own high-risk pools or bring current high-risk pools up to the federal government’s standards under the new law. More than 30 states already operate high-risk insurance pools.

If states opt out of forming their own high-risk insurance pools under the law, the federal government will operate one for them. The high-risk insurance pools will operate until 2014. After that, insurance companies won’t be able to deny coverage to people with pre-existing conditions.

To help people pay for these so-called risky health insurance plans, the new federal health care law includes $5 billion to finance the effort.

But Georgia and Nebraska don’t think $5 billion is enough to pay the insurance premiums for these folks up until 2014.

Georgia Insurance Commissioner John Oxendine doesn’t believe the federal government will be able to fund the high-risk pools and the state will be left to shoulder the additional financial burden of federal health care reform, according to the Atlanta Journal-Constitution.

In a letter to U.S. Secretary of Health and Human Services Kathleen Sebelius, Oxendine said, “I cannot commit the state of Georgia to ... a scheme which I believe the Supreme Court will hold to be unconstitutional, leads to the further expansion of the federal government, undermines the financial security of our nation, and potentially commits the state of Georgia to future financial obligations.”

Georgia and Nebraska both are already challenging the legality of the federal health care law. The states join 18 others in a multistate lawsuit challenging the constitutionality of the law originally filed March 23 by Florida Attorney General Bill McCollum.

Virginia is also challenging the law, but in its own separate case filed in U.S. District Court in Richmond, Va.

Nebraska will also not operate a new high-risk insurance pool under the federal health care reform law. Even though the state is one of 30 states that already operate a high-risk insurance pool for patients who can’t get insurance elsewhere, Nebraska Gov. Dave Heineman said he and the state’s top insurance official were worried federal funding wouldn’t be enough to pay all the insurance claims until January 2014, according to Forbes.

Race to the Top Finalists Announced

2010-03-04T13:02:56-05:00

Fifteen states and Washington, D.C., are leading the pack in the Race to the Top.

Those 16 are finalists for phase 1 of the special education funding included in the American Recovery and Reinvestment Act. It’s part of a $4.35 billion effort by the U.S. Department of Education to reshape America’s educational system to better prepare students.

The finalists are Colorado, Delaware, Florida, Georgia, Illinois, Kentucky, Louisiana, Massachusetts, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee and Washington, D.C.

"These states are an example for the country of what is possible when adults come together to do the right thing for children," Education Secretary Arne Duncan said. "Everyone that applied for Race to the Top is charting a path for education reform in America."

He encouraged the nonfinalists to reapply for phase 2.

States competing for Race to the Top funds were asked to document past education reform successes, as well as outline plans to extend reforms using college and career-ready standards and assessments; build a work force of highly effective educators; create educational data systems to support student achievement; and turn around their lowest-performing schools.

The 16 finalists were chosen from among the 40 states and Washington, D.C., that submitted applications for phase 1. Winners for phase 1 will be chosen from the 16 finalists and announced in April. Applications for phase 2 will be due on June 1 of this year, with finalists announced in August and winners in September. The only states prohibited from applying in phase 2 are those that receive awards in phase 1.

Pondering the Role of the Lieutenant Governor

2010-02-23T10:41:18-05:00

The office of lieutenant governor in Illinois may be on the ropes, but the person who holds the office in neighboring Indiana stays busy.

In fact, Indiana Lt. Gov. Becky Skillman has more duties than any other lieutenant governor nationwide, according to Julia Hurst, executive director of the National Lieutenant Governors Association, an affiliate of The Council of State Governments.

A controversial primary election, and subsequent withdrawal of the Democratic nominee, in Illinois has left the embattled position of lieutenant governor with somewhat of an endangered status. Illinois House Speaker Michael Madigan introduced a constitutional amendment to dissolve the position.

Hurst said the trend, starting in the last decade, has been to expand the responsibilities of the lieutenant governor.

Learn more about this story at Fox Chicago News.

Cash-Strapped States Consider Cutting State Parks

2010-02-22T11:24:28-05:00

By Mikel Chavers

Cash-strapped New York has a plan to save a little money: Shut down state parks. Sound like a new approach? It isn’t. Other states either are considering or have considered the same budget remedy.

New York plans to close 41 parks and 14 historic sites; the state currently operates 178 parks and 35 historic sites, according to the Times Union in Albany. N.Y.

“These actions were not recommended lightly, but they are necessary to address our state’s extraordinary fiscal difficulties,” Carol Ash, commissioner of the Office of Parks, Recreation and Historic Preservation, told the newspaper.

The cuts will save an estimated $6.3 million in an effort to deal with statewide budget cuts.

“In an environment when we have to cut funding to schools, hospitals, nursing homes and social services, no area of state spending, including parks and historic sites, could be exempt from reduction,” New York Gov. David Paterson told the newspaper.

New York isn’t alone in the approach to shut down state parks. The Nevada Legislature is considering closing state parks in efforts to deal with an estimated $900 million budget gap, according to the Las Vegas Sun.

The state’s Interim Finance Committee, which met Feb. 18 in Las Vegas, is expected to consider following the lead of other cash-strapped states that closed parks, including California and Arizona, the Las Vegas Sun reports.

Nevada Senate Majority Leader Steven Horsford’s proposal considers shutting down all state parks to save money. Horsford told the newspaper teachers and other primary services are more important than recreation. He told the newspaper parks that are entirely fee-supported could be exempt from the closures.

“It’s part of our quality of life, but the choice is between doing that or thousands of teachers laid off statewide, which is bad for education, bad for schools and bad for the economy,” he told the Las Vegas Sun. According to his estimates, $8 million could be saved over the biennium, the newspaper reports.

In Idaho, a similar plan to close down two state parks to deal with state budget cuts is so far being avoided, according to the Bellingham Herald.

But the budget constraints still remain on Idaho’s parks, so much so that Parks Director Nancy Merrill is pitching a plan to wean state parks off state funding altogether, according to The Spokesman-Review.

The proposed plan means parks would be self-sustaining and would raise the revenue by raising park fees, charging school groups that visit parks and by closing two parks, Three Island Crossing near Glenns Ferry and Land of the Yankee Fork State Park in central Idaho, for the winter months to save money, according to the newspaper.

It’s not the first time the state has gone down the path of closing parks, Merrill said. In 1981, because of budget cuts, the state closed three parks, two of which were reopened later, she said.

Even though state parks may not be what most call “core” services, “we realize that parks have a lot of impact,” Merrill said.

For more on what cash-strapped states are doing, check out the March/April issue of Capitol Ideas magazine.

Surplus During the Recession

2010-02-12T09:41:25-05:00

Q: What does it take to have a surplus coming out of the Great Recession?

A: Oil.

Alaska is one state that has seen those benefits. The state has a $2.2 billion budget surplus thanks to higher oil prices; that will likely help the state bounce back from the recession quicker than most states.

Meanwhile, some states see losses in tax revenue at greater amounts than expected. Delaware, for one, expects only its personal income tax to return to its peak year of collections by 2014, according to a five-year forecast by the Delaware Economic and Advisory Council.

State of the States 2010: Schwarzenegger Focuses on Budget, Tax Reform

2010-01-06T16:04:20-05:00

By Mikel Chavers

California Gov. Arnold Schwarzenegger may have used an interesting story about his household pets—a pig and a pony working together to break into the food container—to demonstrate teamwork, but he focused his state of the state address on budget and taxes.

Although there’s still more hardship to come “the worst is over for California’s economy,” Schwarzenegger said Jan. 6. “Our economy is well-positioned to take advantage of the future.”

With that, the defining word this year is priorities, he said. And his priorities include reforming the budget system and the tax system as well as creating jobs.

The state faces a $19.9 billion deficit, and $13.3 billion of it is for the upcoming budget year, Schwarzenegger said. What does that mean for the state? “We face additional cuts,” he said.
“What can we say at this point except the truth—that we have no choice?”

Schwarzenegger did vow to protect K-12 education from more budget cuts on the horizon.

But beyond the cuts something else has to be done, he said.

“Our economy is 21st century and our tax system is 20th century—it is stuck in the wrong century,” Schwarzenegger said. “Our economy is diverse whereas our tax system is not.” The governor urged the legislature to work together to reform the budget and tax system, saying state tax collections won’t rebound until at least 2013.

“We must begin work on those tax reforms because we simply cannot wait for the rich to bounce back,” he said. “The budget crisis is our Katrina.”

He mentioned several best practices including performance-based budgeting and creating a rainy day fund. Schwarzenegger is also pushing a constitutional amendment that would bar the state from spending more on corrections than on education.

In the coming year, Schwarzenegger will also introduce a $500 million jobs package to train up to 140,000 workers and create 100,000 jobs.

He also wants to streamline the permitting process for construction projects and wants to propose a homebuyer’s tax credit offering up to $10,000 for purchase of new or existing homes. California is still thinking green as well and Schwarzenegger wants to exempt green technology and manufacturing equipment from the states sales tax.

“That too means jobs.”

Attorneys General Threaten Lawsuit Over 'Cornhusker Kickback'

2010-01-06T13:32:16-05:00

A provision in the health care reform bill approved by the U.S. Senate on Christmas Eve could lead to a lawsuit.

Thirteen state attorneys general said in a letter to House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid they will sue if the provision to exempt Nebraska from paying Medicaid expenses other states would have to pay, according to the CNS News Service.

The “Cornhusker Kickback,” as the provision is known, forces taxpayers in other states to pay for the increase in Nebraska’s Medicaid population, the attorneys general say.

Different versions of health care reform have passed both houses of Congress and now must go to conference committee for reconciliation, followed by a final vote.

Read more about health care reform in the states in the January/February issue of Capitol Ideas, The Council of State Governments new magazine.

States Tackle OPEB Obligations

2009-11-14T07:33:00-05:00

By Mary Branham

California is facing massive budget problems by any measure. And among the major problems it faces is a $100 billion liability in its public retirement plans, said Jason Dickerson, principal fiscal and policy analyst, California Legislative Analyst’s Office.

Dickerson said local governments in California have taken action to reduce retiree benefits for current and future employees, as well as current retirees. That hasn’t gone over well, he said, and the state has no plans to take similar action.

The state has worked with the California Highway Patrol unions toward a plan in which officers will pay into the California Public Employee Retirement System—or CALPERS—trust fund in an effort to address some of the unfunded liability for that group. It won’t cover all of the annual required contribution, however, he said.

And that’s only a small part of the CALPERS liability. Dickerson said state officials face some difficult decisions.

“The choice is whether they believe we can afford this type of pension system even longer,” he said.

That’s a choice many states are having to make, and some are making changes to address those pension shortfalls.

Utah, for instance, has addressed state employees’ other post-employment benefits—sometimes referred to as OPEBs—in an innovative way. The state uses a formula to take an employee’s accrued sick leave to come up with an amount that will go into a health reimbursement account for that employee. That plan replaces the previous benefit in which the state paid the employees’ full monthly health insurance premium.

Alzheimer’s, Diabetes Driving Health Care Costs

2009-11-14T07:29:00-05:00

By Mikel Chavers

When it comes to expensive chronic diseases driving health care costs, the issue gets very personal with Alabama Sen. Vivian Davis Figures. That’s because her mother is suffering from Alzheimer’s disease and her mother-in-law died from Alzheimer’s disease.

Alzheimer’s disease costs $148 billion in health care every year, said Stephen Geist, regional director for the California Southland Alzheimer’s Association. That means someone will be diagnosed with the disease every 70 seconds—and that’s going to be an increasing burden for states to bear.

Geist said states—particularly in the Northwest—will experience an estimated 81 percent to 127 percent increase in Alzheimer’s cases in the next 15 years. Yet only 11 states currently have a state Alzheimer’s plan, according to Geist.

California is working on one slowly but surely, he said. “The others are going to be taken by surprise.”

That’s not to mention the 9.9 million unpaid caregivers who often foot the bill to take care of loved ones with Alzheimer’s. Sixty percent of caregivers are women, he said.

Geist recalls one caregiver in particular—a more than 80-year-old woman on her knees on a tiled floor trying to change her 92-year-old husband’s dirty diaper, because her husband has Alzheimer’s and can’t participate in his own care

Along with Alzheimer’s, diabetes is also driving health care costs, according to Dr. Fran Kaufman, chief medical officer with Medtronic Inc., an associate of The Council of State Governments.

Type 2 diabetes is increasing mostly due to obesity, Kaufman said. And what’s worse, it’s a disease that requires multiple interventions, making it costly to manage.

“But if you don’t control your diabetes, your complication rate is significantly increased,” Kaufman said. Even though Type 2 diabetes can be prevented through lifestyle changes, “if we can’t prevent this, then we’ve got to have better ways to effectively manage it,” Kaufman said.

The money spent on diabetes between 2006 and 2007 nearly doubled, according to Kaufman. In 2007, $174 billion was spent on diabetes in the U.S., she said.

“This is not about me alone in a room with a patient and a family,” Kaufman said. “It’s about how to manage (and) whether someone lives a healthy lifestyle and has access to good health care.”