Capitol Comments

Focus is on Highway Trust Fund

By Sean Slone, CSG Transportation Policy Analyst

Several state leaders learned last week reauthorization of the federal highway program may be delayed, and some Senate and administration officials are focused instead on shoring up the federal Highway Trust Fund.

The Council of State Governments hosted a legislative “fly-in” June 23-24 that gave participants an opportunity to meet with staff from the key committees that will debate the next federal authorization for transportation programs.

States Could Lose out on Stimulus Funds

States that use stimulus funds to plug budget holes could face lose out on millions of dollars, the Obama administration said last week.

That warning came in a letter to Pennsylvania Gov. Ed Rendell after a plan by the Republican-led Senate came to light. The Senate planned to use stimulus money to plug budget holes -- it would reduce the share of the state budget for education while leaving the state's rainy-day surplus untouched, according to an Associated Press article.

Education Secretary Arne Duncan told Rendell the plan could hurt Pennsylvania's chance to compete for a $5 billion competitive grant fund to reward states and school districts that adopt innovations.

While Duncan's letter specifically addressed the situation in Pennsylvania, it also has implications for other states.

In Louisiana, Rainy Day Fund Debate Continues

Like many other states battling the current economic recession, Louisiana is dealing with falling revenues to the tune of a $1.3 billion decrease in the state’s general fund revenue forecast for the 2009-2010 budget, according to The Times-Picayune of New Orleans.

To dig out of that hole, the state can take money from the rainy day fund, known formally as the state’s Budget Stabilization Fund.

And the latest reports indicate Louisiana Gov. Bobby Jindal wants to dip into the state’s rainy day fund, according to The Times-Picayune.

The newspaper reported Jindal said he’s willing to sign a budget that takes $50 million from the rainy day fund to finance higher education. But, Jindal said he would require that the $50 million be replenished using state’s planned tax amnesty program, the newspaper reports.

Facing Budget Woes, Colorado Passes Economic Development Bills

Even though Colorado faced a nearly $1.5 billion budget shortfall this year, the state didn't give up on pursuing economic development measures.

In fact, at a time when the state’s tax revenues are coming in much lower than expected and there’s just less money to go around, many in Colorado argue that now is the most important time for economic development.

Todd Saliman, director of the state’s Office of Planning and Budget, is one of those believers.

“One of the things that we put a lot of effort into this year is focusing on economic development and trying to provide incentives for job creation—and Colorado has been limited in the amount of incentives it could offer to potential businesses that were wanting to locate in Colorado just because of our budget constraints,” Saliman said in an interview with State News.

Managing the Addicted Offender

By Mary Branham Dusenberry

Prison populations are growing at a time when the fiscal picture in the states is bleak. That growth is cutting into the resources set aside to deal with substance abuse issues.

That creates problems down the line for states, according to speakers at the Interbranch Working Group session, Managing the Addicted Offender, Sunday afternoon. States are taking new approaches to try to deal with the underlying problems for those in the court system because of drug offenses.

“We like any other part of American society have a certain percentage of the population that needs to go away for a very long time because they’re bad people,” said Michael Brown, secretary of Kentucky’s Justice and Public Safety Cabinet.

Cohan Explains the Wall Street Animal

By Mikel Chavers

Bad decisions, greed, almost insane attention to profits and financial innovation gone wrong led to the collapse on Wall Street.

Every Wall Street firm was investing in the latest financial fad—mortgage-backed securities.

The firms would “tie a nice little bow around them and get the credit rating agencies to bless them,” bestselling author William Cohan said at a plenary session Sunday. “Everyone who touched them made money.”

The only problem was, no one paid attention to the high risks of the products.

“It just became a big party … and nobody likes anybody that takes away the punch bowl,” Cohan said.

Stimulus Projects Funded, but Road for Transportation Policy Long

By Mikel Chavers

The Port Authority of New York and New Jersey can finally build an $8.7 billion second tunnel under the Hudson River thanks to funding from the 2009 Recovery Act. The existing tunnel is more than 100 years old.

“The impacts will be felt around the country,” said Renee Radcliff Sinclair, the executive director of Congressional and Public Affairs at the Northwest Region of the U.S. Chamber of Commerce. And she hopes other stimulus infrastructure projects funded by the Recovery Act will have similar far-reaching effects.

“It has been able to jumpstart this critical project that impacts movement of goods and people,” Sinclair said.

Building Blocks of Health Care Reform

By Mary Branham Dusenberry

Reforming the health care system won’t be easy, speakers at a workshop on the topic said Sunday.
But everybody knows change is coming as Congress considers options at the national level. In fact, some of those changes have been implemented as President Obama signed the Children’s Health Insurance Program Reauthorization Act Feb. 4.

The goal—getting more people insured—is admirable, Joan Gardner, executive director of State Services for Blue Cross Blue Shield, said. But plans for a national exchange, she said, could create problems. A government-run plan would create an uneven playing field between that plan and those provided in the private sector, she said.

But she acknowledged that changes need to be made.

Reducing Detention To Help Juvenile Offenders

By Mary Branham Dusenberry

It doesn’t make sense to take a student who isn’t going to school out of school even more by placing them in detention for truancy.

That’s the view of the Juvenile Detention Alternative Initiative of the Annie E. Casey Foundation. Rand Young, a technical assistance provider with JDAI, shared alternatives to detention for low-risk juvenile offenders during the Public Safety and Justice Workshop Sunday.

Instead of detaining the youth, Young suggested alternative rehabilitation options, including community service work projects, weekend programs, house arrest and electronic monitoring, day and evening reporting centers, and foster and shelter care programs.

International Committee Raises Awareness to Neighbors in Canada, Mexico

By Mikel Chavers

Every state needs to have an eye toward international issues—because when it comes to operating successfully in a global economy, states can no longer afford to stay within their own borders, or even their own countries.

That’s according to speakers at Sunday’s International Committee Meeting.

The Council of State Governments’ international programs have historically focused on borders and trade issues, “but there’s a lot more that affects states in the international community,” said Chris Whatley, director of the Washington, D.C., office.

He believes an eye to international issues is beneficial for state government officials. “Enriching international exposure that will help them go back home and legislate better,” Whatley said.
CSG facilitates various international programs in the regional offices, particularly in the CSG Eastern Regional Conference and CSG-WEST.