The Pew Charitable Trusts

A cast of first-time governors will bring a fresh approach to their inaugurations in 2005, including a no-frills swearing in at the State Fairgrounds for incoming Indiana Gov. Mitch Daniels (R).

But while the political style may sometimes be different, the script will remain much the same in 2005 for governors and state lawmakers who again face soaring health care costs that will squeeze state budgets.

All 50 state legislatures meet in 2005 and will tackle many of the same issues that bedeviled legislatures in 2004, including how to pay for schools, curb soaring health care expenses and rein in high medical malpractice fees. Some new quandaries on lawmakers' plates include whether to fund stem cell research and whether to thumb their nose at the federal government and make it easier for their residents to get cheaper prescription drugs from Canada.

It's hard to predict if the coming 12 months will have the same political drama for states as the year gone by, a year in which Connecticut Govs. John Rowland (R) and James McGreevey (D) both resigned amidst scandal, and all but six states held statehouse elections.

But Washington state's cliffhanger governor's race has gotten the new political year off to a dizzy and litigious start. Democrat Christine O. Gregoire appears to have more votes than Republican Dino Rossi, who held a slim lead after the Nov. 2 election. It's a good bet that 2005 will begin with more court challenges over the Washington race.

Indiana's Mitch Daniels isn't the only new governor who will break tradition when he takes office. The renovation of the Utah's Capitol has forced that state's incoming Utah Gov. Jon Huntsman Jr. (R) to hold his Jan. 3 inauguration at Abravanel Hall in downtown Salt Lake City, home to the Utah symphony. Huntsman's inauguration will mark the first time the chief executive has been sworn in outside the Capitol since 1917, according to The Salt Lake Tribune.

In Missouri, the National Guard will play a prominent role in the inauguration of incoming Gov. Matt Blunt (R), a Navy reservist. F-16 fighters from the Missouri Air Guard's 131st Fighter Wing will perform a flyover over Jefferson City, the state capital, and members of the 135th Field Artillery Brigade will fire a 19-gun salute to the new governor at high noon on Jan. 10. (A 19-gun salute is one rank below the 21-gun salute that is reserved for the president).

Governors aren't the only new faces in state politics. Twenty-one new speakers of the House will begin their terms and 18 new Senate presidents or presidents pro tem will take the helm in their respective chambers, according to preliminary numbers from the National Conference of State Legislatures. More than 1,200 legislators will begin their freshman year. And party control will switch in a dozen state legislative chambers.

Regardless of who is in the governor's mansion or which political party controls the Legislature, state policymakers will have a heap of tough issues that await them in 2005. Here is a sampling:

• Health care spending: The big gorilla in all state budgets is Medicaid, the state-federal health care program for 52 million poor and disabled Americans that has been growing four times faster than all other state expenditures. Already in fiscal 2005, which began July 1 for most states, 16 states are running out of money set aside for Medicaid, including Arizona, Mississippi, New Hampshire, North Dakota and Texas. The nation's governors in December prodded Congress not to shift more Medicaid costs to states. 
• Education funding: Kansas, New York and New Jersey are among states facing court orders to pony up more money for schools. Florida, Massachusetts, New Mexico and Ohio are among the states expected to focus on early childhood issues in 2005. Most states also are trying to figure out how to pay for new testing and reporting requirements under the federal No Child Left Behind law. 
• Prescription drugs: Many state politicians are likely to pick up where they left off in 2004, when 23 states debated whether to make it easier for citizens to get cheaper prescription drugs imported from Canada. The federal government says it's not a good idea, raising safety concerns. But that didn't stop the governors of Minnesota, North Dakota, New Hampshire and Wisconsin and the secretary of state in Rhode Island in 2004 to set up Web sites that link citizens to Canadian pharmacies. Governors of Illinois, Kansas, Missouri and Wisconsin also teamed up to create the I-SaveRx program that allows their residents to buy prescription drugs from Canada, England, Scotland and Ireland. Despite the opposition of the feds, the import issue is expected to again dominate state policy discussions.  
• Stem cell research: States such as Connecticut, Illinois, Maryland, New Jersey and Wisconsin worry that California's $3 billion stem cell initiative will drain experts and economic benefits from their own states' biotechnology and research centers. Look for states such as Massachusetts and New York to take action. 
• Taxes: Many states will continue to press the U.S. Congress for the OK to collect sales taxes on purchases made online and bring in billions of dollars of additional revenue. Rising property taxes are a top agenda item for lawmakers in Iowa, Florida, Maine and New Jersey. And all states will watch carefully what President George W. Bush's proposed tax overhaul might mean for their own tax collections. 
• Tort reform and medical malpractice: Maryland ended 2004 with a special session on medical malpractice, an issue that is certain to dominate statehouses in 2005. Nearly a dozen states passed new laws in 2004 aimed at addressing costly premiums for medical malpractice insurance. Voters in California and Colorado approved ballot measures to limit lawsuits against businesses, while voters in Florida and Nevada and OK'd measures to rein in medical malpractice cases. In Wyoming, malpractice cases must go through "alternative dispute resolution" process to prevent clogging up court, under a ballot measure voters endorsed.

Finally, and probably most important for 180 state lawmakers in New Jersey and Virginia is the fact that their own jobs will be on the line in 2005. These states didn't have elections this past November, so voters will get the chance to elect members of the New Jersey General Assembly and the Virginia House as well as the governors of both states.