Q & A

Chris Swope: State of the States

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Chris Swope, Editor, Stateline

  Chris Swope
January 27, 2012 — As state legislatures get to work in 2012, Stateline, the daily news service of the Pew Center on the States, is covering the action. Its recently released annual State of the States report looks at the big trends to keep an eye on in 2012. And Stateline journalists will be on the ground in state capitals throughout the legislative sessions, reporting on the year’s biggest stories.

Christopher Swope, Stateline’s editor, discusses what to watch for in the states in 2012.

Q: 2011 was a fairly contentious year in state capitals. Will 2012 be the same?

A: In many ways, 2011 was year one of a Republican revolution in the states, following their historic success in elections the year before. Eighteen new Republican governors came into office, along with thousands of new Republican state legislators. Many of them had big ideas, whether it was tax cuts for business, streamlining regulations or restricting collective bargaining for public employees. The last of those triggered labor protests from Madison to Columbus. But public workers saw big changes in states controlled by Democrats, too. In Connecticut, for example, Governor Dan Malloy, elected in 2010, struck a landmark deal with unions to shore up the retirement fund, only to see union members reject it. They later went on to ratify the plan.

Year two should be quieter. That’s partly because a lot of the new governors got much of what they wanted in 2011. But it’s also because it’s an election year, so there’s a natural inclination for political leaders to push a less controversial agenda.

Q: Is the budget situation looking any better in states?

A: For the first time in several years, the looming question isn’t how deeply states will have to cut their budgets. State revenues are growing again, and a few states are even talking about budget surpluses.

That said, the news isn’t all good. States such as California and Washington State still have big budget deficits. The economy is still a question mark. Unemployment remains a massive drain on services. And many states have big bills coming due—unfunded pension liabilities and Medicaid among them.

Q: What can the states expect from Washington in 2012?

A: Well, less money, to be sure. Major cuts are likely coming as a result of the debt-ceiling deal, although some big-ticket items in state budgets such as Medicaid are exempted. But the exact amount won’t be known until next year.

Some states are building budgets that assume pretty big cutbacks in federal aid. For example, Utah agencies have looked at what they would do if their federal funds were cut by either 5 percent or by 25 percent. The unknowns are pretty big. And nobody is expecting a lot of new answers on budgets until the presidential election has passed.

Q: What’s at stake for the states when the Supreme Court hears the challenge to the Affordable Care Act?

A: More than half of the states sued to try to get the health law overturned. The law relies heavily on states to implement it, particularly when it comes to expanding the Medicaid rolls. So there’s a lot riding on this decision.

Regardless of what the court decides, states will still have a major problem on their hands this year. Medicaid costs are spiraling upward, in part because enrollment is still growing. And yet states have already made deep cuts to the program, particularly when it comes to the fees they pay doctors and hospitals.

Q: What are the governors talking about in their state of the state speeches this year?

Jobs are a big topic, and there’s a lot of focus on infrastructure. New York Governor Andrew Cuomo is talking about building the nation’s largest convention center, and fellow Democrat Mark Dayton in Minnesota wants to borrow money to pay for public works projects. Republican Nathan Deal in Georgia is talking about deepening the Port of Savannah.

But the real flashpoint this year will probably be taxes. At least half a dozen Republican governors have proposed cutting taxes, including Governors Chris Christie in New Jersey, Sam Brownback in Kansas and Dave Heineman in Nebraska. Meanwhile, a similar number of Democrats are pitching tax increases. Governors Jerry Brown in California and Christine Gregoire in Washington, for instance, would have voters weigh in.

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January 27, 2012