States prepare ambitious agendas for 2019

by Reid Wilson - 12/31/18 3:00 PM ET

Democrats and Republicans in state legislatures across the country are preparing ambitious new agendas for the year ahead, buoyed by election results that cemented single-party control of all but a small handful of states.

Once new governors and legislators are sworn in in the coming weeks, more than three-quarters of Americans will live in states in which one party controls all levers of state government.

Democrats will hold all the power in 14 states, where about a third of all Americans live. Those states are mostly on the West Coast and in the Northeast, along with Colorado and New Mexico in the Mountain West, and Illinois.

In those states, Democratic legislative leaders said they would focus on bills to combat climate change and gun violence, expand voting rights and health-care access, and increasing salaries paid to school teachers.{mosads}

“Washington isn’t getting much done. We are, and we’re delivering on things people care about, schools, fixing roads, health care,” Rhode Island Gov. Gina Raimondo (D) said in an interview.

Republicans will run 22 states across the Mountain West, the South and the Rust Belt, accounting for about 42 percent of the population and including mega-states like Florida, Texas and Ohio.

Red-state legislative leaders said they would move to cut taxes, boost broadband spending in rural areas and attract new workers to help grow their economies.

“People want to grow their businesses. We all have workforce challenges in that we don’t have as many people as we could use,” said Linda Upmeyer (R), the Speaker of the Iowa state House. “It’s not going to solve our problems to try and just attract workers from other states, because they need them too.”

In some of the few remaining states where government control is divided between Democrats and Republicans, newly elected Democratic governors say they will renew the push to expand Medicaid to include more low-income residents. Those debates are likely to be the most contentious of the year in states like Wisconsin and Kansas.{mossecondads}

“It’ll be a battle to get Medicaid expansion,” predicted Tony Evers (D), who will be sworn in next week as Wisconsin’s new governor. “My frustration level is that we’re still in a position where it is a political issue.”

Both Democrats and Republicans say they plan new investments in infrastructure, in hopes that a divided Congress and the Trump administration can agree on some kind of national spending plan. In many states, rapid growth has meant additional pressure on local governments that need to build schools and sewer systems fast enough to keep up with population increases.

“I think everybody has fallen behind on needed infrastructure,” said Phil Berger (R), the president of the North Carolina state Senate. “Our local governments have unmet needs as far as school construction.”

States that have a budget surplus, in some cases in the billions of dollars, say they are likely to move ahead with repairing bridges and roads even without federal action.

“We’re going to have hundreds of millions of dollars to spend on roads, bridges, dams and other public service projects,” said Brian Egolf (D), the Speaker of the New Mexico state House. “We can pay with a checkbook and not just a credit card.”

But legislators in both red and blue states are keeping a watchful eye on the national economy, as some fear a looming recession. The prospect of an economic downturn has tempered some impulses to spend on new programs in favor of more cautious savings plans.

“All you’ve got to do is read the newspapers and see the number of stories about how long it’s been since we’ve seen a recession,” Berger said. “The predictions are such that everybody can predict that we’re going to have a recession, but nobody’s very good at predicting when we’ll have a recession.”

Most state budgets are in the black, and states have set aside more than $54 billion in rainy day funds, according to data from the Pew Charitable Trusts. But spending — especially on health care and education — is still rising faster than revenues, according to the National Association of State Budget Officers.

“The No. 1 issue is always taxes, revenues and expenditures. The one thing every legislature has to do every year is pass a budget,” said Bill Pound, the executive director of the National Conference of State Legislatures. “Expenditures are up about 2.9 percent, and revenues are up about 2.6. Coming out of the recession, that has been a general pattern that revenue has lagged expenditure.”

States are much more susceptible to the risk of an economic downturn than the federal government because all but one — Vermont — have balanced budget requirements, prohibiting the kind of deficit spending Washington can turn to in tough economic times.

“In Utah, we have unprecedented surpluses right now,” said Curt Bramble, a Republican state senator in Utah. “We’re not looking at increasing a lot of ongoing spending. We’re looking at squirreling it away in a lot of rainy day funds. We’ll pay cash for buildings, cash for whatever, because we’re looking at when the next downturn occurs.”

Most state budgets are largely taken up by spending on health care, education and corrections. For years, health-care spending has risen the fastest of those three. But after steep cuts to education budgets in the wake of the recession, and after loud protests by teachers in states like Arizona, Kentucky, West Virginia and Oklahoma last year, education spending is starting to rise faster than health-care spending.

Pound said he expects more pressure on legislators to hike teacher pay in the new year.

“We’ll see the red shirts, which was a symbol in several states, at the state capitol on this issue,” he said.

Louisiana Gov. John Bel Edwards (D) said his top priority this year is raising teacher pay. Virginia Gov. Ralph Northam (D) has proposed hiking salaries, and legislators in states like Mississippi and Indiana are considering their own hikes. Oklahoma teachers have asked legislators to give them another raise after state officials projected a $612 million surplus in the next fiscal year.

States are taking new steps to close the gap between rising expenses and lagging revenues. After the Supreme Court ruled in favor of a South Dakota law that will require online retailers to collect sales taxes, 18 other states passed similar requirements, and most of those that have not are likely to address the issue in upcoming legislative sessions.

Democratic-led states like Illinois, New York and New Jersey are likely to pursue legalizing marijuana for recreational purposes, a reflection of both the dramatically changing political calculus of legal pot and the hundreds of millions in revenue recreational use has brought in for states like Colorado, Washington and Nevada.

And states are increasingly exploring legalized sports betting, after another Supreme Court ruling in favor of a New Jersey law to open bookmaking. Sports betting is legal in eight states, and legislation has been introduced in at least another 17 states.