The empire strikes out

LEGISLATIVE ACTION BY ISSUE

Select an issue to the left to read Stateline.org’s analysis of the trends developing in those areas. A roundup of prison closings, for example, is part of the Crimes & Courts section. Funding for schools is outlined in both Education and Higher Education. Look for fee and tax increases in Transportation and Taxes & Budget sections.

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CRIME & COURTS IN 2009 STATE LEGISLATURES

Corrections budgets were on the chopping block in at least 26 states as the recession forced lawmakers around the country to close prisons and lay off correctional officers, cut back on inmate rehabilitation programs and, in some cases, release prisoners early. The cost-saving measures bucked two decades’ worth of growth in state corrections spending — which has surged alongside the U.S. prison population — and hinted at further cuts next year, when state finances are expected to be in even worse shape.

At least nine states — Colorado, Kansas, Michigan, New Hampshire, New Jersey, New York, North Carolina, Tennessee and Washington — closed prisons to save money, in some cases touching off fierce political protests. New York’s prison workers, for example, accused the administration of Gov. David Paterson (D) of creating “the most dangerous conditions ever” inside state prisons by shuttering 10 facilities and packing inmates more tightly into others. In Michigan, Gov. Jennifer Granholm (D) tried to keep some prisons from closing — and state workers from being laid off — by offering to house inmates from California’s teeming correctional system.

Indeed, California’s system is so overcrowded that a federal judicial panel in August ordered the state to come up with a plan to release within two years more than 40,000 inmates, or 27 percent of the state’s overall prison population. The early release of thousands of prisoners also was being considered as a cost-saving measure in Illinois, while other states, including Colorado and Oregon, allowed inmates to trim their sentences by giving them more credit for good behavior. Florida and Kentucky are among the states that ramped up their treatment of substance abusers in an attempt to prevent recidivism, a leading cause of prison overcrowding. Tennessee and other states sought to eke out more savings by reducing inmates’ meal choices and eliminating prison work crews that perform jobs in local communities.

New York made headlines by overhauling its drug sentencing laws to give judges the option of sending many low-level offenders to treatment instead of prison. The laws, commonly known as the “Rockefeller drug laws” because they were enacted in 1973 under Gov. Nelson Rockefeller (R), imposed tough penalties on “millions of everyday New Yorkers,” Paterson said when he signed the new legislation.

Beyond prisons, most state court systems also saw deep budget cuts. To help offset those cuts, legislators in some states — including Florida, Georgia, Iowa, Minnesota, Mississippi, Nevada, New Hampshire, Utah and Washington — raised court fees to bring in more revenue. In Florida, for example, it now costs $100 more for those seeking to adopt a child, and $25 more for those caught driving 15 miles per hour over the speed limit.

Among other notable action:

• Texas abolished life without parole for juveniles, replacing it with a top penalty of 40 years behind bars.
• Maryland became the first state to protect the homeless under its state hate-crimes law.
• Nevada became the first state to pass legislation authorizing “veterans’ treatment courts,” or special courts that aim to help war veterans who have been charged with nonviolent crimes. Like other so-called “problem-solving courts” — drug courts and mental-health courts, for example — veterans’ courts seek to rehabilitate those charged and steer them away from prison. Illinois passed a similar bill.
• Utah became the first state to specifically address “sexting,” in which minors who send or receive nude photos via cell phone — including pictures of themselves — previously faced prosecution as sex offenders and possible registration on the state’s public sex-offender database. Lawmakers there reduced the criminal penalty for minors from a felony, carrying at least a year in prison, to a misdemeanor. Other states, including Ohio and Vermont, considered similar bills.
• Montana exempted the state’s gun manufacturers from federal regulations, potentially allowing residents who buy Montana-made firearms to sidestep criminal and mental-health background checks and other federal registration and licensing rules. Gun-rights proponents hope the new law will spark a legal fight that will reach the U.S. Supreme Court and eventually transfer regulation of gun manufacturers from the federal government to the states.
• Iowa revised a state law banning sex offenders from living within 2,000 feet of schools, playgrounds or other places where children are likely to gather. The new law eliminates that restriction for more than 3,000 low-risk sex offenders, but also creates “exclusion zones,” which sex offenders may not enter.

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DEATH PENALTY IN 2009 STATE LEGISLATURES

• Nebraska Gov. Dave Heineman (R) signed a bill making lethal injection the state’s method of execution. Nebraska had been the last state to rely solely on the electric chair to execute prisoners, but that method was struck down by the state’s highest court as unconstitutional “cruel and unusual punishment” in February 2008.
• For the third year in a row, Virginia Gov. Tim Kaine (D) vetoed legislation that would have expanded the scope of capital punishment by making murder accomplices eligible for the death penalty.
• Maryland Gov. Martin O’Malley (D) made a repeal of the death penalty one of his legislative priorities, but was rebuffed by the state Senate. Lawmakers approved a compromise measure making death sentences far more difficult for prosecutors to win, requiring that they obtain evidence such as DNA or a videotaped confession.
• Efforts to repeal the death penalty cleared at least one legislative chamber in Colorado, Montana and New Hampshire. In Connecticut, the full General Assembly backed a repeal, but the bill was vetoed by Gov. M. Jodi Rell (R).

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ECONOMY & BUSINESS IN 2009 STATE LEGISLATURES

Governors and legislators in at least 18 states tried to piggyback on the momentum of the federal stimulus legislation by approving or proposing their own economic incentive packages.

The plans included a mix of tax credits, bond sales and increasing the amount of money in state banks for small business loans.

Colorado enacted one of the most ambitious packages. It included tax incentives for businesses that create 20 or more jobs, $50 million for small business loans and improvements in job-training programs, especially for people who want to work in the green economy.

First year Missouri Gov. Jay Nixon (D) and leaders of the Republican-controlled General Assembly approved a bipartisan plan to eliminate corporate franchise taxes for 15,000 businesses and expand tax incentives for employers who hire additional workers or add on to their plants.

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MORTAGES IN 2009 STATE LEGISLATURES

Several states acted to help homeowners in danger of foreclosure as mounting job losses and the national recession are causing more homeowners to fall behind on their mortgage payments.

In California, Colorado and Michigan, lenders cannot foreclose on a home for at least 90 days, giving homeowners more time to work out a payment plan with lenders. In Washington, homeowners have 60 days before they have to leave the property. Minnesota now gives homeowners five months to work out a plan before foreclosure can take place.

In Nevada, homeowners facing foreclosure can shell out $200 to demand a sit-down mediation with their lenders, overseen by a retired judge or lawyer, while Colorado allows homeowners to share their assets and income with counselors who can determine who can get new loan terms to keep their homes. In Connecticut, it is now mandatory for homeowners threatened with foreclosure to participate in the state’s year-old foreclosure mediation program.

States are taking action as new nationwide data show the rate at which people are falling behind on their mortgage payments went up for the ninth straight quarter in the first three months of 2009, the credit reporting agency TransUnion reported in June. The rate is expected to keep climbing through the end of the year with Florida expected to have the highest delinquency rate, TransUnion said.

In other action on the mortgage front:

• Minnesota cracked down on foreclosure scams that take advantage of people desperate to save their homes, forbidding companies that offer to negotiate or change the terms of a loan from asking for an upfront payment from the homeowner.
• Tennessee banned unfair or deceptive practices when advertising foreclosure-related services.
• Virginia requires companies to collect fees only after they help the homeowner, and would punish lender fraud with a $2,500 fine.
• New Jersey will allow borrowers with the low “teaser” rates to have those rates extended by three years. The state also now requires loan originators to be licensed and face criminal background checks.
• Colorado made it a crime for an owner to collect rent from a tenant after the foreclosure and sale of the property to another person.
• Nevada residents renting a property that is being foreclosed must receive notice at the start of the foreclosure process and at least 60 days’ notice to prepare to move.

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EDUCATION IN 2009 STATE LEGISLATURES

The $100 billion in the federal stimulus package for schools over the next two years helped legislatures avoid deep budget cuts to education in many states and allowed at least 9 states to increase funding for preschool.

Higher education, however, fared worse as at least 35 states cut higher education or increased tuition.

Despite tight budgets, Alabama, Alaska, Florida, Georgia, New Jersey, New Mexico, Rhode Island, Texas and Virginia increased preschool funding. Alaska and Rhode Island are setting up their first state-funded pre-kindergarten programs, while Georgia’s increase of $12.7 million is expected to accommodate 3,000 more children.

Texas Gov. Rick Perry (R) vetoed a bill that would have set up new quality standards for pre-k, such as teacher training and class sizes. But the state is still increasing pre-k funding by $25 million, the country's largest pre-k increase.

Illinois, however, cut pre-k funding by $38 million, or 9.3 percent. That cut is actually considered a small victory because pre-k was slated to be cut by 30 percent before much of the money was restored. New York is funding for preschool is $75 million less than in the previous year, and Washington’s reduction of $2.3 million will cut 123 spots from pre-k.

Efforts in North Dakota and South Dakota to lay the groundwork for those states’ first state-funded preschool programs were unsuccessful.

As for state K-12 budgets, with the help of the stimulus money, “We’re looking at basically a break-even year,” said Mike Griffith, the education finance expert at the nonpartisan Education Commission on the States. The stimulus was “originally designed to be the icing on top of the cake, but in a lot states it’s the cake itself,” he said.

Stimulus funds helped some states shore up education budgets, including Alabama, Colorado, Florida, Iowa, Kentucky and Missouri, which all had flat funding or small increases.

Montana received $900 million in federal stimulus money, which, among other things, allowed the state to boost funding for K-12 education by 3 percent. And $321 million of federal stimulus money will help boost funding for Iowa’s public schools by 4 percent. Alaska was able to increase education without using stimulus funds.

Maryland lawmakers used stimulus money to balance the budget without hiking taxes and approved Democratic Gov. Martin O’Malley’s bid to freeze university tuition for the fourth year in a row.

But for other states, the budget shortfalls were too deep to avoid cutting education. Idaho, for example, cut education funding for the first time ever, cutting K-12 funds by 7.7 percent and teacher pay by 2.6 percent to balance the 2010 budget. That was on top of the $213 million lawmakers there had to cut during the year to keep the 2009 budget balanced. Kansas, Nevada, and Washington also cut K-12 funding, all by under 3 percent, while Utah saw a 5 percent cut.

The Illinois State Board of Education cut almost $300 million from several education programs, including gifted-child education and after-school programs.

Schools in California were hit particularly hard. In February, the state cut K-12 and community college funding by $8.6 billion for both fiscal 2009 and 2010. In June, lawmakers had to close a new budget gap and slapped schools with another $6 billion cut. Thousands of teachers were laid off, and the new budget eliminates state funding for new textbooks for five years. It also shortens the minimum school year by five days to 175.

This session, at least six states acted to expand charter schools, buoyed by comments by U.S. Education Secretary Arne Duncan that he would favor states with a liberal charter school policy when the education department decides which states will win a piece of the $4.35 billion “Race to the Top” competitive education fund. Illinois just doubled the number of charter schools allowed to 120 from 60. Indiana’s budget doesn’t limit new charter schools and creates a pilot Internet “virtual” charter school. Louisiana eliminated its cap on charters, and Tennessee boosted access to charter schools for poor students in failing schools and districts.

In Ohio, despite the opposition of Gov. Ted Strickland (D), who wanted to cut funding for charters, lawmakers passed a budget that gives charters per-pupil funding equivalent to that of district schools and also raised charter schools standards. Rhode Island lawmakers considered not funding the state’s first new charter schools in six years, but ultimately allocated $1.5 million.

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HIGHER EDUCATION IN 2009 STATE LEGISLATURES

The federal stimulus package helped states avoid deep budget cuts to education, but higher education is faring less well. At least 35 states have cut higher education funding or increased tuition, according to Terry Hartle, the senior vice president at the American Council on Education, an association of higher education officials.

“The size of the cuts and the resulting tuition increases in many states is breathtaking,” Hartle said. “I don’t want to say it’s unprecedented, but it’s certainly reaching levels we have not seen in a long, long time.”

Among the higher education cuts:

• Washington state reduced the higher education budget 11 percent for four-year schools and 7 percent for community colleges. To help make up the difference, the Legislature authorized colleges and universities to raise tuition by as much as 14 percent in each of the next two years.
• Florida previously prided itself on its below-average tuition, but this year, the state enacted a law allowing the state’s 11 public colleges to raise tuition 15 percent every year until it reaches the national average – the largest tuition hike in 17 years.
• The Kansas Board of Regents originally offered to freeze tuition if the Legislature only cut their spending by 7 percent, but backed out when lawmakers instead cut appropriations by 10 percent. Tuition hikes at colleges range from 3.9 percent to 8.5 percent.
• California, which had to close a $24 billion budget gap, slashed funding for the University of California and Cal State University systems; the two systems together lost $3 billion in the latest budget agreement. The University of California will raise tuition by 9.3 percent for the 2009-2010 school year, with the possibility of a midyear hike in January. The Cal State University system is raising tuition 20 percent. Because of the reduced funding, the Cal State system is planning to accept 10,000 fewer students in the 2010-11 school year, while the University of California will cut 2,500 spots this fall.
• Ohio cut $170 million from college spending, ending a state-mandated two-year tuition freeze. Colleges can now increase tuition up to 3.5 percent a year, although most won’t start hiking tuition until fall 2010.

Among the states that made deep cuts to education compared with the previous year’s appropriations: Colorado lawmakers cut higher education funding by $150 million; Louisiana cut about $107 million, or 7 percent, which was lower than the governor’s proposed 15 percent cut; Nevada cut 12.5 percent, lower than the 36 percent decrease the governor originally proposed; Utah had a 9 percent decrease; and Wisconsin cut funding by $250 million.

Some large tuition hikes will be seen in New York, where the 64 campuses of the State University of New York system will increase fees about 14 percent; Wisconsin, where the university system is responding to cuts with a tuition hike of 5.5 percent; and Oregon, where large universities are increasing tuition by 8 percent and smaller colleges by 5 percent. Public colleges in Indiana, Louisiana, Michigan and Pennsylvania are also seeing hikes ranging from 3.7 percent to just over 5 percent.

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ELECTIONS IN 2009 STATE LEGISLATURES

On the heels of near-record voter turnout in 2008’s presidential election, a handful of states made it easier for citizens — and particularly the military — to vote. Other states passed more controversial voting rules that supporters say will help prevent fraud at the ballot box but that critics say infringe on the rights of minorities and the poor.

Utah became the first state to require that voters present photo identification at the polls since the U.S. Supreme Court last year upheld a similar Indiana law. Democratic critics of the Indiana law had said that requiring photo identification presents too high a burden on minorities and the poor, who are less likely to have a valid form of photo ID and who frequently vote Democratic. But the justices sided with Indiana, saying the state had a legitimate interest in preventing fraud.

The fiercely partisan debate surrounding the high court’s decision resurfaced in several statehouses this year. While the photo ID bill fared well in heavily Republican Utah, the Democratic governor of Oklahoma vetoed a voter ID measure passed by the Sooner State’s Republican legislature. In Texas, Democrats blocked a Republican-supported voter ID plan.

Georgia, meanwhile, became the second state after Arizona to require voters to provide proof of citizenship to vote, but the U.S. Department of Justice objected and the law cannot go into effect. Georgia must have any changes to its elections rules approved by the federal government under a section of the Voting Rights Act — which is designed to help minorities in Southern states with a history of racial problems. The U.S. Supreme Court is currently deciding whether to abolish that section of the Voting Rights Act.

Nearly 2 million voters, or 7 percent of the electorate, did not vote in last year’s presidential election because they did not have proper ID, according to 2009 national survey of election administration conducted by the Massachusetts Institute of Technology (MIT) and funded in part by the Pew Center on the States, the parent organization of Stateline.org.

In some states, legislators tried to boost voter turnout. Virginia made it possible for overseas members of the military to receive absentee ballots by e-mail. Colorado allowed online voting for military members. Maryland approved early voting up to a week before elections.

A nationwide movement to effectively override the Electoral College when Americans vote for president also was a subject of debate. Washington became the fifth state to approve the plan, which would give all of the state’s electoral votes to the winner of the national popular vote, but only if enough other states do the same. So far, Hawaii, Illinois, Maryland and New Jersey have adopted the plan, which would almost certainly face a court challenge before it could go into effect.

In other notable action:

• Washington restored voting rights for felons who have completed their sentences.
• New Mexico approved its first campaign contribution limits on candidates for statewide offices.
• Louisiana will allow people to register to vote or change their party affiliation online.

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ENERGY & ENVIRONMENT IN 2009 STATE LEGISLATURES

While Congress prepares sweeping legislation to significantly decrease greenhouse gas pollution nationwide, state leaders are debating how large their role should be in limiting carbon dioxide emissions, the most prevalent greenhouse gas pollutant.

Washington state legislators rejected Gov. Chris Gregoire’s (D) proposal to have the state join the Western Climate Initiative, a multi-state agreement that would impose a “cap-and-trade” mechanism that forces polluters to pay for the amount of carbon dioxide they emit starting in 2012.

The different cap-and-trade systems approved by Western governors, drafted by Midwestern governors, discussed by Congress and put into place earlier this year by 10 Northeastern states all use a similar approach to curb carbon dioxide pollution, thought to be a major cause of global warming. In each, the government would place a cap on the amount of carbon dioxide that can be released and issue or sell emissions permits to companies for that maximum amount. If a company can’t meet that limit, it would be able to buy credits from more efficient companies that didn’t use all their credits.

The system rewards the more efficient companies while giving others more time to adjust their operations to comply with the caps, which the government will lower over time.

In Washington, Gregoire personally lobbied for the cap-and-trade legislation on the last night of session. When that effort failed, she responded by issuing an executive order announcing the state would join the effort anyway.

The Utah House of Representatives also passed a non-binding resolution calling on then-Gov. Jon Huntsman (R) to drop the state’s participation in the program. But Huntsman stuck by the plan, which he helped orchestrate. Huntsman’s successor (Huntsman was confirmed as ambassador to China), Lt. Gov. Gary Herbert (R) also said he would continue to back the effort.

The moves come as a consortium of Northeastern states launched a cap-and-trade this January to limit carbon dioxide emissions from power plants that burn fossil fuel and contribute about 80 percent of greenhouse gas pollution. In June, the U.S. House narrowly approved a bill that would set up a nationwide cap-and-trade system and require that at least 15 percent of all electricity come from renewable sources by 2020. But the proposal remains controversial and its prospects in the Senate are uncertain.

In Kansas, a two-year debate over carbon dioxide emissions at new coal plants fizzled after Obama tapped Kansas Gov. Kathleen Sebelius (D) as his secretary of health and human services. Sebelius’ hand-picked successor, Lt. Gov. Mark Parkinson reversed her policy on blocking new coal plants. Parkinson announced in May that he would support a secretly-negotiated compromise with Sunflower Electric to build a 895-megawatt coal plant — large enough to power 448,000 homes during peak demand — in western Kansas, rather than the two the utility originally proposed by the company. The GOP-controlled legislature quickly went along.
A number of states pushed measures to develop “clean coal” technologies meant to reduce the amount of carbon dioxide and other pollutants released when coal is burned. Montana lawmakers cleared the way for carbon sequestration, the underground storage of harmful carbon dioxide gases.

Wyoming not only tweaked its sequestration laws but invited leaders of other Western states to a symposium this summer on developing technologies to burn coal with reduced emissions. And Indiana lawmakers approved plans for a $2.35 billion plant that would turn coal into natural gas, and then sell that gas to utilities through the state.

New oil drilling on state land became an issue in Ohio and California. Part of California’s budget agreement would allow oil drilling in state waters near Santa Barbara, the site of an oil spill 40 years ago that galvanized public opinion against offshore drilling. The state would receive $100 million up front from an oil producer and would get $1.8 billion over 15 years in royalties. Meanwhile, an effort to allow oil exploration in Ohio state parks was left out of the final budget.

Budget battles also led to park closings and higher entry fees for state park visitors. Thirteen Arizona state parks shut down briefly during a budget impasse; six parks are now open only five days a week. Ohio officials say they will close 55 campgrounds and 9,000 campsites in state parks because of the state’s new budget. Hawaii closed a fish hatchery that supplied fish for state parks. Meanwhile, Florida state parks are now charging more for vehicles to enter.

But some of the worst predictions of state park closings didn’t come to pass. California’s budget agreement won’t close 220 of its 279 parks as Gov. Arnold Schwarzenegger (R) originally threatened. While some parks are likely to close, cuts to state parks totaled only $8 million instead of the $143 million the governor announced earlier. Newly installed Illinois Gov. Pat Quinn (D) reopened several state parks and historical sites that his predecessor, Rod Blagojevich (D), had shuttered.

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HEALTH CARE IN 2009 STATE LEGISLATURES

The recession put the brakes on many states’ ambitious plans to cover some of the estimated 47 million Americans who don’t have health insurance, but more than a dozen states still managed to expand coverage, especially for children.

The failing economy has led to a dramatic growth in Medicaid enrollment as more people who lose their jobs and health insurance turn to states for help. The state-federal program currently provides health insurance for 60 million poor Americans.

The federal stimulus package blunted many budget cuts in health-care programs because, to qualify for the plan’s $87 billion Medicaid infusion, states couldn’t change eligibility standards and application processes they had as of July 1, 2008.

That meant some states like California and South Carolina had to roll back newer policies that cut eligibility or tightened enrollment to get the federal dollars.

Just as important as the federal Medicaid stimulus dollars was President Obama’s decision in February to lift Bush administration restrictions on states trying to expand state Children's Health Insurance Programs (SCHIP) to include children from middle-income families. Obama also in February signed legislation enabling some 7 million children to continue coverage through SCHIP and allowed 4 million more to sign up.

At least 14 states — Alabama, Arkansas, Colorado, Indiana, Iowa, Kansas, Montana, Nebraska, North Dakota, Oklahoma, Oregon, Rhode Island, Washington and West Virginia — moved to cover more children this year through SCHIP.

Oklahoma, Washington state and West Virginia this year put into place their SCHIP expansions that had been put on hold because of the Bush directive, said Jennifer Tolbert, a policy analyst with the Kaiser Commission on Medicaid and the Uninsured.

Alabama, Arkansas, Nebraska and North Dakota all expanded their SCHIP eligibility this year, and the programs have already taken effect or will soon. Rhode Island, with the help of the federal SCHIP expansion, re-instated coverage for legal immigrant children.

“Given the recession and what states are facing, it’s somewhat surprising that a number of states are expanding their CHIP programs,” Tolbert said. She said the question remains whether the states will be able to continue to fund the programs throughout the recession.

In other action:

• Montana decided to fully fund the 2008 ballot initiative that added up to 30,000 more children to the Children’s Health Insurance Program.
• Colorado expanded Medicaid and CHIP eligibility for children and parents, and now offers Medicaid coverage to childless adults.
• Kansas had passed a law expanding its CHIP, but hadn’t funded it until this year.

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HOMELAND SECURITY IN 2009 STATE LEGISLATURES

The long-running battle over Real ID — the controversial 2005 federal law requiring all states to issue more secure driver’s licenses or risk having their residents delayed at airports and federal buildings starting next year — showed few signs of quieting, both in the states and on Capitol Hill.

The Obama administration, recognizing states’ frustrations over the cost and stipulations of the law, threw its weight behind a congressional proposal called Pass ID that would scale back Real ID and cut its $4 billion price tag for the states roughly in half, according to an analysis by the National Governors Association. But others in Congress stridently objected to the new proposal, saying it would bring driver’s license security standards to pre-Sept. 11, 2001 levels.

In the states, legislators in Missouri and Oregon became the latest to ban their states from complying with Real ID, while a plan that would have put Nevada on the path toward compliance was shelved in the waning days of the session. At least 18 states have resolutions or statutes opposing Real ID.

But in Maryland, state lawmakers agreed to meet one of Real ID’s main requirements — that illegal immigrations not be allowed to obtain driver’s licenses. The Old Line State had been the last one east of the Rocky Mountains to offer driving privileges to those in the country illegally, raising concerns over license fraud. The 2001 terrorists had obtained 30 pieces of state identification, supporter’s of Maryland’s plan noted.

Only Hawaii, New Mexico, Utah and Washington continue to allow undocumented immigrants to get driver’s licenses. Maine lawmakers this year tried to get rid of a state requirement that drivers prove they are in the country legally, but Gov. John Baldacci (D) vetoed the bill, calling it a step backward in license security and noting that 46 other states require proof of legal residence.

Other concerns over the legal status of residents also made headlines in state legislatures this year. In-state tuition for undocumented students was a hot topic in Colorado. There, the House passed a measure that would have allowed graduates of Colorado high schools to get discounted tuition rates even if they were in the country illegally. But the proposal ultimately died in the state Senate. Similar legislation failed in Arkansas.

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POLITICS IN 2009 STATE LEGISLATURES

Many expected 2009 to be quiet in state political circles before the surge of 37 gubernatorial races in 2010, but the year will go down as one of the most explosive with the removal of Gov. Rod Blagojevich (D) in Illinois, Alaska Gov. Sarah Palin’s (R) surprising decision to step down before her term ended, and South Carolina Gov. Mark Sanford’s (R) admission to an extramarital affair.

The year began with the spotlight on President Obama’s adopted state of Illinois where Lt. Gov. Pat Quinn (D) replaced Blagojevich in January after impeachment proceedings. Blagojevich is expected to go on trial next year on federal corruption charges that include scheming to sell the U.S. Senate seat that opened with Barack Obama’s presidential win. Blagojevich has denied the charges.

In Alaska, Gov. Palin unexpectedly left office in July, with 17 months left in her term amid speculation she has her sights on national politics. Palin said she stepped down partly because she was spending too much of her time and taxpayer’s money defending herself from frivolous ethic complaints.

South Carolina Gov. Sanford, once considered a strong GOP presidential contender, announced Aug. 12 his political career was over shortly after a state investigation concluded the governor did not misuse state funds for flights when he visited his mistress in Argentina. “I’m dead politically. I’m not running for another office,” he told the local WVOC radio station, a week after wife moved out of the governor’s mansion.

Political scandal also marked the legislative sessions in Massachusetts and Florida, where the House speakers both resigned in disgrace over corruption charges. In Massachusetts, Salvatore F. DiMasi (D) resigned in January as House Speaker and was replaced by Robert DeLeo amid influence-peddling allegations. DiMasi was indicted in June on federal corruption charges.

In Florida, Rep. Larry Cretul (R) replaced House Speaker Ray Samson (R) in January after Sansom faced a grand jury investigation over charges he funneled millions to a college that later hired him. Sansom and the president of Northwest Florida State College were indicted in April.

Meanwhile a state contracting probe derailed New Mexico Gov. Bill Richardson’s (D) plan to head Obama’s Commerce Department, but President Obama tapped five former or current governors for his administration, including one pick that upset the political landscape of a Western state. Obama’s selection of Arizona Gov. Janet Napolitano (D) to lead the Department of Homeland Security hoisted her Republican lieutenant governor, Jan Brewer, into the governor’s mansion, giving Republicans control of both the legislative and executive branches.

Other Democratic state leaders in Obama’s Cabinet include:

• Kansas Gov. Kathleen Sebelius to head the Department of Health and Human Services;
• Former Iowa Gov. Tom Vilsack to head the Agriculture Department;
• A Republican governor, Utah’s Jon Hunstman Jr., was plucked out of office by Obama to be U.S. Ambassador to China and replaced by Lt. Gov. Gary Herbert (R);
• Former Washington Gov. Gary Locke to head the Commerce Department;
• Former commissioner of the New Jersey’s Department of Environmental Protection, Lisa Jackson, to head the U.S. Environmental Protection Agency.

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2009 RACES

The year has just two governor’s races, in New Jersey and Virginia, but both parties hope wins will provide momentum for next year’s contests.

In New Jersey, Gov. Jon Corzine (D), a former Wall Street executive, will go against Chris Christie, a former U.S. attorney. In a first for the state, a lieutenant governor’s race will appear on the ballot. Voters in the Garden State approved in 2005 creating the No. 2 position after then-Gov. Jim McGreevey’s (D) sex scandal left Senate President Richard Codey (D) governor because the state doesn’t have a lieutenant governor. It was the second time in three years that New Jersey used this succession plan. Corzine picked state Sen. Loretta Weinberg of Bergen County as his running mate while Christie selected Monmouth County Sheriff Kim Guadagno. New Jersey joins nearly half the states in which the governor and lieutenant governor run as a team.

Virginians June 9 picked state Sen. Creigh Deeds as the Democratic candidate to oppose Attorney General Bob McDonnell (R) in the race for the seat now held by Gov. Tim Kaine (D). Kaine, whom Obama picked to head the Democratic National Committee, is barred from running again. Virginia is the only state that limits its governors to one four-year term.

Meanwhile, Democrats are hoping to extend their control over Virginia government, as they make a push to gain six seats and take over the Republican-controlled House of Delegates. All of New Jersey’s assemblymen also are up for re-election.

While New York didn’t have state elections in 2009, the state Senate is in turmoil. After winning the state Senate last fall after 40 years in the minority, Democrats lost control for more than four weeks. On June 8, frustrated by what they called chaos in the Senate, two Senate Democrats in June teamed with Republican senators to put a Republican as majority leader. One week later, one of the defectors switched back, leaving the Senate evenly split at 31-31 and throwing the chamber into gridlock.

To break the impasse Gov. David Paterson (D) appointed Richard Ravitch as lieutenant governor, a post that was left vacant when Paterson took over the governorship when Eliot Spitzer (D) resigned amid a prostitution scandal. Republicans sought a court order to block Paterson’s appointment, but too late to stop Ravitch’s rushed swearing-in. The next day, the other Democratic defector returned to the fold to give Democrats the majority again, but by then, measures that Democrats had been pushing were derailed or delayed. They included bills to strengthen abortion rights and legalize same-sex marriage. A judge July 21 blocked Paterson’s appointment.

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SOCIAL POLICY IN 2009 STATE LEGISLATURES

With the recession hitting vulnerable populations the hardest and state revenues tanking, many states faced the painful task of cutting services for the poor.

Arizona, California, the District of Columbia, Nevada and Rhode Island cut cash assistance for poor families, South Carolina and Vermont cut funding for juvenile and family courts, Connecticut cut child abuse prevention programs, Maine cut funding for homeless shelters, Illinois cut child welfare, mental health and youth services programs and California and Rhode Island cut child care subsidies. At least 22 states and the District of Columbia cut programs for the elderly and disabled, according to the Center on Budget and Policy Priorities.

In most states, federal stimulus dollars were used to minimize or avoid cuts to numerous social welfare programs.

Jobless workers also got a boost from stimulus money as most state legislatures approved the use of federal money to extend the duration of benefits. In addition, at least 27states enacted laws that provide benefits to more low-income workers that otherwise would not be covered by unemployment insurance, according to the National Employment Law Project. The laws were enacted to take advantage of a $7 billion incentive fund Congress created to entice states to help more jobless workers, including part-time and temporary workers and those who leave jobs for family-related reasons.

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GAY MARRIAGE IN 2009 STATE LEGISLATURES

Gay marriage may still be a divisive issue in many states, but its legalization in Vermont, Maine and New Hampshire in 2009 solidified New England as a stronghold of the same-sex marriage movement, with Rhode Island the lone state in the region not to sanction it.

And in a surprise to many, same-sex couples can also marry in the heartland state of Iowa after the state’s Supreme Court ruled in April that a state law limiting marriage to a man and a woman was unconstitutional.

Vermont, Maine and New Hampshire were the first states to sanction gay marriage legislatively; both Massachusetts and Connecticut were ordered to do so by their highest courts.

But all eyes now are on California, where the state Supreme Court on May 26 upheld the state’s voter-approved constitutional ban on gay marriage, but ruled that some 18,000 same-sex couples who wed before Proposition 8 took effect in November would still be married under state law. California began allowing same sex marriages less than five months earlier in June 2008. Gay rights activists have vowed to put the issue back on the ballot and overturn Proposition 8.

The District of Columbia voted to recognize same-sex marriages performed elsewhere, joining New York and Rhode Island. Congress did not act to consider overturning the ruling, so it took effect in July.

But the nation remains divided over the issue. Thirty states, including California, have constitutional prohibitions against same-sex marriage.

Nevada this year joined seven other states that offer domestic partnerships or civil unions.

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ABORTION IN 2009 STATE LEGISLATURES

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TAXES & BUDGET IN 2009 STATE LEGISLATURES

Reeling from plunging revenue receipts and tight credit markets, some 30 states raised taxes and major fees to balance their ledgers as they navigate through the worst fiscal crisis in a generation.

At least 18 states will collect more revenue from the sale of cigarettes and other tobacco products — the same year the federal cigarette tax shot up from 39 cents a pack to $1.01, the largest increase in history. Higher driving licenses and motor vehicle tags also were popular in at least a dozen states and the gas tax went up in three states.

Some of the fees and taxes that states hiked so far this year include:

Personal income tax: An emerging trend this year is raising taxes for the more well-to-do, although the measures in Hawaii, New Jersey and New York are temporary. New York added two income tax brackets, increasing to 8.97 percent the income tax on those who earn more than $500,000, up from 6.85; those making more than $200,000 would be taxed at 7.85 percent. Hawaii lawmakers overrode Gov. Linda Lingle’s (R) veto and added three new income tax rates on high wage earners, with the top rate going from 8.25 percent to 11 percent on individual income over $200,000. New Jersey raised income taxes on those who earn more than $400,000 a year to 8 percent from 6.37, and a 10.75 percent rate will apply to those earning more than $1 million.

Oregon raised the top personal income tax rate to 10.8 percent, from 9 percent for income over $125,000 for individuals and 11 percent on income over $250,000 for individuals. Wisconsin added a new 7.75 percent bracket for income over $225,000 for individuals.

Delaware and North Carolina raised the top rate for those who earn more than $60,000, and California passed a temporary one-quarter of 1 percent increase that applies to all income tax brackets.

Colorado, Rhode Island and Wisconsin changed the way they treat capital gains income, generating more money for the state treasury. On the flip side, Maine, North Dakota and Vermont reduced income tax rates.

Sales tax: California approved a temporary 1-cent increase in the sales tax to generate $1 billion. Massachusetts increased its sales tax to 6.25 percent from 5 percent – a 25 percent jump – and Nevada temporarily increased its 6.5 percent state sales tax by 0.35 percent. North Carolina increased its sale tax by 1 percent to 7.75 percent. Minnesota went forward with a voter-approved measure to boost funding for arts and environmental projects by increasing the state’s sales tax by 3/8 of a percent. Maine expanded its sales tax to include some services, such as auto repair and dry cleaning. Kentucky ended its sales tax exemption of alcoholic beverages while Vermont expanded the sales tax to liquor. Tennessee extended the sales tax to software maintenance contracts.

Internet sales taxes: States tried to get more tax revenue from online activity. New York was finally able to implement a law enacted last year that requires certain companies to collect sales taxes on goods purchased over the Internet. (Amazon and Overstock challenged the law in court and the case is on appeal). This year, North Carolina and Rhode Island passed similar measures. In response, both companies have cancelled their so-called associate programs in those states.

Kentucky Vermont, Washington and Wisconsin all expanded the sales taxes to certain digital products, such as software and cell phone ring tones in Kentucky and online music in Washington.

Vehicle registration and licensing: Fees went up in California, Florida, Idaho, Massachusetts, Nevada, North Dakota, Oregon, Utah and Washington. Colorado and New York raised both vehicle registration and car rental fees. Idaho eliminated its 10 percent tax exemption on ethanol. Idaho, Illinois and New Hampshire increased driver’s license fees, and New Jersey raised eight fees, including for driver’s permits and motorcycle registration. New York and Wisconsin increased car rental taxes. Kentucky froze the motor fuel tax that had been set to drop by 4 cents. Gas taxes went up in Oregon, Rhode Island and Vermont.

“Sin" taxes: Florida and Rhode Island increased their cigarette taxes $1 a pack and Kentucky doubled to 60 cents a pack its tax, while Arkansas, Delaware, Hawaii, Mississippi, New Hampshire, Vermont and Wisconsin increased their cigarette taxes by various amounts. Maine and Wyoming changed the way they tax smokeless tobacco, bringing more money to the states. New York, New Jersey and North Carolina raised both tobacco and alcohol taxes. Kentucky, Massachusetts and Vermont ended the sales tax exemption of alcoholic beverages while Colorado ended its sales tax break on cigarettes.

Court fees: Florida, Georgia, Iowa, Minnesota, Mississippi, Nevada, New Hampshire, Utah and Washington raised court fees to bring in more revenue.

Other tax and fee increases: Hotel room taxes went up in Hawaii and Nevada. Florida increased park admissions and fees on slot machine licenses. Colorado and Mississippi increased hospital fees, and Oregon raised a tax on health care providers. Maine, New York and Oregon were among states that raised hunting and fishing fees.

A few states were able to cut, not raise, taxes. Maine, North Dakota and Vermont all reduced income tax rates. Montana and Wyoming cut property taxes.

The budget squeeze prompted some states to try to overhaul the way they spend and allocate money. California voters May 19 soundly rejected a spending cap, a larger rainy day fund and borrowing $5 billion in future lottery profits to help balance the budget.

But in Colorado, Gov. Bill Ritter (D) signed a new law that tweaked one of the country’s strictest state spending caps. The new law eliminates the previous requirement that capped general-fund spending increases to 6 percent every year and replaced it with a spending increase limit equal to 5 percent of personal income growth.

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TRANSPORTATION IN 2009 STATE LEGISLATURES

States will get about $50 billion in federal stimulus money for transportation projects, but that won’t begin to deal with the national need, which the American Association of State Highway and Transportation Officials says is $545 billion.

One of the biggest showdowns on transportation this year was in Idaho where Republican Gov. C.L. “Butch” Otter vetoed 35 bills to prod his own party’s House members to go along with his plan to increase gasoline taxes to pay for $174 million in road repairs. Instead, a $57 million-a-year package of fee and revenue increases was enacted. Legislators also instructed a task force to explore new revenue sources for roads, ensuring the issue will come back next year.

In Illinois, Gov. Pat Quinn signed into law a $31 billion statewide construction program to repair and rebuild roads, mass transit and schools. The package will be financed by legalizing video poker, raising fees on motorists and hiking taxes on candy, beauty products and alcohol.

In other action:

• Vermont lawmakers approved a 2-percent increase in the wholesale price of gasoline, or about 3 cents a gallon based on current prices, to raise money for transportation projects.
• North Carolina lawmakers canceled plans to drop the state’s gas tax by 2 cents, to 28.2 cents-a-gallon, on July 1, to help plug a gap in the state transportation budget.
• Colorado lawmakers hiked vehicle registration fees to raise about $250 million a year for transportation.
• Iowa lawmakers agreed to Democratic Gov. Chet Culver’s plan to borrow $830 million, with the bonds paid off from casino gambling profits.
• Ohio lawmakers approved a $7.6 billion transportation bill that also included unrelated items such as additional unemployment benefits for laid-off workers.
• Arkansas lawmakers set up a commission to recommend ways to generate about $300 million a year in transportation funding.
• The North Dakota and Oklahoma legislatures also boosted transportation spending without increasing taxes.

LEGISLATIVE ACTION BY STATE

Stateline.org has compiled state-by-state summaries of legislative action for those that have finished their 2009 sessions. Connecticut and Pennsylvania have not passed fiscal plans for budgets that began July 1. MIchigan, which has an Oct. 1 deadline, also is still working on its budget. Check back often for new additions and updates.

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Alabama lawmakers hail productive session

Lawmakers of both parties declared the 2009 session one of the most productive in years, despite the flooding that briefly forced them to move to the old statehouse. With the help of about $1.5 billion in stimulus money, the Democratic-controlled Legislature managed to pass its two budgets — the Education Trust Fund and the General Fund — with little controversy.

This session was in stark contrast to the past two: Last year, Gov. Bob Riley (R) was forced to call a special session that cost $110,000 because legislators couldn’t agree on an education budget during the regular session. The year before ended with one senator punching another in the face over a bill on campaign contributions.

Lawmakers passed a $2.5 billion General Fund to fund non-education state services, like state troopers and Medicaid, of which $1 billion comes from stimulus dollars. Most state agencies will receive the same amount in the next fiscal year as they are getting in the current year, as much of the stimulus money is going to one-time transportation projects.

The governor vetoed parts of the budget, asking lawmakers to add $4.2 million for prisons and $10 million for public defenders, but they overrode the measures and used the money instead to fund an expansion of the Children’s Health Insurance Program and their own pet projects.

The Legislature also passed a $6.2 billion Education Trust Fund, with $513 million of that from the stimulus. The current year’s education budget is $5.8 billion; it was originally $6.4 billion before the state was forced to make midyear cuts. The state’s total deficit in fiscal 2009 was $1.05 billion, was lawmakers closed through cuts, stimulus money and tapping the rainy day fund.

Legislators gave Riley one of his priorities: a bill to offer tax credits and incentives to attract businesses, particularly research facilities, data processing centers and green energy companies. 

Before the session, Riley turned down $100 million in stimulus money to expand unemployment benefits, saying that expanding benefits to temporary and part-time workers would cost the state $22 million a year after the stimulus money runs out. The Legislature passed a resolution stating that Alabama wants all available unemployment compensation, but a bill that would have changed state law to make the state eligible for the $100 million failed in the Senate, with Riley and Republicans solidly against it.

One notable bill that failed would have financially shored up the Prepaid Affordable College Tuition Program (PACT), which has 48,000 participants and lost half its value because of the economic downturn. Instead, the Legislature called for a study of the program.

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Palin resigns, lawmakers adopt pre-k pilot

With 17 months left in her term, Republican Gov. Sarah Palin handed the keys to the governor’s mansion to Lt. Gov. Sean Parnell July 26, amid speculation she has her sights on national politics. Ever since she returned to Alaska after her failed vice presidential bid, Palin has been besieged by ethical complaints and failed to regain her former popularity with state voters.

Despite the controversy, the politically divided Legislature adopted a preschool pilot program, expanded adult dental care for Medicaid recipients and dipped into education reserve funds to balance the budget. Approving a $7 billion 2010 budget which was 7.7 percent lower than last year’s budget, lawmakers voted to spend $1.2 billion on job-creating transportation projects, and $7.1 million to continue work on a pipeline designed to provide Alaska residents with plentiful natural gas. A projected $75.8 million shortfall for the year ahead will be plugged with money from the rainy day fund.

Earlier in the year, lawmakers nixed Palin’s first pick for attorney general — Anchorage lawyer and National Rifle Association board member Wayne A. Ross — marking the first time in Alaska history a gubernatorial appointment was rejected. Former prosecutor Richard Svobodny filled the position until June 16, when lawmakers approved her second appointment, former U.S. Assistant Secretary of State Daniel S. Sullivan.

The Legislature also blocked Palin’s efforts to pass a law requiring teenage girls to get their parent’s consent before having an abortion, a measure she and others are now trying to get on the ballot in 2010.

The $2 million prekindergarten pilot program will serve up to 500 mostly 4-year-olds in a half-day program. It is also designed to help parents who home-school their kids by providing instructional materials and other assistance through home visits.

As the session ended May 18, Palin refused to accept $28.6 million in federal stimulus money for energy conservation because she said it would have required adoption of new energy-efficiency building codes that would amount to "a mandatory tax on Alaskans building or renovating homes or businesses." Lawmakers met for a one-day session Aug. 10 and overrode Palin's decision, arguing that her objections were overblown and the state should set the standard for energy efficiency. 

Also in the one-day session, lawmakers confirmed Alaska National Guard chief Craig Campbell as lieutenant governor, replacing Parnell.

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Balanced budget eludes Arizona Republicans

Even though Republicans in Arizona control both the legislative and executive offices, the two sides’ bitter standoff over how to close a $3.4 billion deficit has resulted in Arizona being one of the last states to balance its spending plan for the fiscal year that began July 1.

Under pressure to avoid a government shutdown and keep public schools and other priority services operating, the governor signed a $10.7 billion budget July 1, which included $2.3 billion in stimulus funds for health care and education but still left the state’s budget unbalanced.

The drawn-out debate centers on Gov. Jan Brewer’s (R) insistence on raising the state’s sales tax during the next three years from 5.6 percent to 6.6 percent — a move she says would generate $1 billion a year.

The Legislature is opposed to the measure, arguing tax increases are unwise during a recession because they would cause Arizonans to lose jobs and would severely harm the middle class. Some GOP members are willing to compromise on a tax that would gradually decrease during the next three years.

The Legislature had hoped to pass a conservative agenda this session when Brewer replaced former Gov. Janet Napolitano (D), who resigned from her post in January after President Barack Obama appointed her homeland security chief.

Shocked by the Republican governor’s proposal to raise the sales tax, lawmakers initially agreed on a budget that included $630 million in cuts. Fearing a veto, they refused to pass the budget on to Brewer, who subsequently sued the Legislature for violating the state’s constitution. The state Supreme Court sided with the governor, saying the Legislature must send bills to her desk once they are passed.

As expected, Brewer vetoed the budget plan that landed on her desk, saying it did not offer adequate funding for K-12 education or health care for the poor.

Brewer called a special session July 6 to address how to close the budget gap, continuing to push her tax increase proposal — a decision she said should be made by voters in November. Some other proposals include borrowing against future lottery income and selling and leasing government-owned buildings, including the House and Senate buildings. Democrats are proposing lowering the sales tax rate and expanding the base of taxed products and services.

The Legislature is now in its fourth week of special session, and thus far has passed 130 bills out of 1200. Conservatives won on the issues of guns and abortion, allowing weapons to be brought into bars and restaurants; and imposing a 24-hour waiting period on women seeking abortions, as well as requiring minors to submit parent-signed consent forms.

The Legislature also:

• Made it harder to successfully sue emergency medical providers for malpractice;
• Expanded the definition of domestic violence to romantic and sexual relationships;
• And allowed the state to partner with private companies to build new toll roads.
  

Brewer, concerned about wildfires, rejected a proposal that would have allowed sparklers and other fireworks in the state. Stricter immigration laws failed in Arizona for the second year in a row, when a bill that would have made Arizona the first state to criminalize the presence of illegal immigrants passed in the Senate but failed in the House.

—Kimberly Leonard

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Arkansas boosts tobacco tax, cuts grocery tax

With Arkansas suffering from the recession far less than other states, the General Assembly this year increased the tax on cigarettes to pay for health care, lowered the grocery tax, and set up a commission to oversee the creation of a state lottery.

Arkansas Gov. Mike Beebe (D) praised the Democratic-controlled legislature, which considered many of his priorities. Key among them was the tax increase on cigarettes — 56 cents a pack — and other tobacco products, which is expected to raise almost $88 million to fund a statewide trauma system, an expansion of the state’s Children’s Health Insurance Program to cover families making up to two-and-a-half times the federal poverty line, and other health-related programs.

Lawmakers also set up an independent nine-member lottery commission to help create a state lottery — approved by voters during the 2008 election — to fund college scholarships.

The grocery tax was cut from 3 cents to 2 cents, two years after lawmakers halved the tax from 6 cents to 3 cents. When Beebe took office in 2007 he pledged to eliminate the then 6-percent grocery tax.

The state also cut the sales tax that manufacturers pay on utilities by three-fourths of a penny.

Legislators passed a $4.5 billion budget that includes $1.9 billion for K-12 schools and a $310 million surplus, mostly for one-time projects. At their last regular session in 2007, the General Assembly passed a $4.35 billion budget for 2008 and $4.52 billion budget for 2009.

After moving its presidential primary up to February to compete against other states for electoral significance, lawmakers moved it back to the third Tuesday in May.

The General Assembly also:

• Outlawed the procedure known as a “partial-birth abortion,” which is typically performed in the final trimester of pregnancy;
• Changed the unemployment law so the state can qualify for $59 million in stimulus funds to expand benefits to more people;
• Banned lobbyists from paying for lawmakers’ meals when the lobbyist isn’t present;
• And required police to collect DNA from people arrested on suspicion of violent crimes like murder, kidnapping and sexual assault.

Lawmakers return in February for their first even-year session. The legislature previously met biannually, but voters approved a constitutional amendment in November requiring a session every year, with budget sessions for even-numbered years.

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California budget woes take center stage

Battles over deep cuts to state services to balance the budget have dominated this year’s ongoing legislative session, propelling California onto the national stage as the poster child for the recession.

Facing a $26.3 billion shortfall after voters derailed the initial budget approved in February, officials eventually broke a deadlock and slashed spending on education, health care, social services and the state’s prison system.

But even after $15 billion in cuts, the state has entered fiscal year 2010 facing many of the same troubles.

As negotiations to fix the approved budget dragged on past the start of the new fiscal year on July 1, the state, unable to pay its bills, issued more than $1.09 billion in IOUs and forced workers to take furlough days.

A compromise finally came on July 24, when Democratic lawmakers and Gov. Arnold Schwarzenegger (R) agreed on a budget, which includes across-the-board reductions in government spending. Among those cuts, elementary and high schools lost $5.7 billion in funding, health programs saw $2 billion disappear and the prison system lost $1.2 billion.

Medicaid took a $1.3 billion hit, which is also the same amount the state is hoping to save by furloughing workers for three days each month.

But perhaps the most controversial measure of this session, which is set to end on Sept. 11, is the plan to borrow about $2 billion in property taxes from local governments. While the state has to repay the money within three years, cities and towns are outraged and have threatened lawsuits.

Meanwhile, California will have to deal with more cost-cutting , since the budget relies on $8 billion in accounting tactics that delay, rather than solve, deficits.

Even with the drastic rollbacks, the final budget was not as austere as some had expected. Most notably, Proposition 98, which guarantees schools a minimum level of funding, survived, despite Schwarzenegger’s threats to suspend it.

Also, while the state will take $1.7 billion in redevelopment funds from local governments in addition to the property taxes, the General Assembly rejected a measure to raid their coffers for gas-tax revenue. Lawmakers similarly eschewed an offshore drilling initiative.

These moves again threw the budget out of whack and prompted the governor to make another $489 million in cuts to balance the books and create a small cash reserve. Among his cuts was $80 million from programs that look into potential cases of child abuse. State parks also suffered; the legislature approved closing only 50 parks, but now 100 could be shut.

The state’s February budget ran into trouble after a May vote by residents who rejected five of six fiscally-related ballot initiatives, including ones that would cap government spending and alter the state’s lottery system.

Also, revenues dropped when incomes of the wealthiest 1 percent of taxpayers plummeted as the recession continued. California depends heavily on the personal income taxes of the wealthy to fund daily governmental operations.

In other business during the session, lawmakers approved tax credits for filmmakers who produce movies in the state, and required lenders to delay foreclosures by 90 days, except for lenders with loan-modification programs.

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Colorado emphasizes health care, education

Despite the recession, Colorado’s Democratic-controlled General Assembly expanded health insurance coverage to more people during a legislative session that ended May 6.

About 100,000 more uninsured Coloradans will now be covered under the Health Care Affordability Act, a bill pushed by Gov. Bill Ritter (D). The expansion of coverage relies on revenue generated by increased hospital fees and matching federal Medicaid funds.

Lawmakers also increased K-12 funding and avoided cuts to all-day kindergarten and a statewide preschool program that serves more than 20,000 at-risk children. They used federal stimulus money to keep up funding for the state’s higher education system, despite originally weighing cuts of up to $450 million.

Perhaps the most substantial piece of legislation to receive Ritter’s signature is a budget reform plan that eliminates a maximum 6-percent growth rate on year-over-year state spending. Supporters of the change likened the cap to a “straitjacket” that constrained lawmakers’ options, but opponents said it would lead to unchecked spending in future years.

Lawmakers substantially raised vehicle registration and car rental fees to generate $250 million a year for improvements to structurally deficient highways and bridges. Supporters said the plan, known as FASTER, also would put thousands of Coloradans to work, but some Republicans criticized the idea of hiking fees during a recession.

Democrats and Republicans alike supported extending nearly $10 million in business tax credits in fiscal 2010 to quickly create jobs. One credit applies to companies that create 20 or more new jobs in cities or five or more new jobs in rural areas; another authorizes rebates for film production companies that shoot movies in the state.

Several measures that didn’t pass gained nationwide attention. After clearing the House of Representatives by a single vote, a bill to repeal the death penalty — and use the money saved on capital prosecutions to pay for cold-case investigations — failed by the same margin in the Senate. Gov. Bill Ritter (D), a former district attorney who prosecuted several death-penalty cases, refused to say whether he would have signed or vetoed the bill.

Lawmakers also decided against granting in-state tuition to illegal immigrants. In another measure, legislators declined to award Colorado’s nine electoral votes to the winner of the national popular vote rather than the Electoral College tally — a change in the electoral process proponents are pushing nationally that five states have endorsed.

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Conn. budget still unresolved

A divided legislature and a resolved governor remain in a dramatic impasse in Connecticut in the aftermath of a session largely defined by budgetary disputes.

Facing Democratic control in both chambers, Republican Gov. M. Jodie Rell on June 4 vetoed the lawmakers’ proposed solution to a budget standoff, and since then, officials have been huddled behind closed doors while state spending continues by executive order.

The main sticking point has been taxation, with Rell and a vocal Republican minority in the
legislature arguing that it is possible to address the state’s $8.55 billion deficit without covering the costs with taxes.

Democrats, meanwhile, are seeking $1.8 billion in tax increases, which would primarily affect the wealthy. Rell, once opposed to all tax hikes, is hoping to limit the increases to $391 million in “sin” and corporate taxes, while leaving the income tax untouched.

As leaders work toward a consensus, tensions are running high in all parts of the state, with fundamental issues, such as how much money cities and towns will receive, remaining unresolved.

Meanwhile, Rell also defied lawmakers on the death penalty, vetoing a bill that would have abolished it in the Constitution State.

But not all of Rell’s 20 vetoes stood, as the legislature overrode seven during a special session. Most notably, Democrats successfully countered Rell’s veto of a universal health-care bill that will take effect by 2012.

Also during the session, lawmakers:

• Passed a bill stripping the governor of the authority to appoint U.S. senators in the case of a vacancy. Instead, the legislation calls for a special election.
• Debated, but ultimately suspended consideration of, a bill that would make it illegal to have open containers of alcohol in motor vehicles. Lawmakers were concerned that the legislation would deter people from acting as designated drivers.
• Approved an official apology to African-Americans for the state’s role centuries ago in the slave trade.

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Delaware plugs budget hole with tax hikes, salary cuts

In the early morning hours of July 1, Delaware lawmakers finished plugging an $800 million revenue gap with $206 million in tax and fee increases, plus $155 million in federal stimulus funding. Lawmakers also agreed to reduce the state payroll by $13 million through attrition and a 2.5 percent salary cut.

The final $3.09 billion budget passed just after the June 30 deadline is 8.1 percent smaller than the previous year’s budget.

On the revenue side, lawmakers approved a sports betting lottery that is expected to go into effect in September and generate $50 million in revenues this year.

Tax and fee hikes include increased fees for companies that incorporate in Delaware and a 1 percent increase in personal income tax for people with incomes above $60,000. Although lawmakers failed to approve Democratic Gov. Jack Markell’s proposed alcohol tax hike, they approved a 45-cent hike in cigarette taxes, which is expected to raise $16 million in 2010.

Delaware also enacted increased protections against physical, emotional and financial abuse of seniors, safeguards against predatory lending and stiffer penalties for drunk drivers. Lawmakers also approved a requirement that by 2015, utilities reduce energy consumption by 15 percent.

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Florida session sees tax hikes, political scandal

Facing the darkest economic climate since the Great Depression, Florida ended its overtime 2009 session balancing a budget with the help of federal stimulus dollars, increasing the cigarette tax by a $1 a pack and hiking tuition by 15 percent.

A political scandal that upended the House speaker and a gambling compact also defined the session.

To the chagrin of many in the state’s Republican-controlled legislature, Gov. Charlie Crist (R) accepted $5 billion in federal stimulus dollars. But even with the infusion, the state deficit remained at about $3 billion.

The governor, a moderate Republican who is running for the U.S. Senate next year, abandoned his pledge not to raise taxes and approved more than $2 billion in tax and fee increases. Besides the cigarette tax and tuition hikes, fees rose for court filings, motor vehicle tags, driver’s and fishing licenses as well as hurricane insurance rates. Motor vehicle registration fees rose 35 percent.

The governor signed the $66.5 billion budget May 28, the same day he vetoed a 2 percent pay cut on state workers making more than $45,000 annually. The cut would have saved the state $30 million. Crist also refused to shift $6 million from a trust fund that supports the licensing of concealed weapons permits.

The Legislature and Crist also agreed on a gambling deal with the Seminole Tribe that could give the state at a minimum $150 million a year, but the tribe has until Aug. 31 to accept, reject or offer an alternative. The package would give the tribe exclusive rights to blackjack and other table games at four casinos, including the Hard Rock casinos in Hollywood and Tampa, but the tribe would have to drop blackjack at its casino in Immokalee.

Scandal marred Florida’s session from the very beginning. Rep. Larry Cretul (R) replaced House Speaker Ray Sansom (R) in January after Sansom faced a grand jury investigation over charges he funneled millions to a college that later hired him. Sansom and the president of Northwest Florida State College were indicted in April.

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Georgia gridlock blocks transportation money

Like last year, Georgia lawmakers failed at the last minute to agree on a fix for something many consider one of the state’s top priorities: funding hundreds of road and infrastructure projects.

In the last session, a funding measure failed by three votes. This session, the Republican-controlled General Assembly was so gridlocked over how to implement a sales tax to help pay for these projects that transportation lobbyists and business leaders walked out during the final day’s negotiations.

Lawmakers also passed a slew of tax breaks, passed a couple of first-in-the-nation laws, and enacted an $18.6 billion budget that was $1 billion smaller than the previous year’s, despite using stimulus dollars to pay for Medicaid, unemployment benefits and more.

The General Assembly closed a $3.3 billion budget deficit with the help of $1.35 billion in stimulus funds, $500 million from various reserve funds, and by cutting about $1.5 billion from state agencies, according to the Georgia Budget and Policy Institute. The tax breaks included a tax credit of up to $1,800 on homes bought in the next six months. And a new law forbids local governments from jacking up property value assessments to raise money.

But the biggest tax break — to cut the capital gains tax at a cost of $1 billion to the state — was vetoed by Gov. Sonny Perdue (R), despite having widespread Republican support. That bill also would have given a tax break to businesses that hired someone who had been unemployed at least four weeks.

Although lawmakers couldn’t find a way to fund transportation, they did give the legislature and the governor more power over how the state Department of Transportation spends its money. 

In the wake of the peanut-salmonella outbreak that affected Georgia companies, the state enacted the country’s first law requiring food manufacturers to report tainted food products within 24 hours of testing. Georgia also passed the country’s first law that allows human embryos to be formally adopted by prospective parents, the same way a baby is adopted.

On the immigration front, local governments cannot have immigration sanctuary policies, and Georgia becomes the second state in the country, behind Arizona, to require voters to provide proof of citizenship, but the U.S. Justice Department has objected and it cannot go into effect. A bill to force people to take the drivers’ license exam in English failed.

Fines on “super speeders” will increase and the extra money will help fund trauma care.

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Hawaii lawmakers hike taxes over governor’s veto

Legislators in the Aloha State capped off their tumultuous spring session by overriding Republican Gov. Linda Lingle’s veto and pushing through tax and fee hikes on hotel room rentals, cigarettes, real estate transfers and upper-income taxpayers.

Overwhelmingly controlled by Democrats, the Legislature passed the controversial measures as part of its effort to address a $2 billion shortfall in the state’s budget.

The new taxes are supposed to bring in $250 million. Of that, $96 million would come from hiking the income tax on the top 2.6 percent of Hawaiian taxpayers. Their rate would go from 8.25 percent to 11 percent.  But the move to raise tobacco taxes was muddied by a mistake in the bill that could jeopardize some of the $44 million in new revenues the lawmakers were counting on.

Even with nearly $1 billion of federal stimulus money, lawmakers had to find $800 million in cuts to balance the two-year budget that begins in July. Some departments saw their funds cut by 20 percent. In June, Lingle said she would furlough all state employees, including herself, effectively cutting all state employees’ pay by 14 percent a year.

A proposal to allow same-sex couples to obtain civil unions also sparked fireworks before it was defeated. The fight over the bill, which passed the House, culminated in a late-session showdown in the Senate. White-shirted supporters and red-shirted opponents filled the gallery, as senators voted to revive the bill that had been bottled up in committee. But the effort proved futile because of a last-minute procedural move that effectively killed the bill for the year.

Lawmakers also passed a new law requiring the governor to obtain a two-thirds vote of the Legislature before the state sells any of the 1.2 million acres of land it received from the United States took from the Hawaiian monarchy and returned to Hawaii when it became a state. The measure was seen as a compromise after the U.S. Supreme Court ruled in March that a moratorium on ceded land sales was an improper interpretation of federal law. But the issue isn’t resolved yet; one of the plaintiffs in the lawsuit rejected the agreement, because he wants the moratorium to remain.

In March, the Hawaii Supreme Court ended a controversial passenger and vehicle ferry service between Honolulu and neighboring islands. The Superferry was launched after Lingle and legislature called a special session in 2007 to clear legal obstacles to the service. But the justices ruled this spring that the Superferry service could not continue before an environmental study was conducted. Superferry shut down its services after the decision and has since declared bankruptcy.

This spring, lawmakers tried to prod Lingle into reviving a program meant to provide universal health care for Hawaii’s children. Lingle suspended the Keiki Care initiative in October because of budget pressures, but the legislature set aside money to restart it in this year’s budget.  Lingle has until June 30 to sign or veto the measure.

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Idaho gas-tax standoff concludes stormy session

The second-longest legislative session in Idaho history ended May 8 after a prolonged standoff between Republican Gov. Butch Otter and the GOP-controlled House of Representatives, which refused to go along with the governor’s proposal to raise the gas tax to pay for road improvements. It marked another stinging political defeat for Otter, who failed in a similar effort to raise road funds last year.

Otter, the House and the GOP Senate finally agreed to a $57 million road-improvement plan — the governor initially had asked for $174 million — paid for mainly by raising motor vehicle fees and shifting existing gas tax revenue from agencies to the general fund. Legislators also instructed a task force to explore new revenue sources for roads, ensuring the issue will come back next year.

The session was marked by fiscal crisis, with lawmakers using a combination of cuts and federal stimulus aid to balance the budget. In a stark reflection of the state’s money problems, lawmakers cut K-12 education funding for the first time ever, slashing funds by 7.7 percent. Teachers will see a 2.6-percent pay cut, while administrators will see a 5-percent cut.

Legislators also:

• Limited most Idaho elections to two days a year, one in the fall and one in the spring. Hundreds of small taxing districts and other jurisdictions previously held elections throughout the year; the changes won’t go into effect until 2011;
• Agreed to regulate and license day-care centers that supervise seven or more children.  The state had regulated day cares with 13 or more children;
• Required midwives to be licensed by the North American Registry of Midwives;
• Passed a nonbinding resolution telling the federal government not to encroach on Idaho’s sovereignty. The resolution was approved despite the $1.2 billion in federal stimulus funds the state plans to use for major transportation initiatives and to avoid even deeper cuts to K-12 education and other priorities.

A pair of high-profile issues failed. Otter could not win enough support to relax the state’s system of granting liquor licenses, and a plan to require personal financial disclosure from candidates and elected officials was killed by House Speaker Lawerence Denney (R), even after it cleared the Senate unanimously.

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Illinois ousts Blagojevich, struggles with budget and ethics

The Illinois General Assembly started its spring session by ousting Gov. Rod Blagojevich (D) through impeachment, following his December arrest in a corruption probe. But a new governor didn’t make the budget process any easier, and lawmakers left Springfield in July after passing a budget that is out of balance by billions of dollars.

Gov. Pat Quinn (D) took over the executive branch on Jan. 29, after the Illinois Senate’s unanimous decision to remove Blagojevich from office. FBI agents arrested Blagojevich at his Chicago home in December, as federal prosecutors alleged that he tried to use his office for personal profit.

The prosecutors relied on wiretapped conversations that they allege show Blagojevich tried to shake down state contractors for campaign contributions and wanted to sell President Obama’s vacated U.S. Senate seat.

Quinn promoted an agenda that included ethics reform, a major new public works project and an income tax hike to balance the budget.

The Democratic-controlled legislature agreed to a $31 billion infrastructure improvement package that would fix roads and build new schools. It was the first time in a decade Illinois passed a capital bill.

Lawmakers were more wary of his proposed ethics reforms. They capped campaign contributions at $5,000 a year, although many loopholes remain. They also strengthened laws for public access to public records. But efforts to set term limits for legislative leaders or allow voters to recall governors both stalled.

To bridge what he said was an $11 billion shortfall over 18 months, Quinn wanted to hike the income tax from 3 percent to 4.5 percent, with deductions for low-income workers. The Senate passed a different income tax increase, but the House rejected it.

The $26 billion operating budget passed two weeks after the June 30 deadline. The state constitution requires Illinois’ budgets to be balanced, but few observers in Springfield believe the accord even comes close. Some estimates peg the shortfall for the current year as high as $10 billion.

The budget gives Quinn substantial authority to order cuts, which could include layoffs of at least 2,600 state employees. The state will borrow $3.5 billion in short-term loans to meet its pension obligations and it will push off $3 billion of payments to providers, mostly social service agencies, until next fiscal year.

Lawmakers may revisit an income tax increase in their next session in January. The tax would be easier to pass, requiring a simple majority in each chamber instead of the three-fifths majority it needed in an overtime session.

—Daniel C. Vock

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Indiana passes “Republican-flavored budget” at last minute

When this year’s budget finally passed the Democratic-controlled Indiana House, it did so with a coalition of all 48 Republicans and just 14 Democrats approving a two-year $28.7 billion spending plan.

Gov. Mitch Daniels (R) supported the measure and signed it just six hours before the end of the fiscal year June 30, narrowly averting the first Indiana state government shutdown in a century.

But the measure left a bad taste in the mouth of many Democrats, who argued that changes in the way the state doles out education money will hurt rural and urban schools that are losing pupils.

“It is a Republican-flavored budget. The bad taste has been watered down a little bit,” explained House Speaker Pat Bauer (D). The speaker didn’t vote on the measure but said he likely would have opposed it.

Daniels kicked off the spring session calling for sweeping reforms in local government to increase efficiency. But in the end, legislators focused most of their efforts on how to prevent key programs from going broke.

First, they had to tackle the state’s unemployment insurance fund, which stayed in the black only because of federal loans. Eventually, lawmakers decided against new restrictions for seasonal employees, such as construction workers, that would have made it harder for them to get benefits. Instead, they added rules to root out fraud and raised the unemployment tax on businesses.

The General Assembly also propped up the central Indiana authority that oversees Indianapolis sports stadiums and a convention center. The Capital Investment Board faced a $47 million shortfall after the opening of a new football stadium for the Indianapolis Colts.

To help the authority, legislators agreed to let the city hike its hotel tax and charge higher rental car fees. But Indianapolis Mayor Greg Ballard said the new revenue plus a round of budget cuts will still leave a $12 million deficit.

During the session, state revenue estimates fell several times. By the end of the fiscal year, revenues were $1.5 billion less than projections.

Daniels had enacted several rounds of cuts over the year, including a 7 percent across-the-board reduction in July, a hiring freeze in November and $767 million of cuts in December. Many agencies were affected, but Daniels said he tried to avoid cuts in education, public safety and child protection.

In the new budget, legislators agreed to spend $300 million of the state’s $1.3 billion reserves. Federal stimulus money helped offset cuts to higher education, leaving spending for colleges and universities essentially flat.

—Daniel C. Vock

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Iowa lawmakers approve gov’s bonds, avoid gay marriage ban

The Iowa General Assembly this spring approved a $6.3 billion budget and a major public works program, but the session may be better remembered for one issue the Democrat-led legislature avoided: an Iowa Supreme Court ruling legalizing gay marriage.

The legislature, controlled by Democrats, left Des Moines the weekend before the first same-sex nuptials were performed in the state. Republican leaders tried to pass a constitutional amendment to overturn the April 3 decision, but Democrats blocked the move.

GOP lawmakers also criticized Gov. Chet Culver (D) for allowing the ruling to stand, despite saying during his last re-election campaign that marriage should be limited to unions between a man and a woman.

The marriage controversy came on the heels of an uproar over taxes. During a raucous tax hearing, House Speaker Pat Murphy (D) ordered state troopers to evict some 600 protesters from the House chambers.

The protestors were upset by a proposal to overhaul the state’s tax code in a bill designed to make rich Iowans pay more and poor Iowans pay less. But the proposal also would have ended the state’s deduction for federal income taxes, which opponents said would make Iowans pay “a tax on a tax.” The bill was narrowly defeated.

Lawmakers approved an $830 million public works project championed by Culver. The money would help flood-ravaged communities rebuild after the disastrous summer of 2008 as well as fix up the state’s deteriorating roads and bridges.

Some $529 million of stimulus money in next year’s budget will help offset expected drops in state revenue. Lawmakers had to cut this year’s budget twice to keep the state in the black. The budget for next year, which starts July 1, is even tighter, and lawmakers are already worried about the following year, when the federal stimulus money largely dries up.

Iowa became the third state after Massachusetts and New Jersey to require parents with uninsured children to sign them up for public health care programs if they qualify, although there is no penalty if they don’t. The $5.7 million plan would cover 12,000 of Iowa’s roughly 30,000 uninsured children.

The legislature also agreed to scale back a law that barred sex offenders from living within 2,000 feet of a school or park. The new law imposes other restrictions on sex offenders – such as increased monitoring by ankle bracelets and a ban on loitering near schools – but reserves the 2,000-foot limit for the most dangerous sex offenders.

Labor unions suffered high-profile defeats on all of their top proposals. Among the labor-backed measures that failed were a requirement that contractors on public works projects pay a prevailing wage and a law that would have allowed state employees to pick the doctor they see for treatment of work-related injuries.

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New governor, lawmakers agree on coal plant

Kansans lost their governor to Washington towards the end of the 2009 legislative session but gained a coal-fired power plant in the process.

Two term Democratic Gov. Kathleen Sebelius resigned April 28 to become President Obama’s secretary of health and human services.  Less than a week later, her hand-picked successor, Lt. Gov. Mark Parkinson, announced that he would support a secretly-negotiated compromise allowing an energy company to build a 895-megawatt coal plant in western Kansas. The GOP-controlled legislature quickly went along.

Sebelius and Parkinson had opposed the company’s initial plan to build two coal-fired power plants, leading to a tense 19-month battle pitting the governor and environmentalists against business interests and many Republican legislators. Parkinson, once the state GOP chairman who switched parties to run with Sebelius in 2006, said after he took over as governor that the state needed to settle the issue so “we can start to move forward.”

Environmental groups said they are worried that the plant, which will supply more electricity to Colorado than to western Kansas, will blow dangerous pollution east across Kansas. They would like to see a greater expansion of clean renewable energy, such as wind. Parkinson said the utility, Sunflower Electric, could request a second power plant in two years.

Scott Allegrucci, director of the Great Plains Alliance for Clean Energy, said the fight would continue. “I’ve said this is like a punt,” he said of the agreement. “The playing field has changed but it’s not over.”

Parkinson has ruled out running for a four-year term next year, leaving Democrats without an obvious candidate. That could make it easier for the governor to make politically unpopular cuts required to keep Kansas’ $13 billion budget balanced. A week after signing a balanced budget the legislature had sent him, Parkinson learned the state had taken in about $103 million less in tax revenues than projected in May, guaranteeing a fourth series of cuts this year even though lawmakers used federal stimulus money to plug gaps.  Public schools have taken the biggest hit; so far, the legislature has resisted tax increases and cutting state workers’ pay.

Lawmakers also boosted the minimum wage for the first time in 20 years, from $2.65 an hour to $7.25. Using money from the settlement with tobacco companies, lawmakers expanded medical insurance to 9,000 more children.  They also cracked down on teen drivers talking or texting on their cell phones.

Before leaving Kansas, Sebelius, a Roman Catholic who personally opposes abortion but supports a woman’s right to choose, had vetoed a bill expanding abortion reporting by doctors. She also allowed a bill to become law requiring pregnant women seeking abortions a chance to see a sonogram.

During her confirmation proceedings in Washington, Sebelius was pressed to list campaign contributions from George Tiller, a Wichita abortion doctor who was shot and killed May 31 at his church by an antiabortion protester.

—Stephen C. Fehr

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Kentucky addresses prison reform, new budget crisis

Kentucky lawmakers mended a $446 million hole in the state’s 2009 budget by hiking tobacco and alcohol taxes and cutting programs. The politically split Legislature also enacted emergency prison reforms and overhauled the state’s educational testing system in the regular legislative session that ended March 30.

In a special session that ran from June 15 to June 24, lawmakers primarily used federal stimulus dollars to patch a nearly $1 billion budget shortfall for the fiscal year beginning July 1.

Also in the special session, the Legislature approved economic incentives aimed at bringing the Breeders’ Cup to Louisville and expanding Kentucky’s NASCAR speedway. Democratic Gov. Steven Beshear also won approval for his proposal to finance major transportation projects between Kentucky and Indiana, including proposed Louisville bridges over the Ohio River.

In the regular session, Kentucky lawmakers enacted reforms that will allow courts to substitute more cost-effective drug rehabilitation programs for prison time for some adult offenders as the state faces one of the worst prison overcrowding crises in the country. The Legislature also revamped the beleaguered public school accountability test known as CATS, replacing it with a new exam that must be implemented within three years.

Another new law establishes a database to enforce the state's limits on payday loans and puts a 10-year moratorium on new payday lending shops.

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Louisiana lawmakers scale back governor’s cuts

Louisiana lawmakers had a contentious session over difficult cuts that needed to be made to the new budget after anticipated revenues for the 2010 fiscal year fell by $1.3 billion.

The Legislature finally passed a budget that used more than $1 billion from the stimulus, while managing to avoid the harshest cuts that Gov. Bobby Jindal (R) proposed to colleges and health care.

The politically split Legislature passed a $28 billion budget, down from last year’s $30.1 billion spending plan. The state health department’s funding was $200 million lower than the previous year’s (although Jindal called for cuts of $440 million) and higher education was cut by about $107 million (compared to the $220 million decrease Jindal proposed). Money for health care included federal dollars, and higher education funding came from various funds, including the rainy day fund and health care trust funds.

The Legislature didn’t raise any taxes.

The budget included $34 million in pork, but Jindal used a line-item veto to cut that by $3 million. The state will also spend at least $85 million to keep the New Orleans Saints in Louisiana until 2025.

Jindal, who campaigned on ethics, successfully thwarted efforts by lawmakers to make public more records from his office. Despite numerous attempts, lawmakers also failed to overturn his decision to reject $98 million in stimulus money for unemployment benefits.

The state raised the cap on charter schools, enacted a set of laws to crack down on sex offenders, and protected medical workers from penalties if they refuse to provide medical procedures – such as abortion or emergency contraception – based on moral grounds.

The governor also signed a bill to allow people to register to vote or change their party affiliation online.

Louisiana will also now offer a high school “career diploma” and curriculum specifically for poor-performing students who do not intend to go to college. Critics said that would roll back state standards that have won national praise.

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Maine cuts income tax, enacts gay marriage

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Maryland adopts first-in-the nation laws, freezes colleges tuition

Although Maryland’s 2009 legislative session was mostly consumed by financial woes, lawmakers passed two first-in-the nation laws — one that makes violence against a homeless person a hate crime and another that requires insurance companies to give price breaks to doctors and hospitals to convert to electronic medical records, a major policy goal of the Obama administration.

With the help of federal stimulus money, lawmakers closed a $2 billion budget deficit by cutting expenditures 1.6 percent compared to last year and approved Democratic Gov. Marin O’Malley’s bid to freeze university tuition for the fourth year in a row.

O’Malley lost a hard-fought campaign to overturn the death penalty in Maryland, but lawmakers approved a bill making the sentence among the most restrictive in the nation. O’Malley also won approval for a host of public safety measures, including one that would allow courts to confiscate weapons from anyone issued a restraining order in a domestic dispute and one that creates a special public safety announcement — called a Silver Alert — when elders with dementia go missing.

He also signed laws that tighten rules on the use of covert surveillance, allow speed-monitoring cameras statewide near schools and in highway work zones, increase penalties for drunken driving and raise the maximum prison sentence for child pornography offenses. Typing text messages while driving was banned, although the law does not prohibit reading messages.

On the last day of the session, lawmakers reached a compromise on a controversial measure that ends the state’s policy of issuing driver’s licenses to undocumented immigrants starting June 1.  Immigrants who already have licenses will be allowed to keep them and renew them once. One of only four states — including Hawaii, New Mexico and Washington — that issues licenses without requiring proof of legal residence, Maryland was forced to end the practice because of so-called federal Real ID requirements aimed at improving domestic security.

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Sweeping cuts, higher taxes save Massachusetts budget

It took more than $1 billion in stimulus and reserve money and the largest sales tax increase of any state this year for Gov. Deval Patrick (D) and his Democrat-controlled House and Senate to balance their $27 billion budget.

The dour economy meant lawmakers had to retool their budget proposal multiple times to address dismal revenue projections. The revised numbers, which forecast a $5.1 billion deficit going into fiscal year 2010, forced Beacon Hill to draw $214 million from the state’s rainy day fund and $1.66 billion from its stimulus pot to avoid huge spending cuts and widespread furloughs.

To supplement that money, the legislature also levied new taxes, including a 25 percent sales tax increase — from 5 to 6.25 percent — and a 5 percent, one-time tax on satellite dishes. The new fees are expected to generate $1 billion in revenue over the next fiscal year, according to the state’s Department of Revenue.

Still, Beacon Hill’s revenue efforts did not spare lawmakers from making tough program cuts. Foremost among them was slashing $130 million from health insurance for legal immigrants — a move that could have left up to 30,000 without coverage by July. While Patrick pined the legislature to restore at least $70 million of funding to the program, lawmakers in late July only approved $40 million. It remains unclear how many immigrants the fund can still cover.

Despite the reductions, the governor scored three key reforms in June by threatening to reject the legislature’s sales tax increase unless lawmakers cooperated. They are:

• Revisions to state ethics laws, which better define and regulate “lobbying” and specify new limits on gifts and fundraising; they arrived on the heels of former House Speaker Salvador DiMasi’s indictment on federal corruption charges;
• A consolidation of five transportation bureaus, including the Massachusetts Turnpike Authority and Registry of Motor Vehicles, into the Department of Transportation;
• Pension reforms, which prohibit public workers from factoring additional pay – including stipends and vacation days – into their pension calculations.

Still on the docket this year is a bill that would require offenders released from state custody to be supervised for at least nine months and a proposal to expand in-state gambling, which Patrick has long supported. Lawmakers expect to debate both sometime this fall.

—Tony Romm

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Michigan lawmakers face another year of bleak budget talks

The bad news for Michigan’s economy never seems to stop.

The state continues to have the highest unemployment rate in the country. This year, two of the vaunted Big Three automakers based in Detroit filed for bankruptcy and continued to shed workers by the thousands. The small town of Standish is hoping to import prisoners from California – or maybe Guantanamo Bay – to keep a local state prison from closing.

Bad news in the economy means bad news for the state fiscal situation. The budget picture looks so dire that Gov. Jennifer Granholm (D) suggested cutting off the Michigan State Fair, the oldest in the country, from state funds. And next year’s revenues look even worse.

Michigan lawmakers haven’t agreed on a budget yet, because the state’s next fiscal year doesn’t start until October. But the state is already $170 million short of having a balanced budget for the current year, and state projections suggest legislators will have to close a $2.7 billion budget gap for the next year.
Ideas to bring in more revenue, like taxes on beer and smokeless tobacco, have had a lukewarm reception in Lansing.

In the state known for automobile production, figuring out a way to pay for better roads could also become a major flashpoint in budget negotiations. A task force meeting last year suggested raising the gas tax and vehicle registration fees to bring in $1.5 billion annually for highways and mass transit. The Michigan Chamber of Commerce is pressing for the tax hikes, but lawmakers have been skittish.

On another fiscal front, House Speaker Andy Dillon (D) set off a controversy this summer, when he proposed that the state consolidate health insurance plans for most public employees in Michigan. Granholm, a fellow Democrat, panned the idea, saying she doubted it would save much money. But Republicans, business leaders and some school districts back the proposal.

But legislators did clear the way for the City of Detroit to renovate the Cobo Center, home of the International Auto Show. Local business leaders feared the auto show would leave Detroit for Chicago or Las Vegas unless the Cobo Center was improved, but a regional deal remained elusive before the election of Detroit Mayor Dave Bing.

Bing worked with suburban leaders and state lawmakers to come up with a plan. The city will own the facility and get $300 million to fix it up, but a regional authority will lease the center for 30 years. Detroit will manage the facility after the 30 years is up.

—Daniel C. Vock

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Pawlenty vetoes tax hike, axes programs to balance Minn. budget

The first half of the year was a tumultuous one in St. Paul.

Gov. Tim Pawlenty, a Republican, eschewed a third term, possibly in preparation for a presidential bid. Then he cut $2.7 billion from a Democrat-backed budget that was flawed because it depended on a tax hike Pawlenty vetoed. Finally, the state Supreme Court ended an eight-month recount saga by declaring Democrat Al Franken the victor in last November’s U.S. Senate race.

Pawlenty, who announced in early June he won’t seek a third term as governor in 2010, found the bulk of his savings by delaying $1.8 billion in state payments to school districts — more than a quarter of what they were supposed to receive — until the next fiscal year.

The governor said lawmakers gave him a $34 billion spending plan with only $31 billion in revenues to support it once he vetoed the tax package that would have raised $1 billion with tax hikes on alcohol, credit card companies and income of the state’s highest earners. To balance the budget, Pawlenty relied on a controversial and rarely-used tactic, called “unallotment,” to make the reductions without calling the Legislature back for a special session. 

The cuts affect nearly every state program. Aid to cities declined. Nursing homes were targeted. Money for hospitals, universities, community services, mental health programs and efforts to combat homelessness was also trimmed.

Lawmakers faced a $6.4 billion deficit over two years when they started their session. The legislators kept funding levels for schools flat and trimmed state agency budgets, including 3 percent reductions for the Legislature and governor’s office. 

Federal stimulus money will pour into the state, though. The North Star State is in line to receive $500 million for highways and bridges, $107 million for water treatment and $94 million for mass transit. 

And legislators agreed to go forward with a voter-approved measure to boost funding for arts, parks and other environmental projects. The initiative that passed in November hikes the state’s sales tax by 3/8 of a percent to pay for the new efforts.

On other fronts, Minnesota became the first state to ban the chemical bisphenol-A from baby bottles and cups and lawmakers approved protections for car dealers who lose their franchises.

—Daniel C. Vock

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MISSISSIPPI

A fight over how to fund Medicaid held up the Mississippi budget for longer than any time in recent memory. It took three recesses and a special session before the Legislature passed a $20 billion budget at midnight before the start of the 2010 fiscal year on July 1. Usually the budget is passed by early April.

In the end, the politically split Legislature largely acceded to Republican Gov. Haley Barbour’s plan to pay for Medicaid by taxing hospitals. Initially, Barbour wanted a $90 million tax for the next three years, while the House wanted no tax at all. The compromise that passed will begin the hospital tax at $60 million, but it could increase to $90 million by 2010, when the stimulus money runs out. The Legislature also cut out measures that would have hampered Barbour’s ability to respond to more revenue shortfalls by cutting Medicaid’s budget.

The $20 billion budget — which is $250 million more than last year and includes $523 million in stimulus funds— boosts education and health care spending to record amounts. K-12 schools will get more than $2.2 billion, or $34 million more than last year, and universities will get $799 million, or $11 million more than last year.

Medicaid is getting more than $5 billion, its highest-ever appropriation. Funding is $500 million more than last year, aided by $256 million in stimulus.

Mississippi also passed a cigarette tax increase, a major landmark in a state where the governor is a former tobacco lobbyist and where the cigarette tax hasn’t increased since 1985. All cigarette packs will be taxed an extra 50 cents to 68 cents a pack. That’s expected to bring in about $106 million in revenue.

Non-premium brand cigarettes, or smaller companies that weren’t a part of the state’s 1997 lawsuit against Big Tobacco, will be taxed an additional 25 cents a pack, pulling in an extra $8.8 million.

—Pauline Vu

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First-year governor in Missouri achieves bipartisan victories

Jay Nixon could have easily failed in his first year as the Democratic governor of Missouri. Republicans control the House and Senate, and voters narrowly backed John McCain over Barack Obama in the 2008 election.

Instead, Nixon successfully pushed through his agenda of creating jobs, giving 15,000 small businesses a tax break, keeping college tuition level and using federal stimulus dollars to balance the state budget.

“You bet we scored this session,” Nixon told reporters after the legislative session ended May 15.

Nixon was a former state senator and attorney general who learned the art of cultivating support from Republicans.

“You have a governor who served in the Senate and understands the process and pressures placed on legislators,” said Senate Republican leader Charlie Shields of St. Joseph. “He knew when it was appropriate to inject himself and when not to. Everyone made an effort to talk to each other. The communication between everyone was good.”

There was another dynamic at work this year in Missouri, a state known for its sometimes harsh partisan politics. “The House and Senate leaders all realized that straight partisanship is not necessarily good politics,” Shields said. “Look at (former President) Bush and the Democrats in Congress. Everyone loses then. We were all on the same page making sure that didn’t happen.”

The biggest failure was the defeat of a plan advanced by Nixon and the Missouri Hospital Association to provide 35,000 low-income working parents with health insurance. The Senate backed it but the House rejected it. 

House Republicans also led the early opposition to using federal stimulus dollars to balance Missouri’s budget. They said spending one-time money on ongoing programs was risky because it would set up the state for financial chaos when the money runs out in two years.

In the end, lawmakers added the $785.5 million in stimulus money to the $23.1 billion budget. One reason they yielded is that Missouri only had a $1 billion shortfall, which was smaller than many states. So the stimulus money plugged some holes.

“We felt like we could do that and have a reasonable shot at coming out of this thing (recession) in two years,” Shields explained.

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Montana enjoys budget surplus

In one of the few states to escape the national recession relatively unscathed — Montana enjoyed a $250 million budget surplus when the Legislature adjourned April 28 — lawmakers clashed on whether they should fully implement last year’s voter-approved expansion of health care for children or postpone it until the economy improves.

Democrats, who were in the minority in the state Senate but held the speaker’s gavel in the state House (despite a 50-50 split with Republicans), won the debate, fully funding the ballot initiative and adding up to 30,000 more children to the Children’s Health Insurance Program.

Montana received $900 million in federal stimulus money, which, among other things, allowed the state to boost funding for K-12 education by 3 percent.

“I know that every other governor in America would trade to be in (our) position right now,” Gov. Brian Schweitzer (D) said, according to the Billings Gazette.

On the environment, lawmakers cleared the way for “carbon sequestration,” the underground storage of harmful carbon gases believed to cause global warming when they are released into the atmosphere.

A statewide reappraisal of property taxes — conducted every six years — threatened to leave some homeowners facing huge tax increases, so lawmakers approved a bill to decrease property taxes and expand exemptions over several years.

Lawmakers worked out a thorny debate between landowners and fishermen, forging a compromise that guarantees residents access to rivers and streams for recreational purposes but keeps in place the rights of homeowners to build fences, as long as they include gates or other means of passing through.

In a controversial move that drew national attention, legislators passed a law exempting Montana gun manufacturers from federal regulations, potentially allowing those who buy firearms made in the state to sidestep criminal and mental-health background checks and other federal registration and licensing rules. Gun-rights supporters hope the law will spur a court challenge that could lead to state, rather than federal, regulation of gun manufacturers.

For the second time in two legislative sessions, the state Senate approved a bill to repeal the death penalty only to see it rejected in a House committee. Death-penalty opponents had hoped Montana would follow New Mexico, which eliminated capital punishment in March.

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Nebraska avoids hiking taxes, tackles ambitious agenda

Nebraska’s unicameral Legislature was one of the busiest in the country. Lawmakers balanced the state budget without raising taxes, overhauled programs for vulnerable children and families, adopted lethal injection as the state’s method of execution, ended certain public benefits for illegal immigrants and increased penalties and expanded the definition of violent crime.

MainStreet.com, a financial web site, even cited Nebraska as the “happiest “ state financially based on such factors as the number of foreclosures, unemployment, personal debt and household income. The state is not as well-off financially though as its Midwest neighbor North Dakota ;  the $7 billion, two-year Nebraska budget could only be balanced by using $515 million in federal stimulus  money and $254 million in reserves.

Gov. Dave Heineman (R), who said the session was the most productive in about 10 years, had challenged lawmakers in his Jan. 15 state of the state address to keep taxes at the same levels, boost spending on K-12 education and higher education, preserve services for vulnerable residents and sustain the reserve fund.

Lawmakers complied with the governor’s request, helped by the stimulus money which financed an increase in education spending. The stimulus dollars and rainy days funds also allowed the Legislature to keep a $230 million property tax credit over the next two years.

The nonpartisan Legislature was equally busy on social and criminal justice issues. After re-writing the state’s safe haven law in a special session last fall, lawmakers approved a package of reforms that included creating a statewide crisis telephone line, increased health coverage for low-income children and additional money for children’s behavioral health care. The goal, Heineman said, is “to help more children remain at home with their families.”

The bill making lethal injection the method of execution was necessary after the state Supreme Court ruled last year that electrocution was unconstitutional. The Senate defeated a proposal to repeal capital punishment.

The crime package was prompted by an increase in violent crime in Omaha and Lincoln. It strengthens penalties for first-degree assault, unlawful possession of a handgun, possession of a firearm at school, assault of an officer and possession of a stolen firearm. The bill also defines new crimes including graffiti.

About the only major unresolved issue is long term transportation funding, a problem in many other states. Spending for Nebraska’s roads maintenance budget is outpacing the entire transportation budget, leaving no money for new construction.

Speaker Mike Flood said he believes the key to the success of the 2009 session were the Legislature’s committee chairmen.

“They concentrated on the biggest issues facing Nebraska,” he said. “They were willing to work on a bill and make sure it was palatable to the rest of the senators when it came out of committee.”

He cited as examples a bill to jump start the wind energy industry in the state, and the safe haven reforms. “Every state should examine services to children in the manner we did,” Flood said.

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Nevada lawmakers override governor to raise taxes

Nevada Gov. Jim Gibbons (R) held fast to his pledge not to raise taxes, but did so largely on his own. Republican lawmakers joined with majority Democrats to override nearly half of Gibbons’ more than 50 vetoes — by far the most in state history — including his rejection of a record $781 million tax increase aimed at helping the cash-starved state climb out of an estimated $3 billion budget hole.

The fight over taxes dominated the session, as legislative leaders spent weeks building the two-thirds majority needed to raise taxes — the same margin necessary to overcome a promised Gibbons veto — before adjourning June 2.

The tax package takes aim at businesses by boosting the payroll tax and doubling the business license fee from $100 to $200. But the plan also hits consumers by hiking the state sales tax and hotel room tax and increasing a vehicle registration tax.

Gibbons spent the session pushing deep cuts instead of taxes. The governor’s proposed budget, for example, included a 36-percent cut to higher education that prompted weeks of angry protests from students and Nevada’s chancellor of higher education. In the end, higher education was cut about 15 percent in the state’s $6.6 billion, two-year budget — which Gibbons also vetoed before being overridden by the Legislature.

Eric Herzik, a political science professor at the University of Nevada at Reno, pointed to the clash over college funding as a sign that Gibbons and lawmakers spent the session “on totally different pages” as they dealt with the worst budget crisis in state history.

Even the session’s biggest social policy legislation required a veto override to become law. Lawmakers overruled Gibbons to create domestic partnerships, giving unmarried couples — including those of the same sex — many of the same rights that married couples enjoy. Gay-rights proponents hailed the development as historic.

Other measures passed with broad support. Nevada became the first state to approve the statewide creation of “veterans’ treatment courts,” which promote alternatives to incarceration for war veterans who have been charged with nonviolent crimes.

Nevada is expected to receive at least $1.5 billion in federal stimulus money, and another major bill that Gibbons signed allows the state to use stimulus funds to train some 3,000 workers for “green jobs,” such as retrofitting homes for energy efficiency. Green jobs are seen as key in Nevada, which has a double-digit unemployment rate.

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Despite accomplishments, New Hampshire budget fight looms

In a legislative session dominated by closing a $500 million budget gap, lawmakers also enlarged the state’s health care safety net and approved the last of four reforms designed to improve public education.

Gov. John Lynch (D) signed into law in July a sweeping expansion of the state’s Healthy Kids program, which previously provided low-cost or free health coverage for uninsured children and teens. The expanded program, funded entirely through premiums, offers insurance for adults between ages 19 and 25 — an option that Lynch said will soon be available to more than 21,000 young adults.

Granite State lawmakers also approved the last of four reforms designed to make public education more accountable. The new standards, which arrive 18 years after the state Supreme Court ruled against the state’s school funding and administration practices, require schools to prove they are providing equal and adequate education to students in 12 specific areas, including math, science and language. The law also created an education task force to investigate new ways to measure academic achievement.

Despite these accomplishments, the state House and Senate struggled to tame the budget deficit before the new fiscal year began on July 1. In the $11.5 billion, two-year proposal passed in June, lawmakers cut $25 million from the state workforce — a move that resulted in 18 mandatory furlough days over two years for unionized state workers. The Granite State also increased taxes on a host of products, including tobacco and meals, and tapped $70 million from the state’s rainy day fund.

Yet, the budget battle may be far from over. At issue is $110 million in surplus money lawmakers took from a state-created medical malpractice insurance pool and applied to the budget’s shortfall. Initially, Lynch argued that the money, which doctors paid as premiums, was the state’s spoils. A Superior Court judge, however, disagreed, and returned the money to the insurance pool.

Lynch has since said he intends to appeal the decision before the state Supreme Court. If he loses, it will open a $110 million hole in New Hampshire’s budgets — $65 million in the budget ending in June, and $45 million in the current spending plan.

—Tony Romm

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$1 billion in new taxes helps balance N.J. budget

Desperate for revenue, New Jersey lawmakers turned to the state’s wealthiest residents for help, raising income taxes on those who earn more than $400,000 a year and eliminating a popular property-tax rebate for those who make more than $250,000 annually.

The Democratic-controlled Legislature also increased state liquor, lottery and cigarette taxes on its way to passing a $29 billion budget — $4 billion less than last year’s — days before the new fiscal year began July 1.

The tax hikes, amounting to nearly $1 billion overall, pose a major political test for Gov. Jon Corzine (D), who has struggled with low approval ratings during the recession and faces U.S. Attorney Chris Christie (R) in what is expected to be a bruising governor’s race in the fall.

Tax hikes were not enough to solve New Jersey’s fiscal problems. Legislators cut $940 million in state pension funding and $79 million in aid to municipalities, potentially forcing them to raise property taxes to make up the difference. New Jersey already has the highest property taxes in the nation, according to the Tax Foundation.

Corzine and the state workers’ union agreed to a deal that avoids layoffs but will result in 10 unpaid furlough days and puts off scheduled pay raises. The plan is expected to save $325 million.

Seeking to consolidate state services to save money, Corzine signed a bill that will eventually eliminate 26 school districts, including 13 by the fall. The districts affected were “non-operating,” meaning they were too small to operate their own schools but did employ staff members to oversee paperwork associated with sending students to other districts.

Lawmakers also used $2.2 billion in federal stimulus money to balance the budget, which increases spending on public education.

The budget cuts could have been even more severe, but an amnesty program allowing delinquent taxpayers to repay back taxes without penalties raised $400 million more than expected. Meanwhile, the state is trying to secure future revenue by challenging in court a federal ban on sports betting in 46 states, including New Jersey.

Corzine signed a bill requiring that every American or state flag purchased with taxpayer dollars must be made in the United States.

—John Gramlich

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New Mexico governor signs repeal of death penalty

The Legislature set up one of the biggest political dramas of the year by sending Gov. Bill Richardson a bill repealing the death penalty. New Mexico had executed only one person in 49 years.

Richardson, a Democrat, had supported capital punishment since he was first elected governor in 2002. But since he will not be running for governor next year because he is limited to two terms. the death penalty bill offered the former congressman and Cabinet secretary a chance to revisit his views.

The governor called it “the most difficult decision” of his political career. He examined the death chamber at the state penitentiary and the unit where criminals sentenced to life without parole are housed. The chilling trip was persuasive.

“My conclusion was those cells are something that may be worse than death,” he told reporters after signing the bill. “I believe this is a just punishment.”

So New Mexico became the second state to prohibit executions since the U.S.  Supreme Court reinstated capital punishment in 1976. A spokesman for the New Mexico Sheriffs’ and Police Association said the group would press lawmakers and the governor to reinstate the death penalty because it deters violence against police officers, prison guards and jailers.

Richardson lost on two other social issues. The Senate balked on approving a House-passed measure giving domestic partners the same rights as married couples. The House rejected a Senate-passed bill that would have legalized the use of embryonic stem cells for research in the state.

In another setback this year, Richardson, who was tapped by the Obama administration for commerce secretary, had to withdraw under pressure of a pay-to-play federal investigation of certain political donors.

Richardson dubbed 2009 the year of fiscal restraint. Lawmakers chopped the state budget to $5.5 billion — about 9 percent smaller than last year — but avoided layoffs and tax increases as they erased a $450 million gap.

Because of the uncertainty over how much revenue the state will take in, Richardson said he probably will have to call lawmakers back to Santa Fe later this year for a special session.

Lawmakers also approved New Mexico’s first campaign contribution limits on candidates for statewide offices, which Richardson backed, and a bill requiring legislative conference committees to open their meetings to the public. Such committees consist of lawmakers of both parties who typically meet late in the session to reconcile different House and Senate versions of the legislation.

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New York hikes taxes, fees to close historic shortfall

Reeling from its largest budget gap in state history, New York raised taxes and fees, cut funding to hospitals and nursing homes, and relied on $6.2 billion in federal stimulus money to close a $17.7 billion deficit.

New Yorkers are expected to pay some $6 billion in new or increased taxes and lose $1.5 billion in property tax rebates. The state boosted taxes on wireless devices, cigars, beer and wine and slapped higher registration fees for motorcycles, cars and boats; increased hunting and fishing licenses and is requiring, for the first time, saltwater fishing licenses.

The state also slapped a higher tax on the most affluent households, increasing to 8.97 percent the income tax on those who earn more than $500,000, up from 6.85; those making more than $200,000 would be taxed at 7.85 percent. Previously, the state's tax rate was 6.85 percent for everyone who earned more than $40,000.

Critics say New York’s budget could have been worse. New York Gov. David Paterson (D) proposed more than 100 new or increased user fees, including an 18 percent “fat tax” on soda drinks and a 4 percent sales tax on downloaded music, both of which he later dropped.

Paterson said the state, which gets about 20 percent of its revenue from Wall Street, saw its budget deficit grow by $60 million every day from mid-August to mid-December last fall when the stock markets went into a free fall.

But voters panned the state budget agreement, with some 70 percent opposing lawmakers’ decision to eliminate property tax rebates from the state budget. The budget and the governor’s handling of Caroline Kennedy as a possible replacement for U.S. Sen. Hilary Clinton have put Paterson’s approval rating at near historic lows. A slight majority of New York voters (51 percent) said they would prefer his predecessor — Democrat Eliot Spitzer, who resigned in a prostitution scandal — to him.

“If the governor does what he says he will, and runs in 2010, voters think he'll be bad news for other Democrats on the ballot,” said Maurice Carroll, director of the Quinnipiac University Polling Institute. Democrats now control the Legislature, as the party last November seized control of the state Senate for the first time since 1964.

The higher tax on the wealthy may have helped topple the Democrats from control in the Senate. While New York didn’t have state elections in 2009, Democrats lost control of the New York state Senate that they won last fall after 40 years in the minority. Frustrated by what they called chaos in the Senate, two Democrats — Sens. Pedro Espada of the Bronx and Hiram Monserrate of Queens — teamed with Republican senators to topple Malcolm Smith as Senate majority leader. Dean G. Skelos, a Long Island Republican, was put in charge of the post he held last year. Measures that Democrats had been pushing now may be derailed. They include bills to strengthen abortion rights and legalize same-sex marriage. 

 In other action, lawmakers reformed drug laws to give judges the option of sending many low-level drug offenders to treatment instead of prison. (The laws were commonly known as “Rockefeller” drug laws since they were enacted in 1973 under Republican Gov. Nelson Rockefeller and mandated tough sentences for drug possession.)

Lawmakers also added a new 5-cent beverage deposit to bottled water and required beverage companies to turn over 80 percent of unclaimed deposit funds to the state.  But a federal judge blocked the expansion. By executive order, Paterson phased out the state’s purchase of bottled water, becoming the second state to do so.

—Pamela M. Prah

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North Carolina to raise $1 billion in taxes

The Democratic-controlled General Assembly passed a $19 billion budget more than a month late, which closes a $4.5 billion budget gap and includes $1 billion in new taxes and $1.4 billion in stimulus funds.

In signing the budget, which despite the stimulus was smaller than last year’s $20.3 billion budget, Gov. Beverly Perdue (D) was forced to break a promise she made during the campaign last year: that she’d never raise taxes during a recession.

The state is raising the income tax on those who earn more than $60,000, which accounts for the lion’s share of new taxes; the surcharge on the corporate tax; taxes on alcohol and tobacco; and the sales tax by 1 percent, to 7.75 percent, including on digital downloads and online transactions.

Perdue also said in March that she wanted to increase per-pupil spending, but the budget, which cut $225 million from education, won’t do that either. It contains a provision to keep class sizes the same from kindergarten to third grade, so class sizes for the remaining grades are expected to increase, and districts will be forced to lay off teachers.

The budget also slashes $40 million from mental health, a 10 percent cut; raises tuition at state universities and community colleges; and eliminates 2,200 state jobs – more than 700 of which are filled right now.

The state closed its $4.5 billion gap largely through cuts and stimulus money (70 percent), with the remainder of the gap closed by raising taxes and increasing fees, according to Ran Coble, the executive director of the North Carolina Center for Public Policy Research.

Although it’s been a tough fiscal year, the budget includes $250,000 to create a foundation that could eventually give reparations to living victims of a state sterilization program that ran from 1929 to 1974. During that time more than 7,600 people who were considered mentally ill or genetically inferior were sterilized, sometimes by force.

North Carolina also decided to become the second state, behind Kentucky, to allow judges to commute a death sentence to life in prison if it’s proven that racial bias played a role in the sentencing.

The state also enacted a smoking ban on restaurants and bars. The biggest non-budget fights were over an anti-bullying bill that lists sexual orientation as a reason children might be bullied (which passed only with the House Speaker’s tie-breaking vote) and a sex education bill that requires all 115 school districts to offer comprehensive education along with abstinence-only education, with parents allowed to opt-out their children; currently only about a dozen districts offer comprehensive sex education.

—Pauline Vu

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Surplus allows North Dakota to cut taxes, boost spending

The North Dakota Legislature faced a challenge unlike any state: how to spend a budget surplus. The job was so hard that it took lawmakers 79 days, longer than any session in state history.

When it ended, the Republican-controlled Legislature spent 36 percent more, or about $1.1 billion, than Gov. John Hoeven (R) initially proposed in his FY 2010-2011 budget.  The state also received nearly $600 million in federal stimulus dollars.

Among other things, the money went to financial aid for college students, higher reimbursements to Medicaid providers and pay increases for state employees, nursing home workers and even a 5 percent raise for themselves. The transportation department, coping with record snowfall and flooding, got more money than last year and so did K-12 schools and colleges and universities.

North Dakota’s finances are the soundest in the nation. Revenue is growing — 4 percent a year for the next two years — largely because of increased oil production. Even with the spending, lawmakers still managed to sock away $400 million in a rainy day fund, more than ample in a state that ranks 48th in population.

House Majority Leader Al Carlson, a Republican from Fargo, explained that although some lawmakers in the fiscally conservative state wanted to set aside more money in reserve, it is hard to do that because of pressure from interest groups, government agencies, human service providers, state workers and others who want to know why the state needs to hold onto so much cash.

“We did a great job of spending the money,” he said. “It’s difficult to legislate when you have a lot of money. When you say no, people ask, ‘Why? Do you want to build a bigger reserve?’”

Just as important as increased spending, Carlson said, was the $400 million package of income and corporate tax cuts. “The best stimulus is letting people keep more of their own money,” he said.

Lawmakers even exempted nonprofit cemeteries from special assessments, proving that “not only did the living get tax relief but also the dead,” quipped former lieutenant governor Lloyd Omdahl.

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Ohio lawmakers allow slots at tracks to end stand-off

Gov. Ted Strickland (D), a United Methodist minister, long opposed the expansion of gambling in his state. But facing a $3.2 billion shortfall, Strickland switched course.

He backed a proposal to allow video slot machines at Ohio’s seven horse tracks to balance the budget without a tax hike. Rank-and-file Republicans balked at the idea, but leaders in the GOP-controlled Senate finally agreed to end a standoff that left Ohio without an annual budget for 13 days after the new fiscal year began July 1.

But the new gambling revenue isn’t enough to stave off $2.5 billion in cuts over the next two years. Legislators estimated 3,000 state employees will be laid off. Social service providers would be especially hard-hit.

Public outcry convinced legislators to soften the blow to libraries and mental health providers, but both still suffered significant cuts. Strickland earlier proposed slashing library funding by $227 million, but the final budget contained $84 million in cuts.

Nursing home providers also got cut, because of a change in the way the state reimburses them for Medicaid patients.

Strickland and legislators predicted the addition of 17,500 electronic slot machines at race tracks would generate $933 million for the state in the next two years. The Ohio Lottery would oversee the slots. Voters would not have to approve the gambling expansion, which could have been a deal-breaker. In recent years, Ohio voters have rejected ballot initiatives to expand gambling four times.

Still, other obstacles remain. Lawsuits to challenge the expansion are nearly certain and that could delay the anticipated gambling revenue.

Legislative Republicans overwhelmingly opposed the compromise. Only one GOP House member supported the measure, and five Republican leaders in the Senate helped the bill reach Strickland’s desk.

Despite the widespread cuts, lawmakers slightly increased funding for primary and secondary education with the help of federal stimulus money. They also ended a tuition freeze to help college and universities deal with a $170 million cut. 

—Daniel C. Vock

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First GOP Legislature in Okla. history passes tort reform

An unprecedented political split seemed to assure a standoff in Oklahoma: Gov. Brad Henry, a Democrat, battling the first Republican-controlled state Legislature in state history.

But Henry and the lawmakers set aside their party labels on many issues, saying they wanted to do what was best for the state. The Legislature agreed with Henry’s call in his State of the State address to save energy costs at state agencies, develop alternative energy sources and increase eligibility in a health insurance program for low income working residents. 

“By working together we were able to make significant progress on a number of important issues,” the governor said when the session ended May 26.

In an interview, the state’s first GOP Senate president, Glenn Coffee of Oklahoma City, said he and Henry have known each other for several years, including the last two years when there was a tie between Republicans and Democrats in the Senate.

“We really had to focus on where we could agree,” in those two years, Coffee said. “We built on that relationship this session. The Speaker (Chris Benge) was a big part of that, too. Everyone tried to be reasonable.”

Lawmakers also agreed to a plan that Henry first proposed in 2004 to reform the state’s tort system by cutting down on frivolous lawsuits and capping most pain and suffering damages at $400,000. The business and medical communities had sought the change, which they said would decrease costs such as high insurance premiums and attorney fees. 

State leaders also put together a $7.2 billion budget for the fiscal year that began July 1 that made up a $900 million shortfall through spending cuts and $630 million in federal stimulus money. The federal dollars helped officials avoid having to dip into the $600 million rainy day fund and trim spending priorities, such as education, health care, transportation and public safety.

But state leaders may not be able to stay out of the reserve fund much longer; three weeks after approving the budget and adjourning May 26, lawmakers learned that state revenue fell $136.5 million in May. The decline prompted a 1.4 percent cut in state agency budgets, on top of the 7 percent in reductions already ordered in the budget.

Henry, who can’t seek re-election next year because of term limits, did not get everything he asked for. The Legislature turned back Henry’s request for health insurers to mandate the diagnosis and treatment of autism, and a plan to expand treatment options for methamphetamine addicts.

Lawmakers also rebuffed the governor on his call to expand Oklahoma’s early voting period from three days to a week. Instead, they followed Republicans in other states by approving a voter ID bill that Republicans said would reduce instances of voter fraud but that Democrats said would scare some voters, especially minorities, away from the polls. 

Henry vetoed the voter ID bill, one of 21 bills he rejected, the most since he was first elected in 2002. But he did not stand in the way of less serious bills and resolutions such as erecting a monument to the Ten Commandments on the Capitol grounds and keeping alive the craft of grinding down horse teeth.

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In hard-hit Oregon, job creation is top priority

Jobs were the focus of the six-month legislative session in Oregon, which has the nation’s second-highest unemployment rate (after Michigan). Before adjourning June 29, Democratic supermajorities in the House and Senate muscled through costly economic-stimulus proposals aimed at creating at least 40,000 new jobs in 10 years.

Gov. Ted Kulongoski (D) in February signed a $175 million, state-level stimulus plan, days before Congress approved the national stimulus. The state plan borrows money to start work on ready-to-go capital improvement projects, such as upgrading university buildings and installing energy-efficient lighting at state prisons, and is intended to quickly create or save 3,000 Oregon jobs.

Later in the session, lawmakers approved a $960 million infusion into transportation infrastructure projects that Kulongoski and other state officials said would create 4,600 jobs a year over five years while improving the state’s highway and transit systems. The plan was paid for by borrowing and through tax and fee hikes, including a gas-tax increase from 24 to 30 cents a gallon.

Broader tax hikes — as well as deep cuts and use of federal stimulus funds — allowed lawmakers to balance the budget before the new fiscal year began July 1.

The $15 billion, two-year operating budget relies on more than $1 billion in tax hikes, including a spike in the personal income tax for those earning more than $250,000 annually and an increase in the minimum corporate income tax. But whether those tax hikes will go into effect is far from certain. Opponents are collecting signatures to allow voters in ballot measure-friendly Oregon to nix the hikes in a special election next year.

Lawmakers also raised hunting and fishing fees. The cost of an annual hunting license for Oregon residents will rise to $23.50 from $19, and an annual fishing license will cost $26, up from $21.

Like most areas of state spending, higher education saw significant cuts. To keep tuition increases at state colleges and universities in the single digits, Kulongoski promised to veto a last-minute legislative plan to cut $11.5 million more from higher education than lawmakers originally agreed to cut.

The largest component of the state budget, K-12 funding, proved to be a flashpoint between the Democratic governor and the legislature. Overriding a Kulongoski veto, lawmakers voted to tap rainy day funds to help fund public schools.

A voter-approved plan to increase criminal sentences for drug dealers and others, meanwhile, was delayed by 18 months in another attempt to save money and prison space. Legislators also approved an expansion of good-time credits to free up more prison beds.

Lawmakers delivered a significant expansion of health insurance coverage. Through another tax — this one on health care providers — 35,000 more adults and most of the state’s uninsured children will be covered.

—John Gramlich

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Pa. sees longest budget standoff since 1991

Pennsylvania lawmakers missed their June 30 budget deadline for the seventh consecutive year amid a bitter partisan standoff that some legislators predict could extend into autumn.

Republicans who control the state Senate refused to accept a plan pushed by Democratic Gov. Ed Rendell and the Democratic-controlled House of Representatives to balance the budget by raising the personal income tax by 16 percent for three years. Instead, the Senate sought to close the state’s $3.2 billion budget gap by making deep cuts across state government and by propping up the K-12 education budget with federal stimulus funds, a move Rendell called illegal.

Rendell on Aug. 5 signed what he called a “bridge budget” to ensure that state employees and vendors will be paid — they had gone without pay since July 1 — but the bulk of the budget remains unsettled. Spending on K-12 education is expected to dominate ongoing budget negotiations, with Rendell seeking to boost funding by $418 million and Republicans opposing the increase because of the Keystone State’s bleak fiscal condition.

—John Gramlich

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Rhode Island relies on stimulus to boost budget

Gov. Donald Carcieri (R) reluctantly signed a $7.8 billion budget the day before the new fiscal year began July 1, after the Democratic-dominated General Assembly struggled to close a projected $590 million deficit, or about 20 percent of the state share of the budget.

Carcieri complained the budget “defers more far-reaching, difficult choices for yet another year,” for example, by not deciding whether to convert state pensions to a 401(k)-style retirement plan. He also disagreed with lawmakers’ decisions to increase some taxes and ignore his proposal to reduce the corporate tax rate.

The new budget increases the gas tax by 2 cents and increases the capital gains tax from a maximum of 2.33 percent to a maximum of 9.9 percent. Lawmakers also cut $55 million in funding for city governments.

Rhode Island, with an unemployment rate of more than 12 percent, was hit hard by falling tax revenues.

The state workforce will also take a hit. For anyone not eligible to retire by Sept. 30, the value of their state pensions will drop, and new state employees will have to be 62 years old to retire. Current employees will also have a new retirement date, based on a formula that considers the age they began working for the state and time served. Previously, anyone could retire after working 28 years.

The budget calls for Carcieri to find $68 million in savings through the workforce, and lawmakers say he can do that by not filling vacant jobs.

The cuts would have been much worse if not for the $226.5 million in federal stimulus money Rhode Island received. Lawmakers were able to avoid increasing the income and sales taxes, and reversed upcoming cuts in programs benefiting thousands of poor, elder and disabled people. Overall, the current budget increases spending by almost 13 percent over the previous year.

For the fourth straight year, Carcieri vetoed a bill that would have allowed 16- and 17-year-olds to pre-register to vote, with their registration automatically activating when they turn 18. Citizens under 18 can still register if they turn 18 by the day of the next election.

Carcieri also vetoed a bill to force the bankrupt and state-licensed Twin River gambling hall to have 200 days of live racing at its greyhound track. But lawmakers, who passed the bill because they said it would save jobs, expect to eventually override the veto.

The governor signed a bill to increase fines on industrial polluters. He has not yet acted on a bill to ban pub crawls.

Lawmakers did not take up a bill that would have legalized gay marriage. That makes Rhode Island the only state in New England which doesn’t allow same-sex marriage.

Although the House and Senate have gone into recess, leaders of both chambers say they will return later this summer to consider various bills, such as one that bans indoor prostitution, which is presently legal because of a loophole in a 30-year-old law that specifically bans outdoor prostitution.

Lawmakers may also consider a bill that allows same-sex partners to make funeral arrangements for their partners and another to put a question on the 2010 ballot asking voters to drop “Providence Plantations” from Rhode Island’s official name.

—Pauline Vu

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South Carolina governor loses stimulus fight

The legislative session was dominated by the fight between Gov. Mark Sanford (R) and the Republican-led Legislature over whether to accept $700 million in stimulus money for education. Sanford wanted to refuse the money, saying it would increase the national debt; lawmakers accused the governor of playing politics and ordered him to accept the money. The state Supreme Court agreed with the legislators.

“It’s important to state one last time for the record what a monumentally terrible idea I believe the entire so-called stimulus act is,” Sanford wrote in his letter to the U.S. Department of Education requesting the money.

The $5.7 billion budget for the current fiscal year that began July 1 was initially vetoed by Sanford and easily overridden by legislators. It includes $350 million in disputed stimulus cash. Lawmakers wrote both a bare-bone budget without the stimulus and then another provision listing items funded by the stimulus, making it clear which sectors would lose out if the money was rejected. K-12 schools, for example, received $2.2 billion in the first budget, and another $185 million in the stimulus budget version. Lawmakers said as many as 3,000 teachers could lose their jobs if the stimulus wasn’t accepted.

The budget proposal was originally $7 billion but lawmakers were forced to cut more than $1 billion after revenues fell below expectations.

Sanford became the only governor to take the stimulus argument to the courts, claiming it was unconstitutional for the Legislature to force him to accept the cash. At the same time the governor was sued by education representatives, including a high school senior and a law student, to take the money. A federal judge sent the case back to the state Supreme Court, which ordered Sanford to accept the money.

In a one-day special session June 16, lawmakers also overrode 10 of Sanford’s vetoes. One new law puts new restrictions on the payday lending industry, capping each loan at $550, requiring wait times between new loans, and giving borrowers time to change their minds and return loans.

Another veto gives the Legislature more influence over the State Port Authority, one of South Carolina’s top economic development tools, by limiting the governor’s ability to fire board members.

While at least seven states so far have raised their cigarette tax this year, an effort to increase South Carolina’s lowest-in-the-nation tax — 7 cents per pack — failed again after the House and Senate disagreed on what to do with the estimated $147 million that would come from increasing the tax to 57 cents a pack.

—Pauline Vu

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South Dakota enacts smoking smoking, uses stimulus dollars to balance budget

South Dakota Gov. Mike Rounds (R) faced a thorny choice this year. The GOP-controlled Legislature sent him a bill eliminating smoking in restaurants and bars beginning July 1.

Signing the bill would seem to have been an easy call; the health dangers from cigarette smoke are well-established. But South Dakota allows smoking in its video lottery terminals, which the state pioneered 20 years ago to draw tourists and residents to play poker, blackjack, keno and bingo games.

 Leaders of the state’s gambling and liquor industries urged Rounds to veto the ban because they said it would drain about $30 million a year in gambling revenue from the state at a time when South Dakota needed all the income it could get. Rounds wavered a bit.

“We had a long discussion with him,” said Larry Mann,  who represents the state’s video lottery operators.  The bill “put him in an uncomfortable spot. Who wants to be first governor  to veto a smoking ban?”
Not Rounds. He signed the bill, which actually extends the existing seven-year-old ban on smoking in most public places. Rounds acknowledged the loss in revenue but pointed out that smoking-related illnesses could also drive up state health care costs.

The ban “will provide an opportunity for individuals who have not patronized (video lottery terminals and gaming halls in Deadwood) because of the smoke,” Rounds said in a statement. “I hope they will become new customers for businesses concerned about the loss of patrons.”

The fight isn’t over. Smoking supporters say they are confident they can collect enough signatures on petitions to put the issue up for a vote in the November 2010 election. “I don’t want to be seen as a poster  child for smoking,” Mann said. “Most of us are against smoking. But even the San Francisco airport has a designated room for smoking.”

Less controversial was approval of the state budget. Like many states, South Dakota used a portion of its $770 million in federal stimulus dollars as a one-time bandage to help balance the $3.9 billion state budget and avoid cuts that Rounds had proposed earlier in the year.

When the stimulus money dries up in two years, Rounds said, the state should be able to balance its budget using just state money because spending will have slowed considerably by then. But it won’t be easy, some analysts said.

Rounds and lawmakers “would tell anyone who would listen… that one-time money, even if it lasted several years, would not solve a problem if basic functions of state government were going to cost more than regular revenue sources would produce, “ said David Owen, president of the South Dakota Chamber of Commerce and Industry. “ This is known as the ‘structural deficit’ and unless the post recession economy has more strength than anyone dares to dream, South Dakota’s budget problems will persist.”

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Tennessee lawmakers pass smaller budget, consider social issues

Overcoming a tumultuous start, the legislature passed numerous pro-gun laws as well as a $29.6 billion spending plan that is about 10 percent smaller than last year’s budget.

This session was the first since Reconstruction that Republicans had control of both chambers. But the GOP was blindsided when all 49 Democrats in the House banded together to vote for Republican Kent Williams for House Speaker, instead of the GOP’s preferred choice of Jason Mumpower. The GOP later kicked Williams out of the party.

Williams took a more bipartisan approach in appointing Democrats to top committees, but several Republican initiatives still passed. Lawmakers raised the cap on the number of charter schools allowed to operate and laid the groundwork to change a constitutional amendment that allows the right to abortion.

This was also the Year of the Gun. Legislators allowed those with permits to carry guns at into state and local parks and into places that serve alcohol. They also now allow some judges to carry weapons and loaded rifles and shotguns to be brought into cars in some instances.

One key restriction: people who’ve been involuntarily committed to mental health treatment must be added to a database that blocks them from buying a gun. That database must is checked before a gun is sold.

The budget includes $2.2 billion in stimulus money. Nearly 1,400 jobs will be eliminated, including 717 layoffs. There is also a provision that calls on Gov. Phil Bredesen (D) to cut another $55 million if revenues aren’t as high as estimated.

The budget also allows the state to borrow $547.3 million to fund university and bridge construction.
Pre-k funding got an inflationary increase of almost half a million, pushing total funding to $83.5 million.

Lawmakers moved $22 million in funding for pre-k into the recurring level to ensure continued funding. Previously, $25 million of pre-k’s funding had been from lottery proceeds, which made that amount vulnerable if the lottery had a bad year.

A new law makes it illegal to use unfair or deceptive practices when advertising foreclosure-related services.

—Pauline Vu

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Texas lawmakers keep agencies running, approve $2 billion transportation bond sale

Seinfeld, one of the most popular television comedies of all time, was often described as “a show about nothing.” Texas state Sen. John Carona (R) says that description applies to this year’s legislative session, which he said was “like a Seinfeld episode — the session without a purpose.”

Lawmakers went home June 1 without resolving the fate of five state agencies whose operations needed to be renewed or they would have expired next year. Gov. Rick Perry called the Legislature back a month later in a special session to fix the problem, which would have shut down the transportation and insurance regulation departments, among others, beginning in the fall of this year. 

Perry, a Republican who could face a tough re-election fight next year, set a tone for the session by opposing $550 million in federal stimulus money for unemployment insurance benefits. He was one of a handful of GOP governors who raised the issue nationally, saying accepting the federal money would expand the number of people eligible for the unemployment insurance program and require higher business taxes to pay for it in the long run. 

The Senate voted to take the stimulus money but the House sided with Perry. Texas later had to borrow $160 million from the federal government to pay jobless benefits. Both chambers are controlled by Republicans; the House had a rookie speaker, Joe Straus, who some analysts said was part of the breakdown this year because he did not have experience leading the 150-member chamber.

The House and Senate also split over approving a $2 billion transportation bond sale, adding to the strain between the chambers. The House rejected the package. A separate proposal, offered by Carona, to allow urban areas the option to vote to raise gasoline taxes to pay for transportation also failed, prompting Carona’s Seinfeld remark. Lawmakers settled their differences in the special session, approving the bond package but rejecting Perry’s call to continue a program allowing private firms to build toll roads in Texas. 

Differences also emerged between Republicans and Democrats over a bill requiring voters to show a photo ID before casting their ballots. Republicans said the tighter voting requirement would reduce the chances of fraud, but Democrats said the real motive was to frighten minorities and other groups that usually vote for Democrats. The Democrats succeeded in thwarting the proposal.

Perry and the Legislature did agree on many issues. They approved a $182 billion, two-year state budget that cuts spending by about 2 percent compared to the current fiscal year and keeps $9 billion in a rainy day fund. “There are a lot of people in other states who are still dealing with record deficits and layoffs of employees while here in Texas we (have) a balanced budget and a rainy day fund that remains untouched,” Perry said in a statement.

Lawmakers and Perry cut taxes for 40,000 small businesses. They boosted financial aid to 35,000 additional college students and allowed three state university branches to qualify as stand-alone institutions, which will expand the number of students who can enroll there. They gave state employees $800 bonuses, and enacted reforms to the used-up Texas Windstorm Insurance Fund, easing the burden of catastrophic storms such as Hurricane Ike on the state government.

Perry vetoed 37 bills, including one expanding pre-kindergarten programs. He said the $623 million cost of creating a new pre-k program could be saved if the state simply enlarges an existing program.

—Stephen Fehr

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Utah relaxes alcohol laws, “sexting” penalties

Despite facing a $1 billion shortfall, Utah’s Republican-controlled Legislature balanced the budget without raising taxes and without dipping into the state’s “rainy day fund,” choosing to make deep cuts and use federal stimulus money instead.

Lawmakers also tackled a range of social issues, including bar and alcohol deregulation, civil unions and the teenage phenomenon of “sexting.”

Use of the state’s $414 million rainy day fund became a major point of debate for lawmakers threatening budget cuts of up to 15 percent across state government. State program budgets were eventually cut about 5 percent with state, college and public school employees taking the hardest hit. In the upcoming year, state employees will receive no pay raises, some will face more expensive health benefits or furlough days and many will be laid off.

In late February, Gov. Jon Huntsman Jr. (R) broke away from members of Utah’s Legislature and other prominent Republican governors when he announced he would accept federal stimulus dollars to help cushion the impact of massive budget cuts. Federal stimulus dollars amounting to $561 million have since flowed to schools and construction projects.

With the help of this money, Utah’s $10.6 billion budget did not require dipping deeper into taxpayers’ pockets or the rainy day fund.

“It looks like they even cut more than they had to. It was quite an accomplishment,” said Adam Brown, a legislative expert and instructor at Brigham Young University in Provo.

Lawmakers passed the most expansive bar and alcohol deregulation in 40 years. Previously, bars followed a private club system requiring membership from drinkers, and bartenders could not serve alcohol directly over the counter, but had to walk the drink around to the patron. Both restrictions were lifted. In exchange, legislators passed stricter drunken-driving and ID-check laws.

In response to the Mormon church’s strong support of Proposition 8 in California, which outlawed gay marriage in the Golden State, gay-rights activists pushed the so-called “Common Ground Initiative,” a series of bills boosting the rights of same-sex couples. The bills were struck down by legislators, despite Huntsman’s support.

Utah also became the first state to lessen the criminal penalty for “sexting.” Minors caught sending and receiving nude pictures on their cell phones will now face misdemeanor rather than felony charges.

Huntsman called a special legislative session May 20 to focus on the use of federal stimulus dollars and other adjustments and corrections to laws and resolutions. On May 16, Huntsman was appointed by President Obama as the U.S. ambassador to China. Pending his approval by the U.S. Senate, Huntsman will be replaced by Lt. Gov. Gary Herbert (R).  

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Vermont Legislature overrides governor

By paper-thin margins, the Democratic-controlled Vermont Legislature overrode Republican Gov. Jim Douglas twice on a pair of controversial bills: the first to legalize gay marriage, and the second to pass a $4.5 billion budget.

The veto overrides mark the first in Douglas’ tenure. He vetoed the bill recognizing gay marriage, but said he would not lobby Republican lawmakers to follow his lead, asking them instead to vote their consciences. The House’s 100-49 vote made Vermont the fourth state to recognize gay marriages and the first to do so through the legislature instead of the courts. Same-sex couples can start marrying Sept. 1.

Douglas did lobby the Legislature to sustain his veto of the budget. Weeks of negotiation before a special session failed to settle key differences between the governor and the Legislature over how much stimulus to use, which programs to cut and how much taxes should be raised. Democratic lawmakers mustered up enough votes to pass the override, 100-50.

To fill an expected $282 million deficit, the budget uses federal stimulus money, cuts state spending by $59 million, reduced money to education by $18 million and has $26 million in new taxes, including taxes on alcohol, land, capital gains and cigarettes. Vermont was one of seven states to increase taxes on cigarettes this year. On July 1, the tax will increase 25 cents to $2.24 per pack.

The budget also cuts income taxes by $22 million.

The Legislature passed a companion bill to the budget that creates two sales tax holidays, curbs the governor’s power to lay off state employees — which Douglas says is unconstitutional — and increases contributions to Vermont’s shrinking unemployment insurance fund. The fund is expected to run out of money by January, and the companion bill will not fully solve the problem. Douglas complained that the budget doesn’t shore up the unemployment fund and doesn’t address future shortfalls.

Lawmakers worked with Douglas on a law cracking down on child sex offenders, passing stronger sentences for those who abuse children, increasing the number of prosecutors and police who specifically deal with sex offenders and increasing the number of people who can be added to the Internet sex-offender registry. The Legislature and governor also agreed on a $550 million transportation plan that includes a 2 percent gas tax increase.

Vermont passed one of the nation’s strictest bans on gifts from pharmaceutical companies to doctors. Companies can no longer give doctors free meals, or even coffee mugs.

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Virginia passes smoking ban, rejects $125 million in stimulus funds

Virginia lawmakers approved a smoking ban and rejected $125 million in federal stimulus money this spring, but a worsening budget situation and this year’s election for governor still loomed large.

The state, home to the tobacco giant Philip Morris, will prohibit smoking in most bars and restaurants in December, unless the businesses have separate ventilation systems. The law is a victory for Gov. Tim Kaine (D) who had tried but failed to force legislators to enact a ban in last year’s session.

But the Republican-controlled House of Delegates blocked a move by Kaine to make the state’s unemployment benefits more generous. The Democratic-held Senate had narrowly approved it. Kaine argued that the changes would allow the state to collect $125 million more in federal stimulus money and prevent an automatic tax hike on businesses to keep the unemployment fund solvent. Republicans blocked it because the state would have had to expand benefits indefinitely to receive the money.

Still, other stimulus money came in handy. Kaine predicted in February that the state faced a $3.7 billion shortfall in its current two-year budget, which ends in June 2010. But the federal government is sending at least $1 billion to Virginia, which the state used to stave off cuts in Medicaid. Other areas weren’t so lucky, as the state cut funding for parks and recreation, aid to localities and even education and public safety. 

The General Assembly passed a law to raise the required amount of electricity generated through renewable resources to 15 percent by 2025. Lawmakers banned texting while driving and made it possible for overseas members of the military to receive absentee ballots by email.

For the third consecutive year, Kaine vetoed legislation that would expand the scope of capital punishment, making murder accomplices eligible for the death penalty. That veto stood, but lawmakers overrode Kaine when he tried to block a bill to let retired police officers carry a concealed gun in bars.

In Virginia politics this year, the main event is the race to succeed Kaine, who is barred from seeking a second term.

State Sen. Creigh Deeds bested two opponents in the Democratic primary, setting up a general election match-up against Attorney General Robert McDonnell (R). It will be a rematch of a 2005 race for attorney general, which McDonnell won by 323 votes.

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Washington makes broad cuts to balance budget

Faced with its worst fiscal crisis ever, the Washington Legislature plugged a two-year, $9 billion budget gap by slicing nearly $4 billion in spending, tapping $2 billion in one-time funds and relying on $3 billion in federal stimulus money in a session that ended April 27.

Many Washingtonians will feel the Democratic-led Legislature’s cuts. Lawmakers reduced the higher education budget and, to help make up the difference, authorized colleges and universities to raise tuition by as much as 14 percent. K-12 funding saw an $800 million decrease, though stimulus money going directly to school districts could provide some $400 million in help.

Some 40,000 low-income residents will be cut from the state’s health care rolls by the end of the year. Under another cost-cutting move, the state will reduce its supervision in the community of many low-risk criminals to save $50 million over two years.

Other measures were designed to blunt the effects of the recession. Lawmakers increased state unemployment benefits and passed a sweeping, $7.5 billion road-building plan that aims to put 20,000 people to work in the next two years.

Fresh from a re-election campaign in which she promised not to raise taxes, Gov. Chris Gregoire (D) faced a delicate balancing act on the revenue side of the state’s budget crisis. While lawmakers ultimately defeated broad tax hikes — including a so-called “millionaire’s income tax” on residents earning more than $500,000 a year — they approved nearly 50 fee hikes to generate more than $270 million over two years. The governor also signed a bill that subjects certain digital goods, such as online music and video clips, to the state's 6.5 percent sales tax.

Among other notable action:

• Gregoire signed a measure granting full domestic partnership rights to same-sex couples, and another that automatically restores voting rights for felons who have completed their sentences and are no longer under the supervision of the Department of Corrections. The American Civil Liberties Union of Washington praised the Legislature for delivering a “banner year for civil liberties.”
• After the collapse of the Seattle Post-Intelligencer in March, lawmakers gave the struggling newspaper industry a 40-percent break on the state’s main business tax until 2015.
• Washington became the fifth state to join the so-called “national popular vote,” in which all of the state’s electoral votes in a presidential election will be given to the popular-vote winner, if enough other states agree to do the same.
• Washington also became the 20th state to join a separate interstate compact that seeks to create uniform education standards for the children of military members who transfer from state to state.

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West Virginia adopts education reforms

Buoyed by rising energy prices, West Virginia suffered far less than most states in this recession, making only small cuts in its 2010 budget. Aided by federal stimulus money, Democratic Gov. Joe Manchin III approved the state’s budget in June with no major program cuts.

He also won approval from the Democratic led Legislature for new academic testing to ensure that all third and eight graders have the skills to proceed to the next level.  For kids found to lack the required skills, the program provides after-school help and other educational resources.

The legislature also passed a renewable energy bill aimed at producing 15 percent of the state’s energy from alternative sources by 2010 and 25 percent by 2024.  Another new law would produce new jobs and spare the environment by requiring coal companies to develop detailed land-use plans for strip mines that have been tapped of their resources.

To diversify the coal-producing state’s business portfolio, lawmakers adopted tax incentives to encourage information technology companies to locate server farms in West Virginia.

One of few states to increase spending on mental health, Manchin vetoed a $4.5 million dollar spending bill because he said it favored certain conditions and institutions. Instead, he pledged to spend $12 million on a broader range of services.

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Wisconsin passes smoking ban, cuts $3 billion in spending

Wisconsin Democrats flexed their muscles this spring by banning smoking in bars and restaurants, requiring health insurers to cover treatment for autism, hiking income taxes on top earners and passing the first on-time budget in Wisconsin since 1977.

Democrats won a majority in the Assembly in last November’s elections. Because they already controlled the Senate and the governor’s office, the Democrats controlled the legislative agenda.

Gov. Jim Doyle had pushed for a smoking ban in the state for years but didn’t succeed until this spring. The new restrictions take effect in July 2010. Wisconsin legislators also increased cigarette taxes by 75 cents a pack.

But much of lawmakers’ efforts were focused on balancing the state’s budget. They agreed to chop $3 billion in spending from the next two-year budget. All state employees must take furloughs in the next two years, reducing their salaries 3 percent. State employees gave up a scheduled 2 percent salary hike, and at least 1,000 of them will likely lose their jobs.

To bring in more revenue, lawmakers hiked income taxes on couples making more than $300,000 a year or single taxpayers earning more than $225,000.

The budget also:

• Allows undocumented students from Wisconsin to pay in-state tuition rates at University of Wisconsin campuses;
• Reduces tax incentives for the film industry, imposing a limit of $500,000 a year;
• Raises car rental fees from $2 to $18 to pay for a commuter rail expansion between Milwaukee and Illinois.

Two big-ticket items that were left unresolved but are likely to crop up again are funding for regional transit in Milwaukee and a crackdown on drunk driving, said Mordecai Lee, University of Wisconsin-Milwaukee political science professor.

Doyle vetoed a proposal to let Milwaukee County hike its sales tax by .65 cents to fund public safety and bus transportation. But he vowed to offer a different solution later.

Drunk driving emerged as a major issue after local media outlets, including the Milwaukee Journal Sentinel and the Gannett newspaper chain, highlighted the costs of Wisconsin’s drinking culture in separate reports last year. Legislators are considering tougher penalties for drunk drivers, including more widespread use of ignition interlock devices, which require drivers to pass a breath test before their cars will start.

—Daniel C. Vock

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Wyoming makes cuts for the first time in decades

In Wyoming — one of the last states to enter the recession — falling energy revenues and other tax collections forced cuts to the state budget for the first time in more than 20 years. The cuts, announced by Gov. Dave Freudenthal (D) in June, totaled $230 million and amount to 10 percent of each state agency’s fiscal 2010 budget.

Even before the cuts, the 60th legislative session was marked by fiscal caution. The Republican-dominated Legislature declined to expand the state’s health insurance program for children and nixed a separate pilot project — pushed by Freudenthal — to broaden health coverage for the poor. One lawmaker described the Legislature’s agenda as “nuts and bolts.”

Without having to pass a full budget — Wyoming passed its two-year budget last year — lawmakers approved a $164 million supplemental spending plan that includes $69 million for a new state laboratory in Cheyenne to help criminal, environmental and public health investigations.

The session saw some notable action. Lawmakers agreed for the first time to tax helium that is extracted from the ground by the oil and gas giant Exxon Mobil, which reportedly sold $90 million of the mineral last year and is the only company extracting helium in Wyoming. The state accounts for a quarter of the world’s helium supply, according to the Wyoming Department of Revenue.

Legislators also extended tax relief to some property owners and to film companies that shoot television programs or movies in Wyoming. Another high-profile measure boosts state worker compensation benefits, including to spouses of those killed on the job.

A huge producer of coal, Wyoming lawmakers of both parties emphasized the need to develop “carbon sequestration,” or the underground storage of harmful carbon gases that are emitted by coal-fired power plants. After addressing the subject last session, lawmakers further refined rules for storage of the gas and agreed to spend $450,000 to host an energy forum this summer, featuring leaders of Western states.

Legislators also required school districts to create rules to prevent bullying and agreed to post state spending information on a new Web site.

A proposed statewide smoking ban and a plan to create a state lottery were rejected.