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The Biggest Issues to Watch in 2022

State legislatures will have a lot on their plates. They’ll deal with issues in wildly differing ways. We set the context for the 2022 session with an overview of everything from abortion to taxes.

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California’s state capitol building.
( David Kidd/Governing)
Gavin Newsom’s new budget is enormous. On Jan. 10, California’s Democratic governor unveiled a budget plan that includes $286.4 billion in spending. That amount tops last year’s budget — already of record size — by more than $20 billion. His proposed spending spree is possible thanks to the state’s surplus, which currently stands at $45.7 billion.

California’s numbers are outsized, as ever, but they aren’t unusual. Thanks to federal largesse and unexpectedly robust revenues, states across the country are enjoying a budget season that’s not just rosy but would have been essentially unimaginable when 2021 began. “In a typical year, we might have $300 million or $400 million of discretionary spending decisions to make,” said Colorado state Sen. Chris Hansen. “This year we basically have $4 billion.”

So much money sloshing around is driving dreams of spending for programs old and new, while also leading to promises of tax cuts from Republican and Democratic governors alike. Idaho GOP Gov. Brad Little, for example, has proposed increasing school spending by 11 percent while cutting taxes by more than $600 million. Jim Justice, the Republican governor of West Virginia, wants to raise pay for state employees by 5 percent, while also offering a one-time supplement of 2.5 percent to offset inflation.

Although revenue is plentiful, it’s not an endlessly renewable resource. State surpluses have been boosted by $195 billion worth of aid approved by Congress last year as part of its COVID-19 emergency response. States have also benefited from strong corporate revenue collections. Those may slow down, with forecasters predicting pressures on profits from inflation and rising interest rates. State lawmakers should be thinking about how to go on one-time spending sprees — such as funding infrastructure projects largely underwritten by the trillion-dollar infrastructure bill signed by President Biden in November — rather than obligations they’d have to continue meeting into the future.

Still, as lawmakers craft budgets this year, it’s clearly a good moment. “States are in as good fiscal shape as they’ve been, certainly since before the Great Recession,” says Tim Storey, executive director of the National Conference of State Legislatures. “Their revenues are bursting through their estimates.”

Money isn’t the only thing that matters. The omicron wave offers a reminder that the pandemic, about to enter its third year, is not over. Even Democratic politicians have mostly grown wary of shutdowns and mandates, but states are having to respond to the ongoing health challenges in all sorts of ways, from sending National Guard troops to help out in hospitals to supplying vaccinations and at-home test kits. As they gather in 2022, legislatures themselves are already watching recent history repeat itself, with some lawmakers meeting remotely while others have shown up at the capitol infected.

COVID-19 continues to have indirect effects as well. In November, a group of 15 Republican governors signed a letter promising to ease up on regulations on the strained trucking industry and take other steps to shore up the supply chain. As employers, many states are still trying to figure out how and when to return the whole of their workforces to offices while having to compete for talent in a labor market tighter than it’s been for a generation.

Meanwhile, culture wars are running hot. The Supreme Court will soon rule on a pair of abortion bans. Justices appear unlikely to uphold a Texas law that allows private individuals to sue abortion providers and facilitators, but most observers expect they’ll use a Mississippi case either to overturn or gut the precedent set by Roe v. Wade, the 1973 ruling that made abortion access the law of the land. A dozen states have trigger laws in place to end abortion rights as soon as the court allows. Conversely, on the same day that Newsom unveiled his budget, New Jersey’s Legislature passed a bill to enshrine abortion rights in that state.

Schools have become a battlefield, with more Republican legislators looking to limit the ways in which the nation’s racial history can be taught in schools. Last year was a banner year for private school choice programs. That momentum may continue, given the anger many parents have felt about curriculum and COVID-19 closures.

All these issues and more are happening against the backdrop of an election year. The redistricting process is complete in a majority of states, with the clear loser being competition. There will be even fewer competitive seats left at the congressional or legislative levels. Republicans, who already control a majority of governorships and legislative chambers and seats, can hardly wait until November, convinced they will make more gains given the typical midterm backlash against the president’s party.

Meanwhile, the parties are still arguing about the 2020 election. Republican investigations and audits are continuing in states such as Wisconsin and Texas. For all the laws GOP state legislators passed last year that were designed to ensure election integrity, polling shows that increasing numbers of Republican voters think the game is fixed.

On the Democratic side, meanwhile, voters are convinced that Republicans are seeking to rig the rules to ensure their party’s victory in 2024. Biden’s recent call to change Senate filibuster rules and allow passage of renewed voting rights legislation at the congressional level looks unlikely to be persuasive. The persistent failure of Congress to pass such bills over the past year left the door open for states to enact dozens of voting laws, both restrictive and expansive.

In 2022, whether it’s addressing elections — or climate or energy or immigration or cybersecurity — states will continue to be highly active, even as Congress remains mired in its habitual gridlock.

— Alan Greenblatt

Abortion-rights protesters outside the U.S. Supreme Court.
(Graham Vyse)

Abortion


2022 could be a watershed year for abortion. The Supreme Court is expected to deliver its ruling on a Mississippi law banning abortion after 15 weeks later this summer. With a 6-3 conservative majority in the Court, many expect to see Roe v. Wade gutted, possibly overturned, which would put states in control of abortion, not the feds. If Roe is nullified, a dozen states already have “trigger” laws in place designed to take effect immediately. All, or nearly all, abortions would then be banned in those 12 states.

Additionally, four states have passed amendments explicitly stating that their state constitution does not protect the right to abortion or allow public funds to be used for abortion. By December of 2021, 19 states had enacted restrictions on abortion, the most in any year since Roe v. Wade.

Besides Mississippi, other states have taken legislative action to neuter abortion. Last September, Texas passed a new law that deputized citizens to enforce a ban on nearly all abortions in the state (the Supreme Court is expected to rule against this law). In fact, 2021 was a record year for abortion restrictions, the most in any year since Roe v. Wade was decided back in 1973.

Nearly one in five pregnancies ends in abortion. By some estimates, one in four American women will have an abortion during their lifetime. Legal since Roe v. Wade, rates of abortion have been anything but steady. In the decade following Roe, the rate of abortion rose by 60 percent, peaking in 1983 at 30.4 per 100 women aged 15-44. The rate has since dropped to 13.5 in 2017, the last year figures are available, the lowest rate recorded since abortion was legalized in 1973.

The decline in abortions has occurred in every region of the country, whether states have acted to restrict or support access. Access to clinics has become increasingly difficult in some parts of the country. The number of clinics has increased in the Northeast and West, while declining in the Midwest and South. Mississippi, Missouri, North Dakota, South Dakota and West Virginia each have only one remaining abortion provider. A reduction in the number of clinics, however, has not resulted in a corresponding reduction in the rate of abortion.

In 2017, the District of Columbia, New Jersey, New York, Maryland and Florida had the highest abortion rates. Rates were lowest in Wyoming, South Dakota, Kentucky, Idaho and Missouri. However, many individuals cross state lines to get an abortion. In the five states with the lowest rates, nearly a third of those seeking an abortion go out of state.

Just as some states have moved to restrict abortion rights, so too have a number of other states moved to shore up support for abortion rights and access without relying on Roe. Fifteen states and the District of Columbia have laws on the books that protect the right to abortion. Twelve states explicitly permit abortion before viability or when necessary to protect the health and life of the mother.

In the last weeks of 2021, the federal government lifted restrictions on so-called abortion pills, allowing patients to receive the medication by mail, rather than in person from a doctor’s office, clinic or hospital. This development comes at a time when the use of medication abortion is on the rise, even as abortion rates in general are in decline. Medication abortion now accounts for two of every five abortions in the U.S. The majority of abortions in some states are medication abortions. Eight states enacted restrictions to medication abortion in 2021 and more are expected to follow.

However the Supreme Court rules on Mississippi’s challenge to Roe, the coming year is certain to see continued activity at the state level as well as ramifications for congressional elections and the presidential race two years beyond.

— David Kidd

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(David Kidd/Governing)

Broadband


The American Rescue Plan Act of 2021 (ARPA) includes hundreds of billions of dollars for which broadband projects are an allowed use, whether in schools, communities or public libraries. By November 2021, legislatures in almost half of the states had appropriated ARPA funds for broadband infrastructure grants in amounts ranging from tens to hundreds of millions of dollars.

In recent years, state programs have received applications in excess of available funds, says Anna Read, senior officer for the Pew Charitable Trusts Broadband Access Initiative. “State grant programs to date have focused on expansion of last-mile infrastructure to unserved areas,” she says. Stimulus dollars are enabling states to allocate funds for other purposes, including mapping, public space connectivity, free wireless broadband for public housing residents, municipal broadband pilots and planning.

Looking ahead for 2022, broadband expansion faces a number of stumbling blocks that include supply chain issues and a need for more workers to build, deploy and maintain broadband services, says Shirley Bloomfield, chief executive officer of NTCA–The Rural Broadband Association. Focus on training and apprenticeship could address the latter need.

The Infrastructure Investment and Jobs Act (IIJA) included $65 billion for broadband expansion. The majority of that money, $42.5 billion, will fund a grant program to be administered by the National Telecommunications and Information Administration (NTIA). “NTIA has a huge task ahead in an area where they do not have staff or expertise,” says Bloomfield. “Look for growing pains there.”

Each state will receive at least $100 million for broadband infrastructure, mapping and adoption projects, the remainder awarded on the basis of the number of underserved or high-cost locations in individual states. If a state is unable to submit an application by the funding deadline, an application can be made in its place by a political subdivision or a consortium of subdivisions.

Grant dollars won’t start flowing from NTIA until 2023, but states have much to do in 2022 to be ready to get in line for them. Proposals for funding must be accompanied by a five-year state action plan that reflects meaningful coordination with local and regional entities.

If the goal of these projects is to ensure equitable access, poor data regarding coverage will thwart the best intentions, says Francella Ochillo, executive director of Next Century Cities. It’s important to ask questions about how coverage data is being collected, she says, that it’s not just “top-down” from the FCC to states.

If service is available to just one household in a census tract, the FCC considers the tract to be covered, whether even one household is connected or not. “We need to make sure we’re using bottom-up methodologies to learn from municipalities, counties, unincorporated areas, places that are finding ways to collect data on their own to inform larger data sets.”

Ochillo is also concerned about the standards for connectivity speeds that are built into projects. The FCC benchmark of 25 Mbps download and 3 Mbps upload, used for many projects, was established in 2015. “I think it’s problematic to push money out the door based on a speed threshold that you know is becoming obsolete — we need to make sure that our communities are able to get the best speed that is available to them.”

As more municipalities incorporate broadband within their economic development planning, the issue of speed has particular significance. It’s not just a matter of access to texting and email but ensuring that all citizens have access to the full range of commercial, educational and work resources necessary for 21st-century communities to remain economically viable.

“Last-mile” needs aren’t just about broadband connections. A holistic approach should encompass increasing digital literacy among users and providing devices and tech support where necessary. It’s important to think from the perspective of those who are disconnected, says Ochillo, which is not necessarily the reality of those making broadband policy. What does broadband “access” mean if a family shares a single smartphone and can only afford so much data?

If short-term federal funds are a big part of the reason that broadband becomes affordable to low-income citizens, jurisdictions will have to think about long-term strategies to keep prices down. “We need to remind policymakers that building broadband may be sexy, but maintaining those networks and keeping them affordable will be just as important,” says Bloomfield.

ARPA and IIJA dollars are the most significant broadband investments to date, says Pew’s Anna Read. “A lot is still to be determined about how this funding will be prioritized and used, but it does create an opportunity to make real progress in closing remaining gaps in broadband access and adoption.”

— Carl Smith

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(David Kidd/Governing)

COVID-19


That the disease carries the year of its birth in its very name presents a frustrating reminder of how long the COVID-19 pandemic has dragged on. Last year opened with optimism, with vaccines starting to roll out, holding out the apparent promise of a return to normal life. That promise proved short-lived. As 2022 begins, the omicron variant is proof that the pandemic is still far from over.

Offices that hoped to have workers return in person in the new year have delayed opening fully yet again. Just before Christmas, several of the nation’s most prestigious universities, including Harvard and Stanford, announced that they’re moving classes back online for at least the start of spring semester. The University of Illinois delayed its start by one week, while the University of Virginia announced that faculty and students would be required to have booster shots to return to campus. K-12 schools, at least in some jurisdictions, have also returned to remote learning — while a well-publicized standoff in Chicago that led to temporary school closures — but that is something the vast majority of districts are determined to avoid.

Closures offer a strong sense of deja vu, but they are not the rule. The public and political will for strict lockdowns is now part of the past. Even many Democratic governors have lost their appetite for measures such as mask mandates. After two years, people aren’t reacting well to an “ongoing environment of fear,” Colorado Gov. Jared Polis said in December. “You can’t, at the end of the day, force people to do something they don’t want to do,” he said. “Public health doesn’t get to tell people what they want to wear. It’s just not their job.”

The mask and vaccine mandates that are in place continue to face challenges in court. Republican attorneys general are still battling the Biden administration’s requirements for vaccinations or frequent testing for most workers, in a challenge that reached the Supreme Court. “Let me be clear — I will never force you to get the vaccine,” Mississippi Gov. Tate Reeves tweeted in November. “Why? Because you can be trusted to make good and responsible decisions.”

More than 90 percent of Democratic adults have received at least one coronavirus vaccination, compared with 60 percent of Republicans. Only elderly Republicans are as likely as the youngest Democrats to be vaccinated. In Texas — where President Biden carried just 22 of the 254 counties in 2020 — 17 of the 20 counties with the highest vaccination rates all voted for the Democrat. This divergence has led to a sizable partisan gap in death rates, one likely to worsen as the omicron variant spreads and infects millions more. “In 2021, we started to see more of a divergence, and 2022 is potentially going to be even worse, unless we can pull it back from the intense politics,” says Joshua Sharfstein, vice dean of the Bloomberg School of Public Health at Johns Hopkins University.

Even as omicron cases spike, there is some good news. Late last year, the federal Food and Drug Administration approved the use of two anti-viral pills. One, manufactured by Pfizer, reduced the risk of hospitalization in clinical trials of infected patients by 88 percent. Increasing supply to meet the enormous demand will be a big task, but finally treatments are available that should make a real difference.

All of this means that the pandemic continues to present challenges to state and local governments — running vaccination clinics, supplying at-home test kits, sending the National Guard in to help in strapped hospitals. Some states are planning to send additional stimulus checks to residents whose economic fortunes remain crimped.

Public health officials continue to maintain that the tried-and-true methods of avoiding disease — vaccination, distancing, hand hygiene, avoiding indoor crowds, masks — offer the best hope for individuals to evade omicron. They’re unhappy that about a dozen states placed curbs during the pandemic on the authority of health departments, particularly at the local level. They hope, perhaps optimistically, that lawmakers can be persuaded to strengthen local authority, while also helping to build up public health infrastructure for the longer term that will allow them to address future emergencies more capably.

In the meantime, there are plenty of other public health concerns that have received inadequate attention during the pandemic, including suicide and mental health issues, particularly among young people. Substance abuse has increased, notably abuse of opioids and alcohol. “We have undervaccinated children,” says Lori Tremmel Freeman, CEO of the National Association of County and City Health Officials. “We didn’t have that before the pandemic, but we have it now. We don’t want the pandemic to be a cause for us having to deal with a lot of measles outbreaks, or other outbreaks.”

— Alan Greenblatt

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(David Kidd/Governing)

Crime


After decades of mysteriously declining crime rates, especially in many of America’s most successful cities, the last two years have been a rude awakening. The current year promises to be equally unsettling.

A CNN analysis found that a diverse array of cities across the country had already broken their one-year homicide records before the close of 2021, including Philadelphia, Indianapolis, Louisville, Columbus, Albuquerque, Tucson, Rochester and Portland, Ore. A handful of others, including Austin, are on track to do the same. In some cities, including Philadelphia, the sixth largest in the country, 2022 is off to an equally bloody start.

The surge in violence is fueled almost entirely by guns. The abundance of firearms in the United States makes policing more difficult and dangerous, and officers more likely to react aggressively. But gun regulation efforts are unlikely to advance substantially in 2022, as the Supreme Court looks likely to rule in favor of gun advocates.

Although homicides began trending upwards before COVID-19 struck in 2020, it is widely believed that the immense social dislocation of the pandemic has fueled the surge in gun violence. In-depth reporting on Philadelphia’s horrific 2021 found that disadvantaged young people deprived of school, libraries, sports teams, youth groups and a litany of other supports were uniquely vulnerable to the maelstrom. As the pandemic continues its uncertain course, it remains to be seen if school closures or other safety measures will continue to disrupt social life — or if an easing of COVID-era restrictions could finally stall spiraling violence.

Many pundits and analysts argued that “Defund the Police” sloganeering hurt Democrats in 2020, despite the fact that few politicians used that rhetoric. In 2021 the political ramifications of the crime wave were unclear, but it is sure to be further weaponized by Republicans. In states like Pennsylvania, where elections have been tight, statewide offices are up for contest, and crime has visibly surged in some areas; it seems likely such tactics will be widespread.

Last year, in New York City, former police officer Eric Adams won election as mayor by promising to address violence head-on. Similarly, Democratic mayoral candidates with law-and-order platforms defeated police critics in Seattle, Buffalo and Atlanta. However, the preeminent progressive district attorney in the country, Philadelphia’s Larry Krasner, won re-election easily while voters in Austin rejected a proposal to require the hiring of hundreds of more police officers. In Cleveland, Justin Bibb won handily by campaigning, in part, on additional civilian oversight for the police department, while progressive-backed Susan Hutson defeated the 17-year incumbent in the New Orleans sheriff race.

In 2022, criminal justice will be on the ballot again. In San Francisco, progressive district attorney Chesa Boudin faces a recall election in June. In Los Angeles, a similar effort is targeting prosecutor George Gascón, although it remains unclear if his opponents will gather the number of signatures needed to initiate the recall process. In heavily Democratic California, a victory for a recall campaign against a progressive prosecutor would be a major blow to the criminal justice reform movement.

Many other progressive prosecutors are facing re-election campaigns, including St. Louis County’s Wesley Bell, John Creuzot in Dallas, Brian Middleton in Fort Bend County, Texas, and Joe Gonzales in Bexar County, Texas (home of San Antonio). There are also races between reformers and more traditional district attorneys shaping up in Memphis and Raleigh.

A handful of big cities shifted funds away from their police departments in 2020, including Austin, Seattle, Portland and Minneapolis. But the concept of depriving police departments of funding, especially if framed as a punishment, polls poorly and few mayors are likely to pursue such a path in 2022.

“There were cities where the call to defund translated into meaningful reductions in police budgets, but it wasn't widespread,” says Patrick Sharkey, professor of sociology at Princeton University. “In the coming year, I’d guess police departments will ultimately have higher budgets than at the beginning of the pandemic. That initial momentum to defund is not persistent.”

Funding social services and alternatives to police law enforcement polls much more strongly than defunding. New York and California plan to allocate funds to support violence interrupters and other community-based interventions. In Philadelphia, unarmed traffic wardens are replacing police officers for regulation of some street offenses while alternative first responder programs were established in San Antonio and Dallas during the pandemic, and in 2022 other cities may follow their example.

— Jake Blumgart

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(David Kidd/Governing)

Economy


In 2021, inflation surged to its highest levels in a generation, led largely by prices for fuel, cars and major appliances while snarled supply chains bred chaos in ports, rail hubs and grocery stores. Housing prices remained elevated too, with median home sales prices spiking in many locales. Buoyed by generous federal income supports, and a boom in consumer spending as vaccination spread and social distancing eased, American economic growth shot to levels almost double pre-pandemic figures. Unemployment dropped much faster than was predicted, recovering at an impressive clip in comparison to the sluggish recovery from the Great Recession.

Economists expect many of these features to remain a persistent part of the economic landscape in 2022, although in a more muted fashion than last year. Policymaking in D.C. is likely to be more conservative, with as many as four interest rate hikes possible this year and far less fiscal spending forecasted. Even if some version of President Joe Biden’s Build Back Better bill does pass it is not likely to inject much money into the economy in the short term, unlike 2021’s American Rescue Plan Act.

“You likely will continue to see inflation above the Fed’s two percent target for a lot of 2022, but not the kind seen in the second half of 2021,” says Alex Williams, research analyst with Employ America. “That is going to play a major role in fiscal spending decisions at the federal level and maybe at the state level.”

The politics of inflation are believed to have weighed on the Democrats in the 2021 elections, where Republicans won one of two governor’s races. Concerns over price rises are one of the reasons that U.S. Sen. Joe Manchin gave for setting back the president’s major social spending and climate change bill, evidence that a more conservative fiscal attitude may be winning out. Inflation is likely to be a persistent line of attack for Republicans in the 2022 midterms.

Supporters of Biden’s spending plans say that many of his priorities could ease inflation in the medium-to-long term, enhancing productivity through investments in child care, sick pay and clean energy. We may never find out if they are right, but the president made a similar argument about his infrastructure bill and local leaders are already planning projects with those funds to ease supply chain issues. But the fruits of such spending are unlikely to be seen in 2022.

The National Association of Counties points to investments by entities like Miami-Dade County, which is expanding cargo facilities at its airport. With federal aid and local funds, Chambers County, Texas, is purchasing two purpose-built barges to facilitate the movement of tens of thousands of additional containers around the region. These are just a few examples of the local investments in physical infrastructure, even before the funds from the bipartisan law are distributed.

During the pandemic, cities quickly adjusted their zoning and street codes to accommodate restaurants and other outdoor services for safer dining. This saved many eateries, coffee shops and bars and made life much more pleasant, especially in big cities where outdoor space is at a premium. But as 2021 wore on, some cities and counties rolled back these regulatory easements. In 2022, as the pandemic rolls onward, restaurant industry and outdoor groups may go back on the offensive.

Meanwhile, wages for lower income workers surged ahead of inflation as employers had to lure people out of their homes and compete with pay raises and mass hiring by major corporations like Amazon and Walmart. Labor strikes, union drives and other worker actions saw a notable uptick, although they remained low by mid-20th-century standards. Higher income workers did not see the same wage increases, although their amassed savings from 2020 provided plenty of cushion.

Economists believe consumer spending will remain elevated in 2022 even without further federal fiscal support, as a result of the strong job market, historically low unemployment and rising wages.

“Consumer spending is likely to be buoyed by strong labor markets and gross labor income growth in 2022,” said Williams of Employ America. “This is in contrast to the years leading up to the pandemic, which saw tightening labor markets without the kind of wage growth that we’re seeing right now.”

In 2022, local and state policymakers will continue to compete for scarce workers with the private sector. They have a deep deficit to build back from, and it will be worth watching to see if the public-sector employment levels can return to pre-pandemic levels.

Many public-sector jobs grew increasingly stressful in the last two years, especially in health care, law enforcement and sanitation. Additionally, in 2020, many local and state governments did not replace workers who retired or quit, fearing a coming budget crunch. In some cases, layoffs were enacted.

But today, even with revenues surprisingly robust, state and local employment is still far below its early 2020 levels.

“It's just gotten much more expensive to hire people,” says Tracy Gordon, director of the Urban-Brookings Tax Policy Center. “The great resignation affects the state and local sector as well. To the extent that governments want to hire people, or bring them back, they have to pay much higher salaries. And I do wonder about the sustainability of that.”

The National Conference of State Legislatures reports that the principal concerns over inflation next year for legislative fiscal officers are that everyone will be trying to recruit teachers, police and health-care workers. In addition to competing with the private sector for workers, states and localities will also be crafting bills to entice people into the workforce and prepare them for available jobs.

Along with the usual job training programs, some states are considering higher pay and benefits like child care to help parents ease back into the labor market. Minimum-wage increases to keep pace with inflation could be a possibility in a few states, and even fewer cities. Living-wage increases for government workers are expected in 2022, in an effort to help the public sector compete for employees.

“Every legislator I've been talking to is hearing about workforce problems, both for state employees and private-sector workers,” says Tim Storey, executive director of the National Conference of State Legislatures. “I think many states are going to be paying a lot of attention to workforce issues in the next few months.”

— Jake Blumgart

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(David Kidd/Governing)

Education


A year ago, five states had made educational savings accounts (ESAs) available to parents and students. Now there are 10 such states. West Virginia makes ESAs available to nearly all students.

The expansion of ESAs, which allow students to use public funds for private school tuition or tutoring, is a prime example of the recent growth in school choice experiments. Choice proponents expect the momentum from their breakthrough year to continue into 2022. In an election year, when most legislatures will have shorter sessions, there may not be as many new programs created as last year, but there will be continuing expansion of existing programs in choice-friendly states. School choice legislation has already been introduced this year in a long list of Republican-run states, including Arkansas, Georgia, Iowa, Ohio and South Dakota.

It’s also possible that changes will be pushed through the state budget process, with governors already looking to shift some federal COVID-19 dollars into ESAs. “For an election year, we’re going to see more action on things like education savings accounts, tax-credit scholarships and education measures in general,” says Ben DeGrow, director of education policy at the Mackinac Center, a conservative think tank in Michigan.

In addition, the U.S. Supreme Court is likely to weigh in on a religious education case with major implications. In December, the court heard a challenge against Maine’s policy of banning state funding for parochial schools that engage in religious instruction and activities. The state argues it is not penalizing such schools, merely refusing to subsidize them. Plaintiffs argue that the state, which offers vouchers for secular private schools, is discriminating against religion. The court is expected to decide the case this spring. Justice have been sympathetic to religious schools in other recent cases, including a 2020 decision that overruled state constitutions that ban state aid for religious schools. If they rule against Maine, it could open the door to religious school vouchers across the country.

Choice proponents believe 2022 could be decisive in another way. They believe that political momentum is on their side, pointing especially to the results of the November gubernatorial election in Virginia, in which choice issues played out in favor of newly elected Republican Gov. Glenn Youngkin. If more Republicans win on a school choice platform, it will obviously embolden choice advocates to press harder. “Count me as just a little skeptical that school choice is going to be one of the most prominent political issues in the 2022 election cycle,” says Patrick Wolf, an education policy professor at the University of Arkansas. “But Republicans have pretty much embraced it and they’ve committed to it, while Democrats have to figure out what their response is going to be – and will have to develop a response that’s more family-friendly.”

It’s clear that many parents are angry about what’s happening in schools. They will be demanding greater transparency about curriculum, while many will also be pushing back against standardized testing. “Parents are going to demand a stronger role in influencing what’s taught to their kids and how it’s taught to them,” Wolf says.

Critical race theory is only a small part of this dynamic. Nevertheless, it’s clear that the question of how race and racial history is taught will continue to be a flash point issue. Nine states passed bans on the teaching of critical race theory in 2021, although Arizona’s ban was overturned by the state Supreme Court in November. Expect at least twice as many states to consider similar legislation in 2022.

The state bans are quite broad and limit the way subjects such as slavery and structural racism are taught. Opponents of the bans have noted that critical race theory, an academic doctrine taught largely in graduate and law schools, is entirely absent from K-12 curricula. They are angry about schools and libraries removing a broad range of books not just about race but also gender identity and sexual orientation from the shelves. Nevertheless, the push will continue. In December, Florida GOP Gov. Ron DeSantis announced that he wants to allow parents and other private individuals — including corporate employees who undergo diversity training — to file lawsuits against teachers or others who run afoul of the proposed legislation’s definition of critical race theory.

Aside from the hot-button issues, schools are still struggling with how to deal with learning losses caused by disruptions from the pandemic. Helping kids make up for lost classroom time has been difficult and may become more so, as some districts revert to online and hybrid learning due to omicron outbreaks. Total school enrollment, including higher education, dropped by 2.9 million from 2019 to 2020, according to the Census Bureau. College and preschool enrollments dropped to their lowest levels in decades, while K-12 enrollment fell by roughly 2 million.

There’s been an assumption that most of those kids will come back, once the pandemic is truly in the nation’s rearview mirror. But it’s possible that many are now permanently in charters and home schooling and are lost to traditional public schools. To the extent that parents are angry at their neighborhood schools, it’s clear that, at least in red states, they can count on having more options available in the future.

— Alan Greenblatt

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(David Kidd/Governing)

Elections


Unfounded claims that the 2020 presidential election was “stolen” are dragging election administration into the spotlight as never before. Misunderstanding and disinformation about voting will continue to generate social-media and real-world turmoil and provide fuel for campaigning and fundraising.

According to the National Conference of State Legislatures (NCSL), more than 3,500 election bills have been introduced during the past year, over a thousand more than the average over the past decade. Only 285 were enacted, consistent with the 300 or so seen in earlier years. But tensions can’t be expected to ease.

Local election officials expect even more public attention to their work in the coming year, says Ricky Hatch, the clerk/auditor for Weber County, Utah. While transparency is crucial and welcome, election administration is complex. The past year saw numerous examples where routine processes were seized upon as “smoking guns” by observers who didn’t understand what they were seeing. “I’m also concerned about knee-jerk legislation that is based on inaccurate information or sensationalized anecdotes,” says Hatch.

The number of Americans who voted by mail in 2020 doubled, reaching 46 percent. Although some characterized this as an invitation to fraud, there was more legislative action in 2021 to increase mail voting than to restrict it. It’s unknown how much public health concerns will color the 2022 midterm elections — but that possibility, combined with greater public enthusiasm for voting by mail, could prompt adjustments to ballot deadlines and the time allowed to count mail ballots before election day. A voting rights bill before Congress could protect against restrictions on voting access, but its path forward is uncertain.

Legislative and executive actions taken in 2020 to accommodate COVID-19 have lapsed or expired and legislation has been proposed in some states to prohibit practices such as extending absentee voting to at-risk populations. “The challenge then becomes creating safe ways for voters to cast their ballot in states that do not have election administration laws that facilitate safe voting,” says Brianna Lennon, the clerk for Boone County, Mo.

While the legislation passed to date may not reframe the 2022 voter experience in most states as drastically as feared, attempts to shift authority over certification of vote counts are a different matter. These can give officials with limited understanding of the processes involved in ballot collection and counting the authority to override results, and the will of voters. “Do you want your legislature looking over the shoulder of your election officials?” asks Wendy Underhill of NCSL. “Maybe that’s the job of the secretary of state.”

Partisan efforts can have unintended consequences, says Tammy Patrick, a former election official and senior adviser to the Democracy Fund. Control of a legislature that seizes authority over certification can shift; voters from both parties can have trouble with voter ID or prefer to vote by mail. “Too often,” she says, "politicians believe they understand what the situation is, and they have it wrong.”

Threats and hostility prompted an unusual number of election officials to leave their jobs in 2021. A bill proposed in Washington state would criminalize such harassment. For officials who remain in their positions, disinformation and mistrust are reinforcing a commitment to free and fair elections and leading to new collaborations with colleagues, private-sector leaders, academics and nonprofit organizations.

Risk-limiting audits can play a significant role in convincing voters that vote tallies are accurate. Already required by statute or being piloted in 15 states, they are expected to become more common and more prominently publicized in the coming year. “We could add a statewide risk-limiting audit to the certification process and that would create a two-step process to verify all results,” says Lennon.

As Lennon puts it, election officials need to “take back the space,” replacing false narratives with the truth about their work and its complexity, precision and reliability. This is often best accomplished through personal contact with the public, tours of processing facilities, presentations to community groups and schools or interaction with individual voters.

“I’ve been able to turn people around a little bit or make them feel more comfortable about what we do,” says Carly Koppes, the clerk and recorder for Weld County, Colo.

“That’s what we are going to have to continue to do, but we’re also going to continue to figure out how many other ways we can do that.”

— Carl Smith

A row of power lines.
(David Kidd/Governing)

Energy


Renewable energy development in the U.S. will surge in 2022, according to estimates from S&P Global Market Intelligence. New solar capacity will double what was added in 2021. Wind generation will be more than 70 percent greater, and new battery storage six times greater, than previous single-year records.

Demand for green energy is being driven by emission reduction targets set by government as well as private-sector attention to environmental, sustainability and governance (ESG), says Marlene Motyka, U.S. and global renewable energy leader for Deloitte, a market research firm.

Tech companies such as Google and Amazon that are driving the growth of energy-intensive data centers are also demanding green energy to match their footprint, says Steve Piper, director of energy research, S&P Global Market and Intelligence. Jurisdictions that want to attract them and the companies that are following their lead on clean energy, such as Walmart and McDonalds, need to have policies that facilitate development and procurement of it.

In 2022 and beyond, state and local governments will grapple with siting of projects as renewable generation becomes a bigger part of the power mix, says Piper. Utility-scale projects can create land use controversies in states or crowded metropolitan areas with limited open space, or if projects involve agricultural land. Rooftop solar and microgrids can help address this and governments will need to adjust policies to get the mix of applications right, he says.

Energy demand continues to rise, driven by data centers, electric vehicles and cryptocurrency. Another driver is electricity use from indoor cannabis cultivation, which is approaching that of data centers. A lighting module for four plants can use as much electricity as 29 refrigerators.

Kim Chelsak, director of code for New Buildings Institute, expects to see more attention to building electrification in 2022, whether through codes, gas ban ordinances or building performance standards tied to carbon reduction targets. Attention to building grid integration will also increase, she says, updating building systems so that they can “talk” to the power grid and balance energy demand, on-site generation and storage, and act as grid resources if needed.

Smarter buildings are only one piece of what will be required to ensure the nation’s electricity grid can accommodate escalating clean energy production and demand. The Infrastructure Investment and Jobs Act includes $73 billion to improve grid infrastructure capacity, resilience and cybersecurity.

According to a Net Zero America study from Princeton University, a 60 percent increase in high-voltage transmission capacity is needed by 2030 in order to accommodate the additional clean energy inputs required in “high electrification.” This would require a $360 billion investment, it says.

Aside from the capital needs, adding new high voltage transmission involves significant challenges for state and local governments. The best paths for new lines may pass through private or otherwise protected property. A transmission line might only pass through a jurisdiction or state and not provide power to residents, seemingly reducing the economic incentive to allow it. Utilities may oppose projects from renewable energy developers. Interconnection — enabling a new generator to connect to the grid — is also problematic. (According to Americans for a Clean Energy Grid, 734 gigawatts of proposed power projects, 90 percent of which are wind and solar, are stalled in interconnection queues.)

“Transmission is the bottleneck, transmission is the enabling infrastructure,” said Liza Reed, research manager for low carbon technology policy at the Niskanen Center. “We have to get the transmission first because we can’t get anything else until we have a way to move it forward.”

Increasing the ability to move renewable power from generation sites to load centers can help address climate or disaster-related outages such as occurred in Texas in 2021. The IIJA includes $500 million in grants to states to develop transmission and distribution planning and find ways to move projects forward.

Natural gas shortages led to some increase in the use of coal for power generation in the past year. There could be a short-term continuation of this in 2022 if the winter is especially nasty, says Piper. An increase in nuclear power generation is still in the mix, but state investments are focused on existing facilities.

The push for vehicle electrification will gain momentum from federal funding for charging stations and heavy-duty vehicles such as school buses. State and local governments will need to navigate the needs of vehicle owners, private charging network development, electricity demand and the long-term goal of integrating electric vehicles into a renewable energy grid as both storage and power resources.

The president’s Build Back Better bill, which proposed nearly $600 billion in tax credits and investment to combat climate change, failed to make it through the Senate. It remains to be seen what the priorities and the funding levels of an enacted version will be.

Federal incentives will help keep things moving in the coming year, says Piper. “They won’t accelerate things more than we expected, thanks to the supply chain issues, but they should at least keep things moving.”

— Carl Smith

Construction workers digging.
(David Kidd/Governing)

Federal Spending/Infrastructure


In 2020, state and local governments faced a crisis of previously unimaginable proportions. As the pandemic swept the country, communities shut down of their own accord before governments issued stay-at-home orders. The need for public services surged, even as revenues plummeted. Although the gargantuan assistance packages issued under Donald Trump’s administration helped the economy stay afloat, and kept some revenue streams healthy, Republican policymakers at the federal level declined to make aid available for state and local governments.

That changed under Joe Biden’s administration, which issued its own rescue package, which was targeted less towards business assistance and more towards bolstering the public sector and aiding households. The American Rescue Plan Act (ARPA) provided $350 billion to local and state governments, with stipulations that it could not be used to cut taxes.

But as the economy roared back to life, some of these governments — at least at the state level — proved to be in surprisingly strong fiscal health. Much of the ARPA money has not yet been spent, leaving some conservatives to claim it was a waste.

There are a variety of reasons why some jurisdictions haven’t yet begun spending the money. During the Obama administration, Biden was in charge of implementing the 2009 stimulus act, which was famed for its lack of pork and its stringent safeguards against fraud, waste and abuse. Similar guardrails have been put in place with ARPA, which have the side effect of making it difficult to spend the funds quickly.

“The more strings that are attached to funding, the more slowly it’s allocated and dispersed,” says Amanda Page-Hoongrajok, assistant professor of economics at Saint Peters University. “There’s a lot of questions policymakers have if they can use these funds for this or that. That’s a big part of why it’s taking so long. More strings attached to funding means it’ll be better targeted, but it’s also going to slow things down.”

There is also speculation that delays in 2021 could be attributed to some policymakers wanting to wait and see what would come of the Biden administration’s additional spending plans. A city that wants to spend on broadband access may have waited to see if the infrastructure act passed, so that the ARPA money could be better spent elsewhere. The same logic holds with the Build Back Better bill’s climate change and welfare state provisions.

But they can’t delay forever, and with Build Back Better’s future uncertain that calculus no longer makes sense. The ARPA funds must be allocated by 2024 and spent by 2026. That means fights over how it will be spent will occur this legislative session, as will battles over funds from the bipartisan infrastructure act.

At the county level there is $65.1 billion to be spent from the ARPA. The National Association of Counties describes an array of initiatives the money is being allocated to, from public health to sewer systems to homeless services. These funds could be used to fill gaps in need left by the vanishing federal household and business supports from 2020 and 2021.

“An example would be purchasing additional property to provide housing and wraparound services to those experiencing homelessness,” says Teryn Zmuda, chief economist with the National Association of Counties. “We’ve also talked a lot about workforce and re-employment efforts and small business assistance to business owners impacted by the pandemic.”

The National League of Cities has been tracking ARPA spending across 169 cities that have spent $4.23 billion. So far, 18.5 percent of that has been spent on infrastructure projects, 7.6 percent on public space improvements, and 7.4 percent on sewer and water projects. In cities like Allentown, Pa., much of the $36 million it received was spent on capital improvements like new filters in the city’s water distribution plants, three miles of water main replacements, and storm sewer improvements. Richmond, meanwhile, spent $19 million on stormwater management and climate risk assessment.

“What we’re seeing pretty broadly is that there is a lot of delayed maintenance that needs to be done in our cities,” says Brooks Rainwater, senior executive with the National League of Cities. “These dollars that have been flowing through are being used to bring our communities up to where they need to be.”

At the state level, where Republicans control the majority of statehouses, debates over funds have been more contentious. Many GOP leaders want to use the robustness of their current budgets to reduce taxes, although the Biden administration tried to keep states from using emergency federal dollars for such a purpose.

States will also drive infrastructure act spending. Much of the resources in that law will be fielded through state departments of transportation, which have a mostly untapped ability to spend these federal disbursements in innovative ways. There is also a great deal of competitive dollars in the infrastructure bill that some experts believe state agencies will have to leverage — especially in rural areas and other economically depressed locales.

“What’s different about the infrastructure bill compared to past investments is that there’s a whole chunk of money which is competitive,” says Bruce Katz, director of the Nowak Metro Finance Lab at Drexel University. “We’ve degraded the public sector to such an extent that most places don’t have the capacity to deploy funds intelligently or even apply for a lot of the competitive money.”

Katz argues that it will fall to states to be the platform for such planning in 2022 and beyond, and to build capacity and deal with dozens of separate municipalities and counties under their control. It remains to be seen how many will decide to use the federal dollars in new and innovative ways.

— Jake Blumgart

One elderly woman sitting in a wheelchair and one sitting in a folding chair talking on the phone while looking at a large pill bottle.
(David Kidd/Governing)

Health


Heading into 2022, COVID-19 continues to perpetuate a public health crisis that seems never ending. The ongoing pandemic will continue to dominate public health policies this year and is expected to exacerbate issues concerning mental health and health equity. The state and local public health workforce will remain strained as COVID-19 continues to cut into the number of available workers needed to provide health services to a weary public.

The result? This year, health-care costs will continue to rise and consume an ever-greater share of state budgets, accounting for about a third of total expenditures, and are expected to overtake state spending on all other categories within the next 50 years, according to a study by the Government Accountability Office.

Geography can be a major factor in a person’s health in the U.S. The physical environment, access to local care, cost of insurance and food insecurity are just a few of the factors that can determine quality of life and longevity. In many cases, these problems require solutions beyond the purview of health departments alone. When it comes to health policy and outcomes, not all states are created equal.

Massachusetts is a top state for health insurance coverage and child immunization, with just 3 percent of the population uninsured. With an uninsured rate of 18 percent, Texas has one of the lowest rates of health insurance coverage. Georgia ranks near the bottom for percent of uninsured as well as child immunization rate. There is also wide disparity in the cost of monthly premiums among the states, some of which can be explained by differences in geography and whether or not an area is served by only one health-care system. Medicaid expansion continues to be a factor in state spending and health outcomes. Most of the 12 states that have not adopted expansion are consistently ranked near the bottom in terms of overall health care.

A significant percentage of state and local budgets are spent on factors related to health but not directly associated with health care. The Environmental Protection Agency estimates there are at least 6 million lead water lines still in service throughout the U.S. putting millions of Americans at risk. Efforts are underway in several cities to replace these lines. Illinois will replace all lead pipes over the next 50 years, including in Chicago, which has the most of any U.S. city. Air pollution is another factor in a community’s health. Pollution levels have decreased in several states, even before the pandemic. But despite decades of remediation, air pollution is on the rise in others, including California, Illinois and Nevada.

COVID-19 was the third leading cause of death in 2020, increasing the overall death rate by 17 percent and contributing to a two-year drop in life expectancy. COVID-related deaths totaled over 800,000 before the end of 2021. The disease is costing jurisdictions more than the costs associated with constant testing.

Testing protocols and resistance to vaccine mandates are disrupting health departments across the country. Local officials worry that they will lose employees to neighboring jurisdictions if vaccine mandates are imposed. Public health departments in California have had to close labs due to a staffing shortage. Experienced technicians, nurses and microbiologists across the country are leaving due to exhaustion, retirement or higher-paying jobs.

One positive outcome from the pandemic has been a broader acceptance of telemedicine. But emergency rules put in place in the early days of the pandemic are ending. States had relaxed licensing rules so that physicians could treat remote patients across borders, without the complex forms and fees normally required. At least half of the states have already begun to tighten their rules. One possible solution is the Interstate Medical Licensure Compact, a framework for participating states to streamline the process of licensure for physicians. The nearly 30 percent of rural patients without broadband, however, will still be left out.

— David Kidd

A welder working.
(David Kidd/Governing)

Labor


Somewhere in the neighborhood of 38 million Americans resigned from their jobs in 2021, and 23 percent of the respondents to a December Harris Poll/CareerArc survey said that they plan to quit in the next 12 months. Adjusting for inflation, the average weekly earnings of American workers decreased 1.9 percent between November 2020 and November 2021.

Among the biggest questions for 2022 is how the pandemic might further disrupt the labor market, says AnnElizabeth Konkel, an economist for Indeed.com, the world’s most-used job seeking site. Konkel has seen job seekers gravitate toward sectors that offer remote work and higher wages. She expects employers in the service sector to struggle the most to fill positions such as food preparation and service, cleaning, home health care and construction, work that combines health risks and low wages.

Stimulus checks and unemployment benefits helped workers stay afloat in 2021, along with historically high savings levels. Households have been spending down these funds and if this cushion thins in 2022, job seekers may be forced to lower their standards.

“I will be watching the savings rate in 2022,” says Konkel. “How that intersects with the labor market will be very interesting.”

At a time when simply going to work involved the risk of serious illness, frustrations that workers had tolerated — inadequate pay and benefits, lack of purpose, limited opportunities for advancement — became intolerable. Workers abruptly forced out of low-paying service jobs by public health orders realized they needed jobs with more security. The power dynamic shifted from employer to employee.

Strikes at major corporations, including John Deere, Kellogg and Kaiser Permanente, were one sign of this, as were efforts to organize unions by employees at Amazon and Starbucks. A bill with provisions that could override state laws restricting union activity passed the U.S. House, and another was introduced to expand the right of government workers to unionize. There’s no certainty that either will make it into law, but a Gallup poll has found that American support for labor unions is the highest it has been since 1965.

“Although employers that we speak with are fairly optimistic about the future, they also anticipate that there will be continued talent risks over the next few years, and that includes local and state government,” says Amy Holloway of the consulting firm Ernst & Young.

The health-care sector is vital to any attempt to contain the pandemic and improve workplace and school safety and stability, but 1 in 5 health-care workers have quit their jobs since the pandemic began, says Holloway, and more than a third of nurses have considered leaving their jobs.

According to Kaiser Health News, at least 300 public health department leaders have resigned since the pandemic began. Even more will leave in the coming year, says Brian Castrucci, executive director of the DeBeaumont Foundation, a public health nonprofit. He says they are being pushed out by hypercritical politicians and threats from the public. “The only people who are going to be left are those who are super passionate about public health, because right now the field asks too much of us.”

A stable school workforce is also integral to recovery, but keeping teachers in place is a serious concern. A 2021 Rand study found that 1 in 4 teachers were likely to leave their jobs by the end of the school year, up from 1 in 6 before the pandemic. Teachers were already facing heavy workloads and lack of respect before COVID-19, says Randi Weingarten, president of the American Federation of Teachers. “Add to that the virus’ malaise, political brawling over the teaching of honest history, organized threats of violence in schools like we saw on Dec. 17, and you see the challenges of this school year have made the current situation daunting and debilitating.”

Employers need to get a better understanding of what workers need from them, says Rivka Liss-Levinson of MissionSquare Research Institute. Better pay might be one part of this, but such things as remote work, flexible schedules, child-care support, and mental health benefits are also important.

American Rescue Plan Act funds can be used to improve working conditions for teachers, lower class sizes, hire counselors and nurses and provide wraparound services necessary to keep students engaged. “We can be intentional about addressing the root causes of teacher shortages and low morale,” says Weingarten.

Stabilizing the public health labor force would be much easier if there were a national workforce plan, supported by the federal government and the states, rather than the state-by-state approach in place now, says Castrucci. Easily accessible student loan repayment could help as well. “I think the workforce is waiting for a little recognition, a little encouragement that never comes,” he says.

— Carl Smith

Marijuana plants.
(David Kidd/Governing)

Marijuana


To date, 18 states and the District of Columbia have legalized recreational use of marijuana, either through ballot initiatives, constitutional amendments, or legislation. Thirteen more states have decriminalized recreational use. Half of all Americans now live in states where recreational use is legal. Three quarters live in states with legalized medical marijuana. Support for legalization continues to rise among all age groups and party affiliations. Polls show that a majority of Democrats support legalization, with Republicans opposed by increasingly narrow margins. Members of both parties express strong support for medical use.

Last year Connecticut, New Mexico, New York and Virginia passed laws legalizing marijuana, Virginia being the first southern state to do so. Voters approved ballot measures in Arizona, Montana, New Jersey and South Dakota in November 2020. But a year later the South Dakota Supreme Court ruled that the proposed amendment was unconstitutional. By last month, proponents had collected 15,000 of the necessary 17,000 signatures to place another initiative on this year’s ballot. Similarly, Mississippi’s Supreme Court overturned a 2020 medical marijuana ballot initiative supported by a wide majority of voters. The governor is expected to sign medical marijuana legislation this year, after refusing to call a special session in 2021.

As many as a dozen states could consider some type of marijuana-related ballot measure in 2022, including a Florida initiative that would widen the scope of a 2016 medical use amendment. Washington state may offer a proposal to prohibit cultivation, processing and sale of marijuana in residential areas.

Oklahoma will likely legalize adult use through a ballot measure in November. A second initiative would bolster regulation of the medical marketplace. Delaware is considering legislation to legalize, tax and regulate cannabis in the state. Maryland, Ohio, Pennsylvania and Rhode Island are moving in that direction. A constitutional amendment may appear on the ballot in Missouri this November, legalizing the purchase, possession and sale of marijuana for personal use and expunging the records of non-violent offenders.

As the number of states legalizing pot continues to grow, there is continued enthusiasm at the municipal level to decriminalize. Most recently, the city of St. Louis repealed local penalties for low-level possession and cultivation, joining four other cities in the state that have decriminalized since 2004. Nearly 100 municipalities in over a dozen states have decriminalized possession since 2012. Half of them are in states where marijuana possession is still illegal.

To date, most of the states that have legalized marijuana have been states with Democratic majorities. But with nearly half of Republicans now supporting legalization, it is beginning to seem inevitable that red states will follow suit. The North Dakota bill that passed in 2020 was sponsored by two Republican lawmakers and was the first legalization bill to pass in a Republican legislature.

State legislatures reluctant to tackle the issue often find themselves up against ballot initiatives with widespread support. Besides Missouri, deep red Idaho and Wyoming will likely have initiatives on the ballot in 2022. In the election of 2020, 57 percent of Montana voters approved a ballot measure to legalize recreational use, the same percentage of votes received by Donald Trump. Similarly, 54 percent of South Dakota voters approved the amendment that was ultimately struck down, though just 27 percent of that state’s voters were registered Democrats. If and when more Republican legislatures take up legalization, they will have gained a say in regulation and taxation, something that appeals to many of them.

Seven of the 18 states that have legalized marijuana were not yet collecting taxes by the middle of 2021. Even so, the Marijuana Policy Project reports that nearly $8 billion in state tax revenue has been collected from marijuana sales since 2014. Nearly $3 billion was collected by the states last year alone. This number will inevitably increase as more states establish new markets and old ones are expanded.

California raked in over $1 billion in 2020, a 62 percent increase from the previous year. In Illinois, tax revenues from marijuana sales have often outpaced those from alcohol. Taxes on cannabis are supporting a number of programs around the country including public education, mental health and drug treatment. Going forward, lawmakers will find it increasingly difficult to resist this potential pot of gold.

— David Kidd

A sign that says "You've been Gerrymandered!"
(TNS)

Redistricting


More than half the states are done drawing congressional and legislative maps for the coming decade. Some patterns are already quite clear. It’s likely that Republicans, who control the process in more states, have strengthened their advantages. In part, this is because the voting power of minority communities in many states has been eroded.

Most prognosticators are betting that Republicans will take control of the U.S. House in November. In part, that’s due to the out-party’s usual advantages during presidential midterm elections. But, since the GOP only needs a net gain of five seats, redistricting and reapportionment (the division of seats between states based on population changes) will help. The population continues to shift from the Northeast to the South and Southwest or, to put it another way, out of Biden states and into Trump states. At the congressional level, the GOP has either expanded the number of seats it’s likely to control, as in Ohio, or locked in gains it’s made over the past decade, as in Texas. So far, it looks like the GOP stands to pick up about 100 additional state legislative seats due to redistricting.

There will be fewer competitive seats left at both the congressional and legislative levels. In states where they control the process, including Illinois, Nevada, New Mexico and Oregon, Democrats have aggressively sought to shore up their current holdings and pick up a few more. In California, the independent redistricting commission completed a congressional map in December that puts all of the 42 incumbent Democrats who are running for re-election into districts that President Biden carried by double-digit margins in 2020.

Still, Republicans are drawing more than double the number of congressional seats as Democrats nationwide, thanks to their legislative advantages. The party’s success at gerrymandering following the 2010 elections helped the GOP maintain large leads in numbers of legislatures and legislative chambers throughout the decade, although Democrats took back the U.S. House in 2018. Despite raising unprecedented sums in 2020, Democrats failed to flip a single legislative chamber in time for redistricting.

This is the first redistricting cycle since the Supreme Court threw out certain protections of the Voting Rights Act in its 2013 decision, Shelby County v. Holder. Prior to the ruling, politicians in all or part of 15 states that had engaged in racial discrimination in the past had to receive prior approval, or preclearance, from the Justice Department or federal judges before making any changes to election law, including redistricting.

States including Ohio, South Carolina and Texas have either placed Black incumbent legislators into the same districts, or have divided up minority voters, including Hispanics and Asians, into multiple districts in a way that will weaken their representation. Such moves have been made at the congressional, legislative and local levels.

In December, the North Carolina Supreme Court delayed the state’s congressional and legislative primaries from March until May, to allow it to rule on lawsuits that claim the new maps are racially discriminatory. That same month, U.S. Attorney General Merrick Garland filed suit against the new maps in Texas, alleging that they “deny or abridge the rights of Latino and Black voters.”

The approval of maps in many states has only signaled the start of litigation. Making racial gerrymandering claims will be more difficult this cycle, due to another Supreme Court decision. In 2019, the court ruled that redistricting is an inherently political process and that there is no way for federal courts to determine whether gerrymanders violate the Constitution due to excessive partisanship. The fact that federal courts can’t weigh in on partisan gerrymandering makes racial discrimination harder to prove, since mapmakers can claim they were discriminating on the basis of partisan voting patterns, not race.

That doesn’t mean there will be no partisan gerrymandering cases. During the last decade, the supreme courts of Pennsylvania and North Carolina determined that maps were excessively partisan, based on state constitutional guarantees of free and fair elections. Thirty states have constitutional language about free, fair or equal elections, giving litigants an opening for challenging partisan gerrymanders. It’s still possible, though looking increasingly unlikely, that Congress will pass some sort of regulations regarding redistricting, which would offer courts additional standards with which to judge.

Nearly every decade, maps are thrown out by courts. No doubt that will happen again. But most will stand. And they will serve, on the whole, to reduce partisan competition over the course of this decade.

— Alan Greenblatt

taxes
(Shutterstock)

Taxes


After a year of grim uncertainty, state budgets looked surprisingly hale and hearty in 2021. Tax collections came in above projections almost everywhere, with states like Idaho posting revenues 24 percent higher than the previous year and California’s up by 20 percent. Revenues were boosted for sales, corporate, income and oil taxes.

The gains have been attributed to higher income workers who did not suffer as many layoffs, and continued paying income and payroll taxes, while lower wage workers continued to pay sales taxes as their spending was bolstered by unparalleled levels of federal support. Meanwhile, stock markets surged and profits remained robust, again largely due to massive intervention by the Federal Reserve and Congress.

States and cities also made cuts during the pandemic so had not budgeted as much money this year, anticipating something like the more anemic federal response during the Great Recession. With spending down and an unexpected surge in revenues, states look like they are in a much stronger place. That doesn’t even include the almost $200 billion for states in the American Rescue Plan Act assistance and the funds from the infrastructure law, which will largely be routed through states.

“State budgets are as healthy as they have been in decades,” says Tim Storey, executive director of the National Conference of State Legislatures. “This year [almost] every state budget is in really strong fiscal conditions starting these [2022] sessions.”

This unexpected bounty led many GOP lawmakers to cut taxes in 2021, with many of these efforts expected to come to fruition this year. In Idaho, $220 million in income tax rebates and $163 million in tax cuts for individuals and businesses were put into effect. In December, Arkansas lawmakers moved forward a $500 million income tax cut, the largest such effort in state history. Florida Gov. Ron DeSantis also pitched a $1 billion gas tax cut for 2022, exempting residents from such payments as gas prices remain elevated.

“There’s going to be a tremendous discussion in legislatures about tax relief in many states,” says Storey, “[they will be talking about] targeted reductions in taxes, one time or short term…because they’ve got to think about [not] necessarily [being able to] promise to maintain these efforts.”

Even if states appear flush, many localities would have been in deep trouble without the aid provided by the Biden administration. The biggest city in the country, New York, is still facing a projected budget deficit of $3.6 billion in 2023 when the federal funds ease off. Cities like Philadelphia and Cleveland are reliant on taxes from suburban commuters, revenue sources that are imperiled by the remote work trend.

In some areas tax increases may be under discussion, especially in cities that are suffering from a lack of tourism, office work and the consumer spending that spins off of it. Wealth taxes or other politically appealing targets, at least for progressive politicians, could be a possibility in more Democratically controlled jurisdictions.

But given the uncertain economy, tax increases may be a difficult sell. If the past is precedent, a 2012 Center on Budget and Policy Priorities study found that state budget gaps were largely filled by cuts to services (45 percent) while tax and fee increases accounted for only 15 percent of the responsibility for closing such gaps.

There is scope within the American Rescue Plan Act for tax cuts in cities and counties, but so far there’s been little discussion. However, municipal and county politicians will no doubt be under some pressure from constituents to provide relief, especially as federal household supports vanished at the end of 2021. In a couple states, including Nebraska, there has been talk of allowing local governments to cut property taxes with the understanding that revenue-rich state governments would backfill the revenue losses that result.

There are observers of state and local government who argue that tax cuts are not the best use of this potentially brief period of strong budgets. Given that funding at these levels of government did not recover from Great Recession-induced cuts until just before the pandemic, it might make more sense to reinvest in an atrophied public sector.

“They do have cash, they are running giant surpluses, but all in a context of historic underfunding,” says Amanda Page-Hoongrajok, assistant professor of economics at Saint Peters University. “They should focus on giving resources to all the sectors that faced austerity. Instead of giving tax cuts, they should give resources back from where they were taken from.”

— Jake Blumgart

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Legislatures
Alan Greenblatt is a senior staff writer for Governing. He can be found on Twitter at @AlanGreenblatt.
Carl Smith is a senior staff writer for <i>Governing </i>and covers a broad range of issues affecting states and localities. He can be reached at carl.smith@governing.com or on Twitter at @governingwriter.
David Kidd is a photojournalist and storyteller for <i>Governing</i>. He can be reached at dkidd@governing.com.
Jake Blumgart is a senior writer for Governing and covers transportation and infrastructure. He lives in Philadelphia. Follow him on Twitter at @jblumgart.