Capitol Comments

States Tackle OPEB Obligations

By Mary Branham

California is facing massive budget problems by any measure. And among the major problems it faces is a $100 billion liability in its public retirement plans, said Jason Dickerson, principal fiscal and policy analyst, California Legislative Analyst’s Office.

Dickerson said local governments in California have taken action to reduce retiree benefits for current and future employees, as well as current retirees. That hasn’t gone over well, he said, and the state has no plans to take similar action.

The state has worked with the California Highway Patrol unions toward a plan in which officers will pay into the California Public Employee Retirement System—or CALPERS—trust fund in an effort to address some of the unfunded liability for that group. It won’t cover all of the annual required contribution, however, he said.

Alzheimer’s, Diabetes Driving Health Care Costs

By Mikel Chavers

When it comes to expensive chronic diseases driving health care costs, the issue gets very personal with Alabama Sen. Vivian Davis Figures. That’s because her mother is suffering from Alzheimer’s disease and her mother-in-law died from Alzheimer’s disease.

Alzheimer’s disease costs $148 billion in health care every year, said Stephen Geist, regional director for the California Southland Alzheimer’s Association. That means someone will be diagnosed with the disease every 70 seconds—and that’s going to be an increasing burden for states to bear.

Geist said states—particularly in the Northwest—will experience an estimated 81 percent to 127 percent increase in Alzheimer’s cases in the next 15 years. Yet only 11 states currently have a state Alzheimer’s plan, according to Geist.

California is working on one slowly but surely, he said. “The others are going to be taken by surprise.”

Genographic Project Traces the Family Tree Back to Africa

By Mary Branham

Many folks have traced their roots but not many can go back 60,000 years.

That’s something Spencer Wells and the National Geographic Genographic Project are doing. Wells, a population geneticist, discussed the project during the opening plenary session Friday.

Genographic scientists collect DNA samples from people around the globe to paint the picture of human migration. Wells said using the samples, scientists are able to explain the pattern of human diversity.

His project goes much deeper than the average person tracing his or her family tree.

Chief Justices Appeal for Interbranch Interaction

By Mikel Chavers

Get four chief justices together on a panel and you get some big ideas that reach far beyond the judicial branch. In fact, the judges were aiming for more interbranch cooperation Friday afternoon at a panel sponsored by The Council of State Governments Interbranch Working Group.

One issue where desperate dialogue is needed among the branches is budget reductions in the states. Those reductions are hitting the judicial branch just as hard as other branches, according to the justices.

“Your obligation in your state is to administer justice, openly, completely and without delay,” said Oregon Supreme Court Chief Justice Paul De Muniz. But in the realities of the fiscal environment, that essential function of the courts is crippled, he said. “Feast and famine budgeting is very destabilizing to the courts. The courts are not like a faucet that you can turn on and off at will.”

Alabama Supreme Court Chief Justice Sue Bell Cobb agrees. In her state, 97.5 percent of the funding for the courts goes to personnel, so there’s very little to cut, she said.

Now that Stimulus Cash is Flowing, States are Watching

By Mikel Chavers

In California, there’s a cadre of prosecutors and investigators just waiting for something to pounce on. They’re waiting for a case of fraud, waste or misuse of Recovery Act dollars. And they’re investigating even the small cases.

Basically, California officials are taking Recovery Act spending very seriously.

That’s according to Laura Chick, California’s inspector general for Recovery Act dollars. Chick acts as the watchdog of the more than $50 billion in federal Recovery Act dollars expected to flow through the state. 

The Federal Bureau of Investigations even warned her of the potential fraud when that much money is up for grabs. They told her: Expect 7 percent to 10 percent of out-and-out fraud and misspending.

Alternatives to Oil Come in Several Forms

By  Mary Branham

The energy world is changing.

Concerns about energy security and supply security are cutting into petroleum’s hold on the world energy market, said Chris Standlee, executive vice president for Abengoa Bioenergy Corporation and Abengoa Bioenergy of Nebraska.

“We believe alternative energy is a solution,” he said. His company is working with not only corn-based ethanol but also with cellulosic.

But he doesn’t believe oil will go away. “Oil will be a commodity that will be replaceable with other commodities,” Standlee said.

He touted the growing popularity of ethanol and the growing interest in cellulosic.

Does U.S. Face Global Competitiveness Crisis?

By Tim Weldon

The U.S. will soon be passed by numerous other countries in global competitiveness according to some educational and economic indices.

That may not necessarily be a bad thing, says the leader of one educational policy think tank.
“Is our goal to dominate the world?” asked Watson Scott Swail, executive director for Educational Policy Institute. “What we really want to do is get better than we were. I honestly don’t care if we’re first or fifth or 10th. I just want us to keep getting better.”

“We’ve entered what I call the higher education arms race,” Swail said during an education policy workshop Thursday. Specifically, he argued that the U.S. has an excessive number of colleges—4,000 two- and four-year postsecondary institutions. “I don’t think we need more. I think we need better,” he said.

Health Reform Comes with Challenges, Needs for States

By Mary Branham

The epicenter of the health care debate is in Washington, D.C., these days, but the ripple effects of any Congressional action are sure to affect states.

And state officials have several priorities for any kind of reform, said Alan Weil, executive director of the National Academy for State Health Policy, an independent academy of state health policymakers.

He said leaders want to connect people with the services they need, bring better coordination and integration in the health care system, improve care for people with complex conditions, orient the health care system toward results and promote a more efficient health care system.

States Prescribe Varying Degrees of Health Reform

By Mikel Chavers

When Alan Weil talks about state health reform he always mentions the trilogy—Maine, Massachusetts and Vermont. As executive director for the National Academy for State Health Policy, he’s seen health reform initiatives that span the spectrum.

And a lot of it’s happening in the states, Weil said.

“It’s clear that the structure of the federal bill draws on state’s experience,” Weil said.

But the approaches are all different, even those in the trilogy, he said in a health policy workshop Thursday afternoon.

The Massachusetts health care reform plan, he said, tackled issues of coverage first, and will tackle cost later. Maine, on the other hand, is working on costs and coverage simultaneously, he said. In Vermont, the state started with chronic care management—there is a community-based organization designed to help people manage their chronic conditions, Weil said.

‘Great Recession’ Still Wrecking State Budgets

By Sujit CanagaRetna, CSG Fiscal Analyst

While states have weathered recessions before, the Great Recession, which began in December 2007, will likely wreck state budgets through the rest of the 2010 fiscal year and into the 2011 fiscal year. That likely will lead to permanent changes in state government finances and services.

The intensity of the fallout continues to deplete state coffers as revenue intakes sputter and expenses escalate. Tax collections for the second quarter of 2009 were down 16.6 percent from the same period in 2008; for the 2009 fiscal year, state tax collections plummeted by an average 9.2 percent, adjusted for inflation.

More alarming is that just three months into the current fiscal year, new budget gaps opened in 18 states, with more states expected to join the list. Cumulative budget shortfalls for the 2010 and 2011 fiscal years are forecast at a staggering $350 billion. Even though there are green shoots of growth emerging on the national economic horizon, state revenues notoriously lag the national recovery, so states are looking at a grim immediate future.

Given that this recession is the worst financial crisis to afflict the nation since the Great Depression, states have not faced revenue shortfalls of this magnitude. So not only has this Great Recession affected states more deeply, it will continue to do so for a longer period of time.