Category: Midwest

Shelby Kerns jokes that when she worked in the Idaho state budget office in the not-so-distant past, she “probably would have sold my soul” for year-over-year revenue growth of 5 percent.

Collectively, states got a lot more than that in fiscal years 2021 and 2022: inflation-adjusted increases of 12.7 percent and 7.6 percent, respectively. Several factors led to this unparalleled period in state finances — most notably, large amounts of federal dollars going directly to states as well as into the overall economy, and a temporary shift in consumer spending toward taxable goods and away from nontaxable services.

“We have some pain on the horizon rolling off these one-time [federal] funds, and eventually we will have an economic downturn,” Kerns, now executive director of the National Association of State Budget Officers, said in July to the region’s fiscal leaders at the Midwestern Legislative Conference Annual Meeting.

But Kerns said states are better prepared than ever before to handle the pain.

At one time, the goal of budget leaders was to have the size of state rainy day funds be equal to 5 percent of general fund spending. Estimates for FY 2023 among the 50 states showed rainy day funds on pace to be at 13.2 percent; that compares to 4.4 percent in FY 2009.

More than in years past, too, state leaders are recognizing the cyclical nature of state budget conditions, Kerns said, as evidenced by a change in the kind of tax-cutting measures being proposed by governors: In FY 2024, they called for more than $13 billion in tax cuts, but more than half of that amount only would have only a one-time, rather than recurring, impact on revenue.

“That’s a really important point and shows how strategic you all are being,” Kerns said.

In a separate presentation during the same session, Justin Theal of The Pew Charitable Trusts discussed the value of incorporating long-term fiscal strategies into ongoing budget discussions and negotiations. For example, by conducting budget “stress tests,” legislators learn how prepared their state is for a moderate or severe recession — and how large rainy day funds should be.

Likewise, fiscal leaders can get a better picture of potential structural deficits on the horizon by requiring budget projections to go beyond the next year or two, but instead as much as 10 years into the future.

Over the longer term, Theal said, states face three major fiscal challenges, all of which are best addressed during times likes this  — when revenue has been growing and surpluses are high.

One of those challenges is the need for more funding to respond to natural disasters. Most states have accounts for this purpose, he said, but little money is in many of them.

Second, about 30 percent of states’ future pension obligations are unfunded, though these numbers can vary widely from state to state. For example, Wisconsin’s and South Dakota’s systems are fully funded, whereas Illinois’ system is less than 50 percent funded. Indian a is among the states where a portion of budget reserves is now automatically directed toward paying down pension obligations, Theal said, while the Illinois, Kansas and Michigan legislatures recently authorized supplemental payments (above what is required by statute) to state or local pension systems.

A third long-term challenge is infrastructure, Theal said, with states facing unfunded liabilities of at least $1 trillion in deferred infrastructure maintenance.

 

 

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The Midwest’s transmission grid is rapidly evolving to handle the dramatic shifts toward renewable energy for power generation and customer usage patterns wrought by climate change, but this transition is still measured in years.

That was the message from Bob Kuzman, director of state regulatory affairs for the Midcontinent Independent System Operator (MISO).

Kuzman, a former Indiana legislator, provided lawmakers with an introduction to the regional electrical grid at the Midwestern Legislative Conference Annual Meeting in July. He was the featured presenter at the first meeting of the MLC’s new Energy and Environment Committee.

MISO operates 72,000 miles of transmission lines, including in Illinois, Indiana, Iowa, Manitoba, Michigan, Minnesota, North Dakota and parts of South Dakota.

“We’re like an insurance policy; we spread the risk,” Kuzman said. “If someone’s having a bad day in Indiana, we can move electricity from as far away as Manitoba or Nebraska.”

MISO is neither a utility operator nor a power generator. Its main jobs, he said, are planning for future transmission needs as well as buying electricity at the wholesale and retail levels to deliver power where it’s needed for 42 million end users.

While taking no position on the fuel sources used, MISO does care about how new generating capacity is connected to the grid, and how dependable the power will be as usage patterns shift.

Big shifts in both of these areas pose potential challenges for MISO and state energy leaders.

According to Kuzman, renewable energy generation projects are “growing massively.” As of September 2022, of the 1,723 proposed projects in the MISO “queue” (not all of which will be built), 96 percent were either planned renewable or storage operations: 54 percent solar, 17 percent a hybrid mix, 16 percent storage and 9 percent wind. Only 3 percent were gas or other fuels; coal-generated projects haven’t been in the queue since 2011.

“This does pose new risks to the reliability of the grid,” he said, “because there are days when the wind doesn’t blow, there are days when the sun doesn’t shine.”

Part of MISO’s new planning regimen, he added, includes how to fill in daily morning and evening gaps in electrical generation as solar and wind power get going or wind down. Battery storage technology is improving, but isn’t yet at the point where MISO can rely on it to cover those gaps, he said.

Further complicating matters are the effects of changes in the climate. MISO used to plan for a “worst day,” or highest demand on the system, twice per year; now, Kuzman said, it needs to make sure power is delivered across the region on a “worst day” in every season and in every month.

He said “shoulder” months such as April or October — neither too hot nor too cold, when gas or coal plants could be taken offline for maintenance or to switch fuel sources — don’t really exist anymore.

With more 70- and 80-degree days in October, and even November, more electricity is being used in those months, and temperatures are staying hotter deeper into nighttime hours, thus extending daily peak morning and evening demand hours — all of which increase demand on the grid.

Asked about nuclear power as another non-hydrocarbon source of electricity, Kuzman said MISO doesn’t expect to see proposals for large-scale nuclear plants due to costs. Small modular reactors are a potential option, but no one knows when they’ll be ready. When, and if, they are, MISO will plan for them, too.

“MISO is resource neutral. We just want to keep the lights on,” Kuzman said.

 

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Amid the despair of broken and lost lives due to a rise in the prevalence of substance use disorder (SUD), there is at least one glimmer of hope. States have more financial resources and tools to address SUD.

More money is flowing to states through two federal grant programs: 1) the Substance Use Treatment, Prevention, and Recovery Services Block Grant; and 2) State Opioid Response grants. The National Opioids Settlement is providing new dollars as well, and revamped federal rules on Medicaid are offering states new options to meet the needs of higher-risk populations, including incarcerated individuals returning to their communities.

Making the most of these new funding and policy opportunities was the focus of a July session at the Midwestern Legislative Conference Annual Meeting. Organized by the MLC Health and Human Services Committee, the session provided legislators with a set of evidence-based principles to guide future decision-making.

“Maximizing how the state is spending Medicaid dollars for opioid use disorder …. is really critical because it’s such a big payer,” said Andrew Whitacre, an officer with The Pew Charitable Trusts.

Among nonelderly adults with opioid use disorder, nearly 40 percent rely on Medicaid for their health insurance. A first step for legislators is to make sure their state’s Medicaid program is covering all evidence-based services allowed under federal law. But he said a second step is equally important: evaluate and, when necessary, boost reimbursement rates for services such as care coordination and medication-assisted treatment for opioid use disorder (the “gold standard” for treatment, he said).

“There are a number of states that do cover all those [SUD] services, but the pay is so low that no providers will participate in the network,” Whitacre noted.

Other obstacles stand in the way of access to effective treatment. Among them: the lack of an information technology infrastructure that would enable providers to establish proper billing systems, coordinate with other providers and evaluate practices. Non-Medicaid, flexible federal funds can be used to build up this infrastructure, Whitacre said, as well as address other areas not covered by the public insurance program. That includes harm reduction strategies such as the distribution of overdose-reversal drugs and fentanyl test strips, as well as funding for syringe service programs.

Opioid-settlement dollars can help in these non-Medicaid areas as well, and Whitacre said it’s critical for states to have guardrails in place to make sure these dollars fund new programs and services. Without such safeguards, the new money may simply be used to supplant current funding streams for existing initiatives.

New federal Medicaid waivers are another way of expanding access to care, John O’Brien, a former senior advisor for the U.S. Substance Abuse and Mental Health Services Administration, said during the session. For instance, some states are taking advantage of a new opportunity to provide treatment services, via Medicaid, to individuals in the 90 days before they leave prison or jail and to continue that care upon re-entry. (An estimated 65 to 90 percent of individuals in jails and prisons have a substance abuse disorder.)

Likewise, a handful of states (California, Montana and West Virginia) are seeking waivers to pay for “contingency management” — providing incentives to individuals on the path to recovery (payments for a negative urine sample, for example). This treatment method has proven to be effective, O’Brien said.

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Five days of learning, leadership development and relationship building marked the experience of legislators taking part in The Council of State Governments’ 28th annual Bowhay Institute for Legislative Leadership Development.

The 2023 BILLD program was held in August in Madison, Wis., with participation from a bipartisan, binational group of legislators from across the Midwest.

Read about this year’s class »

Serving state and provincial legislators in their first four years of service, BILLD is a signature program of CSG’s Midwestern Legislative Conference. Fellows are selected via a competitive application process overseen by the MLC’s BILLD Steering Committee.

The 2023 program featured:

• a roundtable discussion on legislative strategies with Minnesota House Minority Leader Rep. Lisa Demuth (BILLD Class of 2021); Indiana House Minority Leader Phil GiaQuinta (BILLD Class of 2009); and Wisconsin Senate President Pro Tempore Patrick Testin (BILLD Class of 2018);
• training on communication, leadership style, time and focus management, bipartisan collaboration, negotiation and conflict resolution;
• policy sessions on the Midwest’s labor force and economy, cybersecurity and digital modernization in state governments, and U.S.-Canada relations;
• featured speakers who provided their expertise on the region’s state legislative institutions and how to build excellence in them, the interplay between the legislative and judicial branches, and the enduring legacy of principled political leadership.

Applications for next year’s BILLD program will be available later this year or in early 2024.

Learn more about BILLD »

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The newest class of national CSG Toll Fellows includes seven legislators from the Midwest, all of whom are graduates of the Midwestern Legislative Conference Bowhay Institute for Legislative Leadership Development.

Toll Fellows is the nation’s premier leadership development program for state government officials. Participants are nominated by their peers and chosen by alumni of the program.

Congratulations to the seven BILLD graduates on becoming Toll Fellows (all pictured here).

Commitment to leadership training

Leadership development is a core part of The Council of State Governments’ mission to champion excellence in state government. CSG Midwest’s BILLD program provides annual training for newer state and provincial legislators from this region. Toll Fellows is an “intensive leadership boot camp” for officials in all three branches of state government.

This year’s five-day Toll Fellows program was held in August.

“Fellows are selected based on their demonstrated commitment to solve problems, to work collaboratively to get things done, and their belief that state government can and must be a force for good,” said David Adkins, CSG’s executive director and CEO.

Here is the full list of 2023 Toll Fellows from the Midwest:

• Michigan House Majority Floor Leader Abraham Aiyash
• Ohio Senate Assistant Minority Leader Hearcel Craig
• Bryan Echols, senior advisor and deputy director of impact investments for the Illinois treasurer
• Kansas Rep. Mari-Lynn S. Poskin
• Michael Queensland, Wisconsin Senate chief clerk and director of operations;
• South Dakota House Majority Whip Rebecca Reimer
• North Dakota Senate Majority Caucus Leader Kristin Roers
• North Dakota Rep. Shannon Roers Jones
• Sara Stolt, deputy commissioner for the North Dakota Department of Health & Human Services;
• Wisconsin Sen. Mark Spreitzer
• Jason W. Thompson, senior assistant revisor of statutes in Kansas

 

 

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Minnesota has a new “right to repair” law that not only is the first of its kind in the Midwest, but has been hailed by national advocates as the most comprehensive measure in the nation. Included as a provision in one of the Minnesota Legislature’s omnibus budget bills (SF 2744), the Digital Fair Repair Act aims to ensure that consumers can fix myriad digital electronic products without having to go through the original equipment manufacturer.

The new law covers almost all electronic products, including appliances, HVAC equipment and enterprise computing systems. Cars, medical devices, farm and construction equipment, video game consoles and home energy storage systems are exempt.

In opposing such bills, manufacturers have argued that broadening access could pose dangers to equipment and would-be repairers, as well as compromise device safety and/or security.

Over the past few years, right-to-repair legislation has been considered in state capitols across the country, but Minnesota became only the fourth U.S. state to enact such a measure, following Colorado, Massachusetts and New York. As of June, bills had been introduced this year in at least five other Midwestern states: Illinois (HB 3593), Iowa (HF 587), Michigan (HB 4562), Ohio (SB 73) and South Dakota (SB 194), according to the Public Interest Research Group.

State measures vary on what products are covered and what is exempted. For example, this year, Colorado became the first state to cover farm equipment in its right-to-repair law.

Led by Illinois Attorney General Kwame Raoul and Indiana Attorney General Todd Rokita, 27 state attorneys general co-signed a letter in March calling on the U.S. Congress to pass a trio of federal right-to-repair bills that would cover automobiles, agriculture equipment and digital electronic equipment. Attorneys general Dana Nessel of Michigan, Keith Ellison of Minnesota, Marty Jackley of South Dakota and Josh Kaul of Wisconsin also signed the letter.

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“Reducing Harm, Increasing Criminal Penalties” ~ PDF

Introduction: ‘Single deadliest drug threat our nation has ever encountered’

In less than a decade’s time, the number of drug overdose deaths in the United States more than doubled, reaching nearly 107,000 by 2021.

One of the striking aspects of this rise has been the increasing role played by fentanyl and other synthetic opioids. They were involved in close to 70 percent of all overdose deaths in 2021, compared to only 6 percent of the fatalities nine years earlier, according to a Commonwealth Fund analysis of federal mortality data. Anne Milgram, head of the U.S. Drug Enforcement Administration, has said that fentanyl “is the single deadliest drug threat our nation has ever encountered.”

This threat has received considerable attention in the Midwest’s state legislatures, with many of the recent legislative proposals taking one of two approaches — and sometimes incorporating a mix of both.

The first approach is “harm reduction”: change a state’s laws or invest in new programs that prevent overdoses by reaching and helping people who use drugs. A second common approach has been to increase criminal penalties related to fentanyl trafficking and/or overdose-related deaths.

 

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This Issue Brief was written by Tim Anderson of the Midwestern Office of The Council of State Governments. It was produced as part of CSG Midwest’s support of two binational, interstate committees of the Midwestern Legislative Conference: the MLC Criminal Justice & Public Safety Committee and the MLC Health & Human Services Committee. 

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On the final day of this year’s Midwestern Legislative Conference Annual Meeting, participating lawmakers approved four policy resolutions urging federal action on subjects such as border policy, food security and the farm bill.

These resolutions, adopted on July 12, are delivered to leaders in the federal legislative and executive branches of government.

• The MLC’s new policy statement on border policy calls on U.S. Customs and Border Protection to expand hours of operation at several ports of entry. Specifically, legislators want the agency to “immediately adopt the same hours of operation as the Canadian Border Services Agency at these land border ports of entry, or 7 p.m. local time, whichever is later.” The resolution states that early closures “greatly harm cross-border trade, tourism, agriculture production, social relationships and the economies of border communities.”
• A second resolution is built around the MLC Chair’s Initiative of Michigan Sen. Roger Victory — “Food Security: Feeding the Future.” Specifically, legislators note the importance of continuing investments in nutrition incentive programs in the farm bill as well as helping states build up local and regional food infrastructure systems.
• The third resolution urges passage of a new farm bill.
• The fourth resolution endorses the continued support of the relationship and shared interests between member jurisdictions of the MLC and Taiwan.

A bipartisan committee of legislators oversees the MLC’s resolutions process. This committee considers resolutions introduced by individual members of the MLC as well as those supported by various MLC policy committees. Any resolution approved by the Resolutions Committee is then voted on by legislators in attendance at the MLC Annual Meeting. This year’s meeting was held July 9-12 in Detroit.

View all recent MLC policy resolutions »

 

 

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Once fully implemented, North Dakota’s HB 1398 will have K-12 schools across the state and at all grade levels providing instruction in computer science and cybersecurity.

The new law makes North Dakota the first state in the nation to require cybersecurity education. By exposing students to this subject area throughout their K-12 careers, the state hopes to help young people: learn from an early age how to be safe online and a good digital citizen; gain the digital skills and knowledge needed to thrive in many sectors of the current and future workforce; and position graduates to take advantage of growing opportunities in fields related to cybersecurity and information technology.

By July 2024, elementary and middle schools must show how they will integrate academic standards on computer science and cybersecurity into coursework. This requirement also applies to high schools, which must provide students with the opportunity to take a stand-alone class in at least one of these subject areas. To graduate, students will need to have taken a stand-alone course or completed the school’s integration plan for cybersecurity and computer science education.

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