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State governments are examining the prospect of interlocal shared service initiatives as a means of reducing service delivery costs and providing tax relief, as well as streamlining local services, eliminating duplicative services, and enhancing governmental responsiveness and transparency. In an effort to effectively encourage the development and implementation of shared services, states should: provide financial support or incentives; collect and disseminate concrete information regarding the benefits of shared service initiatives; establish shared service performance measures; develop a central point of information to field questions from communities who are in the process of developing, implementing, or sustaining shared services; and work to ensure that the long-term interests of the taxpayers are paramount.

On May 11, 2005, Congress passed the Real ID Act. The law sets minimum standards for the creation and issuance of state-issued driver’s licenses and ID cards if they are to be accepted as valid identification for federal purposes. Initial estimates have shown Real ID  implementation will xceed $11 billion over five years. The burden of compliance with Real ID will prove challenging and costly for states.

The No Child Left Behind Act is the most ambitious piece of education legislation ever enacted by Congress. Designed to promote accountability and prod states to address educational inequities, NCLB includes significant provisions regarding assessment, sanctions for low-performing schools and districts, teacher quality and standards for educational research.

Empirical studies provide strong evidence that most of the U.S. cancer burden can be attributed to tobacco use, physical inactivity, overweight and obesity, and failure to get screened for cancer at recommended intervals. This review of state legislation enacted between 2005 and 2006 suggests that legislators are becoming increasingly aware of the importance of policy interventions to reduce cancer risk.

Governors and legislators should develop a suite of policy options that would recognize market demand with environmental sensitivity to cost-effectively increase energy efficiency and deliver sufficient and timely clean energy resources to citizens they serve.

Despite an impressive list of advantages, the U.S. can no longer assume that foreign firms will continue to invest and employ people here at the same rate as in the past. The effects of lobalization and off-shoring trends have led to fluctuations in foreign investment, with the U.S. dropping to third place (from second) in 2005 as the most attractive future FDI location after China and India.

The successful renewal of the research and development (R&D) tax credit in the nation’s capital is just one of several economic development issues affecting states that continue to seek a head of steam in Congress, as supporters will try to convince the 110th Congress to make the Economic Development Act of 2005 into law. In the meantime, one state’s experience with incentives demonstrates that not all that glitters is gold.

State welfare caseloads in 2006 reflected the maturation of policies adopted in response to federal TANF legislation passed 10 years earlier. Caseloads continued to shrink, and many families on welfare received benefits only for the children. Significant shares of adults on welfare were exempt from work requirements due to illness or disability. Some received welfare through a time limit extension, and others were denied assistance because of a sanction. New federal rules requiring states to increase work participation will change the shape of future caseloads. States with large shares of their caseloads exempt from work requirements face the greatest challenge.

While enjoying an unprecedented level of cooperation in recent years on numerous cross- border policy issues, the United States and Mexico face important challenges that will affect the long-term prosperity of North America. These challenges include the need for both countries to address the contentious issue of immigration, promote a shared vision for competitiveness in the 21st century and give government the tools to manage binational concerns along the U.S.-Mexico border.

More than a year has passed since the devastation of Hurricane Katrina, but the fallout continues. Three separate reports on the disaster from the U.S. House of Representatives, Senate and the White House have resulted in numerous criticisms, recommendations and requirements. Whether these reactive measures will result in a better prepared nation is yet to be determined. Underlying all of the challenges is the ongoing struggle between adequate funding and saving human life and property during a disaster. Given the recurring demands on state budgets as well as federal programs, this pressure shows no sign of abating.