Top 5 in 2016

As the world becomes more interconnected, state leaders continue to play a larger role in international affairs – both by identifying opportunities to grow their economy through international trade and monitoring the geopolitics to ensure the health and safety of their citizens. In Washington, DC, states will be watching Congress to see if they act on President Obama’s top priority on his trade agenda – the Trans-Pacific Partnership agreement, or the TPP. The TPP agreement between 11 nations would be one of the largest agreements on history, covering over 800 million consumers and 40 percent of the world’s gross domestic product. It is important that state leaders review and understand the proposed agreement and voice their thoughts with Congress and federal agencies.

CSG Director of Federal Affairs Andy Karellas outlines the top five issues in international policy for 2016, including the Trans-Pacific Partnership (TPP), export promotion and economic development, global cybersecurity, attracting foreign investment, and global humanitarian crisis.

Workforce Development, Wages and Innovation: States are looking for innovative strategies to overhaul economic development programs and tie those strategies to workforce development goals, including worker re-training programs. That will mean identifying ways for the public, private and academic sectors to work together more efficiently to create and sustain high-paying jobs and foster an environment conducive to entrepreneurial investment. In addition, a renewed focus and commitment by the federal government on workforce development through programs like the Workforce Innovation and Opportunity Act, or WIOA, will help drive and provide resources for state initiatives in 2016. 

Modest Revenue Growth, Strategic Decisions: For states in the coming year, no news is good news when it comes to finances. For the last few years, states on the whole have seen a slow and steady increase in revenues. In the coming year, state leaders will have a little bit more breathing room when making fiscal decisions. States collected $912 billion in total tax revenues in fiscal year 2015—an increase of 5.6 percent over 2014 levels. Growth over this time was widespread—47 states reported growth—while three states, Alaska, Illinois and North Dakota, reported declines. For states reliant on natural resources, that cautious revenue growth could be derailed by volatility in the oil market. For other states, that breathing room comes with a complex set of choices: Do they shore up their savings or invest in infrastructure? In addition to decisions on saving for a rainy day and infrastructure investment, state leaders may begin taking a look at tax reform, but it is unlikely there will be huge shifts anytime soon.