Policy Area

CSG South

This presentation was given by Sujit M. CanagaRetna, Fiscal Policy Manager at the Southern Legislative Conference (SLC), before the SLC Fall Legislative Issues Conference in Savannah, Georgia, November 12, 2006. It deals with a topic that has enormous implications for state finances: under-funded and unfunded state pensions.

A vital tool for policymakers across the region, Comparative Data Reports (CDRs) offer a snapshot of conditions on a number of issues. Published annually, the CDRs track a multitude of revenue sources, appropriations levels, and performance measures in Southern states, and provide a useful tool to state government officials and staff. CDRs are available for adult correctional systems, comparative revenues and revenue forecasts, education, Medicaid, and transportation.

CSG South

On December 12, 2005, the Robert Wood Johnson Foundation (RWJF) awarded The Council of State Governments’ (CSG) Southern Office, the Southern Legislative Conference (SLC), a grant to determine pension portability among public health employees in the United States. RWJF focuses on the pressing health and healthcare issues facing the United States and is the nation’s largest philanthropy devoted exclusively to improving the health and healthcare of all Americans.

In order to meet the requirements of the grant, the SLC conducted a survey of the administrative entities managing the pensions of public health employees in all 50 states to determine their rules and regulations regarding pension portability for this category of public employee. Based on the responses to the survey questionnaire and additional research, the SLC researchers were able to ascertain whether the pension plan in a state permits an employee to purchase service credits for prior periods of qualified employment in another jurisdiction, both in another state and within the state; whether the pension plan is a defined benefit (DB) or defined compensation (DC) plan; the minimum amount of time required for an employee’s pension benefits to be fully vested; the existence of any recent legislative activity related to the portability of retirement plans of public health officials in each state; whether any federal tax laws impact on the pension portability of these public health employees; and the existence of pension portability in other public employment sector categories.

Based on the information gleaned from the survey responses and additional research, this report contains:
» Details on the current status of the different elements of our nation’s retirement infrastructure;
» Information on the public health employee landscape, including a snapshot of current and expected shortages and other workforce challenges facing this employment category;
» Analysis of the survey responses on pension portability from the 50 states;
» Federal tax implications relating to pension portability in the states;
» Information from other non-health, public sector categories on pension portability; and
» Issues for consideration by state policymakers that would help create an environment to retain and attract professionals to the public health sector.

CSG South

Most provisions of the 2002 Farm Bill will expire in 2007. The USDA and Congress have been seeking input on a new Farm Bill through a series of public hearings throughout the end of 2005 and early 2006. The 2007 Farm Bill will be crafted at a time unlike that of any other in the legislation’s long history. A host of factors will affect discussions and deliberations on the future of the Farm Bill and U.S. farm policy. Among them are the growing federal deficit, ongoing negotiations of the Doha round of the World Trade Organization, political and leadership situations in Congress, and current farm sector conditions, among many others. These four major influences provide some context for understanding the debate that is ahead on the Farm Bill.

Most facets of coercive federalism—including federal aid shifted from places to persons, conditions and earmarks attached to federal aid, pre-emptions, limits on state taxation, federalization of criminal law, defunct intergovernmental political institutions, reduced federal-state cooperation in major programs, and federal-court litigation—remain vibrant. Only unfunded mandates and court orders requiring major state institutional change are less prevalent. State policy activism remains vigorous, but the Supreme Court is not enamored with state authority.

Hiring private sector contractors to perform functions and services that would otherwise be performed by government employees—now called “outsourcing”—is not new to state government, especially for Information Technology (IT). Many states have outsourced key IT functions and services, including all or part of their networks, since the 1990s. In fact, as early as 1999, the National Association of State Chief Information Officers (NASCIO) gave recognition awards to states with outstanding public-private partnerships. What has changed for states are (1) the increased importance of using IT outsourcing in ways that tangibly enhance efficiency and costeffectiveness; and (2) emphasis on successfully managing the outsourced IT function.

National-state relations have undergone a major transformation since 1965, when Congress sharply increased the pace of enactment of regulatory preemption statutes including those in regulatory areas that had been the exclusive preserves of the states. Protection of the reserved regulatory powers of the states against further congressional encroachment will necessitate enactment of new interstate regulatory compacts and/or uniform state laws.

Most state budgets were in very good shape at the end of fiscal year 2006, and election-year budgets for 2007 will lead to tax cuts. But beyond 2007 states will face challenges, including the need to fund or constrain rapid Medicaid growth, pressures to strengthen pension funding and begin financing newly disclosed liabilities for retiree health care, and the need to respond to large cuts in federal grants.

Forty-five states now have an officeholder using the title “lieutenant governor.” The experience and profile of the candidates for the office have grown for two years, and that trend continues in the 2006 elections. The duties of the office are also increasing: USA Today newspaper reported in August 2005 that the office of lieutenant governor is a significant, visible and often controversial office. As the office gains attention, future trends indicate state officials will examine the most effective uses of the office.

Similar to the attacks of Sept. 11, 2001, Hurricane Katrina shone a bright light on the nation’s level of preparedness and revealed serious gaps in the country’s ability to respond to another terrorist attack. Debate continues on whether the federal government’s focus on preparing for a terrorism incident has overlooked the more common threat of natural disasters. Adequate funding for allhazards is a major concern for all state and local emergency managers, particularly since federal mandates in preparedness and response increase regularly, without matching federal funding.

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