Report

State Legislative Roundup: Sour Economy Limits Options In '08

  • July 02, 2008
  • By Daniel C. Vock

For many states, 2008 will be remembered for record numbers of home foreclosures, $4-a-gallon gasoline and the beginning of a slide into new fiscal trouble after two years of overflowing coffers.

Stateline.org's annual state-by-state look at legislative accomplishments, covering 36 states so far, finds lawmakers uneasy over finances and largely shying away from major expansions of public health-insurance programs or free preschool classes. A basket of new worries emerged: homeowners sucked into mortgage scams, the threat of expanding Medicaid rolls as unemployment rises, a looming shortfall in states' main source of highway funding and predictions of even worse financial woes ahead.

Seeking new ways to replenish its treasury, New York in 2008 became the first state to target billions in internet sales by requiring out-of-state retailers to start collecting sales taxes on state residents' purchases, though Amazon.com is challenging the law in court. Pennsylvania Gov. Ed Rendell (D) solicited a whopping $12.8 billion bid from a private company to lease the state's turnpike for 75 years, a proposal still under debate.

While tax increases are usually a last resort for lawmakers, especially in an election year, Minnesota legislators overrode a veto by Gov. Tim Pawlenty (R) to hike the state's gasoline tax by 8.5 cents a gallon to raise road and bridge funds in the wake of last year's deadly Minneapolis bridge collapse. Maryland adopted a new tax on millionaires, and New York upped its tax on cigarettes from $1.50 a pack to $2.75 a pack -- highest in the country.

With the race for the White House in full swing, states began waiting out the Bush administration to see whether they'll fare better with a new president in a host of disagreements with the federal government. Numerous states are pushing for changes in federal policies on immigration enforcement, secure driver's licenses, global warming, children's health insurance and the No Child Left Behind education law.

In the biggest social policy development of the year, California became the second state after Massachusetts to legalize same-sex marriage and thrust the volatile issue not only onto the state's November ballot but also into the presidential contest. The Republicans' presumed nominee, U.S. Sen. John McCain of Arizona, supports a California ballot measure to reverse the court ruling and ban gay marriages, while Democratic contender U.S. Sen. Barack Obama of Illinois has announced his opposition to the measure. Voters in Arizona and Florida also will be asked to decide Nov. 4 whether to prohibit gay marriage.

Among this year's most common legislative moves were efforts to boost energy efficiency and reduce greenhouse gases, along with measures to curb smoking, promote gym class in schools and tighten restrictions on teen drivers.

Stateline.org has compiled state-by-state summaries of 36 legislatures that have adjourned or passed budgets so far. New summaries will be added as other legislatures finish their work, along with updates on the trends and precedent-setting policies to emerge from state capitols.

Read the complete 2008 Legislative Year in Review as well as state-by-state summaries of this year's sessions on Stateline.org's Web site.