STATE AND LOCAL UPDATE

January 10, 2018

Policy and Politics I. Trending Topics

Issues in Focus

STATE LEGISLATURES GAVEL IN: Well over half of the country’s state legislatures have gaveled in for the 2018 session. The National Conference of State Legislatures is tracking legislative sessions and more information can be found here (.pdf breakdown of session dates here). According to Governing, a handful of issues will be on state legislative radars in 2018. They include: federal tax revision, health insurance, building next generation data networks, sexual harassment, fair work schedules, opioids, union regulations, budgets and revenue, and election cybersecurity. For more in-depth coverage of these issues, see here. Governors are also giving their annual State of the State addresses outlining priorities for the 2018 session. Details on those addresses can be found in the state section below. In addition, the National Governors Association (NGA) is tracking every governor’s State of the State address. The list, which is regularly updated, can be found here.

A. BUDGETS, TAXES, & REVENUE

STATES ESTIMATE REVENUE INCREASES FROM TAX BILL: State tax systems are directly affected by federal tax changes because nearly all states conform to the federal code in some way. For example, in 36 states, taxpayers start their state income tax form by using the gross income, adjusted gross income, or taxable income figure from the federal return. Nine states have no income tax, so that leaves just six states where taxpayers must start from scratch. This conformity—shadowing federal provisions—reduces tax compliance costs and generally makes things easier for everyone involved. Most states have found positive revenue impacts from the federal bill. MARYLAND GOVERNOR HOGAN is discussing legislation that would return the state’s windfall to taxpayers in some form, perhaps by targeting high-income taxpayers likely to be paying more due to the SALT cap. For Iowa, federal tax reform may provide revenue that would enable the state to undertake its long-talked-about state tax reform. TRUMP TAX REFORM HAS STATES HUNGRY FOR LOWER UTILITY BILLS: It’s been less than a month since Congress approved a sweeping tax overhaul and states are already chomping at the bit to get a piece of the action. Regulators from Montana to Kentucky have ordered utilities to act now to ensure ratepayers share in the windfall from the tax bill signed into law by President Donald Trump that slashed corporate rates to 21 percent from 35 percent.

The following are among states that have taken action so far:

• Montana Public Service Commission gave utilities a March 31 deadline to calculate tax savings and how they should be shared with customers.

• Kentucky Public Service Commission ordered utilities to begin tracking tax savings.

STATE AND LOCAL UPDATE

• Indiana Utility Regulatory Commission ordered a review into the impact of the tax cut and how customers can benefit.

• Louisiana Governor John Bel Edwards asked the state public service commission to review utility rates and adjust them to reflect the tax cut.

Utilities that are already offering to cut rates include:

• Exelon’s Baltimore Gas & Electric will pass around $82 million in annual tax savings to customers. • Exelon’s Commonwealth Edison in Chicago is seeking approval to pass along about $200 million

in tax savings to customers this year. • Eversource’s customers in eastern Massachusetts will see a reduction in rates of around $35.4

million instead of an approved increase of $12.2 million; its customers in western Massachusetts also stand to gain.

BLUE STATE OFFICIALS PLOT RESPONSE TO GOP TAX LAW: Elected officials in high-tax Democratic-leaning states are looking at creative ways to prevent the new tax law from raising their residents’ bills. One option is to challenge the tax law in the courts. NEW YORK GOV. ANDREW CUOMO has said he plans to sue over the law, and NEW JERSEY GOV.-ELECT PHIL MURPHY has expressed interest in a legal challenge as well. But tax experts doubt the lawsuits will be successful. They noted that Congress has broad discretion to levy an income tax, and pointed out that the alternative minimum tax has limited the SALT deduction for years. Another option that blue-state officials are considering is allowing taxpayers to make tax-deductible charitable contributions to state and local funds. KEVIN DE LEÓN, the president pro tempore of the California Senate who is also running for the U.S. Senate, offered legislation that would allow state residents to donate to a fund and receive a dollar-for-dollar tax credit for those contributions. Cuomo and Murphy are looking at taking similar initiatives. A third option under consideration for the states is shifting toward a payroll tax system. Under that option, states would create employer-side payroll taxes, which would still be deductible on federal tax returns, and would also provide employees a credit to offset their income tax liability. But Jared Walczak, a senior policy analyst at the Tax Foundation, suggested that the payroll tax combined with a tax credit could still draw concerns from the IRS. More on Democratic strategies to blunt the impact of the GOP law can be found here, from the New York Times, as well. HOW THE TAX BILL WILL CHANGE STATE GOVERNMENTS’ BORROWING COSTS: For the first time in more than 30 years, Congress has passed a major overhaul of the tax code. The final bill is better than initially expected for state and local governments, but key provisions are still likely to force big changes to their cost of borrowing. The cause of these changes is indirect: The bill's big break for corporations on their income tax rate will force some state and local governments into higher debt payments on money they have already borrowed directly from banks, thanks to triggers placed in those loan contracts. Also worth considering, the lower corporate tax rate could also potentially make it more expensive for governments to issue bonds in the municipal market. More here.

POPULATION DECLINE: Eight states lost population between July 2016 and July 2017, according to new U.S. Census Bureau estimates. If the estimates hold up, it would be the first time in 30 years that so many states lost residents in a single year. According to this year’s state population estimate, Alaska, Hawaii, Illinois,

STATE AND LOCAL UPDATE

Louisiana, Mississippi, North Dakota, West Virginia and Wyoming all lost population between 2016 and 2017. The states that lost population between 2015 and 2016 were Connecticut, Illinois, Pennsylvania, Vermont, West Virginia and Wyoming. The last time eight states lost population in one year was between 1986 and 1987, when a collapse in oil prices hit the economies of energy-producing states. “Domestic migration drove change in the two fastest-growing states, Idaho and Nevada, while an excess of births over deaths played a major part in the growth of the third-fastest-growing state, Utah,” said Luke Rogers, Chief of the Population Estimates Branch.

B. HEALTHCARE & INSURANCE

AGING, UNDOCUMENTED AND UNINSURED IMMIGRANTS: For decades, the United States has struggled to deal with the health care needs of its undocumented immigrants — now an estimated 11 million — mainly through emergency room care and community health centers. But in the coming years, that struggle will evolve. As with the rest of America, the population of people living here illegally is aging and beginning to develop the same health problems that plague senior citizens generally and are a lot more expensive to treat: chronic diseases, cognitive disorders and physical injuries. MEDICAID WAIVER TRACKER: WHICH STATES HAVE APPROVED AND PENDING SEC. 1115 MEDICAID WAIVERS: The Kaiser Family Foundation tracks which states have approved or pending Medicaid waivers. Section 1115 Medicaid demonstration waivers provide states an avenue to test new approaches in Medicaid that differ from federal program rules. While there is great diversity in how states have used waivers over time, waivers generally reflect priorities identified by states and the Centers for Medicare and Medicaid Services (CMS). More here.

STATE OF THE OPIOID CRISIS: The nation's opioid crisis reached new proportions in 2017, with provisional data revealing that there were 17 percent more deaths from drug overdoses between May 2016 and May 2017, compared to the previous year. Though the epidemic has grown over the past few years, it reached new heights this year, forcing federal and state governments to take immediate action. In October, President Donald Trump declared a public health emergency over the crisis. Earlier in 2017, the governors of Alaska, Arizona, Florida and Maryland issued a public health emergency. Massachusetts was the first state to declare the epidemic an emergency in 2014, followed by Virginia in 2016. With the government's proposed tax cuts and an unclear future for Obamacare, many are wondering how the crisis will look in the coming year, and whether Trump will reveal a more detailed plan to combat it. STATES MOVING AGGRESSIVELY ON INSURANCE REGULATIONS: The Trump administration is hollowing out regulations to the benefit of industries across the board, delivering on a central campaign theme. When it comes to insurance, however, there is only so much that Washington officials can do. State insurance commissioners continue to wield the most regulatory power, and are expected to act “aggressively” in 2018, said Howard Mills, global insurance regulatory leader for Deloitte. The main issue on the table is extension of the fiduciary standard. Trump’s team managed to delay the most punitive aspects of the Obama-era Department of Labor fiduciary rule until July 1, 2019. In the interim, analysts expect the DOL to weaken the rule significantly.

STATE AND LOCAL UPDATE

C. ECONOMY & TRADE

MINIMUM WAGE: More than 4.5 million American workers will get a fatter paycheck starting this month, and the raise has nothing to do with the sweeping tax overhaul bill approved last month. Eighteen states and 19 cities, including the District of Columbia, will boost the statutory minimum wage effective in January, according to the National Employment Law Project. That will provide workers at the bottom of the income ladder with a combined wage increase of more than $5 billion next year, according to figures compiled by the Economic Policy Institute. In most states, the increases are the result of recent laws that raise the pay rates for those at the bottom of the income ladder. Others have laws on the books that automatically boost the minimum wage to keep up with inflation. More on this subject from The Hill here, and CNN here.

CANADA IS INCREASINGLY CONVINCED THAT TRUMP WILL PULL OUT OF NAFTA: Canada is increasingly convinced that U.S. President Donald Trump will soon announce that the United States intends to pull out of the North American Free Trade Agreement. The sources said they expected Trump would make his move at about the same time that negotiators from the United States, Canada and Mexico meet in late January for the sixth and penultimate round of talks to modernize the treaty. A Canadian official told CNBC that while the chances of a U.S. withdrawal from NAFTA are increasing, there is no convincing information to suggest it will happen soon.

NJ, NY, CT FOUND TO BE MOST MOVED FROM STATES IN US: People are continuing to flee the tri-state area and heading west, according to tracking statistics from the moving company United Van Lines. New Jersey, New York and Connecticut rank among the top outbound states in moves for the third consecutive year: 61 percent of moves in New Jersey are outbound, 61 percent in New York and 57 percent in Connecticut. Economist and UCLA professor Michael Stoll says the data reflects longer-term trends of movement to the western and southern states, where housing costs are relatively lower, climates are more temperate and job growth has been at or above the national average. INTEREST GROUPS PUSH IVORY TRADE BAN IN STATES: The PEW Charitable Trusts looks at efforts by animal welfare activists to ban ivory sales in states. The legislation — which has been enacted in six states so far — would close what animal welfare activists say are loopholes in the federal restrictions on African elephant ivory imports and sales. Making the changes, they say, would help shut down the market and put an end to the illegal poaching of African elephants, which has caused their population to dwindle. Groups like the National Rifle Association and the Antiques Dealers’ Association of America are pushing back.

D. TECHNOLOGY & PROCUREMENT NET NEUTRALITY: Along with pursuing lawsuits over irregularities in the FCC process (like millions of fake citizen comments being submitted), several states are crafting their own net neutrality laws, which they will start debating as new legislative sessions commence this month. They would prohibit internet service providers from blocking or hindering access to legal online content sources, or from offering premium-bandwidth “fast lane” deals to others. Washington State was first to act, with Democratic and Republican state representatives debuting nearly identical bills back on December 13 and 14.

STATE AND LOCAL UPDATE

STATE LEGISLATORS TURNING FOCUS TO CRYPTOCURRENCIES AND BLOCKCHAIN TECHNOLOGIES: State legislators are paying increased attention to cryptocurrencies with several bills introduced in a handful of states. In Nebraska, three bills have been introduced, one of which would amend the state's money-laundering statutes to account for cryptocurrencies while the other two focus on blockchain applications more broadly. In New York, Assemblyman Clyde Vanel has introduced three bills. One bill would amend the state’s technology law to include a definition of blockchain technology, smart contracts and provide a legal understanding for digital signatures stored on a blockchain. Another bill would create a digital currency taskforce to analyze the impact of cryptocurrencies on New York financial markets. Illinois, Hawaii, Maine and North Dakota have all passed laws that direct state government to find out how blockchain technology can enhance record keeping. FOUR STATE AND LOCAL GOVERNMENT TECH TRENDS TO WATCH IN 2018: Local governments deployed a whirlwind of new tech in 2017, including chatbots, the cloud and artificial intelligence, in order to make internal IT operations more efficient. Meanwhile, smart city initiatives brought connected technologies onto the streets in cities, towns, counties and states across the country. But when it comes to local government IT innovation and spending over the last year, the greatest surprise is that there weren’t very many surprises at all, says Alan Shark, executive director and CEO of the Public Technology Institute. “What we’ve seen is that local governments are doing better financially, the tax base is picking up since the recession, but IT spending has not increased. There seems to be a shyness to pick up spending,” says Shark, noting that this has led to frustrations in local government IT, as many IT leaders recognize the need to replace legacy equipment but are slow to plan aggressively for upgrades. More from StateTech here.

E. FEDERAL/STATE RELATIONS BIPARTISAN SENATE BILL WOULD HELP STATES BEEF UP ELECTION CYBERSECURITY: Six U.S. senators have filed a bipartisan bill that would provide grants to states to help them move from paperless voting machines to paper ballots in an effort to make voting systems less vulnerable to hackers. In September, the U.S. Department of Homeland Security notified election officials in nearly two dozen states that their voter registration systems had been targeted by Russian hackers during the 2016 presidential election. The new proposal would help streamline cybersecurity information-sharing between federal intelligence agencies and state election officials, authorize grants to states to replace outdated electronic voting machines, and establish an advisory panel to develop election cybersecurity guidelines.

DEMOCRATIC AGs SEEK HIGHER OFFICE BY FIGHTING TRUMP: With the Republicans fully in control of Washington, D.C., and holding a majority of governorships, the role of Democratic attorneys general has been elevated. Since Trump took office a year ago, they have consistently been at the vanguard of their party's opposition to the president. Many of these Democrats will surely be running for higher office before too long, and Democratic strategists hope to bring in reinforcements this year. Just as Democrats appear to be on offense generally in congressional and gubernatorial races, they are also confident they will grow their ranks of attorneys general in the 2018 elections. Democratic attorneys general are using lawsuits — or the threat of legal action — to challenge the president's policies on climate, energy exploration on federal lands, health care, immigration, women's reproductive rights and much more. There's a joke at NAAG, the National

STATE AND LOCAL UPDATE

Association of Attorneys General, that the acronym really stands for the National Association of Aspiring Governors. Certainly, the position of state attorney general — particularly in the 21st century — has been a springboard to higher office.

DEMOCRATIC AGs SUE TRUMP AT RECORD PACE: Democratic attorneys general in a handful of states are mounting a fierce battle against President Trump's government, filing almost 50 lawsuits that have bogged down some of the administration's key initiatives. The wave of lawsuits, Democrats say, is the product of an unprecedented effort to coordinate legal actions across state lines, both to defend Obama-era rules and to block what they see as Trump's overreach.

II. Politics

TRACKING THE 2018 GOVERNORS RACES: There are 36 governors' races this year. Republicans will have to defend 26 of them and Democrats nine. There is one independent governor -- Alaska's Bill Walker -- and that race is rated Lean Independent. “Governing” has ranked each race, and mapped them as seen below.

TOP 10 GOVERNOR’S RACES OF 2018: Republicans hold 33 governorships, to just 16 for Democrats, heading into 2018 — but that could change rapidly next November. The political environment looks bad for the GOP, and the current governors are term-limited in a number of key states, giving Democratic candidates an opportunity to run for open seats in blue states like New Mexico and Maine. The party has also been energized by the opportunity to win seats at the table in the next round of redistricting, which was controlled by Republicans in most states the last time congressional and state legislative district lines were drawn, in 2011 and 2012. Here are POLITICO’s top 10 governor’s races of 2018.

STATE AND LOCAL UPDATE

WASHINGTON POST – THE TOP 10 GUBERNATORIAL RACES OF 2018: The Washington Post outlines its top 10 races which include: Maryland (Republican Larry Hogan), Ohio (open), Connecticut (open), Michigan (open), Florida (open), Nevada (open), Illinois (Republican Bruce Rauner), Alaska (Independent Bill Walker), Maine (open), New Mexico (open).

RACES FOR GOVERNOR, STATE LEGISLATURE KEY FOR REDISTRICTING: Buoyed by a string of electoral victories during President Donald Trump's first year in office, Democrats will wage a renewed battle this year to wrest control of Congress from Republicans. Yet the contests with the greatest long-term consequences could be listed elsewhere on the ballot —for governors and state lawmakers who will shape the boundaries of congressional districts for the decade to come. Voters in two-thirds of the states will be electing governors to new four-year terms in 2018. Of those, 26 will be vested with the power to approve or reject congressional maps that will be redrawn after the 2020 Census. Although most of the thousands of state lawmakers responsible for redistricting will be chosen in 2020, a total of 766 will be elected to four-year terms in nearly two dozen states where they will play a role in approving congressional maps.

BGR Insight

BGR Founding Partner, Haley Barbour, recently appeared on CBS Face the Nation to discuss the 2018 elections. Barbour cited the economy as a potential defining issue in whether Republicans will maintain their majorities in Congress and in state capitals across the country. “I think biggest thing is the economy. We had very slow economic growth in the Obama administration. We averaged 2.1 percent a year of GDP growth. Where over -- since World War II, we’ve been averaging 3.1 percent. So, think about it in the heartland the economy had been growing half again faster.” See the full interview and transcript here.

CLF RAMPS UP GROUND GAME, ANNOUNCES 27 OFFICES NATIONWIDE: The Congressional Leadership Fund, the super PAC endorsed by House Republican leadership, announced its national field program has expanded to 27 offices now open in key congressional districts across the country, which has resulted in over 5.1 million voter contacts since early 2017. Recently opened offices are located in the following districts: California’s 45th district, Colorado’s 6th district, Iowa’s 1st district, Illinois’ 6th district, Kentucky’s 6th district, Michigan’s 8th district, Pennsylvania’s 16th district, Texas’ 7th district, Texas’ 23rd district, Virginia’s 2nd district, and Washington’s 5th district. View complete list of offices here.

WOMEN RUNNING IN 2018: This year, at least 79 women — 49 Democrats and 30 Republicans — are running for governor or seriously considering it as filing deadlines approach, according to a tally by the Center for American Women in Politics at Rutgers University. The numbers are more than double what they were four years ago and on track to surpass the record 34 women who ran for governor in 1994. In Ohio, there are three women running for governor in the Democratic primary and one in the Republican. In Georgia, both Democratic candidates are named Stacey. Female candidates are stepping up at every level of the ballot. Of the 15 seats that Democrats picked up in the Virginia House of Delegates, 11 were won by women — and the number could grow, depending on how the continuing dispute over another race is settled.

STATE AND LOCAL UPDATE

SPECIAL ELECTIONS INDEX: According to the left-leaning Daily Kos’ Special Elections Index, in 2017, Democrats flipped 14 Republican-held state legislative districts in special elections—and the Alabama Senate seat —while Republicans flipped just three. They say Democrats haven’t performed this well in special elections since the late 1980s.

Matthew Walter writes in the Washington Times: “With state legislative Republicans at all-time highs after the 2016 elections, the political goalposts have moved so far to the right (nearly 1000 state legislative seats flipped to Republican under President Obama), there should be plenty of opportunities for Democrats to reclaim momentum, and they haven’t. In the last quarter of 2017, it has been Republicans flipping blue seats to red — three of them in the bluest states in the country. With better candidates, now backed by a solid tax reform package, Republicans will continue to win in blue areas in 2018… While the map does not look good for Democrats in 2018, their threat is real, and their willingness to spend at a record pace is real. Groups led by Eric Holder and his liberal allies are raising more money and attacking pro-growth policies and individual liberties at an alarming rate. But misreading the tea leaves in 2017 blue state election results may make a nice liberal talking point, but it is misleading and wrong.”

DEMS HOPE TO FOLLOW VA WINS WITH SUCCESS IN 2018: The nationally watched battle for control of the Virginia House of Delegates is a precursor to a broad Democratic effort to flip statehouses blue in 2018 and boost the party’s power to draw legislative maps for the next decade. Democrats won at least 15 GOP-held seats in Virginia, part of a backlash to President Trump’s ascension that included a host of new groups devoted to down-ballot races, a quadrupling of small donations to Democratic legislative candidates since the last cycle and the largest gubernatorial-year turnout in two decades. Now Democrats hope to replicate that success across the country. Seats in 87 of 99 state legislative chambers are on the ballot in 2018. Republicans currently hold 67 of those chambers, while Democrats hold 32.

State of the States ALABAMA

IVEY SAYS STATE OF THE STATE IS STEADY, SOUND: Nine months after abruptly landing in the state's top office, GOV. KAY IVEY delivered an upbeat message with a State of the State address that she hopes will not be her last. Ivey said her budget proposals would include pay raises for both education employees and state employees. Ivey did not specify an amount for the raises, but the numbers in her budget proposal indicate it would be 2 percent to 3 percent. According to the Montgomery Advertiser, “The speech — notably nonpartisan and noncontroversial — reflected what analysts say will be one of the best budget pictures in recent state history and a desire from state legislators to avoid controversy after a wrenching series of leadership scandals over the past four years.”

ISSUES TO WATCH IN THE LEGISLATURE: Education reform, jail/corrections reform, mental health reform, day care oversight, Montgomery County not having a senator during the session. For more in-depth coverage of each issue, see here.

STATE AND LOCAL UPDATE

TOYOTA, MAZDA BUILDING BILLION DOLLAR PLANT: Toyota Motor and Mazda Motor are set to unveil plans for a $1.6 billion assembly plant in Huntsville, Alabama. The plant is projected to employ about 4,000 workers and produce approximately 300,000 vehicles a year.

ARIZONA

5 TAKEAWAYS FROM GOV. DUCEY’S STATE OF THE STATE: According to the Phoenix New Times’ Antonia Noori Farzan, the main takeaways from Gov. Doug Ducey’s State of the State are: women are awesome, opioid addiction will be a major focus of this year’s legislative session, there won’t be any money going toward expanding prisons this year, Ducey says he will invest in education but hasn’t specified where that money will come from, and the governor is psyched about getting rid of obscure boards and regulations.

ARIZONA GOVERNOR LAYS OUT AGENDA: In his final State of the State speech before his 2018 re-election campaign, Gov. Doug Ducey touted his accomplishments while presenting an agenda of tackling the opioid crisis, increasing school funding and adopting new policies for ex-prisoners and the child-welfare system.

ISSUES TO WATCH IN THE LEGISLATURE: Health care, higher education, water law reform, abortion, marijuana, firearms, transportation, and deregulation. For more in-depth coverage of each issue, see here.

ARKANSAS

HUTCHINSON LAYS OUT $5.63 BILLION STATE BUDGET: Gov. Asa Hutchinson pitched to legislators a $5.63 billion spending plan for next fiscal year that would be nearly $173 million more than the current general revenue budget, with most of the new money devoted to the state's Medicaid program. The governor's budget for fiscal 2019 -- which starts July 1 -- also would provide a surplus of about $64 million, he said. Hutchinson said $48 million of that would go into a restricted reserve fund that could be used in an economic downturn. The remaining $16 million would be used to match federal highway funds.

CALIFORNIA

GOV. BROWN PROPOSES 2018-19 BUDGET: Keeping the state on a path to long-term fiscal stability, Governor Edmund G. Brown Jr. today proposed a $131.7 billion General Fund budget plan for 2018-19 that fills the state’s Rainy-Day Fund to its constitutional target, fully implements the state’s K-12 school funding formula two years ahead of schedule and provides $4.6 billion for the first year of a 10-year transportation improvement plan. “California has faced ten recessions since World War II and we must prepare for the eleventh. Yes, we have had some very good years and program spending has increased steadily,” said Governor Brown in his budget letter to the Legislature. “Let’s not blow it now.” More here. PROPOSED FEDERAL TAX CAP-WORKAROUD: California’s attempt to skirt the GOP’s new $10,000 cap on local and state tax deductions is officially in play. SENATE LEADER KEVIN DE LEÓN introduced legislation to allow

STATE AND LOCAL UPDATE

Californians to make a charitable donation to the state — to the California Excellence Fund — in exchange for a dollar-for-dollar state tax credit. In other words, people would be able to donate to the state instead of paying taxes. The new tax law Congress passed last month does not place a cap on deductions for charitable giving. DEMS LOSE SUPERMAJORITY FOLLOWING ACCUSATIONS OF SEXUAL HARRASSMENT: Two Democrats — FORMER ASSEMBLYMEN RAUL BOCANEGRA (D-PACOIMA) AND MATT DABABNEH (D-WOODLAND HILLS) — resigned in the wake of allegations by women about incidents during their political campaigns and while in office. A third legislator, ASSEMBLYMAN SEBASTIAN RIDLEY-THOMAS (D-LOS ANGELES), resigned recently, citing serious health issues. One lawmaker who has been accused of inappropriate contact with women, STATE SEN. TONY MENDOZA (D-ARTESIA), declined a request to take a leave of absence while a formal investigation is conducted. The resignations have left Democrats short of what would otherwise be a supermajority of seats in the Assembly, even after the election of ASSEMBLYWOMAN WENDY CARRILLO (D-LOS ANGELES) last month. The vacancies could complicate any policy efforts to raise new revenue, enact laws quickly or place proposals on the statewide ballot – actions that would all take a two-thirds vote in both houses.

Colorado A LOOK AT THE TOP EIGHT ISSUES FOR THE 2018 LEGISLATIVE SESSION IN COLORADO: General Assembly reconvenes Wednesday to discuss a hefty list of major policy changes on topics ranging from public pensions to opioid treatment — if they can see through the political fog that makes this an unpredictable session. The all-important 2018 election and a series of controversies that rocked the Colorado statehouse in recent months set the stage for a challenging legislative term that promises to take a different tone than a year ago, when lawmakers celebrated major bipartisan accomplishments. The agenda for the 120-day session makes the task ahead more difficult, according to dozens of interviews ahead of the start. Here’s a look at the top eight issues and a forecast for what lawmakers and lobbyists expect in the 2018 session: state pension funding, sexual harassment, infrastructure, opioids, and oil & gas drilling safety regulations.

Florida GOV. SCOTT’S STATE OF THE STATE: Full text of GOV. RICK SCOTT’S prepared remarks for his final State of the State speech can be found here. According to the Orlando Sentinel, Scott focused on his familiar theme of job creation but also called for more funding for education, the environment and the opioid epidemic.

ISSUES TO WATCH IN THE LEGISLATURE: Rural economies, health insurance, transportation, education, adoption and foster care, budget, environment, Irma recovery, permit-less carry, insurance, opioids, and texting while driving. For more in-depth coverage of each issue, see Orlando Sentinel - Depleted Legislature Faces Long List of Issues, MyNews13 - Florida’s Legislative Session: Five Issues We’re Watching, News 4 Jacksonville - 10 Issues to Watch in 2018 Legislative Session, Tampa Bay Times - Florida’s Legislative Session 2018: Five Issues to Watch, and Miami Herald – Issues to Watch in the 2018 Legislative Session.

STATE AND LOCAL UPDATE

DESANTIS ANNOUNCES BID FOR GOVERNOR: With PRESIDENT DONALD TRUMP’S blessing, U.S. REP RON DESANTIS, Florida’s most conservative congressman, official declared his candidacy for governor. Already in the race for the Republican nomination is AGRICULTURE COMMISSIONER ADAM PUTNAM, also a former member of Congress. RICHARD CORCORAN, speaker of the Florida House of Representatives, also may enter the contest for the Republican nomination. Another Republican, JACK LATVALA, is still officially a candidate. But his campaign is essentially over following his resignation from the state Senate over a sexual harassment scandal. GOV. RICK SCOTT is prevented from running for re-election by term limits and Trump has urged him to run against U.S. SEN. BILL NELSON, D-Fla.

GEORGIA

CONTROVERSIAL ISSUES IN AN ELECTION YEAR: Some of the state’s most contentious political topics are sidelined for now but could take center stage at a moment’s notice during the 2018 legislative session. With every state legislator up for re-election and several running for higher office, they could fan the flames of their most energetic supporters by pressing controversial topics, though other candidates would prefer a smooth 40 days of business so they can get back to campaigning. Religious freedom efforts are perhaps the most controversial and enduring. Already, four Republican candidates for governor have pledged to sign religious liberty legislation if they’re elected. Meanwhile, some Democrats see a narrow opening to relocate Confederate monuments or ban bump stocks like those used in the rapid-fire shootings Oct. 1 in Las Vegas.

5 ISSUES TO WATCH IN THE LEGISLATURE: Rural economies, health insurance, transportation, education, and adoption & foster care are issues on the legislative radar, according to the Gainesville Times. STATE LAWMAKERS RETURN TO ATLANTA WITH ELECTIONS IN MIND: The governor's office is opening up as incumbent Nathan Deal finishes his limit of eight years in office. Republican Lt. Gov. Casey Cagle and several others are seeking the top office, emptying their own offices for other claimants. Every legislative seat is also open for election this year, so most everyone running for re-election has an incentive to return home to campaign with a few popular accomplishments in tow. Top issues on the radar include jump-starting Georgia’s rural economies, speeding up broadband deployment, and infrastructure development.

HEALTHCARE A MAJOR ISSUE FOR GA LEGISLATURE: The past year’s headlines say it all. Slices of Georgia are in a full-on health care crisis: Premiums higher than a mortgage payment. Insurance networks for 2018 that suddenly exclude all of a family’s doctors. An opioid epidemic; rural hospitals going bankrupt; the uninsured poor; their unpaid emergency room bills. Legislators from both the House and the Senate spent much of the past year running committees devoted to issues surrounding health care, including the rural-urban divide. Their findings include the need for broadband access in underserved areas to facilitate “telehealth” service Some are hoping the Legislature will step in to fill the federal funding gaps to pay for uncompensated patient care.

STATE AND LOCAL UPDATE

GOP RETAINS TWO SEATS IN SPECIAL ELECTIONS: Former state House representative Brian Strickland, a Republican, moves up to the state Senate after capturing nearly two-thirds of the vote in a special election Jan. 9. In the House District 111 race to replace Strickland, Republican Geoff Cauble captured more than 51 percent of the vote. The district contains part of Henry County. More here.

HAWAII

AG STEPPING DOWN FOR CONGRESSIONAL RUN: ATTORNEY GENERAL DOUG CHIN is stepping down to run for Congress. His last day in office as attorney general will be March 15. IGE REQUESTS MILLIONS MORE IN EDUCATION SPENDING: GOV. DAVID IGE’S supplemental budget request to the Hawaii Legislature for next fiscal year includes an additional $24 million in state Department of Education operating funds and an extra $150 million for public school improvement projects, including the construction of an elementary school on Oahu. Tucked within the request is a modest $2 million increase to the weighted student formula, the method that determines per-pupil-funding. But it proposes funding for other areas previously overlooked, such as $4.1 million in workers’ compensation benefits for injured DOE employees, students and volunteers. Other notable education-related items in Ige’s supplemental budget request include $1 million to expand Early College learning programs in the public schools, $2.8 million to broaden school-based health services under the Hawaii Keiki program and $3.1 million to purchase equipment for newly constructed school facilities.

IDAHO

TAXES, SCHOOLS, HEALTHCARE SHAPE GOVERNOR OTTER’S FINAL STATE OF THE STATE ADDRESS: In his 12th and final annual address to the Legislature on Monday, Gov. Butch Otter called for tax relief, dramatically reshaping how Idaho runs its colleges and universities, and new proposals for delivering health insurance to this state’s residents. The governor proposes spending $3.68 billion for the fiscal year starting in July 2018, up 6.62 percent from the year before. His proposed budget assumes possible tax revenues as high as $3.78 billion in that same year. He spoke of two overall goals, to make healthcare more accessible and affordable, and to ensure that employers in the state have educated and skilled workers. One of his biggest proposals this year calls for almost $95 million in net tax relief to Idahoans. Under Otter’s plan, the state’s corporate tax rate and income tax top rate, both 7.4 percent, could each drop to 6.95 percent. GOV. OTTER’S STATE OF THE STATE: The full text of Gov. Butch Otter’s prepared remarks for his State of the State speech can be found here.

ILLINOIS

GOV. RAUNER TALKS INFRASTRUCTURE, POLITICS, PLANS FOR 2018: GOV. BRUCE RAUNER joined the Herald-News editorial board for a conversation about his campaign for re-election and what is on his legislative agenda for 2017. The full transcript can be found here.

STATE AND LOCAL UPDATE

INDIANA

ISSUES TO WATCH IN THE LEGISLATURE: Alcohol sales, marijuana legalization, hate crimes, permit-less carry, technology and innovation, opioid epidemic, and redistricting reform. For more in-depth coverage of each issue, see here.

5 TAKEAWAYS FROM HOLCOMB’S STATE OF THE STATE ADDRESS: The Indy Star’s 5 takeaways from GOV. ERIC HOLCOMB’S State of the State address include: developing a skilled workforce is the “defining issue of the decade,” Holcomb is in harmony with GOP leaders on key goals but avoids the most contentious issues, Holcomb knows how to set goals but we’ll have to wait and see if he meets them, Holcomb sticks to slower, methodical approach to problems at the Department of Child Services, and he offered an unexpected goal of tackling infant mortality.

IOWA

ISSUES TO WATCH IN THE LEGISLATURE: The budget, tax reform, education funding/school choice, water quality, Medicaid/mental health services, abortion/family planning, sanctuary cities, bottle bill, death penalty, and sports betting. For more in-depth coverage of each issue, see here.

KANSAS

2018 SESSION TO HIGHLIGHT KEY ISSUES: Kansas legislators convened Monday afternoon for the start of their annual session with a number of policy issues expected to make it a difficult spring. HOUSE SPEAKER RON RYCKMAN, an Olathe Republican, said school finance and balancing the state budget would be the biggest challenges for lawmakers. He has previously expressed concern an increase in funds for K-12 will make it difficult to address other essential areas of the state’s tight budget, such as mental health and child welfare. The state’s attorneys would like to see a plan passed by March 1, which legislators have said may not be possible. Others have expressed opposition to the court ruling or cast doubt on their ability to fund K-12 schools to the liking of the plaintiff school districts’ attorneys — another $600 million each year.

AG PROPOSING TO STRENGTHEN ELDER ABUSE LAWS: The Kansas Attorney General, along with the Johnson and Sedgwick County DA's, announced they plan to ask the Kansas Legislature to strengthen the state's laws against elder abuse. KANSAS AG DEREK SCHMIDT, JOHNSON COUNTY DA STEPHEN HOWE AND SEDGWICK COUNTY DA MARC BENNETT said their proposal would expand the definition of criminal mistreatment of an elder person to include infliction of physical injury, unreasonable confinement or unreasonable punishment. It would also include violations of the guardian or conservator laws. Derek Schmidt's office says current statute prohibits financial abuse but not physical abuse.

STATE AND LOCAL UPDATE

BROWNBACK GIVES STATE OF THE STATE ADDRESS: GOV. SAM BROWNBACK said he would give the State of the State address and deliver a budget proposal this week, then remain in office until he is confirmed to a diplomatic post. Brownback had previously said LT. GOV. JEFF COLYER was taking the lead in developing the governor’s blueprint for how Kansas should spend billions in tax dollars. Brownback layered the final State of the State speech of his career with personal reflections on faith and Kansas’ innate goodness with an explosive proposal to add $600 million in state aid to public schools that was fiercely denounced by Republicans as financially irresponsible. Brownback recommended the 2018 Legislature allocate the additional money to schools over the next five years but rejected the idea of any form of tax increase and avoided sharing ideas for financing the package. Lawmakers are under pressure from the Kansas Supreme Court to correct unconstitutional flaws in the amount and manner state aid is provided K-12 schools. The full text of Brownback’s address is available here.

KENTUCKY

HOUSE SPEAKER JEFF HOOVER RESIGNS: Shortly after the Kentucky House gaveled into session on Monday afternoon, House Speaker Jeff Hoover took the floor to resign his leadership post. More here. WHAT TO EXPECT IN KENTUCKY’S 2018 LEGISLATIVE SESSION: State revenue and pension funding top issues for 2018. More here. BILL LEGALIZING SPORTS BETTING: At least one lawmaker in Kentucky is looking to bring sports betting to the cradle of US horse racing. It’s the latest in more than a dozen of states that have been considering legalization of sports wagering via their legislatures. The sports betting bill from STATE SEN. JULIAN CARROLL “takes effect only if the federal Professional and Amateur Sports Protection Act is repealed by Congress or is rendered void by the United States Supreme Court.”

MARYLAND

HOGAN IN POTENTIALLY TIGHT RACE FOR GOVERNOR: A new poll shows Maryland’s race for governor will be a competitive contest, with popular REPUBLICAN GOV. LARRY HOGAN failing to get 50 percent of the vote in any hypothetical matchup against Democratic challengers. While Hogan enjoys high job approval and favorability ratings in a new nonpartisan poll from Mason-Dixon Polling & Strategies, it is not enough to suggest he will sail into a second term, pollsters said. Since registered Democrats outnumber Republicans in Maryland by a margin of more than 2-to-1, Hogan needs a fair number of Maryland voters to cross party lines in order to be re-elected next year. The poll, which has a 4 percentage-point margin of error, found that PRINCE GEORGE’S COUNTY EXECUTIVE RUSHERN L. BAKER III is the “strongest contender” right now in the field of seven Democrats. In a hypothetical matchup between Hogan and Baker, Hogan would win by 7 percentage points, despite having a name recognition that is 35 percentage points higher than Baker’s. Voters surveyed supported Hogan by 46 percentage points to Baker’s 39 percentage points, with 5 percent undecided. Although Hogan is ahead, pollsters noted he is below the 50 percent threshold generally considered “safe” for incumbents.

STATE AND LOCAL UPDATE

MASSACHUSETTS

BAKER EXPECTED TO TRUMPET BIPARTISANSHIP IN ADDRESS: Kicking off an election year as a Republican in a state that is not, GOVERNOR CHARLIE BAKER will deliver his State of the Commonwealth address to the Legislature and the people of Massachusetts on Tuesday, Jan. 23, his office announced. The speech is poised to offer the Swampscott 61-year-old his highest-profile opportunity to make the case for what he has accomplished during his three years steering the ship of state government. It will also offer Baker, who is running for a second term, a chance to set his priorities for spending taxpayer money just a day before he is likely to release his proposed state budget. WBUR POLL: BAKER’S POPULARITY CONTINUES TO SOAR: Gov. Charlie Baker continues to enjoy the kind of approval ratings that most politicians can only dream of. That's according to a new WBUR poll (topline results, crosstabs), which finds that 74 percent of Massachusetts voters approve of the job Baker is doing. It's a much different story for President Trump, who remains strikingly unpopular in the state: Just 29 percent of voters here approve of the job he's doing. The survey offers a study in contrasts. On the one hand, Baker, a low-key, moderate Republican governor, working effectively with Beacon Hill Democrats, has become the most popular politician in Massachusetts — and perhaps the most popular governor in the country. More here.

MAINE

WHO/WHAT TO WATCH IN 2018: Elections, Medicaid, Susan Collins, marijuana sales, citizen-initiated referendums, bonds, unfunded programs, tax conformity, and “unspent” taxpayer funds. For more in-depth coverage of these issues, see here. FIGHT FOR MEDICAID EXPANSION LIVES ON: GOV. PAUL LEPAGE has until early April to follow through on his constitutional duty and submit expansion paperwork, but the state’s Democratic lawmakers are already promising to take LePage to court if he puts up a fight beyond that deadline. The process in Maine may not be going as smoothly as advocates for the program might have hoped, nevertheless, the outcome has served as an example to campaigns in other expansion holdout states.

MINNESOTA

FISCHBACH ASSUMES LT. GOV. ROLE, REJECTS HIGHER PAY: Minnesota's new REPUBLICAN LT. GOV. MICHELLE FISCHBACH said she'll reject the job's higher salary and hasn't scheduled the constitutionally-required oath of office as she fights to keep her seat in the Senate. Fischbach's ascension to DEMOCRATIC GOV. MARK DAYTON'S administration was automatic, laid out in the state's constitution by her role as Senate president and set in motion by FORMER LT. GOV. TINA SMITH'S appointment to the U.S. Senate. Smith resigned the job at midnight Tuesday, hours before being sworn in to replace SEN. AL FRANKEN, who formally resigned amid a cloud of sexual misconduct allegations. Though Fischbach confirmed that she had assumed the role,

STATE AND LOCAL UPDATE

she stressed she was the state's "Acting Lieutenant Governor" and made clear her top priority was remaining in the Senate even as Democrats aim to force her out.

MISSISSIPPI

BRYANT HITS FAMILIAR THEME WITH STATE OF THE STATE ADDRESS: According to the Daily Journal, Gov. Phil Bryant did not use the occasion of his seventh State of the State speech to unveil any new policy initiatives. Instead, the second-term Republican spoke for about 35 minutes touting proposals that he had previously unveiled, such as providing “targeted work force training” in the community colleges for high-demand jobs and professions and expanding school choice.

MISSISSIPPI REALITY DIFFERENT FROM CRITICS’ VIEW: Gov. Phil Bryant says critics are painting a false and negative picture of Mississippi. The Republican said in his State of the State address Tuesday that critics portray Mississippi as “a declining state whose people are suffering mightily.” But, he says the state is filled with progress and is “inhabited with caring, hard-working people of all races and ages.” BRYANT TAKES PAGE FROM TRUMP’S PLAYBOOK: Gov. Phil Bryant said he got a break-a-leg call of encouragement from President Trump before he gave his seventh Mississippi State of the State address. Bryant then went on to give a wide-ranging speech with a theme that could have come from the Trump playbook: Critics and media are all wrong — he and Mississippi legislative leaders have made many great accomplishments in recent years. Read some of the highlights here.

ISSUES TO WATCH IN THE LEGISLATURE: Budget cuts, Medicaid, education formula rewrite, school choice, state lottery, roads and bridges, mental health reform, domestic violence and divorce reform, contract reform, reverse auctions, nurse practitioners, elimination of agencies, boards and commissions. For more in-depth coverage of each issue, see here.

MISSOURI

ISSUES TO WATCH IN THE LEGISLATURE: Labor, tort reform, taxes, ethics reform, funds for nursing care, and foster care reform. For more in-depth coverage of each issue, see here.

NEBRASKA

GOVERNOR RICKETTS DELIVERS STATE OF THE STATE: Nebraska Governor Pete Rickets delivered his fourth State of the State address calling the state's budget challenges the top priority as the legislature gets down to business. The governor told lawmakers, "In October, the Nebraska Economic Forecasting Advisory Board reduced the revenue forecast. While our state’s economy once again has the wind at its back, revenues continue to fall short of the board’s expectations." He said the goal this year is to mirror last year's blueprint of delivering a balanced budget without raising taxes.

STATE AND LOCAL UPDATE

RICKETTS LAUDS SENATORS FOR WORKING TOGETHER, OUTLINES TAX PLAN IN STATE OF THE STATE SPEECH: Striking a conciliatory tone and heaping praise on state senators from both parties, Gov. Pete Ricketts on Wednesday lauded lawmakers for working together to grow Nebraska and its economy. Businesses and people around the state are beginning to take notice of Nebraska, Ricketts said, helping the state achieve “record levels of employment with over 1 million non-farm jobs and the lowest unemployment rate in our state since 1999 at 2.7 percent.” The state also topped a population of 1.92 million people for the first time ever last year, he said. More here.

LOOKING AHEAD TO THE 2018 SESSION: The Lincoln Journal Star provides a preview to the 2018 session with a Star Wars theme – The Legislature Awakens. Read more here.

NEW JERSEY

GOV. CHRISTIE’S STATE OF THE STATE: Full text of GOV. CHRIS CHRISTIE’S prepared remarks for his final State of the State speech can be found here. NJ TOWNS TRY TO ELUDE GOP TAX LAW: Faced with a new federal tax law that limits state and local tax deductions, three communities in New Jersey have come up with a novel solution: They want people to donate to a town-run charity as a way of mitigating their property taxes. The three towns — Paramus, Park Ridge and Fair Lawn — announced that they would allow residents to donate the same sum they would have been charged in property taxes to pay for municipal services. Under the tax bill signed by President Trump last month, deductions for state and local taxes, including property taxes, are limited, but charitable donations are not. The new plan, like any tax loophole, is simple in theory and complex in execution, but it could work more or less like this: Paramus, for example, would start a charitable trust and a taxpayer who pays $20,000 in annual property taxes would contribute that exact amount to the charitable trust. The charitable trust would then allocate the $20,000 to various entities — the schools, the police department and other agencies — as though the donation were a tax payment. The town would then credit the taxpayer for 90 to 95 percent of the donation, making it nearly entirely deductible. (The town could factor in administrative costs to lessen a donation’s value.) But building a town-run trust to take the place of a local tax collection process is relatively uncharted waters — for one thing such a change in municipal governance would require approval by each town’s local governing body.

NEW MEXICO

MARTINEZ, LEGISLATIRE SET SPENDING PRIORITIES: GOV. SUSANA MARTINEZ and leading lawmakers proposed increases in state spending on public school education, Medicaid, public safety agencies and economic development incentives for the coming fiscal year, amid a sharp increase in state income from taxes and oil-field revenues. The two budget wish lists - from the Republican governor and the Democratic-led Legislature - both emphasize investments in early childhood education and the justice system, with pay increases assigned for teachers, prison guards, prosecutors and state workers. The Legislature's lead budget-

STATE AND LOCAL UPDATE

writing committee is seeking a $178 million increase in general fund spending to nearly $6.3 billion. The governor is seeking a $250 million increase, with more money set aside for reserves.

NEW YORK

NY TO SUE OVER FEDERAL TAX LAW: GOV. ANDREW CUOMO said New York will sue over the federal tax overhaul signed into law last month, calling it unconstitutional and an "assault on New York." In his briefing book for his State of the State address, the Democratic governor said New York will sue over the law, lead a "repeal and replace" effort and look to adjust its own state tax policy. Cuomo, who is seeking re-election in November and a prospective presidential candidate in 2020, has threatened a lawsuit over the law for weeks, saying it targets blue states like New York. Cuomo said his public campaign against the law will be called "Tax Fairness for All," and he will explore "a plan to restructure the current income and payroll tax system." Specifics of his plan will likely be released when Cuomo releases his 2018-19 state budget for the fiscal year that starts April 1. More coverage from Cuomo’s State of the State can be found here. AG’s BATTLE WITH TRUMP: ERIC SCHNEIDERMAN, New York’s attorney general, reached a milestone of sorts recently. By moving to sue the Federal Communications Commission over net neutrality, his office took its 100th legal or administrative action against the Trump administration and congressional Republicans. His lawyers have challenged Mr. Trump’s first, second and third travel bans and sued over such diverse matters as a rollback in birth control coverage and a weakening of pollution standards. They have also unleashed a flurry of amicus briefs and formal letters, often with other Democratic attorneys general, assailing legislation they see as gutting consumer finance protections or civil rights. In Mr. Schneiderman’s seventh year as attorney general, the office has been transformed into a bulwark of resistance amid an unusually expansive level of confrontation with the federal government. How far Mr. Schneiderman is willing to go in taking on Mr. Trump could define his political career, particularly in a blue state where disapproval of the president is high. The potential of the attorney general’s office for troublemaking and generating national headlines was redefined in the early 2000s by ELIOT SPITZER. Mr. Schneiderman is a less combative man who was often the target of Mr. Trump’s Twitter wrath amid a three-year civil investigation into Trump University. In the end, Mr. Schneiderman’s office extracted a $25 million settlement in the case.

NORTH CAROLINA

UNCONSTITUTIONAL GERRYMANDERING: A panel of federal judges struck down North Carolina’s congressional map on Tuesday, condemning it as unconstitutional because Republicans had drawn the map seeking a political advantage. The ruling was the first time that a federal court had blocked a congressional map because of a partisan gerrymander, and it instantly endangered Republican seats in the coming elections.

STATE AND LOCAL UPDATE

OHIO

CORDRAY, SUTTON TO MERGE OHIO GOV BIDS; TAYLOR CHOOSES RUNNING MATE: Former federal consumer watchdog RICHARD CORDRAY will join forces with former congresswoman and Obama-era official BETTY SUTTON in the race for Ohio governor, a Democrat close to the campaign said. The move comes as Democrats position to win back control of the key battleground state in November. The new team is expected to draw big-name Democratic support that could include former PRESIDENT BARACK OBAMA, FORMER VICE PRESIDENT JOE BIDEN AND U.S. SEN. ELIZABETH WARREN of Massachusetts. The Cordray-Sutton ticket still faces a crowded Democratic field. DAYTON MAYOR NAN WHALEY, EX-STATE REP. CONNIE PILLICH, STATE SEN. JOE SCHIAVONI (who announced last week that Ohio Board of Education member Stephanie Dodd will be his running mate) and SUPREME COURT JUSTICE WILLIAM O’NEILL are seeking the party’s nomination, and FORMER CLEVELAND MAYOR AND CONGRESSMAN DENNIS KUCINICH has filed paperwork for a likely run. LT. GOV. MARY TAYLOR of Green, also hoping to become the first woman elected governor in the state, will introduce a Cincinnati-area business executive as her running mate. NATHAN ESTRUTH, president and chief executive officer of Hamilton-based iMFLUX, an injection molding company, will serve as Taylor’s No. 2 in the May 8 primary. Taylor is seeking the Republican nomination for governor in a three-way contest with the tickets of ATTORNEY GENERAL MIKE DEWINE AND SECRETARY OF STATE JON HUSTED AND U.S. REP. JIM RENACCI of Wadsworth and CINCINNATI CITY COUNCIL MEMBER AMY MURRAY.

WHAT IS LEFT ON OHIO’S WISH LIST? 2017 saw a lot of talk at the Ohio Statehouse over big blockbuster issues that have been stewing in the legislature for a while. But after all that talk, several of these issues didn’t really go anywhere. There were plans to shore up the unemployment compensation fund, a task force to reform congressional redistricting, and a bill to cap high interest rates on payday lending loans. None of these issues saw any real movement. But we’re only halfway through this session, which means this year’s “bills that didn’t pass” can be 2018’s legislative wish list. Read more here.

SOUTH CAROLINA

MCMASTER BUDGET CALLS FOR TAX CUTS IN STATE OF THE STATE ADDRESS: GOV. HENRY MCMASTER on proposed $162 million in income tax cuts as the first step in a five-year plan to reduce taxes by $2.2 billion. In a letter introducing his first proposed budget, McMaster noted that South Carolina has the highest income tax rate of all states in the southeast and 12th highest in the nation. His proposed budget for the fiscal year starting July 1 calls for nearly $140 million in tax savings, as well as an additional $22 million in tax exemptions for retired veterans, firefighters and law enforcement officers. Under his proposal, the state's general fund budget would grow to $8.06 billion, an increase of $113.8 million, or 1.4 percent, over the current spending plan. Other highlights of McMaster's proposed budget include:

• Nearly $111 million in additional funding for education, including $5 million for a school safety program, $5 million for school bus leasing and $500,000 for Clemson University’s Call Me MISTER teacher retention and recruitment program.

• $44 million in increases for economic development and workforce training. • A $20 million contribution for a new state forensics lab.

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• $14 million for statewide voting machine replacement and maintenance. • $10 million for opioid response efforts • $2 million in renovations at the Richard M. Campbell Veterans Nursing Home in Anderson County.

PLENTY TO DO ON 2018 LEGISLATIVE AGENDA: The Post and Courier Editorial Board writes: “Lawmakers have a lot on their plates as they return to Columbia. Addressing the nuclear disaster should come first, but it’s certainly not the only South Carolina need awaiting legislative action. And in an election year, all eyes will be on the Statehouse.” 10 ISSUES S.C. LEGISLATORS WILL FACE IN 2018: The State looks at 10 pressing issues facing SC lawmakers in 2018 noting that legislators “are notorious for doing as little as possible in elections years.” Issues include: electricity/nuclear energy, ethics reform, water regulations, taxes, education funding, and concealed carry permitting. More here.

South Dakota

GOV. DAUGAARD STRESSES WORKFORCE DEVELOPMENT, BIPARTISANSHIP IN FINAL STATE OF THE STATE ADDRESS: The Governor outlined some of the things he would like to see this session, like further developing the state’s workforce. Daugaard says there is a shortage of workers in the state and a low number of those with post-secondary education. Other items on Daugaard’s agenda include: extending the sunset law on non-meandered waters for three years, loosening restrictions on micro-breweries, and re-allocating money to grant programs.

DAUGAARD – SOUTH DAKOTA SEEKING MEDICAID WORK REQUIREMENT: South Dakota is going to ask the Trump administration to allow the state to require some Medicaid recipients to work to qualify for the government-funded health coverage for the poor, Gov. Dennis Daugaard said Tuesday in his State of the State address. The change would apply to about 4,500 low-income, able-bodied parents who are not caring for a child under the age of 1, Daugaard told state lawmakers gathered for the first day of the 2018 legislative session. The governor proposed piloting the new requirement in Minnehaha and Pennington counties.

TENNESSEE

5 ISSUES TO WATCH IN THE NEXT SESSION: Opioids, welfare reform, juvenile justice and corrections, education, and short-term rentals. For more in-depth coverage of these issues, see here. TENNESSEE LAWMAKERS HEAD INTO SESSION WITH ELECTIONS LOOMING: Tennessee lawmakers return Tuesday for a session colored by upcoming elections and Gov. Bill Haslam's final lap before he hits his term limits. Four Democrats and 13 Republicans in the House aren't seeking re-election, including Harwell, who is running to succeed Haslam alongside four other leading Republicans and two Democrats. Three Senate Republicans have already left. Republican Senate Majority Leader Mark Norris will be gone once the U.S. Senate confirms him as a federal judge, and another Republican and Democrat won't seek re-election.

STATE AND LOCAL UPDATE

MANY LAWMAKERS ARE LEAVING TENNESSEE GENERAL ASSEMBLY: Big changes are in store for the 132-member Tennessee General Assembly next year with at least 21 current lawmakers having already announced plans to retire or having already departed, and more are expected to decide later. Their reasons range from seeking higher offices to federal appointments, disenchantment or more pressing needs at home. The most high-profile figure is House Speaker Beth Harwell, a Nashville Republican who was elected seven years ago as the first female speaker in Tennessee history. Harwell is running for governor.

TEXAS

VALDEZ KICKS OFF BID FOR GOV: LUPE VALDEZ, the former Dallas County Sheriff, formally launched her Democratic bid for governor, touting a campaign aimed at representing all Texans and listing a broad range of topics she plans to address as election season gets underway. Valdez, 70, announced late last year she was entering an already crowded and potentially competitive primary field. Ten Democrats are vying to face off with REPUBLICAN GOV. GREG ABBOTT in the November general election, including Valdez and ANDREW WHITE, the son of late Gov. Mark White. The eventual Democratic Party nominee faces long odds to unseat Abbott, who has a $40 million-plus war chest for re-election. RACES TO WATCH: Keep your binoculars on these races, each of which could be a bellwether of this election year: STATE SEN. KONNI BURTON of Colleyville and STATE REPS. VICTORIA NEAVE of Dallas and TONY DALE of Cedar Park. A Democratic electorate — or an anti-Republican one — could be bad news for Republicans like Burton and Dale. The three, taken together, will be useful in the political autopsies that take place after November’s general election. All other things being equal (they’re not equal: Neave will try to survive any political repercussions from drunkenly driving her car into a tree last June), the incumbents should all be taking the oath of office again in a year. But political winds are dangerous to down-ballot candidates like those running for the Texas Legislature.

VIRGINIA

REPUBLICANS TO MAINTAIN CONTROL OF HOUSE OF DELEGATES – APPEALS COURT DENIES DEM MOTION TO KEEP THOMAS FROM SWEARING IN: The U.S. Court of Appeals for the Fourth Circuit entered an order at 9:50 a.m. Wednesday denying a Democratic-aligned law firm’s longshot emergency motion to prevent REPUBLICAN DEL.-ELECT BOB THOMAS from assuming the 28th District seat today. The three-judge panel did not provide a written ruling. Thomas defeated DEMOCRAT JOSHUA COLE, a pastor from Stafford, by 73 votes in the race to succeed Republican House Speaker Bill Howell. Republicans will have a 51–49 edge in Richmond’s lower chamber barring any last-minute developments.

VA DEMOCRAT SHELLY SIMONDS CONCEDES TIED NEWPORT NEWS RACE: SHELLY SIMONDS, the Democratic candidate for a Virginia House of Delegates seat, conceded the election to REPUBLICAN DAVID YANCEY on Wednesday, marking the end of a wild election that came down to picking names from a

STATE AND LOCAL UPDATE

bowl. Last week, state officials determined the tied vote for the 94th District seat by drawing Yancey’s name, thus ensuring Republicans would retain control of the House of Delegates. The unusual election results had caught national attention. While Yancey was initially declared the winner of the November election, a recount deemed Simonds the victor by one vote. But when a court reviewed the recount, Yancey’s lawyers found a single ballot they believed should have been counted for the Republican. The court agreed to accept it, and the race became a tie.

COX ELECTED SPEAKER OF THE HOUSE: In a 98-0 vote, the Virginia House of Delegates elected KIRK COX, a Colonial Heights Republican, as the next House speaker, enacting a long-planned succession of power. The House elected Cox in a 98-0 vote, with no vocal opposition after a contentious election season in which Republicans lost 15 seats in the House but survived a series of recounts, lawsuits and a tiebreaker to keep a 51-49 majority.

GENERAL ASSEMBLY CONVENES, FORECASTS MAJOR ISSUES: Last session, legislators filed 3,201 pieces of legislation. But that number could be higher this year because delegates and senators are allowed to pre-file an unlimited number of bills during long sessions that occur in even-numbered years. Major issues to be considered this session include: electric utility regulation, taxes, minimum wage, election reform, the Patrick County hospital, Interstate 73, treatment of animals, hunting on Sundays, and gourmet shops.

WASHINGTON

4 ISSUES TO WATCH IN THE NEXT SESSION: How Democrats will wield power, education funding, capital budget vs. water policy, and whether the legislature will be able to adjourn on time without requiring a special session. For more in-depth coverage of these issues, see here.

INSLEE LASHES BACK AT SESSIONS ON MARIJUANA: GOV. JAY INSLEE expressed a defiant attitude toward U.S. ATTORNEY GENERAL JEFF SESSIONS, who announced Jan. 4 the rescinding of Obama-era guidelines that assisted the legalization of nonmedical marijuana in Washington, seven other states and the District of Columbia. Inslee, flanked by WASHINGTON STATE ATTORNEY GENERAL BOB FERGUSON, SEN. ANN RIVERS, R-LA CENTER, AND REP. DAVID SAWYER, D-TACOMA, voiced vehement opposition to Sessions’ announcement, calling out President Donald Trump’s administration for going against what Inslee called progress.

INSLEE TALKS CARBON PRICING, TRUMP, AND OPEN STATE GOVERNMENT: In an interview with The Seattle Times last week, GOV. JAY INSLEE discussed his new carbon plan, which would tax carbon and use some of the revenue to help fund K-12 education. He also discussed the Trump administration and open government at the Legislature. Read the transcript here.

DEMS TAKE ON NEW LEADERSHIP ROLES IN LEGISLATURE: Hanging in SHARON NELSON’S new office is a popular print depicting a group of ducks crammed into a small, open boat in dark, stormy seas — a version of the allegorical “Ship of Fools.” It’s a reminder for Nelson, the Washington state Senate’s new Democratic majority leader, to question her decisions. Along with new Democratic budget writer SEN. CHRISTINE ROLFES and other leaders, Nelson — elected to the Senate in 2010 after a few years in the House — must navigate a Democratic Legislature operating with the thinnest of margins. Nelson leads a Senate with a one-vote majority,

STATE AND LOCAL UPDATE

wrung from the Democratic victory in November’s 45th District Senate election. Her House counterpart, Democratic SPEAKER FRANK CHOPP of Seattle, has a similarly slim two-vote majority. Lawmakers are tasked with finding an agreement to satisfy the Washington state Supreme Court’s latest K-12 education-funding order — which could potentially cost $1 billion. And Democrats and Republicans remained deadlocked over a $4 billion capital-construction budget and rural water-use legislation. Senate Republicans last year blocked passage of the capital budget when Democrats didn’t approve their water-use bill.

WEST VIRGINIA STATE REVENUE COLLECTIONS BREAKS 59-MONTH LOSING STREAK: For the first time in 59 months — since 2012 — West Virginia tax collection for December lacked one thing: red ink. The collection of $367.54 million topped estimates for the month by $16.8 million, or 5 percent. After years of revenue shortfalls and mid-year spending cuts, the state passed the midpoint of the 2017-18 budget year in the black, with year-to-date collection of $1.968 billion exceeding estimates by $2.7 million. Year-to-date collection also is more than $106 million higher than the same point in 2017, when the state had collected but $1.86 million in tax revenue and was on pace to finish with a $165 million budget shortfall. More here. GOVERNOR, LAWMAKERS OPTIMISTIC ABOUT COOPERATION IN CHARLESTON: The West Virginia Legislature will gavel in the first day of its 60-day regular session on Wednesday, January 10, with education and tax reform legislation already taking shape. Justice has said he foresees a more “harmonious” legislative session in his second go-round. Senate President Mitch Carmichael agreed, saying he is more optimistic and sees a better working relationship with the governor this session. At last week’s West Virginia Press Association Legislative Lookahead, lawmakers addressed issues they expect to come up during this year’s session. While lawmakers from the House Committee on Finance and the Joint Committee on Tax Reform said they do not anticipate legislation to change personal income or consumer sales tax, they do expect to introduce a bill to eliminate the business inventory tax – a tax on business equipment. More here.

WYOMING

INTERESTING RACES IN 2018: So far, the biggest Republican names being floated for the race to replace GOV. MATT MEAD have yet to make any announcements. SECRETARY OF STATE ED MURRAY, STATE TREASURER MARK GORDON AND HOUSE SPEAKER STEVE HARSHMAN, a Casper Republican, have declined to say whether or not they will enter the race. With Murray, Gordon and Harshman all undecided — or at least yet to make a public announcement and start campaigning — the field belongs to the Democratic candidate MARY THRONE, a former state lawmaker, and three political novices in the Republican field: BILL DAHLIN, HARRIET HAGEMAN AND REX RAMMELL.