28 chamber executive Spring 2010

by ian scottBarely two years ago, Chamber Execu-tive ran a cover story titled “Catching and Tracking Contagious Issues.” In the article, my colleague Lisa Itamura high-lighted the “noticeable trend of policies spreading from state to state,” and specu-lated about the factors that drive certain issues to become “contagious.” To illus-trate how state/local policy proposals can

spread, she traced plastic bag bans from San Francisco’s 2005 bag tax and 2007 ban through similar proposals in Oakland, Portland, Boston and eventually the state of California. And while the issue is still active (Washington, D.C., implemented a 5-cent tax on plastic bags this January), don’t you yearn for a time when plastic bags were the most pressing issue?

That cover story from our Fall 2007 issue marked the launch of the Policy Clearinghouse, ACCE’s platform for chamber lead-ers to learn and share information about emerging state and local public policy issues. Two years and one presidential elec-tion later, many chambers are now focused on a different set of issues and faced with a vastly altered political climate.

fedeRal foCusOver the past 18 months, federal-level policy issues have taken on a much bigger role for many local chambers across the country. In a recent quick poll of the ACCE Government Relations Division, 64

percent of respondents say that they concentrated more advocacy effort on federal-level policy in 2009 than during any other year this past decade. That is no surprise when you look at the laundry list of issues debated in Washington last year: Card Check, health-care, cap-and-trade, and financial reform all have the potential to fundamentally reshape America’s business landscape.

“For years we’ve worked in concert with the U.S. Chamber on federal-level issue advocacy,” says Jack Camper, IOM, CCE, president of the Tucson (AZ) Metro Chamber of Commerce. “But with the dramatic impact that issues like Card Check could have on local business communities, it’s now incumbent on local chambers to make federal advocacy a priority.”

The focus on big federal issues has at least one potential pay-off: members are paying more attention to chamber efforts. In the same Government Relations Division poll, respondents were asked to describe how member engagement in their advocacy program changed during 2009. Sixty-four percent report an increase in engagement, while 13 percent have experienced a dramatic increase. No one says interest has fallen.

state budgets in peRilThe dramatic upsurge in federal-level policymaking doesn’t mean that it’s all quiet on the state/local front. While some issues, like local immigration enforcement, have slowed, there is still plenty to keep the business community busy.

State budget insolvency is probably the most ubiquitous and imminently pressing concern for local businesses. According

Contagious issues on the RadaR sCReenA Policy cleAringhouse uPdAte

30 chamber executive Spring 2010

to the Fall 2009 Fiscal Survey of the States, a report released semi-annually by the National Governors Association and the National Association of State Budget Officers: “States are cur-rently facing one of the worst, if not the worst, fiscal periods since the Great Depression.” Revenue from every source has declined, leaving states with a combined $256 billion in budget gaps between fiscal year 2009 and fiscal year 2011. Most states are constitutionally mandated to balance their budgets, and with no federal stimulus to backfill the gaps, it seems almost certain that they'll have to substantially cut spending and locate new revenue sources in 2010.

For the business community, this translates to slashed spending on important programs like education and economic development and the threat of burdensome new taxes at a time when most businesses are already struggling. The cuts are hap-pening; the taxes are, too.

tax hikes on the wayThe first major statewide tax hike to garner national headlines happened this January in Oregon, where voters approved two ballot measures raising $700 million in new taxes.

Measure 66 raises income taxes by 2 percent for individuals earning more than $125,000 a year and couples whose income exceeds $250,000. Measure 67 raises taxes on businesses, including an increase in the corporate minimum tax. Both mea-sures are retroactive to 2009, and will hit small business owners hard. While 54 percent of voters decided to increase taxes, the burden for generating that $700 million in new tax revenue will fall primarily on Oregon's businesses and business owners.

“In battling these tax proposals, we were challenged with a broad lack of understanding about the importance of the free market system,” says Jason Brandt, director of public affairs for the Salem (OR) Area Chamber of Commerce. “Oregon vot-ers were taken in by misleading and persuasive union ads that highlighted Oregon's corporate minimum tax of $10. Much more needs to be done throughout Oregon and the country to help voters realize that private sector employers fuel local economies.”

The statewide campaign to approve these tax hikes was large-ly funded by public employee unions which outspent a coalition of chambers, trade associations and tax advocates by more than $2 million. “What happened in Oregon is a perfect example of the undeniable power of the union machine used to influence elections,” says Brandt.

Support for this kind of tax hike plays off growing populist sentiment and is fanned by anger at Wall Street. Other states could face similar tax proposals, particularly as the reality of budget deficits sets in.

the silveR lining The Policy Clearinghouse is not only tracking potentially oner-ous issues, we’re also following smart policy proposals by cham-bers. In this year of budget woes, some of the best ideas have been solutions to state budget challenges.

Last fall, the Salt Lake (UT) Chamber proposed a strategy to close the state budget gap by cutting spending and tapping rainy day funds. Their plan preserves spending for K-12 and higher education, stopping short of calling for any new taxes.

“The challenge is not just to balance the budget,” says Lane Beattie, president and CEO of the Salt Lake Chamber. “The challenge is to balance the budget in a manner that propels our economic recovery and reclaims Utah’s long-term economic leadership among states.”

The Kentucky Chamber has also been an active proponent of closing the budget gap through smart spending cuts and struc-tural changes. Its “Leaky Bucket” report, released last Novem-

In a recent quick poll of the ACCE Government Relations Division, 64% of respondents say that they concentrated more advocacy effort on federal-level policy in 2009 than during any other year this past decade.

chamber executive Spring 2010 31

ber, called for a re-examination of three specific policy areas that dramatically impact the state’s bottom line: corrections and sentencing, Medicaid, and public employee health benefits.

"Businesses and families are having to re-evaluate their own budgets and spending in this tough economy; state govern-ment shouldn't be exempt from these difficult decisions," says Bryan Sunderland, director of public affairs for the Kentucky Chamber. "Our Leaky Bucket report is the perfect analogy for the state's budget situation: no matter how much additional tax revenue is poured in, more will always be needed without addressing how the money is spent." He adds, "This report is part of our Chamber’s proactive approach to addressing the state’s budget challenges, rather than simply reacting to a num-ber of onerous business tax proposals.”

still on the RadaR sCReenTax and budget issues may dominate attention for the foresee-able future, but the Policy Clearinghouse is tracking other important, potentially contagious state and local issues.

We watched intently this fall as Greater Spokane Incorpo-rated fought Proposition 4, a collection of nine city charter amendments innocuously named the Community Bill of Rights. The Community Bill of Rights would have guaranteed city resi-dents the right to a locally-based economy, affordable housing, affordable healthcare, renewable energy, and prevailing wages,

but it made no provision to pay for those rights. Thanks to the business community’s hard work, voters ultimately rejected this amendment at the polls, but don’t be surprised if another community is faced with a similar struggle in the near future.

In the category of land use, Hometown Democracy is on the Florida ballot for this November. Hometown Democracy is a proposed constitutional amendment that would mandate voter approval through ballot referendum for any changes to a municipality’s comprehensive plan. If it passes, voters — not their elected representatives or community planning boards — would decide whether to approve new commercial or residential developments. The logistical headache of voting on every zoning code change would bring growth in the state to a standstill.

Many things have changed since the Policy Clearinghouse was launched, and some issues are still with us. What hasn’t changed, however, is the responsibility of chambers of com-merce to represent the interests of private sector business with elected officials at all levels of government. The importance of your role as advocate, lobbyist and policy leader has never been greater, and ACCE is here to help.

Ian Scott is ACCE’s director of community advancement. Find him on Twitter at ianscottacce, email him at iscott@acce.org or call him at (703) 998-3530.

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