Top 10 of 2013: As Sessions Begin, Lawmakers May Find Some Solace in Knowing They Face Several Common Challenges

Article excerpt

A still-sluggish economy, uncertainty about federal fiscal issues and a host of other challenges will greet the nation's 7,383 legislators this month as many begin their sessions. Even though half of these lawmakers will have fewer than two years' experience in the legislature, they will take on a host of major issues ranging from stabilizing budgets to controlling health care costs, from planning for future energy needs to encouraging job growth. NCSL's policy experts have identified several issues most likely to be on the greatest number of legislative agendas this year. This an overview of those top 10 issues.


Stabilizing Budgets

As the nation's economy yawns and stretches its way out of the Great Recession, state officials are forecasting year-over-year tax revenue growth for the third consecutive year and 10th consecutive quarter, what some have called a "weakovery." The growth in tax collections has slowed, and the robust return of state collections that typified previous economic recoveries remains elusive. Projections for fiscal year 2013 reflect this slow growth trend as officials in nearly three-fourths of the states and the District of Columbia anticipate total tax revenue growth between 1 percent and 4.9 percent.

With "fiscal cliff" and "sequestration" now at the front of the economic lexicon, states are increasingly wary of how federal actions to reduce the deficit will spill onto their budgets. Actions to reduce the federal deficit may pose a real challenge to states since state-federal discretionary and other grant programs constitute approximately 12 percent of the federal budget. Many see them as the "softest" or most vulnerable part of the budget. Think sequestration, and reductions to education, energy, social services, job training, environment and justice programs come to mind. And even if sequestration is swept aside, 10-year statutory discretionary spending caps and other cuts await.


State lawmakers will spend much of their time on budgets, with revenue increases and tax cuts sure to be topics for heated discussions. Some states will examine tax expenditures (exemptions, deductions and credits) as an alternative to hiking rates. And some will look for new avenues of potential revenues.


Addressing Health Care

Within this uncertain economic context, lawmakers must tackle the federal Patient Protection and Affordable Care Act (PPACA), which has created a push-pull situation for states aiming to control costs as well as make decisions about the law's provisions. With health care costs continuing to outpace inflation, state lawmakers are searching for ways to reduce expenditures and improve efficiencies, especially in Medicaid programs.

At the same time, policymakers must decide whether to expand Medicaid eligibility to millions of uninsured Americans with incomes less than 133 percent of the federal poverty guideline. Other decisions regarding the federal law involve establishing insurance exchanges, ensuring that health information technology works properly, addressing shortages in health workers, and developing prevention and treatment strategies to reduce the incidence and severity of chronic conditions.

Changing the way health care is delivered and charged has become a priority for legislators, especially as they deal with the federal law. Payment models that reward results rather than services provided, is considered by many crucial to corralling Medicaid expenses.

More states will be experimenting with the medical home model, which relies on a team of providers--such as physicians, nurses, nutritionists, pharmacists and social workers--to meet patients' needs for certain Medicaid or Children's Health Insurance Program beneficiaries.

States are also looking to bundled payment models and accountable care organizations that give providers an incentive to improve efficiencies in their practice. …