Job Creation and State Fiscal Relief Resolutions Moving in the States

Job Creation and State Fiscal Relief Resolutions Moving in the States

Thursday, February 11, 2010




Job Creation and State Fiscal Relief Resolutions Moving in the States

In the State of the Union speech, President Barack Obama stated:

"The devastation remains.  One in 10 Americans still cannot find work.  Many businesses have shuttered.  Home values have declined.  Small towns and rural communities have been hit especially hard.  And for those who'd already known poverty, life has become that much harder...  That is why jobs must be our number-one focus in 2010, and that's why I'm calling for a new jobs bill."

With the fiscal crisis forcing states to layoff hundreds of thousands of teachers, nurses and police officers, the need for more federal job creation and state fiscal relief support is clear.  And there is substantial momentum building around this issue in the states.

  • New Mexico Rep. Eleanor Chavez introduced HJM39, a joint memorial calling on the federal government to pass a jobs creation plan.  The memorial passed the House of Representatives last Saturday and will now be considered by the state Senate. 
  • Similar resolutions are likely to be introduced in Illinois, Nevada and Vermont.  New Yorkers for Fiscal Fairness (NYFF) and the Progressive Leadership Alliance of Nevada (PLAN) are working with lawmakers in their states to highlight the acute need for increased federal support.
  • Along with Maine Senate President Libby Mitchell, House Speaker Hannah Pingree held a press conference this past Tuesday to garner awareness of Maine's economic and fiscal situation and highlight the need for another round of federal aid.

If you are a lawmaker interested in introducing a resolution requesting the federal government to move a jobs bill, PSN can assist you in that effort.  Please contact us at for support.  General resolution language can be found here.

Additionally, over one hundred legislators from thirty-one states have signed on to Progressive States Network's letter calling on the President and Congress to move swiftly on job creation and state fiscal relief.  State lawmakers can sign onto the letter here, while citizens and advocates can use this online tool to contact their state legislators and ask them to add their signature.

The Need and Public Support for Action:  As we discussed in January, the passage of the American Recovery and Reinvestment Act (ARRA) in early 2009 was critical in preventing a full collapse of the national economy and helping states address huge budget gaps.  The Congressional Budget Office (CBO) estimates that the ARRA created or maintained 600,000 to 1.6 million jobs as of September 2009 and found it decreased the unemployment rate by almost one percentage point.  Unfortunately, millions of Americans are still out of work and states are struggling to find ways to deal with enormous deficits and plummeting revenue.  Projected governors' budgets could lead to layoffs amounting to an additional 900,000 jobs lost in the economy.

There is extensive bipartisan support for federal funding for job creation and aid to states.  Winthrop University conducted a poll in late 2009 and found that 71.6 percent of respondents favor funding for jobs (94.5 percent identify as Democrats, 53.4 percent Republican, 68.9 percent Independent) and 62.7 percent support "giving aid to states in serious financial trouble" (80.6 percent Democrat, 50.9 percent Republican, 63.6 percent Independent). 

As the U.S. Senate moves on a jobs package within the next few weeks, timing is crucial.  State lawmakers must send a strong message to Washington that the country needs jobs and states need relief.

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Hypocrisy of "State Rights" Conservatives on Health Care

Both national conservative leaders and a number of state legislators have attacked the current federal health bills as infringing on "state sovereignty."  Yet they oddly ignore the fact that two of the main planks in conservative health proposals proposed by Congressional leaders -- allowing insurance companies to sell across state lines and overriding state medical malpractice laws through "tort reform" -- are far clearer attacks on state authority.  

The main difference is that the progressive health reform bills already passed in Congress would strengthen consumer rights, while the conservative counter proposals would benefit corporate interests and weaken state consumer protections.

  • Take the proposal to allow insurance companies to sell across state lines.  The Right has been shopping this scam for years; it sounds good until you recognize that what the right-wing is proposing is for those insurance companies to be able to sell insurance in a state while ignoring all state regulations.  Companies could ignore rules prohibiting gender discrimination, charge the elderly more for insurance than allowed under state community rating rules, eliminate maternity benefits, or ignore rules requiring annual reviews of insurance increases.  Insurance companies could essentially pick their own regulations by setting up shop in a state with weak consumer protections, then sell policies that violate local state law in every other state in the nation.
  • Similarly, "tort reform" is just a code word for the federal government gutting state medical malpractice laws.  Patients would lose legal rights they previously had under individual state law.  Despite medical malpractice being a tiny percentage of health care costs — less than two percent of overall spending — conservatives blithely see striking down state laws across the country as a top priority.

And the reality is that neither solution will cut medical costs in any significant way; in fact, the proposal to allow insurance companies to sell products across state lines would actually increase insurance costs for many consumers, especially the sick and the elderly who would see premiums skyrocket, as documented in this New America Foundation report.

Part of Larger Trend of the Right-Wing's "States Rights" Hypocrisy:  This hypocrisy is part of a broader trend of the right-wing using "states rights" rhetoric to mask a pro-corporate, anti-consumer rights agenda.  From 2001 to 2006, the right-wing majority in Congress voted over 57 times between 2001 and 2006 to preempt state laws, including action to preempt state limits on air pollution, to preempt state regulation of contaminated food, and to block tougher state regulation of Internet "spam."

Some grassroots conservatives may believe the "states rights" rhetoric around health care reform, but they are being used by corporate interests promoting federal laws that would actually further the weakening of state consumer protection laws -- all without providing significant additional coverage and hurting the sickest and most vulnerable patients who most need strong patients' rights.

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Eye on the Right: Arizona's Failed Experiment with Tax Cuts

How are Arizona's right-wing legislators responding to the state's most severe fiscal crisis since the Great Depression?

Massive corporate income tax cuts, of course.

A "Corporate Bailout":  Arizona's "job recovery act" (HB2250), passed the state House of Representatives in late January and included such corporate subsidies as reducing the assessment for business property taxes, cutting the the corporate income tax rate from 6.968 to 5 percent over four years, and lowering income tax rates by 10 percent.  Ignoring demands by progressive legislators to at least postpone the vote until a fiscal impact study could be conducted, the leadership just has taken steps towards further fiscal calamity.

Opponents of the measure in the legislature point out that if businesses property taxes are reduced, homeowners will have to pay a greater share.  Rep. Tom Chabin states, "[i]t is very clear that homeowners today cannot sustain this kind of burden."  Assistant Minority Leader, Rep. Kyrsten Sinema adds, “[t]he reality is that it’s a corporate bailout package” that would harm the economy and benefit CEO's rather than the middle and working class.

How Arizona's Tax Cuts Fed Their Current Fiscal and Economic Crisis:  The state has become so averse to taxes that a picture of the Sesame Street character, Grover, hangs in the Senate Republican staff room.  The caption under the photograph reads: "Ask Grover," referring not to the beloved children's puppet, but to Grover Norquist, the head of Americans for Tax Reform, an organization that opposes raising taxes and asks lawmakers to sign on to a pledge to reject any and all increases.  Arizona has one of the highest percentage of lawmakers who have added their signatures to the pledge.  Since 1992, the state has approved 42 tax cuts to its three major revenue sources--personal and corporate income, and sales--and eliminated statewide property taxes that accrued to the general fund. 

The result?

Despite right-wing promises that tax cuts prevent job losses and foster economic growth, the state now faces a projected FY2011 budget deficit of $2.6 billion and has suffered the largest job losses of any state in the nation.  In fact, since the current economic recession began in December 2007, Arizona has lost 265,000 jobs, or 9.9 percent of the state's employment.  Even Michigan, with an economy dependent on a shrinking car industry, has not seen those kinds of losses as a percentage of jobs during the recession.  Arizona has some of the highest foreclosure rates in the country, 18.9 percent of the state lacks health insurance and 276,500 Arizona children do not have coverage.  Since 2000, Medicaid rolls have increased exponentially, reaching over 1.3 million in August 2009.

Arizona Fails to Invest in the Future:  Having systematically cut taxes and underfunded education and other long-term social investments for years, the state last year continued to dig a deeper hole by slashing public health, all levels of education, and even temporary health insurance for people with serious medical problems.  Gov. Jan Brewer even approved a proposal to sell Capitol buildings to private firms, which will just cost the state even more in rent payments in the future-- a classic pattern of right-wing state leadership engaging in short-term thinking at the expense of long-term fiscal and economic health.

As PSN has detailed, utilizing progressive tax increases to invest in the building blocks of growth, like education, health care, transit, et cetera, leads to higher economic growth in the long-term and is a far better alternative to massive budget cuts.  Grover's picture needs to come down off the wall at the Arizona state capitol.

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Research Roundup

The Case of the Missing Jobs, Revisited - Good Jobs First finds that ARRA data is significantly undercounting jobs created due to federal spending because states are not reporting any jobs created for many projects already underway.

From Foreclosure to Re-Redlining: How America’s largest financial institutions devastated California communities - Using original research using lending and loan modification data that have been largely inaccessible and seldom analyzed, this report from the California Reinvestment Coalition finds that high cost predatory loans in the past have now led to an alarming trend of dispossession in neighborhoods with high concentrations of African American and Latino residents.  Those lenders continue to refuse to work with families to prevent foreclosures.  The report recommends strong federal and state regulatory reform, more help for struggling homeowners and continued vigilance in enforcement of fair housing and fair lending rules.

Spotlight’s questions about TANF - With the nation's welfare program, Temporary Assistance to Needy Families (TANF) expiring in October, Spotlight on Poverty and Opportunity has asked Governors, Mayors, and state legislators to give their insights on the program.  Over the next three weeks, Ohio Governor Ted Strickland, former Indianapolis Mayor Stephen Goldsmith, Savannah Mayor Otis Johnson, and former Wisconsin Governor Scott McCallum answer one question each week about TANF in the 21st century.  Another group of elected officials will contribute during the following weeks.

Health care studies highlight gains from pharma reforms, savings on "medical homes", and rising projected costs in health care:

  • Pennsylvania's academic detailing program launched in October 2005 has an annual cost of $1 million.  However, an evaluation of the program has found a significant decrease in inappropriate prescribing, leading to dollar savings that offset the cost of the program.  The program is looking to expand to other state-funded entitlement programs.

  • Medicaid and Managed Care: Key Data, Trends, and Issues, a policy brief from the Kaiser Commission on Medicaid and the Uninsured provides an overview of the Medicaid program’s increasing reliance on managed care to deliver services.  The goal of this approach is to improve access to care and coordination of care by assuring that enrollees have a "medical home" with a primary care provider, and to rely more heavily on preventive and primary care.  Adopting managed care also gives states more cost predictability and control over their Medicaid programs, and contracts with managed care plans offer states a mechanism for holding plans accountable for the quality of care they provide to Medicaid enrollees.

  • Health Spending Projections Through 2019: The Recession’s Impact Continues: According to a new government study published last week in Health Affairs, national health expenditures are projected to have risen to $2.5 trillion in 2009, or 17.3 percent of the Gross Domestic Product (GDP), the largest one-year increase since the federal government began keeping track in 1960.  The 1.1% point increase in expenditures was boosted by spending on public health programs amidst a deepening recession.  These findings underscore the need for comprehensive health care reform that will help rein in the unsustainable spending growth that is placing an increasing burden on American families, businesses, and state and local governments.  Of greater concern for the future of our health system and the health of our economy is the projection that health spending will increase to nearly one-fifth (19.3%) of GDP by 2019, with a growing number of uninsured and underinsured as more businesses find it difficult to pay for adequate insurance coverage for employees.

Please email us leads on good research at


Job Creation and State Fiscal Relief Resolutions Moving in the States

Center on Budget and Policy Priorities - Additional Federal Fiscal Relief Needed to Help States Address Recession's Impact
Center on Budget and Policy Priorities - Recession Continues to Batter State Budgets; State Responses Could Slow Recovery - Economist Mark Zandi: On stimulus, jobs, state finances, inflation and the year ahead
Moody's Analytics - The Case for Another Round of Federal Aid to State & Local Govt
WhiteHouse.Gov - Remarks by the President of the United States in State of the Union Address
Winthrop University - Winthrop Poll Results - November 2009 Findings
Center on Budget and Policy Priorities - Governors’ New Budgets Indicate Loss of Many Jobs if Federal Aid Expires

Hypocrisy of "State Rights" Conservatives on Health Care

New America Foundation - Across State Lines Explained: Why Selling Health Insurance Across State Lines is Not the Answer
Americans for Insurance Reform - True Risk: Medical Liability, Malpractice Insurance and Health Care
Progressive States Network - Protecting State Health Care Standards
Progressive States Network - Restoring State Authority: An Agenda to Restrict Preemption of State Laws
U.S. House Oversight and Government Reform Committee - Congressional Preemption of State Laws and Regulations 
Open Salon- What the Right Won't Admit About Tort Reform

Eye on the Right: Arizona's Failed Experiment with Tax Cuts

Arizona Daily Star - A needed increase in taxes won't hurt Arizona's economy
Ballot Initiative Strategy Center - Fiscal/Budget Issues
Center for American Progress - State of American Political Ideology, 2009: A National Study of Values and Beliefs 
Center on Budget and Policy Priorities - Recession Continues to Batter State Budgets; State Responses Could Slow Recovery
Pew Center on the States - Beyond California
Progressive States Network - Revenue Options in 2010: Making the Case and Debunking the Myths
Progressive States Network - State Job Creation Strategies Part I: Finding the Money and Investing in Human Capital and Physical Infrastructure


The Stateside Dispatch is written and edited by:

Nathan Newman, Executive Director
Nora Ranney, Legislative Director
Marisol Thomer, Outreach Director
Fabiola Carrion, Broadband & Green Jobs Policy Specialist
Enzo Pastore, Health Care Policy Specialist
Suman Raghunathan , Immigrant Rights Policy Specialist
Altaf Rahamatulla, Tax & Budget Policy Specialist
Julie Bero, Executive Administrator and Outreach Associate
Mike Maiorini, Online Technology Manager

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