StatelineMidwest Vo l . 2 0 , N o. 6 • J u n e 2 0 1 1

Stateline Midwest is published 12 times a year by the Midwestern Office of The Council of State Governments.

Annual subscription rate: $60. To order, call 630.925.1922.

CSG Midwestern Office StaffMichael H. McCabe, DirectorTim Anderson, Publications ManagerCindy Calo Andrews, Assistant Director Ilene K. Grossman, Assistant DirectorLisa R. Janairo, Senior Policy AnalystLaura Kliewer, Senior Policy Analyst Gail Meyer, Office ManagerLaura A. Tomaka, Senior Program ManagerKathryn Tormey, Policy Analyst/Assistant Editor Kathy Treland, Administrative Coordinator and Meeting Planner

INSIDECSG Midwest Issue Briefs 2

Around the Region 4Getting the most out of spending on roads, and revamping nation’s flood insurance program

Question of the Month 5How are state-supported passenger rail routes funded?

Profile 8Wisconsin Speaker Jeff Fitzgerald and Senate Majority Leader Scott Fitzgerald

• New economic development measures get OK

• A look at recent Great Lakes bills in the states

• Proposals make hunting a constitutional right

• New incentives to restructure long-term care

Feature Story 5A look at the rules that impact minority-party rights and powers in state legislatures

FirstPerson 9Kansas Gov. Sam Brownback on his state’s new Rural Opportunity Zones

CSG News & Events 10• CSG Midwest secures grant to continue work on behalf of Great Lakes Legislative Caucus

Capitol Clips 12• Illinois adopts sweeping reform of its K-12 education system

• New Kansas program seeks to increase state’s number of engineering graduates

• Ohio ‘pill mill’ law designed to address problem of prescription drug abuse

• Nebraska reaches compromise to alter how public-sector labor disputes are resolved

• CSG’s ‘The Book of the States’ now available online

When officials at the Wisconsin manufacturing company Spee-Dee Packaging Machinery began

seeking ways to expand the business, it became clear that one of their best options was to export.

The 30-year-old firm — which makes automated machines used to measure and dispense dry foods such as coffee and cereal — primarily sells its equipment to large businesses (many of them are Fortune 500 companies) and, as a result, has a limited U.S. customer market.

“We needed to find other customers, so it was important for us to look glob-ally,” says Timm Johnson, vice president for sales and manufacturing at Spee-Dee, which employs 45 people and is based in the southeast Wisconsin town of Sturtevant.

But just as is the case for many other small- and medium-sized firms, export-ing was not an easy step for Spee-Dee.

How would the staff at a small com-pany find the time — and gain the expertise — to understand different global markets, overcome language bar-riers, find buyers and develop an overseas presence?

The decision to move ahead with an export plan was not taken lightly, Johnson says, and he credits the assis-tance provided by the state with helping the company through the process.

Spee-Dee is an early success story: In less than a year, exports have helped increase the company’s sales figures by $300,000.

And as states in the Midwest look to rebound from the Great Recession, these stories of exporting success will be one barometer of the health of the region’s economy.

“Ninety-five percent of the world’s customers live outside of the United States,” notes Laura Baughman, an econo-mist with Trade Partnership Worldwide, a

trade and economics research firm.She adds that the U.S. does not have

the world’s fastest-growing economy, so growing and emerging markets are good targets for American companies.

Room for growth: Exports lag compared to other countries In the Midwest, with its rich tradition

as a global leader in the manufacturing and agricultural sectors, states have long relied on their export economies.

Today, exports account for a signifi-cant portion of total state gross domestic product in all 11 Midwestern states — from 11.8 percent in Michigan to 4.5 percent in South Dakota, according to 2008 data compiled by Baughman for the Business Roundtable, an association of CEOs at leading U.S. companies. (See table on page 6 for percentages for all 11 Midwestern states.)

Yet these figures are much smaller than those of many key U.S. trading part-ners and competitors, note the authors of a fall 2010 report by the Brookings Institution.

For example, exports account for 35.8 percent of GDP in China and 35.1 percent in Canada.

Though exporting is stil l vitally important to the Midwest, the region has lost some of its dominance in recent years.

“The region can no longer take it for granted that it will be an export power-house,” says Jennifer Bradley, a co-author

Trade partners: States help budding exportersRise in exports key to region’s long-term prosperity by Ilene Grossman (igrossman@csg.org)

PLeASe TuRN TO PAGe 6

Common export services provided by states* 1) Export counseling for firms

2) Trade missions (may include travel support)

3) Training programs and seminars

4) Market research

5) Overseas trade offices or representatives

6) Trade shows (may include travel support)

7) Training on export readiness

8) Strategy development for entering new markets

9) Searches for sales agents/distributors

* Ranked in order, based on number of survey respondents who said service was provided to businessesSource: State International Development Organizations (2010 survey)

Employees use Spee-Dee Packaging Machinery equipment at a frozen-food plant. Spee-Dee recently began exporting its products, thanks in part to the help of the state’s Bureau of Export Development. Increasing export activity is seen by many economists and policymakers as critical to long-term economic growth for the Midwest.

T H E M I d w E S T E R N O f f I C E O f T H E C O u N C I L O f S T A T E G O V E R N M E N T S

� STATELINE MIDWEST JuNe 2011

CSG MidweSt Issue BrIefsIssue Briefs cover topics of interest to the various groups and policy committees associated with the Midwestern Office of The Council of State Governments. Located in suburban Chicago, CSG Midwest provides staffing services for the Midwestern Legislative Conference, Great Lakes Legislative Caucus, Midwest Interstate Passenger Rail Commission and Midwestern Radioactive Materials Transportation Committee. More information is available at www.csgmidwest.org.

Lawmakers across the Midwest are seeking ways to support and expand existing and new economic development programs. In North

Dakota and Michigan, bills recently signed into law will ensure those states’ commitment to technol-ogy-based economic growth will continue.

North Dakota’s biennial budget includes $12 million to maintain the state’s Centers of Research Excellence. Through the centers, the state’s higher- education campuses partner with the private sector to commercialize projects in several targeted areas: renewable fuels development, energy workforce training and technology, aerospace, electronics, advanced manufacturing, and other technical research-and-development areas.

The approved appropriation is lower than the $20 million requested by Republican Gov. Jack Dalrymple to expand the program. (He wanted to restructure the existing centers and provide additional funding for three new centers

that would have focused on commercialization, entrepreneurship and workforce.) However, the $12 million will allow the state to continue its investment in infrastructure and research capacity at the existing 18 centers.

The North Dakota budget also includes funding for technology-based entrepreneurship grants and establishes a program to provide matching grants for startup technology businesses.

The new $1 million Small Business Technology Investment Program will provide grants of up to $50,000; it requires a two-to-one match from a North Dakota angel investment fund. Other provisions in the budget to support economic development include $2 million in workforce enhancement grants and $4 million for entre-preneurial centers at the state’s non-research four-year colleges.

In an attempt to encourage investment in high-tech businesses and support the state’s agricultural industry, Michigan Gov. Rick Snyder signed a bill that will expand the state’s 21st Century Jobs Fund.

The measure (SB 144) will allow a wider range of industries involved in research and advanced

Economic Developmenttechnology to compete for funds. Currently, tech companies engaged in activities such as life sciences and alternative energy are eligible for

funding. Under the new bill, more

tech-based f i rms ( those involved with information technology and agricultural processing, for example) also will be eligible for funding.

“We need to open our door to all innovators, not just those from a few select industries,” says Republican

Sen. Mike Green, sponsor of the bill. “This legisla-tion does exactly that.”

“[It] will encourage economic growth in Michigan agriculture and the information technol-ogy sector,” Green adds.

“It also greatly expands the focus of the 21st Century Jobs Fund, sending a message to all innovators and entrepreneurs here in Michigan and across the nation that we’re ready to do business.”

North Dakota, Michigan seek to boost economy with new investments in research

S everal Great Lakes-related measures have been introduced in state capitols across the region during the first half of

2011, from bills on how to handle future offshore wind energy projects to new legislative proposals on how states should manage their water resources.

Below is a brief synopsis of these bills, some of which either already have been enacted into law or ap-peared headed toward legislative pas-sage as of late May.

• Future of offshore wind en-ergy — Will wind turbines be dotting the Great Lakes shoreline in the years ahead? The policy choices that state legislators make today will go a long way toward answering that question.

In Illinois, lawmakers want to create a Lake Michigan Offshore Wind Energy Advisory Council to guide their decisions. Under HB 1558, which had passed both houses as of late May, the council would develop a

host of policy recommendations: for example, how to determine the proper siting of offshore wind projects on Lake Michigan and how to compensate the state for the use of lake bottomlands.

In Michigan, where some of these initial studies have been done, legislation has been introduced to

ban the installation of wind turbines in the lakes. The sponsors of HB 4499 have cited several concerns about offshore wind energy, including its potential impact on the environment and local property values.

• Indiana’s new Great Lakes council — With passage of SB 157, the Indiana General Assembly has directed the state’s Environmental Quality Service Council to examine issues related to the supply and quality of Great Lakes water.

• Tougher invasive species rules — Minnesota lawmakers want to strengthen how the state regulates and manages invasive species, which have been discovered in more than 1,000 Minnesota lakes and rivers.

HF 1162 (passed by the House in May as part of a larger bill on the environment) authorizes the state

Brief written by Tim Anderson. He can be reached at tanderson@csg.org. CSG Midwest staffs the Great Lakes Legislative Caucus, a nonpartisan group of state and provincial lawmakers. for more information on the caucus, and to access its state and federal legislative trackers, go to www.greatlakeslegislators.org.

Great LakesFuture of offshore wind energy, water withdrawals among issues being tackled in state capitols

Department of Natural Resources to conduct more-thorough watercraft inspections, increases penalties for violations, and requires training and permitting for lake service providers.

• Managing Great Lakes water — Legislation that would determine how and when states regulate water withdrawals has been introduced in New York and Ohio. The New York bill, AB 5318, was passed by the state Assembly in early May. Under the measure, anyone with the capacity to withdraw more than 100,000 gallons per day would be subject to state permitting requirements. (There would be some limited exceptions to this rule, including for agricultural users.) Inter-basin trans-fers of more than 1 million gallons per day would have to be registered with the state Department of Environmental Conservation.

Ohio’s bill, SB 170, would set higher thresholds. It would require a withdrawal permit for facilities that withdraw 5 million gallons or more of water from Lake Erie; 2 million gallons a day from groundwater and rivers and streams; and 300,000 gallons from certain designated rivers and streams.

All Great Lakes states are in the process of adjusting to and complying with the new rules and requirements set out in the Great Lakes-St. Lawrence River Basin Water Resources Compact.

Brief written by Laura Tomaka, CSG Midwest staff liaison for the Midwestern Legislative Conference Economic development Committee. She can be reached at ltomaka@csg.org.

State legislative districts within

Great Lakes basin

State # of districts

Illinois 26

Indiana 50

Michigan 148

Minnesota 14

New York 54

Ohio 64

Pennsylvania 10

wisconsin 89

Total 455

Sen. Mike Green

�STATELINE MIDWEST JuNe 2011

M innesota, North Dakota and Wisconsin are the three Midwestern states in which hunting is a constitutional right.

Indiana might eventually become the fourth now that legislation has been passed that begins the multi-year process of putting the issue before voters as a proposed constitutional amendment.

And SJR 9 actually goes a step further than those other amendments: It seeks to en-sure the right not only to hunt and fish, but also to “engage in the agricultural or commercial production of meat, fish, poul-try, or dairy products.”

The sponsor of SJR 9, Indiana Sen. Brent Steele, says a previous effort to add the amendment to the Indiana Constitution failed. He is hopeful that the outcome will be different this time around, in part because of the addition of the language on agriculture.

The measure, he says, brings together two constitu-encies — hunters and farmers — that see themselves as under attack by animal-rights activists.

“I looked at the Humane Society of the United States website and saw how they wanted to end all animal-based protein. They were against both modern agriculture and hunting,” Steele says.

“I decided that adding farming would put the wind beneath the wings of the bill” in terms of helping it pass. The Senate approved the legislation

44-5, and the House passed it 75-12.In 2005, a version of Indiana’s right-to-hunt

constitutional amendment (without the language on animal agriculture) was passed by both legislative chambers. However, before being placed on the ballot, any proposed amendment approved in one session must also be passed by the legislature chosen after the next general election. The right-to-hunt measure failed to pass the Indiana House in 2007.

Nebraska legislators are also advancing a bill (LRCA 40) this session to establish in the state constitution “the right to hunt, to fish, and to harvest wildlife and to state that public hunting and fishing shall be a preferred means of managing wildlife.”

These recent actions in the Midwest are the continuation of a national trend. Last year, residents in four states outside the region voted on whether to extend constitutional protections to include the right to hunt and fish; the measures passed overwhelmingly in Tennessee, South Carolina and Arkansas. The proposal was voted down in Arizona.

Thirteen states now have these constitutional guarantees in place. Two others have language that constitutionally guarantees only the right to fish, while some states have included trapping in the language.

These proposals are designed “to head off possible attacks by animal rights/anti-hunting groups,” according to the United States Sportsmen’s Alliance.

Opponents of these state measures have said they trivialize constitutions by establishing protec-tions for hobbies such as hunting, and that they also could allow criminals to claim a constitutional “right” to hunt — and, as a result, the right to buy

Agriculture & Natural ResourcesIndiana seeks constitutional protections for hunting, adds ‘right to produce’ to proposal

a gun.According to the U.S. Fish and Wildlife Service,

12.5 million Americans hunted and 30 million fished in 2006, the last date such numbers are available.

In addition to the constitutional amendments being proposed in Indiana and Nebraska, another Midwestern state took action on a hotly debated hunting issue.

Iowa’s SF 464 was signed into law in March. It gives the state Natural Resources Commission the authority to add mourning doves to the list of game birds that can be hunted legally. With Iowa’s actions, Michigan is now the only state in the Midwest state without a dove hunting season.

Opponents of dove hunts argue that the bird has little value as game and is simply shot for target practice. In 2006, Michigan voters defeated a ballot referendum calling for a dove-hunting season.

Hunting as a constitutional right in Midwestern states

Right to hunt granted by state constitution

Brief written by Carolyn Orr, CSG Midwest staff liaison to the Midwestern Legislative Conference Agriculture and Natural Resources Committee. Carolyn can be reached at corr@agandruralleaders.org.

Sen. Brent Steele

Brief written by Kate Tormey, CSG Midwest staff liaison to the Midwestern Legislative Conference Health and Human Services Committee. She can be reached at ktormey@csg.org.

Health & Human Services

The federal government has launched a new initiative designed to change how states deliver services in one of the most costly areas

of Medicaid: long-term care.Under the State Balancing Incentive Payment

Program, which was included in the federal Affordable Care Act of 2010, states will have the chance to receive enhanced Medicaid matching funds in exchange for increasing their commitment to home and com-munity-based care.

The goal of this new federal incentive is in line with a common recommendation made by health care experts: Reduce spending on long-term services by allowing patients to receive care at home or in their local communities instead of in institutions.

Evidence from several states shows that providing services in home and community-based settings can be less expensive than institutional care. In addition, consumers report increased satisfaction when they can receive services at home or closer to

their families.Medicaid finances about 40 percent of the nation’s

spending on long-term services.By law, states are required to cover the costs of

services in institutions, but states can choose to offer home and community-based options, usually through a federal Medicaid waiver.

Now, with the new incentive program in place, states that spend less than 50 percent of long-term-care dollars on home and community-based services are eligible for an enhanced Medicaid match. According to the Kaiser Family Foundation, 45 states — and all Midwestern states — are eligible.

Up to $3 billion in federal matching funds is available between fiscal years 2012 and 2015. States that spent less than 25 percent of their long-term-care dollars on non-institutional care in 2009 will need to reach 25 percent by 2015. They will receive a 5 percentage-point increase in their matching percentages. States that currently spend less than 50 percent of their long-term care budgets on these services will have to reach 50 percent — and will receive a 2 percentage-point increase in the federal match.

In addition to meeting these spending goals, participating states must also make administrative changes to increase the use of home and com-munity-based services in Medicaid. For example, states must put in place a “no wrong door” system in which consumers can get information about all long-term services through a single entity.

Annual spending on home and community-based services under

Medicaid waivers

$869 million

$1.4billion

$454million

$462 million

$958 million

$354 million

$1.4 billion

$429 million

$202 million

$86 million

$72 million

Source: Kaiser Family Foundation (2007 data)

New federal incentives encourage states to shift long-term care spending away from institutions

�

Around The regIon

STATELINE MIDWEST JuNe 2011

Study: Put performance-based transportation funding on fast track

T ransportation is one of the “big four” when it comes to spending in state government. Along with K-12 education, Medicaid and

higher education, roads and other infrastructure needs take up a majority of state expenditures every year. (The big four account for 61 percent of total state spending, National Association of State Budget Officers data show, with transportation making up 7.8 percent of the total.)

All of these big-ticket items are vulner-able to budget cuts under current state fiscal conditions, but that may be especially true of transportation — at least if public opinion polls are any indication.

For example, in a 2010 poll done by the Pew Center on the States, only one in five Illinois residents said they would be willing to pay higher taxes in order to maintain current transportation funding levels. In contrast, a majority of Illinoisans said they would accept higher taxes to avoid cuts in K-12 education and health and human services.

A more recent Pew study, released in May, points to these recent poll results as one reason that states should embark on a new path when it comes to transportation policy and financing — one that is guided by clearly defined goals and relies on performance measures and data.

Some states are already on this path, with Minnesota being one of the 13 that Pew says is “leading the way” because of how it evaluates transportation investments.

Minnesota has performance measures for 10 areas identified in its current transportation policy plan: for example, addressing the needs of the state’s aging population, and reducing congestion by targeting areas where a disproportionate share of travel takes place.

The Pew study lists six transportation goals for states to use: 1) safety, 2) jobs and commerce, 3) mobility, 4) access, 5) environmental stew-ardship and 6) infrastructure preservation.

States have fairly robust systems for tracking, evaluating and making use of safety-related data (fatalities and injuries), Pew researchers say. But states are less likely to have other performance measures in place, such as tying transportation spending to economic and environmental out-comes or to the ability of people to reach jobs.

T h e f u l l Pe w s t u d y i s ava i l a b l e at www.pewcenteronthestates.org.

In year marked by historic floods, Congress may reform insurance program swimming in debtA s residents in parts of the Midwest experi-

enced record flooding this spring, discus-sions began on Capitol Hill about the future

of the National Flood Insurance Program.Created in 1968, the NFIP was enacted due to

the higher disaster-relief costs being incurred by taxpayers and the difficulty of getting flood risks underwritten in the private insurance market.

Forty-three years later, the program itself is now under water, upwards of $17 billion in debt.

Originally funded in part by appropriations, the NFIP was financially self-sustaining (through the premiums and fees paid into it) from 1986 to 2005. Its financial condition changed dramatically, though, in the latter part of the last decade due to the devastation wrought by four different Atlantic hurricanes.

Along with the current debt problem, another factor has spurred interest in restructuring the NFIP — the possibility of more frequent natural disasters in the future. According to a 2008 National Science and Technology Council report, floods in areas such as the Midwest that typically occurred every 20 years are now projected to happen every four to six years due to changes in climate.

The program has already been through three ma-jor reforms, including changes in 1994 (following the Midwest floods of 1993) that led to stricter purchase provisions based on the flood risks of communities and homes.

Despite this change, however, concerns remain that purchases of flood insurance in flood-prone areas are too low. Without this insurance, the property owner

must repair damages out of personal funds or secure taxpayer-funded relief payments.

A 2006 report by the RAND Corporation estimated that only 49 percent of property owners in special flood-hazard areas had NFIP policies; the market

penetration rate is even less in the Midwest (an estimated 22 percent).

Several factors contribute to the low par-ticipation rate, despite the requirement that flood insurance be purchased, according to a March study done by the Congressional Research Service. Those factors include decisions by the property owner not to maintain coverage over the life of the home loan and instances in which the homeowner either does not have a mortgage or has it through an unregulated lender.

Long list of potential reformsEarlier this year, a congressional subcommittee approved a bill (HR 1309) to reauthorize the NFIP through September 2016.

The chair of that subcommittee, Republican U.S. Rep. Judy Biggert of Illinois, says the measure includes important reforms that will “restore the financial integrity of NFIP.” Those reforms include better mapping of flood areas; applying actuarially

sound pricing to determine premium rates (many property owners receive below-market rates through the NFIP); and directing the Federal Emergency Management Agency to better manage risk.

Under the legislation, FEMA’s role in the program would change; for example, the agency would be given the authority to demolish and rebuild flood-damaged properties if it were deemed a cost-effective flood-mitigation strategy. In addition, the bill seeks to incorporate the private insurance and reinsurance markets more into the NFIP.

Some members of Congress also want to ensure that FEMA’s map modernization program does not place an undue burden on people with residences or businesses in floodplains. FEMA is in the process of reviewing what areas are considered floodplains, and property owners in newly mapped flood zones might have to purchase flood insurance.

Meanwhile, the recent experiences of some states in the Midwest might help shape some of the eventual reforms. For example, two effective flood-mitigation strategies have been to acquire at-risk property and to elevate property in high-risk floodplains. After the 2008 floods in Iowa, the state analyzed its disaster-mitigation projects since 1990 and discovered that those efforts prevented possible damages to 834 properties in 2008, thus avoiding $50 million in flood-related damages.

Another possible NFIP reform is to increase state involvement. For example, the CRS study says an interstate compact among the states of North Dakota, South Dakota and Minnesota might help address flooding problems in the Red River Valley by helping officials better maintain dams and levees and make crucial land purchases.

This article was written by Nell Etheredge, a legislative policy analyst in the washington, d.C., office of The Council of State Governments. Nell can be reached at netheredge@csg.org.

News from Washington, D.C.

The cost of “repetitive loss properties” in National Flood

Insurance Program*

State Total payments

# of claims

# of properties

Illinois $143 million 11,541 3,813

Indiana $60 million 3,742 1,384

Iowa $60 million 2,592 1,007

Kansas $29 million 1,229 434

Michigan $18 million 1,634 636

Minnesota $25 million 1,539 622

Nebraska $11 million 905 366

North dakota $16 million 641 273

Ohio $97 million 5,501 1,990

South dakota $3 million 232 106

wisconsin $24 million 1,439 621

* A repetitive loss property is one that has experienced flood losses on multiple occasions. These properties account for a disproportionate share of costs in the National flood Insurance Program. Most of these properties, too, are currently subject to insurance premium discounts.

Source: Congressional Research Service (“National Flood Insurance Program: Background, Challenges, and Financial Status”)

Where states stand: Evaluation of policies that measure e�cacy of

transportation investments

Leading the way

Trailing behind

Mixed results

Source: Pew Center on the States

�STATELINE MIDWEST JuNe 2011

Q u E S T I o N O F T H e M O N T H

QuESTIoN: How are state-supported passenger rail routes funded?

One of the many services provided by the Midwestern Office of The Council of State Governments is its Information Help Line, a research service intended to help lawmakers, legislative staff and state officials from across the region. The CSG Midwest staff is always available to respond to members’ inquiries or research needs regarding various public policy issues. The Question of the Month section highlights an inquiry received by this office. To request assistance through CSG Midwest’s Information Help Line, call 630.925.1922 or use the online form available at www.csgmidwest.org.

Today’s system of state-supported passenger rail is based on the federal legislation passed in 1970 that created Amtrak. That measure allowed states to request additional passenger rail service if they agreed to pay a portion of the costs.

Currently, 15 states subsidize one or more Amtrak corridor routes, including Illinois, Michigan, Mis-souri and Wisconsin in the Midwest. (Missouri is included here because it is part of the Midwest Interstate Passenger Rail Compact.)

There are 27 Amtrak routes that travel less than 750 miles from start to end. Sixteen of these are entirely state-supported, while five have some state support. States pay for these shorter-distance routes through a variety of means. During the first three years of new ser-vice, startup costs for these operations can be funded through the federal Congestion Mitigation Air Quality (CMAQ) program. After that time has elapsed, many states (including Illinois, Missouri and Wisconsin) have paid for service via general fund allocations.

However, there are instances in which states use

transportation trust funds, either dedicated or non-dedicated revenue. (Dedicated revenue means that the funds, by law, must go to the rail routes.)

In Michigan, state-supported passenger rail service receives a non-dedicated allocation of revenue from the transportation fund.

In Iowa, which is looking to establish new passenger rail service between Chicago, the Quad Cities and Iowa City (the line would also eventually link to Omaha, Neb.), the state has developed a multi-tiered business plan to fund operations for the first 10 years of service. Its plan calls for using a combination of CMAQ funds and con-tributions from municipalities that will benefit from the service. The plan would not use money from the state general fund or transportation-specific funds.

States outside the Midwest rely on a variety of rev-enue sources to fund intercity passenger rail. For instance, California’s Public Transportation Account is funded with a portion of state taxes on diesel fuel and gasoline. Pennsylvania has a public transportation trust fund whose revenue sources include the state lottery, a portion of the state’s sales tax, and annual payments from the state’s Turnpike Commission. And passenger rail service in Oregon is funded primarily from a dedicated source — personalized or “vanity” license plate fees.

There has never been a strict definition determining which Amtrak routes states should pay for and how much they should pay. But Section 209 of the Passenger Rail Investment and Improvement Act (passed in 2008) requires Amtrak and the states to establish a system for allocating operational and capital costs for routes under 750 miles. State and Amtrak officials have been work-ing on a funding model to meet this new requirement. The final agreement is expected to be built around the principles of a fair, equitable and transparent allocation of operating and capital charges to states that are sup-porting Amtrak routes under 750 miles.

to be considered on the Senate floor.Meanwhile, in Indiana and Wisconsin, there has

been legislative movement to prevent future minor-ity-party walkouts from occurring. As part of the budget bill signed into law in Indiana, a civil penalty of up to $1,000 per day can now be imposed on a lawmaker who “commits the act of legislative bolting.” In Wisconsin, Democratic Sen. Tim Cullen has called for a constitutional amendment to eliminate the rule requiring that three-fifths of members be present for fiscal bills to be passed.

The balance between the powers of the majority party and procedural rights of the minority in legislatures is an institutional issue not often

discussed beyond the walls of state capitols.But this year was an exception, the result of the

closely watched “walkouts” this year by two minority-party caucuses in the Midwest. In Wisconsin, Senate Democrats left the state in mid-February to prevent a vote on a controversial bill limiting the bargaining rights of public employees. Indiana House Democrats used a similar tactic, protesting contentious measures involving unions and public schools by leaving the state. A month-long standoff ensued.

Though not unprecedented, this minority-party maneuver is seldom employed, in part because state constitutions make it unusable. In most states, only a simple majority of members in a legislative body is required for a quorum and to conduct legislative business. That is true of every Midwestern state except Indiana and Wisconsin (see map).

State constitutions, though, don’t determine many of the procedural rights of minority parties. That is instead left to the legislatures.

“There is a quite a bit of differences among the states, more than many might realize,” says Nancy Martorano, a professor of political science at Dayton University. “Those variations come both from the formal rules of the legislature and informal norms.”

In a 2004 paper, Martorano developed an eight-point index to measure the procedural powers granted

to minority parties in state legislatures. Several of these measures focus on the power of

the minority within legislative committees. Do these committees have ranking minority members? What is the majority-to-minority ratio of membership on these committees? Does the minority have the right to request committee meetings and to file committee reports on the floor of the legislature? Can a bill be discharged from a committee by a minority vote or the request of a single member, thus allowing an open debate by the full legislature? (In North Dakota, legislative rules allow all bills to reach the floor.)

And then there are the rights afforded to, or not afforded to, minority parties on the floor of the legisla-ture. For example, some states require a super-majority vote to suspend normal legislative rules or procedures — a rule that protects the minority party.

Another factor, Martorano says, is the extent to which legislatures allow floor amendments on a bill. Some permit amendments at multiple stages of the process, thus giving the minority party ample op-portunity to have its voice heard. In contrast, Oregon allows no floor amendments. Many legislatures have established some kind of middle ground, limiting amendments to the second or third reading of a bill.

Martorano says she knows of only one state with a rule close to the U.S. Senate’s “filibuster rule,” which allows a minority of members (39 of the 100) to effectively stall and block legislation. That state is Texas, where a two-thirds vote is required for any bill

Revenue sources for state-subsidized passenger rail in the Midwest

State# of

daily trains

Routes Revenue source

Illinois 28*

Chicago-Carbondale; Chicago-St. Louis;

Chicago-Milwaukee; and Chicago-Quincy

General fund

Michigan 4Grand Rapids-

Chicago and Port Huron-Chicago

Transportation fund

Missouri 4 Kansas City-St. Louis General fund

wisconsin 14* Milwaukee-Chicago* General revenue

*Route cost shared with adjacent state. Sources: Midwestern Interstate Passenger Rail Commission and Amtrak

Rules on quorums in state legislatures

Two-thirds of members required for quorum

Majority of members required for quorum; three-fifths required for actions on fiscal bills

Majority of members required for quorum

The minority rules: Measuring the power of majority party, rights of minority in legislaturesby Tim Anderson (tanderson@csg.org)

� STATELINE MIDWEST JuNe 2011

ing out to companies that have not sold goods in foreign markets and encouraging them to explore the possibility. The bureau partners with 25 orga-nizations around the state — including community colleges, chambers of commerce, local economic development corporations and university business schools — to conduct outreach and offer seminars to prospective exporters.

The next step is to provide technical assistance: for example, information on financing, customs

Cover sTory

States can’t break down trade barriers, but can help firms overcome obstacles to exporting CONTINueD FROM PAGe 1

of the report and co-director of Brookings’ Great Lakes Economic Initiative.

“Other places [other regions and offshore loca-tions] have come up to speed in manufacturing, and metropolitan areas [in the Midwest] have not done a good job of replacing what has left with new, more innovative, high value-added products,” she adds.

In the 2010 study, Bradley and her co-authors argue that the prosperity of the Great Lakes region will depend on a shift toward a more export-oriented economy and away from a consumption-based economy.

Niche for states is helping small and medium-sized firms sell goods overseas

When it comes to export assistance, Baughman says, large firms mostly need help from the federal government in

breaking down trade barriers.States are best suited to help small and

mid-sized firms, which often require the type of personalized assistance that the Wisconsin Bureau of Export Development gave to Spee-Dee.

Unlike larger companies, smaller firms often don’t have the staff needed to develop and execute an export strategy, which, to be successful, must address how to overcome language barriers, regulatory hurdles, and various banking and legal issues.

States’ no- or low-cost assistance to these smaller operations generally cover four broad areas.

• Education — Counseling firms about the value of exporting;

• Training — Helping firms get ready to export;

• Market development — Assisting firms with market research and development and helping locate sales agents and distributors; and

• Market access — Aiding firms in entering markets and selling their products through trade missions, participation in trade shows and other targeted assistance.

Recent federal data indicate there is signifi-

cant room for export growth among small- and medium-sized enterprises (SMEs): Of the nation’s approximately 6 million firms with 500 or fewer employees, only about 270,000 export. Over a 10-year time frame, SMEs accounted for approxi-mately 30 percent of total U.S. export activity.

In Wisconsin, assistance to these firms is pro-vided in several ways, says Mary Regel, director of the Wisconsin Bureau of Export Development.

The bureau first serves as a facilitator, reach-

In the 1930s, exports accounted for just 3 percent of the nation’s GdP.

Eighty years later, the goods and services sold to other countries made up 12 percent of GdP, note Bruce Katz and Emilia Istrate in a recent report for Export Nation, a research project of the Brookings Institution’s Metropolitan Policy Program.

And over that time period, no region came to rely on the power of exports as an economic engine more than the Midwest.

Today, for example, exports support 398,000 jobs in Chicago and 20,000 jobs in des Moines, according to Export Nation. Chicago and detroit rank in the top 10 metropolitan areas in the nation for highest dollar volume of exports (and greatest reliance on exports as well). Minneapolis and Indianapolis are in the top 20.

“The Midwest has been a particularly export-rich region,” says Jennifer Bradley, co-director of the Great Lakes Economic Initiative at the Metropolitan Policy Program, noting the region’s strength as both an agricultural producer and a manufacturing hub.

But the region’s status as an export powerhouse has been questioned in recent years, and retain-ing or regaining it will be critical to the overall economic recovery of states, Bradley says.

Nurturing growth in innovation, research and development, and technology firms is one overarching strategy for states to take. Another is to encourage more businesses to export.

Currently, only 1 percent of all firms in the united States export; most are content to sell domestically, viewing this country as having a big enough pool of customers.

But not only do 95 percent of the world’s consumers live outside of the u.S., Bradley says, the middle class in Asian and Latin American countries is growing rapidly. And these areas have been much quicker to come out of the global recession than have Europe and u.S. regions such as the Midwest.

Laura Baughman, an economist with Trade Partnership worldwide, notes, too, that u.S. exports are much more than the goods made by manufacturers or commodities produced by farmers.

Services are important as well. According to the Brookings Institution, u.S. exports of commercial services, including business and technical services, exceeded $500 billion in 2008.

In a recent report for the Business Roundtable, Baughman and her colleague estimated that more than 38 million u.S. jobs — 6.3 million in the Midwest — were dependent on trade in 2008.

‘Export-rich’ Midwest still relies heavily on ability of its companies to sell goods and services overseas

Approximate % of state’s GDP that is based on export activity (2008)

8.5% 9.7%

11.8%

10.4%

8.6%

8.9%

7.3%

10.2%

6.5%

4.5%

8.9%

Source: Business Roundtable

Profiles of Midwest’s export economies: Leading markets and products

State Leading export products Leading export markets

Illinois1) Machinery, 28% 2) Chemicals, 13% 3) Transportation

equipment, 11% 4) Computers/Electronics, 10% 5) Electrical equipment, 5%

1) Canada, 28% 2) Mexico, 8% 3) China, 5% 4) Australia, 5% 5) Japan, 4%

Indiana1) Transportation equipment, 26% 2) Chemicals, 20%

3) Machinery, 16% 4) Computers/Electronics, 7% 5) Primary metal manufacturing, 7%

1) Canada, 40% 2) Mexico, 8% 3) united Kingdom, 7% 4) france, 5% 5) Germany, 5%

Iowa 1) Machinery, 29% 2) Processed foods, 18% 3) Crop production, 10% 4) Chemicals, 9% 5) Transportation equipment, 7%

1) Canada, 32% 2) Mexico, 16% 3) Japan, 7% 4) Germany, 5% 5) Russia, 3%

Kansas1) Transportation equipment, 39% 2) Crop production, 12%

3) Processed foods, 12% 4) Machinery, 9% 5) Computers/Electronics, 8%

1) Canada, 21% 2) Mexico, 11% 3) Japan, 7% 4) Germany, 5%

5) united Kingdom, 5%

Michigan1) Transportation equipment, 47% 2) Machinery, 9%

3) Chemicals, 9% 4) Oil and gas, 7% 5) Primary metal manufacturing, 5%

1) Canada, 53% 2) Mexico, 14% 3) Germany, 3% 4) Japan, 3% 5) China, 3%

Minnesota1) Computers/electronics, 21% 2) Machinery, 15%

3) Transportation equipment, 11% 4) Medical equipment and miscellaneous manufacturing, 10% 5) Processed foods, 7%

1) Canada, 29% 2) China, 5% 3) Japan, 5% 4) Ireland, 5% 5) Mexico, 4%

Nebraska1) Processed foods, 27% 2) Machinery, 19%

3) Crop production, 15% 4) Transportation equipment, 9% 5) Chemicals, 7%

1) Canada, 28% 2) Mexico, 21% 3) Japan, 7% 4) China, 4% 5) Korea, 3%

North dakota1) Machinery, 43% 2) Crop production, 22%

3) Transportation equipment, 8% 4) Processed foods, 8% 5) Oil and gas, 8%

1) Canada, 52% 2) Mexico, 7% 3) Russia, 5% 4) Belgium, 3% 5) Germany, 3%

Ohio1) Transportation equipment, 35% 2) Machinery, 13%

3) Chemicals, 11% 4) Computers/Electronics, 7% 5) fabricated Metals, 6%

1) Canada, 44% 2) Mexico, 8% 3) Brazil, 4% 4) China, 4% 5) Japan, 3%

South dakota1) Computers/Electronics, 31% 2) Processed foods, 21%

3) Machinery, 16% 4) Beverages and tobacco products, 7% 5) Transportation equipment, 6%

1) Canada, 35%, 2) Mexico, 18%, 3) Thailand, 12% 4) Hong Kong, 10% 5) Germany, 4%

wisconsin1) Machinery, 30%, 2) Computers/Electronics, 15%

3) Transportation equipment, 13% 4) Processed foods, 6% 5) Electrical equipment, 5%

1) Canada, 32% 2) Mexico, 9% 3) China, 6% 4) Germany, 4% 5) Japan, 4%

Source: Trade Partnership Worldwide (for Business Roundtable)

�STATELINE MIDWEST JuNe 2011

was contracting.Now, as states in the Midwest position them-

selves for positive future growth, they will rely at least in part on having a thriving export economy. In turn, small- and medium-sized firms will continue to rely on states for assistance.

FeAture sToryregulations, legal requirements and regula-tory compliance. Bureau staff also works with the company to explore the best global markets for the firm’s products. Spee-Dee used the state of Wisconsin’s low-cost, fee-based service to do research about potential customers.

Another common approach used by states is to help companies connect with local overseas sales agents and distributors. In Wisconsin, this work is done with the assistance of the state’s four trade offices, located in Canada, China, Brazil and Mexico. (Some of these overseas offices are shared with other states.)

Wisconsin also helps companies develop an overseas presence through participation in foreign trade shows. The state offers $5,000 grants to companies to participate in these events; the grant covers the direct costs of participat-ing in a show, such as registration fees, but cannot be used for travel costs.

S i m i l a r l y , Iowa provides up t o $ 3 , 0 0 0 f o r a company to travel overseas to meet with potential customers. Companies can receive these grants up to two times in a year, and the money can be used for participation in trade shows or trade missions.

Companies that export lead way on innovation, pay higher wages

Most states in the Midwest provide some level of export assistance to small and medium-sized companies.

Exactly what type of assistance proves to be most beneficial varies from firm to firm.

For Spee-Dee, Johnson says, the state of Wisconsin’s ExporTech program is what gave the company the final push to begin selling its products overseas. Companies pay $1,000 to enroll in the program, which runs for three months, includes experts on everything from shipping to banking, and results in a customized export plan for every participating firm.

In the case of Spee-Dee, the plan called for the company to enter three new markets (Canada, Mexico and the United Kingdom), as well as to build on relationships it already had with inter-national companies in order to get its products in overseas plants.

The company’s exporting plan has quickly expanded to include India, where Spee-Dee’s ma-chines are well adapted to dispensing raw rice.

A l ong t he way, t he Bu re au of E x p or t Development helped Spee-Dee locate overseas distributors and sales agents and assisted the firm in understanding the different safety standards in overseas markets. And when Johnson made a recent sales trip to Mexico, he was able to use Wisconsin’s trade office.

States offer most of their export services at reduced costs, and sometimes at no costs.

As result, there is a fiscal commitment to exporting — a commitment that, as in all areas of state government, is being tested due to today’s difficult budget conditions.

Though the recruitment of companies from other states or countries often gets more public

during his State of the union address in 2010, President Barack Obama announced his plans for the National Export Initiative, the goal of which is to double u.S. exports by 2015.

Meeting this objective would result in an additional 2 million jobs, administration officials estimate.

Traditionally, export assistance at the federal level has been fragmented. According to Joe Hurd, chair of the Trade Promotion Coordinating Council, 18 different federal agencies have a role in various aspects of export promotion.

The executive order creating the new federal initiative es-tablished an Export Promotion Cabinet, made up of a number of cabinet-level officials and agency directors.

In addition to trying to better coordinate export-develop-ment effor ts at the federal level, the newly formed cabinet has developed 70 recommendations (published in September 2010) for how to increase u.S. exports. (Another document outlining a national export strategy was expected to be issued in June.)

One recommendation of the 2010 report focused on providing more coordinated export advocacy overseas. for example, senior-level executive officials in relevant agencies are now reporting their travel schedules. If a u.S. company is being considered for a government contract in another country, all department officials going to that country, for nearly any purpose, will be asked to mention this in their meetings.

In all, eight priority areas are targeted in the 70 recommen-

dations. They include expanding government loan programs for exporters and negotiating international agreements that remove trade barriers in other countries.

Another priority is to provide additional assistance to small and mid-sized enterprises (companies with 500 or fewer employees).

for these firms, export assistance has often come from states, and the federal government is looking to expand on these state-level initiatives.

under the three-year State Trade and Export Promotion (STEP) pilot program, up to $90 million in federal grants will be provided to states.

State initiatives likely to be funded through STEP include training workshops; support for

overseas travel to develop foreign markets; and help in creating marketing products, campaigns and trade show exhibits.

This federal assistance comes at a time when states are struggling to maintain their export-assistance activities.

According to a recent survey done by the State International development Organizations, an association of state trade agencies, more than two-thirds of the states cut funding last year to their international programs. The average reduction was 10 percent.

Collectively, though, states have historically devoted more staff resources to trade promotion than has the federal government, SIdO says. In 2008, states spent a combined $103 million on small-business export promotion and on attracting foreign plants and investment.

New federal export initiative includes more grant money for state programs

“At a time when jobs are in short supply, building exports

is an imperative.”President Barack Obama, in a 2010 speech

announcing his new Export Council

International presence: Countries where Midwestern states have trade offices or consultants (as of �009)*

Country # of Midwestern states with trade offices/consultants

China 7 (Illinois, Indiana, Iowa, Kansas, Minnesota, Ohio and wisconsin)

Japan 6 (Illinois, Indiana, Iowa, Kansas, Nebraska and Ohio)

Mexico 5 (Illinois, Iowa, Kansas, Ohio and wisconsin)

Germany 1 (Iowa)

Canada 3 (Illinois, Ohio and wisconsin)

united Kingdom 2 (Indiana and Kansas)

Israel 2 (Illinois and Ohio)

Taiwan 1 (Indiana)

Brazil 2 (Ohio and wisconsin)

Chile 1 (Ohio)

Belgium 2 (Illinois and Ohio)

South Africa 2 (Illinois and Ohio)

India 2 (Illinois and Ohio)

Australia 1 (Indiana)

Hong Kong 1 (North dakota)

Poland 1 (Illinois)

Kazakhstan 1 (North dakota)

ukraine 1 (North dakota)

* In some cases, international trade offices are shared among multiple states. Source: State International Development Organizations

attention, Bradley says, helping existing firms export and expand is an investment that pays off for states.

Kathy Hill, team leader in the Iowa Department of Economic Development’s International Trade Office, says companies that export tend to be more innova-tive, and often spend more on research and develop-ment. These are characteristics seen as vital not only for individual firms, but for overall state economies to be able to compete in the global economy.

Regel says exporting companies bring many benefits to Wisconsin’s economy. For example, they grow faster than non-exporters and pay higher wages to employees — between 10 and 14 percent more, according to state of Wisconsin data.

According to Bradley, Hill’s and Regel’s findings and observations about exporters in their states

hold true across the country: These companies tend to innovate more and p ay h ig her salaries.

Fe dera l dat a show that jobs at exporting compa-nies pay 15 per-cent more than the

average U.S. salary. (In 2008, exports accounted for nearly 7 percent of total U.S. employment and one in three manufacturing jobs.)

Regel adds that as Wisconsin struggled through the national recession, exporting companies helped maintain the state’s manufacturing base.

Companies that exported were more likely to be able to hold on their employees, Regel says, because of their ability to trade in markets whose economies were growing while the U.S. economy

“The region can no longer take it for granted that it will be an export

powerhouse.”Jennifer Bradley, co-director, Great Lakes Economic

Initiative at the Brookings Institution

� STATELINE MIDWEST JuNe 2011

StAteLine ProfILeStAteLine ProfILe

tion at the polls. Voters without identification on election day can cast provisional ballots and later prove their identity to validate their vote. Both Speaker Fitzgerald and Senator Fitzgerald strongly supported the legislation, which had failed to pass in previous years due to concerns about voter disenfranchisement.

“It’s really about restoring some voter integrity in the election system here in Wisconsin,” Sen. Fitzgerald says. “We’ve had some problems with fraud, such as felons voting and people double voting.

“It’s about trying to get back to where we have a fair election where voters don’t feel that their vote was cancelled out by someone who committed fraud.”

Last month, CSG Midwest interviewed the Fitzgeralds about their legislative careers, policy goals and leadership philosophies. Here are some excerpts from the interview.

Q: W h e n yo u to o k ove r a s l e a d e r s o f t h e Wisconsin legislature this year, what was your

first priority when you were sworn in?

Speaker Fitzgerald: We came in the first month of session … and we had 10 special-session bills that were really focused on job creation in the state, including some regulatory reforms. We are trying to make it better for people to either relocate a new business here or for businesses in Wisconsin to expand. It was a very fast pace … and we passed nine bills in January and we’ve already seen some great results. Since January, we have seen over 30,000 new jobs in Wisconsin. In a magazine ranking, we have jumped 17 spots on the list of best places to do business — the biggest jump of any state on the list. That’s what our main priority is: getting people back to work.

Senator Fitzgerald: I don’t think that there was much else that the members of my caucus ... were focused on besides the economy and job creation.

The governor came out with a pretty major reform, which was to eliminate the Department of Commerce and replace it with the Wisconsin Economic Development Corporation, which is a quasi-governmental, private-sector [group]. Many of the members of my caucus were relieved to see that we were headed in that direction, because they knew we needed some major reform.

Q: Your state was the focus of national attention earlier this year as lawmakers debated a contro-

versial employee labor bill. What was it like to be under that level of scrutiny?

Speaker Fitzgerald: We didn’t realize the national atten-tion we were going to gain on that issue. We thought it would be controversial; whenever you are dealing with reforms in government, it’s going to be very difficult. With the thousands of protesters and the people from all over the country who contacted us, there was a

huge silent majority that was with us as well.On the Friday we went in to session to debate

the bill, I had the Capitol police come to me and tell me that they could no longer guarantee the safety of me and my members on the floor, so I had to send them home for the weekend. I had the votes, and as speaker, you never want to send your members home when you have the votes. But they went back to their districts and when we came back on Monday, we were more unified as a caucus because they had heard from that silent majority that they represent. ... All of the controversy that surrounded the bill has brought us closer and made us a stronger caucus, which has helped with the other bills that we’ve had in session.

Senator Fitzgerald: Every day was uncharted terri-tory, and not only making decisions about where we were as far as legislative priorities and policy, but on a lot of security decisions and logistical decisions.

Q: What has it been like to lead during this difficult time in state government?

Speaker Fitzgerald: It’s been a very interesting first five months. I knew going into this that it was going to be a tough session, and when I was sworn in as speaker, I said in my speech that I thought this would be the most difficult session in which anyone could ever serve. But I also think it could be the most rewarding. In state government right now, we’re up against it. And there are only two ways out: you either cut government spending or you can raise taxes. When you cut government spending, you make some tough decisions.

Senator Fitzgerald: It’s been incredible. We never ex-pected that Wisconsin would end up being the tip of the spear on the changes in the budget repair bill and would become part of the debate nationwide. We are very fortunate to have strong caucuses and leaders that were able to pull together. ... And it’s still a changing environment. In the Senate, there is clearly a divide that exists between the parties that I have never experienced before, so that’s made it even more challenging.

by Kate Tormey (ktormey@csg.org)

On a regular basis, Wisconsin Senate Majority Leader Scott Fitzgerald needs to seek the assistance or counsel of the leader of the

state’s other legislative chamber, the Assembly.And when he picks up the phone to call the

speaker, the voice on the other end of the line is a familiar one: that of his younger brother, Jeff.

Both Republicans — and with more than 30 years of legislative experience between them — the brothers currently lead their respective legislative chambers, where party control changed hands after the fall elections.

Their close relationship was particularly helpful earlier this year, when Wisconsin was in the national spotlight as lawmakers debated a controversial bill to change state employee labor policies.

“I look back and think about some of the decisions we were making in February and March, and I realize that if you had leaders that didn’t communicate, [it would have been] painful sometimes,” Sen. Fitzgerald says.

“Because Jeff and I have that personal relation-ship, we were able to communicate and work through things that would have otherwise been very difficult.”

A tradition of leadershipThe Fitzgeralds’ passion for public service was fostered by their father, who served for 14 years as sheriff in northeast Wisconsin’s Dodge County. As young men, the brothers helped their father with his campaign, writing press releases and arranging appearances at local events.

And the brothers’ parents were deeply involved in their local community through service organi-zations and their church — a civic-minded way of life that left a lasting impression on their sons.

“My father, being in law enforcement, really was about helping people, and that was a mantra that our parents instilled in us from an early age,” Speaker Fitzgerald says. “Public service is something to be valued, and you probably don’t get any greater reward than helping a constituent.”

Sen. Fitzgerald was the first to follow in his father’s path of public service. He was elected to the Senate in 1994 and has held the legislative seat ever since.

It wasn’t long before his younger brother was drawn to politics as well. Speaker Fitzgerald served on the Beaver Dam City Council for three years before being elected to the Assembly in 2000.

Leadership is not new to either of them. They have each served as minority and majority leader in the past, including during the 2009-2010 legisla-tive session, when they were minority leaders at the same time.

The Fitzgeralds have their own styles and legislative agendas, but this year, they have shared at least one policy goal: reducing voter fraud.

Late last month, policymakers approved legislation that requires voters to show identifica-

Wisconsin Speaker Jeff Fitzgerald andSenate Majority Leader Scott FitzgeraldFor lawmaker brothers, public service is a family affair

With more than 30 years of legislative experience between them, brothers Speaker Jeff Fitzgerald (left) and Senate Majority Leader Scott Fitzgerald (right) hold the top leadership positions in their respective legislative chambers.

9STATELINE MIDWEST JuNe 2011

paying jobs and the lack of opportunities for the county’s young people.

With its five-year student loan repayment program, the ROZ legislation makes it more affordable. When qualified teachers, lawyers, veterinarians, doctors and farmers coming out of college move to a ROZ county that partners with the state, they will receive help paying off their student loans.

Incentives will have ripple effect

I t is innovative and aggressive incentives such as ROZs that will help attract business, entrepreneurs, professionals and families to

move to Kansas. For each of these groups of people who move into these “opportunity zone” counties, services, businesses and infrastructure will have to meet their needs, spurring further economic development.

This new economic development tool won’t take effect until January 2012, but my administration already has heard from businesses and families from coast to coast who want to know more about how they can improve their quality of life and help to grow Kansas.

Just like the original Homestead Act encouraged the settlers that were the forefathers of Kansas, I believe our Rural Opportunity Zones will reverse the population decline these 50 Kansas counties have experienced for too long, and will help create and sustain thriving communities.

Kansas Gov. Sam Brownback was elected governor in 2010 after serving 15 years in the u.S. Senate.

FirSt PersonFirSt PersonA F O R u M F O R L E G I S L A T O R S A N D C O N S T I T u T I O N A L O F F I C E R S

On Jan. 29, 2011, Kansas celebrated its 150th year of statehood. As the governor of Kansas, I was proud and humbled to

mark the occasion and to reflect on our state’s rich history.

The first generation of Kansans pledged their lives and destinies to forge a Kansas of freedom amidst the blood and fire of war. Against im-measurable odds, they succeeded and God blessed our state with generations of men and women who had the courage to build a Kansas of humanity and hope.

Freedom is central to the Kansas experience, as is opportunity. Free land drew pioneers to settle the state at the end of the Civil War with passage of the Homestead Act.

If you and your family had enough courage to come and claim 160 acres, then it was yours. Some families succeeded, some failed, and meanwhile, a state was born through the creation of opportunities.

Great Recession hit state hardKansas families again face enormous challenges. More than 100,000 Kansans are out of work, and our state budget was more than $500 million in the hole. The Great Recession exacted a tremendous toll from our state, and Kansans are still feeling the effects.

National and global forces over which we will have little control will certainly come to bear on Kansas during the next decade. But without goals and a focus, we will simply wave in the wind, wait-ing for a change of weather. We can-not stand idly by as global events overtake us.

D u r i n g t h e c a m p a i g n , L t . Gov. Jeff Colyer a n d I p l e d g e d that growing our state’s economy w o u l d b e o u r administration’s top priority.

Attracting capital and investment to the state is key to growing our way out of the recession, especially in those parts of our state that are experiencing a loss in population. The 2010 U.S. Census found that nearly half of the state’s 105 counties underwent double-digit percentage population declines in the last 10 years.

To fight the loss of population, my administra-tion proposed the creation of Rural Opportunity Zones, targeted toward growing rural Kansas

counties by providing economic incentives to attract people into those declining areas.

SB 198, which I signed into law on March 31, designates 50 Kansas counties as Rural Opportunity Zones, or “ROZs.” It provides two basic incentives: 1) an exemption from the state in-come tax for five years for individuals who relocate to those counties from out of state and 2) a state- matching program for counties to repay student loans of up to $15,000 for qualifying students who move into the ROZ counties.

I was pleased by the broad bipartisan support that SB 198 received from legislators from across the state.

The Kansas Department of Revenue will administer the tax credit portion of the ROZ pro-gram, and the Kansas Department of Commerce will oversee the student loan repayment portion.

Kansans from small towns and rural counties appreciate that there are more tools at their disposal to attract people, money and jobs into their communities. And like the Homestead Act

that helped settle our state, ROZs offer opportunity instead of hand-picking winners and losers.

For example:• K a n s a n s

who have built a career in another state can come back to Marion County to spend their retirement years in the natu-ral beauty of the

Flint Hills of Kansas without having to pay taxes on their income for five years.

• Coloradans, Nebraskans and Oklahomans who have lost their jobs in their home state can cross the state line into Morton, Stanton, Rawlins or any of the 17 ROZ counties along Kansas’ border to take advantage of the job creation that ROZs will bring.

• College graduates who want to move home to counties such as Stafford County in western Kansas find it difficult to do so because of lower-

Kansas acts to counter dramatic population drain in rural counties‘Opportunity Zones’ incentives seek to attract new residentsby Kansas Gov. Sam Brownback (governor@ks.gov)

Submissions welcomeThis page is designed to be a forum for legislators and constitutional officers. we accept submissions on a wide range of public policy issues and state initiatives. The opinions expressed on this page do not reflect those of The Council of State Governments or the Midwestern Legislative Conference. Responses to any firstPerson article are welcome, as are pieces written on other topics. for more information, contact Tim Anderson at 630.925.1922 or tanderson@csg.org.

Kansas counties designated as Rural Opportunity Zones

Source: Kansas governor’s o�ce

For each of the various groups of peoplewho move into these counties, services,

businesses and infrastructure will have to meet their needs, spurring further

economic development.

10 STATELINE MIDWEST JuNe 2011

s

The Council of State Governments was founded in 1933 as a national, nonpartisan organization to assist and advance state government. The headquarters office, in Lexington, Ky., is responsible for a variety of national programs and services, including research, reference publications, innovations transfer, suggested state legislation and interstate consulting services. The Midwestern Office supports several groups of state officials, including the Midwestern Legislative Conference, an association of all legislators in 11 states: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Nebraska, North dakota, Ohio, South dakota and wisconsin. The Canadian provinces of Alberta, Manitoba, Ontario and Saskatchewan are MLC affiliate members.

Ohio justice reforms based on CSG report

A s of late May, a series of proposed reforms to Ohio’s criminal justice system had passed the House with near-

unanimous bipartisan support and had the backing of Republican Gov. John Kasich.

HB 86 is based on recommendations made by The Council of State Governments’ Justice Center and its Justice Reinvestment project, which issued a report in February with ideas on how the state could reduce corrections spending and use the savings to invest in strategies that can reduce crime.

The Ohio measure is projected to save the state up to $100 million over four years. Among other reforms, the legislation would divert nonviolent offenders to community programs in lieu of sending them to prison. It would also offer inmates time off of their sentences (up to a 25 percent reduction) for participating in treatment or other programs.

CSG’s Justice Reinvestment projectCSG’s Justice Reinvestment project provides as-sistance to state policymakers in evaluating and strengthening their criminal justice systems.

To get started, policymakers establish an interbranch, bicameral and bipartisan team of elected and appointed officials to work with the Justice Center’s nationally recognized policy experts. These experts then consult with a broad range of stakeholders, such as prosecutors and public defenders; judges; corrections and law enforcement officials; service providers and community leaders; victims and their advocates; and people who have been incarcerated.

Together, these policymakers, experts and stakeholders work to

a n a l y z e d at a a n d d e ve l op p o l i c y options,adopt new policies and put reinvestment strategies into place, andmeasure performance.

Along with its work in Ohio, the Justice Reinvestment project has completed work in 13 other states, including Indiana, Kansas, Michigan and Wisconsin.

The CSG Justice Center receives support from the U.S. Bureau of Justice Assistance and private grant makers such as the Public Safety Performance Project of The Pew Center on the States. For more information on the CSG initiative, visit www.justicereinvestment.org.

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S tate policymakers are encouraged to reg-ister for this year’s Midwestern Legislative Conference Annual Meeting, the premier

event for state lawmakers to gather and share ideas on issues of importance to this region. The meeting will be held July 17-20 in Indianapolis.

Registrat ion materia ls are avai lable at www.csgmidwest.org.

The conference provides a unique opportunity for legislators to learn from policy experts and work with one another in a welcoming, nonpartisan environment. It will also offer attendees and guests a chance to see all that Indiana and its capital city have to offer.

Daytime activities for spouses and other adult guests include walking tours of historic Indianapolis and a visit to the Indianapolis Museum of Art. In addition, trips to the Indianapolis Zoo, the NCAA Hall of Champions and the Children’s Museum of Indianapolis have been planned for children. Evening events — for both MLC meeting attendees and their guests — include an opening night reception at Lucas Oil Stadium (home of the Indianapolis Colts and host of the 2012 Super Bowl) and Family Night at the Indianapolis Motor Speedway.

The business agenda will offer sessions in a variety of policy areas, as well as opportunities for profes-sional development. Below are some of the sessions and topics that will be featured.

Sunday, July 17

MLC Agriculture & Natural Resources Committee Meeting

Ethanol and commodity pricesEconomic gardening in rural communitiesStates and animal-rights activismEnvironmental regulations

MLC Economic Development Committee Meeting

Regional collaboration on economic development policyEconomic gardening

MLC Energy Committee MeetingElectric transmission in the MidwestThe future of nuclear energyAlternative and renewable energy

MLC Health & Human Services Committee Meeting

Medicaid reform/cost containmentLong-term careRural health issues

MLC Midwest-Canada Relations Committee Meeting

Perimeter security and the economyReducing barriers to exportingCross-border supply chainsCross-border regulatory cooperation

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MLC Annual Meeting offers legislators chance to work on policy issues in nonpartisan forum

CSG MidweSt news & eVenTs

Monday, July 18

Keynote Address“America at a Crossroads: Today’s Critical Policymaking Challenges and Opportunities” (Ron Br o w n s te i n , p o l i t i c a l director, Atlantic Media Company)

Expert Panel“America at a Crossroads: Pe rsp e c t ive s f rom t he Midwest”

Public Policy Roundtables

State Strategies for Improving ElectionsCollective Bargaining and Employee Labor LawTransportation Funding Alternatives

Tuesday, July 19

Plenary Session “The States’ Role in Transforming K-12 Education”

Plenary Session “Re g iona l D emog raphic Changes and Implications for the States” (Dante Chinni, director of the Patchwork Nation project)

Luncheon Presentation “The Beltway and Beyond” (Mara Liasson, NPR national politics correspondent)

Professional Development Workshop“From C a mp a i g n i n g t o

Governing: The Art of Public Decision Making” (Phillip

Boyle, president, Leading and Governing Associates)

Wednesday, July 20

Closing Session“An Economic Long View: What Can We Learn from the Past?” (John Steele Gordon, business/financial historian)

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Ron Brownstein

Mara Liasson

11STATELINE MIDWEST JuNe 2011

C A L E N D A R

uPCOMING MIDWESTERN LEGISLATIvE CONFERENCE AND COuNCIL OF STATE

GOvERNMENTS EvENTS

GREAT LAkES LEGISLATIvE C AuCuS MEETING

July 15-16, 2011 Indianapolis, Indiana

Contact: Tim Anderson (tanderson@csg.org)630.925.1922

www.greatlakeslegislators.org

66TH ANNuAL MEETING OF THE MIDWESTERN LEGISLATIvE

CONFERENCEJuly 17-20, 2011

Indianapolis, Indiana

Contact: Gail Meyer (gmeyer@csg.org)630.925.1922

www.csgmidwest.org

17TH ANNuAL BOWHAY INSTITuTE FOR LEGISLATIvE

LEADERSHIP DEvELOPMENTAugust 12-16, 2011Madison, wisconsin

Contact: Laura Tomaka (ltomaka@csg.org)630.925.1922

www.csgmidwest.org

HENRY TOLL FELLOWS LEADERSHIP CONFERENCE

September 9-14, 2011Lexington, Kentucky

Contact: Krista Rinehart (krinehart@csg.org)859.244.8249

CSG NATIONAL CONFERENCE AND NORTH AMERIC AN SuMMIT

October 19-23, 2011Bellevue, washington

Contact: Kelly Arnold (karnold@csg.org)800.800.1910

www.csg.org/events

67TH ANNuAL MEETING OF THE MIDWESTERN LEGISLATIvE

CONFERENCEJuly 15-18, 2012 Cleveland, Ohio

Contact: Gail Meyer (gmeyer@csg.org)630.925.1922

www.csgmidwest.org

The 2011 edition of The Council of State Governments’ signature reference tool, “The Book of the States,” is now available online in

its entirety and free of charge.“The Book of the States” is CSG’s longest-standing

publication. Launched in 1935, it has been the state government reference tool of choice for more than three-quarters of a century, providing information, analysis and comparative data on all 56 U.S. states and territories.

State government leaders and their staffs — across all branches and agencies — have come to rely on “The Book of the States” as the most comprehensive and accurate resource on state government.

The publication is also used across the country by the media, academic researchers, various other publications, attorneys, libraries, graduate students and private citizens.

The compendium not only fo-cuses on historical data, but also highlights current trends in various state public policy areas. Considered the encyclopedia of state govern-ment, and featuring approximately 100,000 pieces of unique data, it includes 200 in-depth tables, charts and figures.

The book also has more than 30 articles from state leaders, innovative thinkers, noted scholars and CSG policy staff that analyze and report on

the evolving world of state government and state policy.

Articles found in this year’s edition discuss topics such as state reforms of public retirement systems, the solvency of unemployment insur-ance trust funds, and effective prisoner re-entry strategies.

In addition, “The Book of the States” contains data and information from other professional organizations, including the National Association of State Budget Officers, the National Association of Secretaries of State, the National Association

of Attorneys General and the National Governors Association.

The book also contains in-formation from several fed-eral agencies, including the U.S. Census Bureau, the Bureau of Justice Statistics, the Bureau of Labor Statistics and the Federal Highway Administration.

In all, information is col-le c te d f rom more t han 500 sources in state government, the federal government, nonprofit organizations and private citizens through survey responses and

data verification.Contents of “The Book of the States” can be

accessed at www.csg.org/bookofthestates.Print editions will be available in July and can

be purchased at www.csgstore.org.

2011 edition of renowned reference tool “The Book of the States” available online

New grant secured for Great Lakes Legislative Caucus; group to meet July 15-16 in Indianapolis

A two-year grant from the Joyce Foundation will allow CSG Midwest to continue its staff support of the Great Lakes Legislative

Caucus. The goal of the caucus is to provide a forum

for state and provincial lawmakers to exchange ideas and information on key Great Lakes issues, as well as to strengthen the role of legislatures in protecting and restoring the lakes.

The nonpartisan group is open to all legislators who represent districts within the basin or who

have an interest in Great Lakes issues.

It will next meet on July 15-16 in Indianapolis in conjunction with the Midwestern Legislative C o n f e r e n c e A n n u a l Meeting. A travel and lodging stipend is avail-able (on a limited basis) for legislators who attend

and participate in the caucus event.For more information, please contact Tim

Anderson (tanderson@csg.org) or Mike McCabe (mmccabe@csg.org) at 630.925.1922.

The caucus meets at least once a year.

Other member ser vices include a website (www.greatlakeslegislators.org), an electronic newsletter, and a bill tracker that monitors state and federal Great Lakes legislation.

With the new grant, the caucus plans to travel to state capitols over the next two years to raise awareness among state legislators about key Great Lakes issues.

In the past, the caucus has weighed in on various Great Lakes issues (including a resolution pushing for stronger measures to keep Asian carp out of the lakes) and held workshops on the Great Lakes-St. Lawrence River Basin Water Resources Compact when the measure was being debated in state legislatures. The compact became law in 2008.

Minnesota Sen. Ann Rest currently serves as chair of the caucus, which was started by legisla-tors in 2003.

Minnesota Sen. Ann Rest

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CAPitoL CLIPskansas invests in plan to boost number of engineering graduatesOne of the first sentences in a recently enacted kansas law explains the rationale for the state’s new, targeted investment in higher education: “Engineering intensive industries represent ap-proximately one-third of the statewide payroll and tax base.”

Kansas wants more engineering graduates, and the increased economic activity that it believes will come with them.

To that end, SB 127 and SB 154 were passed by the Legislature and signed into law in May. The first measure sets aside $10.5 million annually over the next 10 years. That money will be split evenly among three public universities, which will work with the Board of Regents and Kansas department of Commerce to increase the num-ber of engineering graduates. The state’s goal is to have 1,365 graduates by 2021, a 56 percent in-crease over current figures, according to the Law-rence Journal-world. SB 154 will allow the uni-versity of Kansas School of Engineering to issue $65 million in bonds for an expansion project.

Between 1986 and 2006, Kansas was one of 30 states where the number of students earning a bachelor’s degree in engineering declined, ac-cording to a 2008 American Association of Engi-neering Societies study. Iowa, Minnesota and Nebraska were the only three Midwestern states not to experience a drop over this time period.

Major school reform gets near-unanimous approval in IllinoisLonger school days, new rules for when teach-ers can strike, and changes in the granting of teacher tenure are among the major provisions in Illinois legislation that has been hailed as a milestone in K-12 education policy.

SB 7 passed the Illinois House and Senate with near-unanimous approval. It is the result of col-laborative negotiations among teachers unions, school-management groups, education reform advocates and legislators.

According to the Chicago Tribune, the bill requires a 75 percent vote of members before the Chicago Teachers union can strike. SB 7 also authorizes Chicago Public Schools to increase the number of hours in a school day and the number of days in the school year. In addition, the bill instructs districts across the state to base teacher-layoff decisions on performance and job qualifications, not just seniority.

Rules on tenure will change as well. To be granted tenure, teachers must receive consis-tently positive evaluations over their four-year probationary period. Accelerated tenure will be offered to high-performing teachers, while the process for removing poorly performing tenured teachers will be streamlined. SB 7 also requires school board members to undergo training in areas such as financial oversight, accountability, and education and labor law.

Nebraska finds common ground on how to handle labor disputes Amid all of the partisan rancor this year over the future of public employee labor law, one state in the Midwest managed to enact a major reform of its system without a single “no” vote.

That state is Nebraska. And while LB 397 passed by an overwhelming margin in the unicameral Legislature (48-0-1), and was signed into law the next day, it took countless hours of negotiations to finally reach consensus, the Omaha world-Herald reports. The compromise legislation maintains public employees’ rights to collectively bargain, keeps intact the state’s unique process for resolving labor disputes, and is expected to help local governments control costs.

In Nebraska, a five-member, governor-appointed “labor court,” the Commission on Industrial Relations, serves as the arbiter of public-sector labor disputes. Reforms to the commission’s decision-making process were pushed this year by cash-strapped municipalities.

under LB 397, the commission will now consider not only the wages of employees, but pension benefits as well. The commission, which makes its rulings by looking at compensation levels in comparable local governments, will also be given a range for where to set compensation levels — between 98 percent and 102 percent of the midpoint. during a recession, the range falls to between 95 percent and 102 percent.

Ohio takes on problem of prescription-drug abuse with new lawLast month, Ohio lawmakers approved legislation aimed at cracking down on “pill mills” that illegally provide prescription medications to patients.

under Ohio’s HB 93, pain-management clinics — and the physicians who work in them — will be more heavily regulated under special licenses from the state Board of Pharmacy. The state Medical Board will establish rules for physicians who operate these facilities and standards for doctors who provide care.

The bill also limits the amount of controlled substances that physicians can personally provide to their patients, and these prescriptions will be tracked in the state’s existing drug database. In addition, a program will be created to collect unused medication.

Ohio legislators took on the issue this year due to continuing concerns about prescription-drug addiction and related deaths in the state and across the nation. According to the white House Office of National drug Control Policy, rates of deaths due to drug overdose have doubled since the early 1990s. Prescription painkillers were implicated in nearly 40 percent of these deaths.

Policymakers in 43 states have set up or are in the process of creating prescription-drug monitoring programs, which track patients and prescribers to identify troubling patterns.