Developments in the States, 1997

▪ 1998

Introduction

      State governments enjoyed a prosperous yet contentious year at the centre of national public policy debates. Strong economic conditions in most states produced record revenues and allowed a third consecutive year of multibillion-dollar state tax cuts. The black ink was augmented by the success of state-inspired welfare reform, which had cut nearly two million recipients from public assistance rolls during recent months.

      The state financial outlook was brightened further by a historic accord with the U.S. tobacco industry. Two states negotiated major settlements, and the industry agreed to pay other states a settlement worth billions of dollars.

      The first effects of challenges to a decades-long affirmative action trend were felt in states during the year. States continued to struggle with the federal government over a variety of issues ranging from environmental rules to the distribution of the tobacco-settlement funds. Growing use of the Internet, too, led states to wrestle with a host of new taxation, privacy, and legal concerns. All 50 states held regular legislative sessions during 1997, and 11 staged special sessions.

Party Strengths.

      No significant change was demanded by voters in limited off-year elections for governors and state legislatures during 1997. In New Jersey and Virginia gubernatorial races, Republicans retained seats won four years earlier. The partisan governors' lineup for 1998 thus remained at 32 Republicans, 17 Democrats, and one independent (in Maine).

      Only a few seats changed hands in 226 legislative races nationwide. The only significant move occurred in Virginia, where the Republicans gained control of the equally represented state Senate by capturing the governor's office. After November balloting, the partisan lineup was unchanged at 50 chambers controlled by Democrats, 46 by Republicans, and two tied. (Nebraska has a unicameral, nonpartisan legislature.) Going into 1998, Republicans had two-chamber control of 18 legislatures, Democrats dominated both houses in 20 states, and 11 state legislatures were split or tied.

Government Structures and Powers.

      By a margin of nearly two to one, New York voters rejected a proposed 1999 state constitutional convention to address issues such as term limits for public officials, caps on state indebtedness, and ballot initiatives. Opponents portrayed the proposal as a "playground for politicians."

      In a law targeted at gangsta rap, Texas became the first state to prohibit state agency pension funds from investing in companies producing sexually explicit or violent music lyrics. Michigan became the 14th state to reform its juvenile justice system, lowering the permissible age for charging offenders as adults from 15 to 14 and expanding applicable crimes from 9 to 20. Oklahoma revamped its state corrections system, approving a truth-in-sentencing law that would virtually abolish parole.

      Charging overreaching by activists, the European Union filed a World Trade Organization (WTO) complaint against Massachusetts for its politically inspired boycott of products made in Myanmar (Burma). Under WTO rules, only economic considerations could be considered in such decisions.

      New York became the first state victim of new line-item-veto authority granted to the president in 1996. Pres. Bill Clinton disallowed New York permission to impose a health-provider tax to match federal Medicaid dollars. The veto cost the state an estimated $200 million.

Government Relations.

      Federalism, the relationship between state and federal governments, continued to generate controversy during the year. Although the Republican-controlled Congress voiced support for devolving duties to states, actual progress was slight, and arguments broke out on numerous fronts. States argued with the federal government over air-quality standards, mandates in federal programs, welfare regulations, tobacco industry settlements, and highway funding.

      States rights received a boost from a 5-4 U.S. Supreme Court decision invalidating part of the Brady Handgun Violence Protection Act. The court ruled that local law-enforcement officials could not be forced to conduct the background check required by the federal law. The high court also strengthened state autonomy in regard to reapportionment, election rules, and operation of federal programs.

      Several states also contested a Clinton administration plan to use statistical sampling procedures in the upcoming 2000 national census. At year's end Congress elected to test the procedures but did not commit to using them. Following yet another federalism-oriented debate, both houses of the Oregon legislature asked that states be allowed to undertake Social Security reform by enacting their own retirement plans.

Finances.

      A booming national economy during 1997 helped produce the biggest state treasury surpluses in two decades. The good news prompted states to reduce taxes for the third consecutive year, this time by a net $1.7 billion.

      Even so, the surpluses produced arguments. Legislators in Colorado, Missouri, and Oregon rejected spending ideas and required that excess revenues be returned to taxpayers. Some observers suggested that capital gains taxes from stock market profits contributed to black ink in state treasuries. Others credited the work requirement in welfare reform, which helped prompt a dramatic drop in welfare expenditures and a resultant increase in taxpaying jobholders.

      Twenty-one states reduced taxes specifically to offset higher-than-expected revenues, and 18 used a portion of higher revenues to shore up their "rainy day" funds. Another 18 targeted programs for one-time or extraordinary funding increases. Six reduced state debt.

      Nineteen states reduced personal income taxes, with significant reductions occurring in Arizona, Connecticut, Iowa, Massachusetts, and Minnesota. Other major tax reductions included cuts in sales taxes on food in Georgia, Louisiana, and Missouri and property tax reductions in Kansas and Montana.

      Tax increases were few in number. Michigan, Pennsylvania, and Utah raised motor-fuel taxes. Colorado voters rejected a gas tax hike to finance highway and infrastructure repairs. Alaska, Maine, New Jersey, Oregon, Rhode Island, and Utah boosted levies on cigarettes and tobacco. Alaska's boost in cigarette taxes to $1 per pack resulted in a price of about $3 per pack in that state. A Maine law providing for taxation of charities that benefit nonresidents was invalidated by the U.S. Supreme Court.

Education.

      Ohio and Vermont joined a majority of states under court order to equalize school funding between rich and poor districts by reducing state reliance on local property tax revenues. New York voters turned down a school bond referendum.

Health and Welfare.

      Tobacco dominated state health and fiscal news during 1997. As individuals began to win judgments alleging their health problems were affected by tobacco-related complications, the attorneys general of Mississippi and Florida were able to negotiate multibillion-dollar settlements with tobacco companies in order to repay the states for their tobacco-caused health expenditures. Mississippi Attorney General Michael Moore announced the first state settlement, a $3,366,000,000 payout over 25 years. Florida Attorney General Bob Butterworth later revealed a similar pact, this one for $11.3 billion. At one time during the year, 40 states were pursuing tobacco lawsuits, citing similar grounds.

      After extensive negotiations with two dozen state attorneys general and plaintiffs' lawyers, the tobacco firms finally agreed to a historic $368.5 billion settlement. The agreement said the funds would compensate states and class-action individual plaintiffs for costs of smoking-related illness, fund antismoking programs, and provide health care for uninsured children. The proposed pact provided for states to share in an $8.5 billion payout by tobacco companies for 5 years, followed by $15 billion in payments for 20 additional years.

      The pact, however, required congressional and U.S. executive branch approval. The federal government was spending about 60% of government health care dollars through the Medicare program, and at year's end many congressmen were objecting to terms of the settlement. They demanded that the U.S. government share in settlement proceeds and that up to $25 billion in payments to plaintiffs' trial lawyers be markedly reduced.

      States also continued to grapple with the consequences of the historic 1996 federal welfare-reform law, which required able-bodied welfare recipients to find a job within two years or face a cutoff of benefits. Seventeen states passed new laws accommodating the federal mandate, often setting up stringent welfare-to-work programs.

      Aided by a booming national economy, welfare-reform statistics were startling; a federal study at the end of the year indicated that 1.9 million recipients had been removed from state welfare rolls over the previous two years, with every jurisdiction except Hawaii and the District of Columbia showing a marked decline. Reform advocates hailed the development, saying the shift from welfare to work reduced despair among recipients and dramatically enriched state treasuries.

      Washington state voters turned down two health-related ballot initiatives. One would have legalized the medicinal use of marijuana, LSD, and heroin. The other would have allowed workers to retain their individual physicians if they changed their health care coverage.

      Oregon voters again endorsed the state's unique Death with Dignity Act, this time by a 60% favourable vote. The measure legalized physician-assisted suicide. In 1994 a similar measure had been approved by a 51-49% margin, but legal challenges delayed its implementation and led to the second vote.

      When a federal ban was vetoed by President Clinton, 14 states outlawed "partial-birth" abortion, a late-term procedure attacked by pro-life advocates. New Jersey's legislature enacted a ban on that procedure over Gov. Christine Todd Whitman's veto. The California Supreme Court overturned the state's 10-year-old law requiring notification of parents before teenagers could receive an abortion. The court based its decision on privacy rights it found in the state constitution and thus avoided federal court review.

      A nationwide drive to toughen drunk-driving laws made progress during 1997. Fifteen states followed National Highway Traffic Safety Administration recommendations and lowered the blood-alcohol-content standard from 0.10% to 0.08%. Other states moved to confiscate automobiles, impound license plates, or confiscate registration papers for drunk-driving felonies or repeat offenders.

Law and Justice.

      According to statistics released during the year, serious crime dropped by 3% nationwide, the fifth consecutive annual decline. Paced by an overall drop in the murder rate of 9%, incidents of violent crime fell by 6%, and more numerous property crimes were down by 2%. The national juvenile arrest rate also fell. Authorities attributed the trend to tougher sentencing, a crackdown on minor offenses, and the aging national population. Gun-control advocates suffered a setback in November when Washington voters rejected 71-29% a proposal to require trigger guards on weapons sold in the state.

      States executed 74 men during 1997, the highest total since capital punishment was reintroduced in 1976. Half of the national total, 37 men, were put to death in Texas, and 9 more were executed in Virginia. The surge of executions in Texas was facilitated by court approval of a 1995 state law designed to shorten death-row stays by allowing state and federal appeals to run concurrently.

      The upward trend in executions continued even in the face of adverse publicity. On March 25 fire erupted from the leather face mask of an inmate being put to death in the 74-year-old electric chair at the Florida State Prison in Starke. After a medical report indicated that the convict had died instantly, Florida Gov. Lawton Chiles announced there would be no change in the procedure.

      At year's end, of 38 states with a death penalty statute, only Florida, Alabama, Georgia, Kentucky, Nebraska, and Tennessee relied solely on the electric chair for executions. The remaining states all offered lethal injection as an option.

      In a controversial decision, the U.S. Supreme Court upheld a 1994 Kansas law allowing the state to confine violent sexual offenders even after their prison terms had been served. Five other states had similar laws.

      Louisiana became the first state explicitly allowing motorists who feared for their life to shoot and kill carjackers. Reversing a decades-long trend toward easy divorce, Louisiana also became the first state to toughen its marriage laws and narrow the grounds for divorce. Couples seeking a Louisiana marriage license would now choose between marriage vows with strict divorce requirements or the standard license, which allowed no-fault divorce.

      In a novel case arising from an Internet discussion on sport hunting, an El Paso, Texas, student was arrested for suggesting that a pro-hunting California state senator be "hunted down and skinned and mounted for our viewing pleasure." The accused became the first to be charged with making an on-line threat to a public official, a felony in California.

      Kentucky became the first among 15 states with victim-notification laws to automate its system fully. Individuals who registered with the state received a computer-generated call within 10 minutes when an inmate was released or transferred to a new facility.

Ethics.

      Arizona Gov. J. Fife Symington III was convicted on September 3 on seven felony counts of defrauding lenders to his troubled real-estate empire. Symington resigned two days later and was replaced by Arizona's secretary of state, Jane Dee Hull, another Republican. Symington was the 11th state governor to be forced from office during this century because of scandal and the third during the 1990s.

      Massachusetts State Sen. Dianne Wilkerson pleaded guilty to four counts of failure to file income tax returns and was sentenced to six months of home detention. The senator said she failed to pay because death threats she received as a lawyer for the National Association for the Advancement of Colored People (NAACP) forced her to spend her money on security.

Prisons.

      The growth rates of both prison construction and inmate populations slowed during 1997. Penal construction expenditures rose 4.8% during the year, well under the average increase for the 1990s.

      Statistics released at midyear showed that the number of prisoners housed in state and federal prisons increased by 5% to 1,182,169, also well under the 7.3% average population growth of the 1990s. Another 518,000 adults were held in local jails on a typical day in 1997.

Gambling.

      For the third consecutive year, opponents of legalized gaming were encouraged by a slowdown in gambling's expansion. Countering a national trend, voters in the Navajo Reservation, the country's largest, rejected casino gambling on their land in Arizona, Utah, and New Mexico. Oregon voters, however, approved a statewide lottery to finance construction and computer equipment purchases for public schools.

Environment.

      Conflicts in Washington, D.C., continued to dominate environmental news during the year. Despite objections from some states, the federal government imposed tough new ozone standards, which led to predictions of job losses and economic hardship in some areas.

      The U.S. Department of the Interior reneged on a 1993 decision to sell federal Mojave Desert land to California to be used as a low-level nuclear-waste facility. Both state and federal tests had pronounced the area safe for the site, but owing to environmental concerns, the Clinton administration reversed the decision, which had been made during the presidency of George Bush. California filed suit to enforce the agreement.

Equal Rights.

      A three-decade trend of growth for affirmative-action programs was slowed and sometimes even reversed during the year. The U.S. Supreme Court refused to hear a challenge to California's 1996 Proposition 209, which barred race- or gender-based preferences in school admissions, public hiring, and public contracting.

      The court decision, along with a similar outcome in a 1996 Texas case, led to the abolition of affirmative-action admissions programs at Texas and California universities and a resultant drop in admissions of African-American and Hispanic law-school applicants. Proponents of 209 said the court action would clear the way for similar anti-affirmative-action proposals that were pending in 26 states.

      Advocates of additional legal protection for homosexuals enjoyed mixed success. In Washington voters rejected a proposal barring discrimination on the basis of sexual orientation. Responding to the nation's first court decisions legalizing the action, the Hawaii legislature amended the state constitution to bar same-sex marriages. New Jersey, however, became the first state to allow homosexual partners to adopt jointly, treating them the same as married couples.

      Rejecting a claim that mere advantage on the civil service test was sufficient, the Illinois Supreme Court ruled that the state must give "absolute preference" to veterans applying for state jobs. Maine voters rejected a proposal to extend voting rights to the mentally ill under guardianship; other individuals with guardians, including the mentally retarded, had such rights in the state.

Consumer Protection.

      The growing popularity of computers and the Internet led to numerous state policy and funding debates during 1997. Many states grappled with novel problems arising from Internet use, including privacy of medical records, gambling availability, and other issues.

      All states moved to address the serious computer network problem that would result from the change from 1999 to 2000. To save money and space, most programming in the past few decades had used only the final two digits in the date; consequently, computers in 2000 would assume the date was 1900, which would throw state payments, receipts, and other functions into disarray. One consulting firm estimated that fixing the problem could cost upwards of $600 billion during the next few years. Nevada became the first state to address year 2000 liability concerns. A new Nevada law provided immunity to state and local governments "from any civil action . . . caused by a computer that produced, calculated or generated an incorrect date."

      When several states objected, a congressional effort to bar states from imposing extra taxes on Internet commercial trans-actions was stalled in the federal government during the year. States also moved to protect tax revenue from Internet expansion by cracking down on interstate wine and liquor sales. By the year's end, 21 states prohibited direct shipping of wine, with Georgia, Kentucky, and Florida classifying direct shipment as a felony. At the end of 1997, nine state attorneys general announced they were initiating an antitrust investigation against the Microsoft Corp. for monopolizing the market for operating-systems software.

DAVID C. BECKWITH

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