State and Local Affairs

▪ 1997

Introduction

      States continued to be at the centre of national debates on public policy during 1996. The U.S. Congress, reacting in part to successful experimentation by a number of states, enacted a historic welfare-reform measure that relied on state and local oversight to reduce the dependency of recipients on government. The development was part of a continued trend toward increased state powers in a federalist system.

      Continuing economic expansion allowed states to enact record tax reductions for the second consecutive year. Voters decided some 200 initiatives, referenda, and state bond issues in the November balloting, another national record. In the most highly publicized issue, California citizens ordered an end to government affirmative action programs, although enforcement of the measure was at least temporarily delayed by a federal judge.

      Forty-nine states (all except Kentucky) held regular legislative sessions during the year, and 12 states held special sessions.

Party Strengths.

      Democrats made modest gains in the November state elections, winning a net increase of 70 seats among approximately 6,000 contested legislative races and holding even in governors' contests.

      In 11 gubernatorial elections there were party changes in two; Republicans captured a Democratic-held office in West Virginia, and Democrats took the New Hampshire governorship from Republicans. The governors' lineup for 1997 thus remained at 32 Republicans, 17 Democrats, and 1 (Maine) independent.

      Going into the 1996 elections, Republicans had two-party control of 18 state legislatures, Democrats dominated in 16 states, and 15 legislatures were split. Overall, Republicans controlled 50 of 99 legislative chambers. (Nebraska had a unicameral, nonpartisan legislature.) After November's legislative balloting in 45 states, Democrats controlled 50 of the 99 chambers and Republicans 46, with 2 tied. For 1997 Republicans maintained full control of 18 legislatures, Democrats held 20, and 11 state legislatures were split.

      The election results confirmed a national trend toward divided government. For 1997 a record 31 states had at least one legislative chamber controlled by a party different from the governor's.

Government Structures and Powers.

      In the wake of a 1995 Supreme Court decision declaring federal term-limit measures by states to be unconstitutional, backers turned to other methods to generate turnover among elected officials. Voters in Alaska, Arkansas, Colorado, Idaho, Maine, Missouri, Nebraska, Nevada, South Dakota, and Wyoming required candidates to pledge their support for term limits or be identified on future ballots as having refused to do so. Similar initiatives were defeated in Montana, North Dakota, Oregon, and Washington.

      States continued to experiment with ways of improving voter turnout. For the first time, presidential primary elections were held by mail in three states—Nevada, North Dakota, and Oregon. Although a federally mandated "motor-voter" law boosted registration by 11 million nationwide, the turnout in the November election was just below the historic low of 50%.

      Fulfilling a 1994 campaign promise, the state treasurer of Texas pushed through the abolition of her agency during the year. Treasury operations were turned over to the state comptroller.

Finances.

      A strong national economy and a conservative political climate prompted states to reduce taxes in fiscal 1997 for the second consecutive year, this time by a net $4 billion, or 1.1% of the previous year's collections. With the $3.1 billion reduction in fiscal 1996, this action was the largest two-year state tax reduction in history and the first back-to-back drop in 17 years. Only two states, Missouri and Idaho, raised taxes overall, with both using gasoline levies to increase revenue.

      Personal income taxes were again the primary focus of state tax-cutting efforts, with Connecticut, Delaware, New York, Ohio, and Utah cutting personal tax rates. Iowa, Kentucky, Massachusetts, New York, Ohio, and South Carolina increased the standard deduction or personal exemptions, which effectively reduced personal tax burdens.

      Seventeen states modified business taxes during 1996, most by reducing corporate levies in an effort to retain or recruit jobs. For the second straight year, the most dramatic changes came in New York, which phased out its corporation income tax surcharge entirely. California, Connecticut, and North Carolina reduced corporate tax rates, Delaware and Rhode Island reduced bank tax rates, and Washington cut business taxes.

      Georgia and North Carolina reduced sales taxes on the purchase of food for home consumption, but Louisiana and Vermont extended temporary sales tax increases. Connecticut, Illinois, and Kentucky reduced taxes on health care providers, while New York and Rhode Island extended similar taxes due to expire during the year.

      Indiana halved its motor-vehicle excise tax, but motor-fuel taxes were increased in Connecticut, Idaho, Illinois, Missouri, and North Dakota. Massachusetts and Utah hiked tobacco taxes, while Delaware reduced levies on alcohol. Among miscellaneous tax actions, Arizona repealed its education property tax, New York ended the taxation of real-estate gains, and North Carolina phased out soft-drink levies. Florida reduced pari-mutuel gambling taxes, and North Carolina and Utah eased tax burdens on utilities and gas producers.

      Voters in Florida, Nevada, and South Dakota approved measures requiring a two-thirds legislative or popular majority for enacting new taxes, bringing to 13 the number of states with so-called supermajority laws. Oregon voters went even farther, requiring that a majority of all registered voters approve any new state taxes or fees.

      New Jersey staged a highly successful tax-amnesty program during the year, collecting $350 million in delinquent taxes. Michigan lawmakers enacted an experimental "renaissance zone" plan to eliminate both property and income taxes for businesses and residents of blighted areas.

Education.

      Colorado voters rejected a controversial initiative that sought to give parents "the natural, essential and inalienable right to direct and control the upbringing, education, values and discipline of their children."

      In a case involving the Virginia Military Institute, the U.S. Supreme Court declared unconstitutional the "categorical exclusion" of one gender from any government-funded school or college.

      Alabama approved a bill giving teachers who followed school-district guidelines immunity from lawsuits that arose from paddling students. Twenty-six states had laws prohibiting the use of corporal punishment on pupils.

Health and Welfare.

      Following years of experimentation by states, a historic federal welfare-reform act was signed into law by Pres. Bill Clinton in 1996. The legislation mandated work or job training, ordered a cutoff in benefits after two years for most recipients, and ended the financing of welfare for illegal aliens.

      The new law was denounced by liberals as heartless and cheered by many Republican governors as overdue. Wisconsin Gov. Tommy Thompson announced in late 1996 that his state's welfare rolls had been cut in half during the previous four years after "Wisconsin Works," a state version of the federal law, was enacted.

      In a controversial step designed to prevent the spread of AIDS, New York became the first state to require the mandatory testing of newborns for HIV. New York also joined Arizona, Nevada, Oregon, and Washington in requiring boxers to undergo HIV screening.

      Reacting to advances in gene research, Illinois and New Jersey joined 13 other states in prohibiting health insurers and employers from discriminating on the basis of genetic findings.

      The development of effective but expensive protease inhibitors threatened to exhaust state AIDS budgets during 1996. Federal rules required that all FDA-approved drugs be covered by Medicaid, with states picking up one-third of most program costs. States faced the funding shortage in a variety of ways, which included rationing and seeking additional legislative funding.

      As a dozen states sued tobacco companies, seeking reimbursement for public health funds expended on tobacco-related illnesses, Massachusetts went farther; a new law there required the publication of the exact ingredients—from chocolate to ammonia—in each brand of cigarette, cigar, and chewing tobacco. In a corporate response that postponed enforcement, tobacco firms complained in a suit that the law would force them to reveal trade secrets.

      Regulation of increasingly powerful health maintenance organizations (HMOs) was argued in several states. Arizona and Wyoming became the first states to require the disclosure of HMO financial incentives with provider-doctors. Massachusetts enacted a law to prohibit HMOs from restricting communication between providers and patients. A number of states passed laws requiring insurance plans to cover a given minimum length of hospitalization for women giving birth. California voters, however, rejected two measures that would have imposed tough new HMO regulations.

Laws and Justice.

      States continued to wrestle with knotty end-of-life medical issues. Most states had enacted "advance-directive," or right-to-die, laws that allowed dying patients to order the withholding of heroic treatment. Iowa became the 34th state to explicitly prohibit suicide assistance by doctors. Two federal courts declared similar laws to be unconstitutional, and at the year's end the U.S. Supreme Court was preparing to address the issue.

      Missouri adopted a new law that would keep repeat sexual offenders under lifetime parole by the corrections department. Voters in Arizona and California approved the medical use of marijuana, but the Clinton administration enjoined the measures as violating federal law.

      A trend toward providing more rights for crime victims, including input into the sentencing of convicted criminals, continued during 1996. Voters in Connecticut, Indiana, Nevada, North Carolina, Oklahoma, Oregon, South Carolina, and Virginia approved new measures protecting crime victims.

      Although courts continued to clear legal hurdles to capital punishment, only 45 convicts were executed by states during 1996, down from 56 the previous year. More than 200 persons were sentenced to death over the same period, and some 3,100 inmates were left on death row awaiting punishment at year-end.

      Texas became the first state to employ neural network technology, which used electronic methods of recognizing suspicious patterns, to combat fraud in Medicaid claims. California voters rejected an initiative backed by trial lawyers that was designed to circumvent federal reforms in lawsuit abuse and to facilitate lawsuits for alleged securities fraud.

Ethics.

      Arkansas Gov. Jim Guy Tucker was convicted on two felony counts of conspiracy to defraud the Internal Revenue Service and other government agencies over cable television contracts. The charges had been brought by a federal independent counsel and grand jury investigating the Whitewater affair. Tucker, the 10th U.S. governor to be convicted of a crime in the 20th century, resigned his office.

      The year produced few other major ethics scandals, although several legislatures grappled with a perception that special interests enjoyed inordinate influence over public processes. Continuing a trend, voters in California and Maine approved new limits on political campaign spending and contributions.

Prisons.

      States boosted corrections spending during 1996 by 6.8%, the fastest-growing category of state expenditures. The increase was made necessary by tougher anticrime laws, including "truth-in-sentencing" and "three-strikes" legislation.

      Accelerated prison construction allowed the number of state prisoners to increase by 5.6% during the year, to a record 1.1 million.

      The U.S. Supreme Court overturned an Arizona federal judge's ruling that would have required states to provide first-rate law libraries for inmates, including special help for illiterate and non-English-speaking prisoners.

Gambling.

      Michigan voters narrowly approved casino gambling for Detroit, but other pro-gambling ballot measures went down to defeat. Arkansas voters rejected a state lottery and casinos in Hot Springs; Nebraska voters said no to offtrack betting on horse races; Ohio turned down an initiative for riverboat casino gambling; and Washington voters defeated a proposal for electronic gambling on Indian lands.

      In a victory for states rights, the U.S. Supreme Court effectively ruled that states did not have to negotiate with Indian tribes to establish casino gambling on reservations within their borders. In 1988 Congress had ordered states to allow reservation gaming where requested by Indian tribes, but in a case brought by Florida, the high court ruled that the 11th Amendment prohibited states from being sued to do so.

      The Missouri Gaming Commission approved a novel plan aimed at protecting compulsive gamblers from themselves. After a gambler had registered as a "disassociated person," the gambler's photograph would be circulated to riverboat casinos. Casino employees were then required to escort the gambler off the premises immediately if he or she was recognized.

Environment.

      The Minnesota Senate approved a measure that would have established the nation's first constitutional right to hunt and fish, but the House failed to endorse it before adjourning. The proposed amendment was a response to antihunting and animal rights activists. After an animal-welfare group in New Jersey attempted to prosecute a man who had killed a rat in his garden, state legislators excluded rats and mice from protection under the state's animal cruelty laws.

      Some 34 environmental initiatives and bond issues were decided by voters in 14 states in November. Voters in Florida rejected a "penny-a-pound" tax on sugarcane producers to combat water pollution in the Everglades. A billion-dollar environmental bond issue was approved in California, but an even larger bond issue for pollution cleanup was defeated in New York. Maine voters rejected a ban on timber clear-cutting, but they voiced their approval of additional restrictions on logging operations.

Civil Rights.

      By a 54% to 46% margin, California voters approved a high-profile civil rights initiative that would eliminate state and local government affirmative action programs. Proposition 209 was stayed by a federal judge, however, following the November balloting. If enforced, the measure would end preferences based on race or sex in public hiring, the awarding of contracts, and college admissions.

      A Hawaiian court ruled that the state had no legitimate interest in prohibiting same-sex marriages and set off a storm of controversy nationwide. States traditionally honoured other state determinations on such matters, but the U.S. Congress approved a Defense of Marriage Act, signed by the president, that allowed states to ignore same-sex marriages granted elsewhere.

      A 1992 Colorado voter initiative prohibiting gays and lesbians from winning "any minority status, quota preferences, protected status or claim of discrimination" was struck down by the U.S. Supreme Court. The decision cast doubt on the legitimacy of numerous state laws that might discriminate on the basis of sexual orientation.

      California approved a new law prohibiting gender-based differences in pricing for services such as haircuts and laundering. Citing a constitutional right to equality between the sexes, a Florida court struck down an 1895 law requiring a husband to pay for his wife's housing, food, clothing, and medical bills.

Consumer Protection.

      California moved to deregulate its electric utility industry, removing utilities' monopoly in power generation and allowing consumers eventually to choose their own power providers. The move was part of a nationwide trend, with, by year-end, some 47 states moving to reduce or eliminate such regulation.

      Attempting to reduce expensive newspaper advertising, 20 states began listing the names of unclaimed-property owners on an Internet site. Ohio became the 12th state to enact an agricultural disparagement, or "veggie-libel," law. The measure allowed farmers to sue critics who made false or degrading claims about their products.

      Virginia approved a law preventing out-of-state telemarketers from pretending that they were locally based.

      For the first time, the U.S. Supreme Court struck down the punitive damages verdict of a state court for being so "grossly excessive" as to violate the U.S. Constitution. The ruling overturned a $2 million award from an Alabama court to the buyer of a BMW who had not been notified that the paint on his supposedly new car had been touched up. (DAVID C. BECKWITH)

▪ 1996

Introduction

      The U.S. states were at the epicentre of national policy debates during 1995. The Republican Congress attempted to transfer responsibility back to state and local levels. Although budget disagreements at year-end prevented any substantial transfer of federal funding to states via block grants, the trend toward increased state powers during the year was unmistakable.

      The states continued their leadership role in devising innovative answers to social concerns, from welfare to corrections to health care. The crackdown on crime continued to have repercussions, with state prison populations topping the one million mark for the first time. A strong national economy and conservative-trending politics led to record state tax cuts during the year. Affirmative action was challenged in California, the nation's most populous state, and measures allowing the carrying of concealed weapons were approved in several states, but the enthusiasm for limiting the terms of public officials stalled.

Party Strengths.

      After two consecutive years of substantial advances, Republicans failed to make additional major gains in 1995 state elections. Persistent party switching, particularly in the South, however, gave the Republicans control of more state legislative chambers at year-end than at any other time since the early 1930s. In November gubernatorial balloting Republicans wrested away one additional governorship, in Louisiana, boosting their total to 31. Democrats had 18 governorships at year-end, with one (Maine) held by an independent.

      Democrats gained an edge in limited off-year legislative elections. In the most closely watched balloting, Democrats thwarted a Republican assault on both of Virginia's legislative chambers, although Republicans did manage a tie in the state Senate. Going into 1995, Republicans controlled both houses in 20 legislatures, with Democrats having two-house majorities in 19. Party switches during the year reduced the Democrats' control to 17 states. Following the November balloting, Republicans had control of legislatures in 19 states and Democrats in 16, with 14 states split. (Nebraska had a unicameral, nonpartisan legislature.)

Government Structures and Powers.

      Federalism—the distribution of power between Washington, D.C., and the states—enjoyed a resurgence in 1995. Governors, state legislators, the Republican Congress, and the nation's courts all participated. The United States Supreme Court gave states victories in such areas as health care spending, welfare, school desegregation, prisoner lawsuits, and parole policy. For its part, Congress moved toward giving back the responsibility and funding, via block grants, to states in areas such as welfare, Medicaid, and job training.

      Early in the year, Congress overwhelmingly approved a law curbing "unfunded mandates," federal laws imposed on states without funds for their enforcement. State officials lobbied Washington virtually nonstop during the year for fewer strings on federally assisted programs. Governors were particularly active in seeking a compromise on Medicaid grants, the health program for low-income citizens. Both congressional and state Republicans generally favoured block grants for such programs. Democrats were less enthusiastic, worrying that states would abandon support for the poor. No significant changes were instituted, however, largely because of unresolved disagreements with Pres. Bill Clinton.

      The states were affected by the two partial federal shutdowns over the budget late in the year. Fearing the loss of revenue from tourism, Arizona Gov. Fife Symington, for example, sent National Guard troops to the Grand Canyon in November in an attempt to reopen the national park, shuttered in the budget fight. A month later Arizona and New Mexico averted a second lockout by using state funds to keep furloughed federal park workers on the job at the Grand Canyon and Carlsbad Caverns.

      In a startling 5-4 ruling, the U.S. Supreme Court struck down the Gun-Free School Zone Act of 1990 as an unconstitutional federal infringement on state powers. It was the first time since 1935 that the high court had thrown out a federal law on the grounds that the Congress had exceeded its authority under the commerce clause. Even when the states lost, however, the Supreme Court's reasoning heartened advocates of federalism. In another 5-4 decision invalidating 23 state laws setting term limits for Congress, a solid minority maintained that states must be allowed to exercise all powers not specifically withheld from them by the Constitution.

      The trend toward federalism produced a number of developments with major influences on everyday lives. After Congress repealed the speed-limit mandate on states in November, for example, only five (Connecticut, Delaware, Hawaii, New Jersey, and Rhode Island) opted to retain the 55-mph limit in nonurban areas. Most states went to 65 or 70 mph as a new limit, but Nevada and Wyoming immediately allowed 75 mph. Montana abolished daytime speed limits entirely but kept a 65-mph limit at night.

      At year-end, Congress banned states from taxing the pension income of former residents living in other states.

      The five-year trend toward imposing term limits on public officials seemed to stall during 1995. Not only did the Supreme Court invalidate state attempts to cap congressional terms, but no new state legislatures joined the 23 states that previously had imposed limits. In the only general balloting on the idea, Mississippi voters in November rejected a proposal to limit the terms of most state officials. North Carolina joined the other 49 states in granting veto authority to its governor. The constitutional amendment was subject to ratification by state voters in 1996.

      Oregon enacted a law requiring special elections to be held via mail balloting. At year-end, filling an open U.S. Senate seat, Oregon staged the nation's first congressional election conducted entirely by mail. Although critics worried about possible electioneering misconduct, no serious fraud complaints were reported.

      Maryland legislators rebelled after Gov. Parris Glendening promised professional football team owners substantial concessions for relocating teams to Maryland. After the governor offered to pay $78 million for road improvements in Prince Georges county for the Washington Redskins and to build a $200 million stadium in Baltimore rent-free for the Cleveland Browns, legislators ordered renegotiations.

Finances.

      Buoyed by an expanding economy and spurred by Republican political advances, the states cut taxes by $1.1 billion during 1995, the biggest aggregate state tax cut in a decade. Combined with previously enacted cuts, the overall tax liability of residents fell by $3.1 billion during the year, a record drop. The reduction in taxes would have been even greater, analysts said, except for fears about the effects of federal deficit reduction and of the devolution of greater responsibilities to the states.

      Personal income levies were the source of the bulk of state tax cuts. Arizona, Delaware, and New Jersey cut personal income rates, while the top rates in California and New York fell under previous legislation. A number of states—including Arizona, Delaware, Iowa, Michigan, North Carolina, and Ohio—increased personal exemptions and standard deductions. Connecticut also granted a personal credit for property taxes, while Iowa and Virginia increased their pension exclusions for retirees, and New York expanded its earned income credit for low-income workers.

      Montana and Oregon authorized large personal income tax rebates during the year. Business taxes were reduced in three states; Michigan and Pennsylvania trimmed major corporate taxes, while Oregon also provided business tax rebates. Only three states—Hawaii, South Dakota, and Vermont—authorized significant overall tax increases, and some of their levies were offset by local tax reductions.

      Although several states extended health care provider taxes that were due to expire, three states—Illinois, New Hampshire, and Rhode Island—reduced levies on Medicaid providers. Sales tax changes were minor, with Kansas and Washington providing additional exemptions and South Dakota broadening its sales tax base in order to provide property tax relief.

      Among excise tax actions, cigarette taxes were raised in Arizona (by voter initiative), Rhode Island, South Dakota, Vermont, Washington, and Wisconsin. Washington's cigarette tax rose to 81.5 cents per pack on July 1, the highest in the U.S. New Mexico and New York reduced motor fuels taxes, and Oregon reduced trucker taxes, while Connecticut boosted its gas levy.

      North Carolina repealed its intangibles tax. Utah and Washington reduced statewide property taxes. Idaho, South Carolina, and Wisconsin provided local property tax relief by putting more state funds into schools. Pennsylvania repealed an inheritance tax on surviving spouses, and Kentucky began a four-year phaseout of its inheritance tax.

Education.

      In December a coalition of 21 western state governors announced plans for developing a "virtual university" over the next decade. Students would have access to classroom and teaching materials via computers, television, the Internet, and other high-tech devices, making long-distance learning a reality. Alabama approved a new education law specifically allowing educators to impose corporal punishment.

Health and Welfare.

      As the U.S. Congress deliberated over reform of the welfare system, widely judged a failure nationwide, states continued to create innovative solutions on their own. Massachusetts, Connecticut, and New Hampshire joined Indiana and Wisconsin in tough new legislation requiring the poor to work. The new laws typically required all able-bodied welfare recipients with no children under age six to work, granted credits to businesses hiring them, and assigned public service duties if jobs were not available.

      Arkansas, Maryland, New Jersey, New York, Oregon, and Wyoming moved to combat excessive managed-care cost-saving techniques by approving "patient protection acts" to preserve the choice of doctors. The Arkansas law was particularly tough, allowing any person under managed-care to go to "any willing provider" of medical services. Statutes in Maryland and New Jersey required health insurers to provide new mothers and their children with specified minimum hospital care. The new laws mandated the provision of at least 48 hours of hospital care following a normal birth and 96 hours following a cesarean section. Similar laws were pending in eight other states.

      Montana, New Mexico, Utah, and West Virginia joined nine other states approving medical savings accounts. The accounts were designed to reduce health care consumption by making consumers responsible for their own health payments.

      A federal court invalidated a state law allowing Oregon doctors to prescribe lethal doses of medication for dying patients. The judge declared that the law, approved by state voters in 1994, violated the U.S. Constitution's equal protection clause.

      Reversing a 20-year national trend, Washington became the first state to toughen its law on runaway youngsters. The new measure allowed police to pick up runaways and return them to their parents, required schools to report all truancies, and permitted parents to commit their children for drug or mental health care. Most states had previously decriminalized running away, leaving parents without legal recourse.

      Massachusetts began putting the names and pictures of individuals in arrears on child-support payments on the Internet. The state's revenue department had previously sponsored a successful "Ten Most Wanted" poster campaign.

      Maryland joined California, Utah, Vermont, and Washington in banning smoking in most workplaces. Massachusetts joined Florida, Minnesota, Mississippi, and West Virginia in suing the tobacco industry to recover $1 billion in state-paid health costs. A federal appeals court overturned a Colorado constitutional amendment that prohibited the state from funding abortions except in cases where the mother's life was at risk. The state had to pay for abortions as long as it accepted federal Medicaid money, the court ruled.

Laws and Justice.

      Washington state's sexual predator law, the first in the nation to keep sex criminals in confinement after they had served their sentences, was invalidated by a federal court on the grounds that it punished an offender twice for a single crime. Ohio voters approved a measure requiring the governor to consult with parole authorities before cutting any prison sentences. Pennsylvania voters allowed children to testify via videotape or television in highly charged cases. Alabama legislators repealed a unique law requiring rape victims to pay up to $200 for a forensic examination.

      States continued to ease restrictions on concealed weapons. Following action in a dozen states, only eight states—Illinois, Kansas, Kentucky, Missouri, Nebraska, New Mexico, Ohio, and Wisconsin—now generally prohibited private citizens from carrying concealed guns for self-protection. Florida had led the trend with a 1987 law, and gun enthusiasts noted that the state's homicide rate had dropped significantly in the ensuing eight years.

      After 18 consecutive years of legislative approval followed by gubernatorial vetoes, New York in March became the 38th state to provide for capital punishment. States executed 56 convicts during 1995, the highest total since capital punishment was reinstated by the U.S. Supreme Court in 1976. Nearly 200 individuals were sentenced to death over the same period, however, which left some 3,100 inmates on death row at year-end.

Ethics.

      Arkansas Gov. Jim Guy Tucker was indicted on June 7 by a federal grand jury on three felony counts alleging conspiracy to defraud the Internal Revenue Service and Small Business Administration over cable television contracts. Tucker was charged again on August 17 on an additional fraud count alleging loan laundering to deceive state and federal authorities. The charges were pressed by an independent counsel investigating the role of present and former Arkansas officials and bankers in the so-called Whitewater affair.

      Joseph Salema, chief of staff to former New Jersey governor James Florio, pleaded guilty on February 23 to one count in a kickback payment scheme to direct municipal bond business. In Florida, a former Escambia county commissioner was among those pleading guilty on March 3 to bribery in a similar case. Former Pennsylvania attorney general Ernie Preate was sentenced to 14 months in prison on December 15 after pleading guilty to felony mail fraud. Preate was accused of having failed to report $20,000 in campaign contributions from video poker operators.

      Minnesota's Democrat-Farmer-Labor Party was jolted during the fall when six state representatives and two state senators were arrested on various unrelated charges ranging from domestic assault and shoplifting to felony drunk driving and fraud. One defendant, charged with 24 counts of conspiracy, bribery, mail fraud, and theft, offered a novel defense; Sen. Harold ("Skip") Finn claimed that the federal government could not legally prosecute him because he was a Native American. A federal judge rejected the argument.

      A new ethics law in Alabama required all public employees making $50,000 or more to publicly report all outside income, debts, and assets. When critics noted that college coaches were specifically exempted, Alabama's governor promised remedial legislation in 1996.

Prisons.

      Accelerated state prison construction continued to open new beds. According to the U.S. Department of Justice, the number of state prisoners surged by 9.1% during the year to reach 1,004,608 at midyear. The jump, the largest annual increase in the nation's history, meant that the U.S. was locking up a larger percentage of its residents than any other nation.

      Inmate growth was attributed to stiff mandatory sentences for violent and drug crimes, toughened parole rules, and an increased likelihood of being imprisoned once arrested. A 1995 Department of Justice study showed that 104 of every 1,000 persons arrested for drug offenses went to prison, compared with only 19 of every 1,000 in 1980.

      In part because federal and state sentencing guidelines mandated stiffer sentences for crack cocaine, used mainly by blacks, than for powder cocaine, used mostly by whites, civil rights groups charged racial discrimination in the faster growth of minority inmates. Only 13% of the U.S. population was black, but blacks accounted for nearly half of the nation's prisoner population. Some 6.8% of all black male adults were in prison or jail at midyear, compared with less than 1% of white male adults.

      Another study showed that at midyear a record 2.9 million adults were on probation and another 690,000 on parole following a prison sentence. Probation and parole populations nationwide had tripled since 1980.

      The beginnings of a backlash against spiraling convict populations were evident during the year, however. New York's newly elected Republican Gov. George Pataki successfully proposed repealing a mandatory prison law for drug convictions. Seventeen other states enacted presumptive sentencing rules designed to ensure that prison beds went first to violent offenders.

      Another trend involved making prison life as unpleasant as possible. Arizona, Florida, and Mississippi joined Alabama in reinstituting high-profile, well-publicized chain gangs for inmate work. More than a dozen states approved regulations restricting prisoner access to amenities such as weight-lifting equipment, television, and telephones. California became the first state to prohibit inmates from being interviewed by journalists. Five states restricted tobacco use by prisoners, and Kansas, Oregon, Texas, and Utah banned smoking altogether.

      Reacting to what was perceived as escalating abuse of the legal process, the U.S. Supreme Court ruled that most state prisoner lawsuits complaining about the "ordinary incidents of prison life" should be dismissed. The ruling promised to reduce the more than 30,000 federal suits filed annually by state prisoners, most of which were considered a costly nuisance by administrators.

      A nationwide trend toward contracting out correctional facility construction and operation to private firms continued during the year. Thirty-two states had established statutory authority to contract for private corrections by year-end, and nearly 50,000 prisoners were being held in 88 secure adult facilities run by private companies. Advocates said that privatization, growing by an estimated 25% per year, was already saving taxpayers at least $150 million annually.

Gambling.

      Proponents of state-sanctioned games of chance had mixed luck during the year. Legislators in Florida and New York approved proposals to set up casino gambling in selected areas, subject to voter approval in 1996.

      Several problems arose in gambling, however. Prominent Louisiana legislators were subpoenaed in a federal probe of alleged payoffs to protect gambling interests, and in Mississippi eight persons were indicted on charges of fixing blackjack games. Casino gambling bills were rejected in Alabama and Pennsylvania, and the proposed expansion of riverboat gambling to the Chicago area stalled in the Illinois legislature. Governors in Michigan and Texas rejected the expansion of gambling in their states.

      Backers of a Washington state initiative to allow video poker and slot machines in American Indian casinos came up with a unique selling point; they offered to share 10% of all profits with everyone who voted in the November election, or an estimated $100 per voter every year. In a resulting backlash, critics charged gaming proponents with trying to buy votes, and the measure was defeated.

      The Alaska legislature allowed organizers of the Iditarod sled dog race to stage a fund-raising sweepstakes. Sponsors of the $2 million annual race were fewer in recent years because of protests from animal rights activists.

The Environment.

      California put the brakes on antismog regulations that would have required automakers to sell more than 20,000 electric-powered cars per year in the state starting in 1998. The reversal came after both domestic and foreign manufacturers complained that the best available battery technology did not allow sufficient range.

      Several states tangled with the federal government over a tough new centralized emissions testing regulation imposed under the 1990 Clean Air Act. Connecticut, Maine, New Jersey, New York, and Texas rebelled, forcing the Environmental Protection Agency to allow simpler, less burdensome testing that put the states into compliance.

Civil Rights.

      Federal courts continued to wrestle with the constitutionality of black-majority congressional districts drawn to ensure minority representation, but no clear guidelines emerged. Judges threw out black-majority districts in Georgia, North Carolina, and Texas on the grounds that they were drawn primarily for racial reasons. The U.S. Supreme Court heard two new cases in the fall, however, and experts awaited more definitive rulings in 1996.

      For the first time, substantial opposition to the concept of affirmative action emerged in the states. Several states joined President Clinton in initiating research on the effectiveness of affirmative action programs.

      California Gov. Pete Wilson banned most affirmative action hiring and contracting by state agencies, pushed the University of California to drop admissions policies that favoured applicants according to race, and even sued his own state government to rid it of racial preferences, goals, and set-asides. Wilson acted while running as a Republican presidential candidate, and critics accused him of pandering to conservatives. Even so, complaints by whites and a more conservative political climate put affirmative action on the defensive during much of the year.

      The ban on taking race or sex into account in hiring, promotions, or admissions at the University of California was particularly controversial. Some academics charged that the number of black and Hispanic students at the university's Los Angeles and Berkeley campuses would drop significantly, while Asians would increase.

      Michigan approved a law requiring that state education and employment forms include "multiracial" as a classification for people having parents of different races. "Other" was no longer to be used.

      A federal appeals court ordered South Carolina to establish a comparable, separate collegiate program for women or else to enroll a woman at the Citadel, a state-supported military school. The woman was admitted, but after encountering difficulty with the rigorous physical drills, she dropped out. California became the first state prohibiting employers from refusing to allow employees to wear pants solely on the basis of their sex.

      By a 53-47% margin, Maine voters rejected a ballot initiative prohibiting state laws that protected homosexuals as a group. The bill's sponsors said that they were outspent 12-1 by out-of-state gay rights groups, but the winners hailed the result as a rejection of right-wing discrimination.

Consumer Protection.

      Massachusetts joined Maryland and Vermont in requiring that consumers receive free access to their credit reports. The new Massachusetts law held providers of credit information legally liable for mistakes on a report. About 20 states now had some type of credit-reporting regulation.

      In a 5-4 decision, the U.S. Supreme Court upheld a Florida law prohibiting lawyers from sending sales letters to accident victims or their relatives within 30 days of the mishap. Justice Sandra Day O'Connor, writing for the majority, justified the law as preventing lawyers from "engaging in conduct that . . . is universally regarded as deplorable." Hawaii became the 25th state to require that home sellers disclose the details of defects in property.

      (DAVID C. BECKWITH)

▪ 1995

Introduction

      The sweeping change wrought by voters in the 1994 midterm elections seemed to be a stark repudiation of U.S. Pres. Bill Clinton and of the Democratic Party. Voter rejection of Democrats did not stop in Washington, D.C., however, but filtered down to give state Republicans their biggest legislative victory in a generation as well as impressive gains in gubernatorial contests. Whether, as some pundits believed, the Republicans' victory presaged the eventual transfer of increased authority from Washington, the states continued in 1994 to be the real innovators in social policy.

Party Strengths.

      The political tidal wave that produced the Republican takeover of the U.S. Congress for the first time in 40 years produced a similar upheaval in the states. Republicans won control of a majority of state legislatures for the first time since the Eisenhower landslide in 1956, gaining 472 new legislative seats, compared with only 11 for the Democrats. They also captured a majority of the nation's governorships, with a net gain of 11. In all, Republicans made net gains in 45 of the 46 states holding elections in 1994. Legislative strength changed dramatically. Before the elections Democrats had a 24-8 lead in the control of state legislatures, with 17 others split. After the balloting Republicans controlled both chambers of 19 legislatures and Democrats controlled 18, with 12 others split. (Nebraska had a unicameral, nonpartisan legislature.) In 15 states Republicans controlled both the governorship and the legislature, compared with 7 for the Democrats.

      In New York a relatively unknown Republican state senator, George Pataki, denied Mario Cuomo's bid for a fourth term as governor. Cuomo's opposition to the death penalty and his liberal philosophy benefited the challenger. In California incumbent Republican Gov. Pete Wilson handily defeated State Treasurer Kathleen Brown. In Texas, George W. Bush, son of the former president, rode a wave of anti-Clinton sentiment to victory against incumbent Ann Richards. Bush's brother Jeb was unsuccessful in Florida, where incumbent Democrat Lawton Chiles was reelected. Postelection results gave Republicans 30 governorships to 19 for the Democrats, with one independent. Previously, Democrats had controlled 29 statehouses and Republicans 19, with two independents.

Government Structures and Powers.

      In those states where citizens were permitted to put initiatives on the ballot, they voted on a record 142 measures in November. Hot topics included taxes, term limits, gambling, and crime. The most heatedly discussed ballot initiative was California's Proposition 187, denying public services to illegal immigrants. The measure passed by 59% to 41%, but a federal court issued a restraining order to stop the state from implementing its provisions. If it survived court tests of its constitutionality, the measure would deny education, health, and social services to illegal aliens, and it would require people to report suspected illegals to federal and state authorities. Officials estimated that education, emergency health care, and prison expenses for illegal immigrants cost the state more than $2.5 billion a year, and California, as well as Florida and New York, had sued the federal government for reimbursement for such costs.

      By a slim margin Oregon voters approved the so-called death with dignity measure. The law gave terminally ill patients the right to get prescriptions for lethal drugs that would enable them to end their lives. Opponents, arguing that the law would encourage suicide for primarily financial reasons, initiated legal action.

      The issue of term limits was prominent once again in 1994. Measures setting term limits passed in seven of the eight states where they were on the ballot. In Colorado, where the issue started in 1990, voters imposed term limits on local officeholders and toughened limits on members of its congressional delegation. Alaska, Maine, and Oklahoma put limits on federal lawmakers, and Idaho, Massachusetts, Nebraska, and Nevada passed limits on both state and federal officials. Only in Utah did a term-limits measure fail, but the failure might be partly explained by the fact that Utah was the first state in which legislators had passed a law limiting themselves to 12 consecutive years in office.

      Voters were as tough on criminals as politicians. Georgians approved a "two-strikes" measure mandating life in prison without parole for a second violent felony, which gave that state the toughest sentencing law in the country. Oregon voters passed a measure that would toughen sentences for violent crimes and require state prison inmates to work full-time. Violent felons in Colorado would no longer be able to post bail while awaiting trial, and Ohio voters toughened death penalty appeals. Oklahoma and Wyoming passed constitutional amendments instructing their legislatures to crack down harder on crime. Lawmakers in Oklahoma would be able to set minimum prison terms with no parole for convicted felons. Wyoming voters limited the governor's power to commute death sentences and gave legislators the authority to create a sentence of life imprisonment without parole. Measures guaranteeing victims' rights passed in Alaska, Idaho, Maryland, Ohio, and Utah.

      With voters, animals fared better than either politicians or criminals. Arizona eliminated leghold traps, and bears and cougars in Oregon could no longer be hunted with bait or dogs. Florida limited marine net fishing. In other issues, two wineries in Oklahoma got voter approval to use out-of-state grapes, and in Washington voters gave denture makers the right to sell false teeth directly to the public rather than through a dentist.

Finances.

      For the second consecutive year, once-embattled state governments breathed a little easier on finances. The continuing national economic recovery, combined with several years of state tax increases and spending cuts, resulted in a measure of stability not seen since the economic downturn in 1990. The National Conference of State Legislatures estimated that state tax changes would generate a net increase of $3.9 billion in fiscal year 1995, a modest 1.1% more than 1994. Net increases in 20 states and reductions in 15 others were a misleading measure of tax activity, however. Excluding a huge increase in Michigan, the net tax increase among the other 49 states was a paltry $800 million. Without the extension of some taxes already in place, moreover, taxpayers would actually have seen their net liability drop by $1.3 billion.

      Only six states levied significant tax increases. Michigan voters approved a major overhaul of state taxes in a March special election. As a result, local school property taxes were reduced by $4.5 billion, but a statewide property tax was enacted, and the sales tax increased by one-half, from 4% to 6%. The net effect was a $3.1 billion tax increase.

      Although personal income taxes rose in 12 states and declined in 10, most of the changes were insignificant. In fact, for the first time in several years, no states increased personal income tax rates. New York, however, postponed a scheduled rate reduction, resulting in a whopping $800 million tax increase. Personal rates were reduced in Arizona, Michigan, New Mexico, and New Jersey, where the new governor, Christine Todd Whitman, redeemed a campaign pledge by signing a $480 million tax cut. Reductions in New Mexico and Pennsylvania were largely targeted to low-income taxpayers. Business tax activity was minor. Michigan and Pennsylvania reduced rates; Arizona, Minnesota, New York, and Wisconsin increased net business tax receipts.

      The vast majority of net tax increases came as the result of higher sales and related taxes. Louisiana raised $410 million in revenues by continuing the suspension of an exemption for food, utilities, and other items from the sales tax. Maine increased its sales tax on automobile rentals, while Florida lowered the pari-mutuel tax on jai alai gambling by 28%. Oklahoma imposed a 1% entertainment tax (subject to voter approval), and South Dakota increased its video lottery tax. New York and Tennessee increased taxes on health care providers, and Kentucky made its health care tax permanent. Connecticut adopted its first health care provider tax and raised $300 million in revenues by extending its sales tax to medical services.

      Taxes on cigarettes and tobacco products continued to rise, although not as drastically as in previous years. Only three states increased cigarette taxes, compared with 16 in 1993. The largest tax hikes were in Michigan, which imposed a new 16% tax on the wholesale price of tobacco products and tripled the cigarette tax from 25 to 75 cents per pack. Oregon, on the other hand, reduced the cigarette tax by 26%.

      The downward trend in state taxation was expected to accelerate with the continuation of the taxpayers' revolt nationwide. Efforts to limit the power of state legislatures to raise taxes by such means as requiring a mandatory referendum on any tax hike or demanding a supermajority vote for tax-increase bills were growing in popularity.

Education.

      Changes in school financing continued in 1994. Although property taxes had traditionally been the mainstay of public-school financing, during the year more than two dozen states faced court challenges because of the inequities between wealthy districts and poor ones. In New York state, for example, the richest district spent almost $46,000 per student, while in New York City, the average was $6,644 per student. Michigan voters approved a constitutional amendment to replace property taxes as the method of financing school systems, choosing instead to raise the state sales tax and taxes on cigarettes. Although lawmakers in Colorado, Vermont, and Wisconsin advanced similar plans, no legislation was passed in 1994.

      Education funding, which had been particularly hard hit in the preceding few years, showed signs of improvement in 1994. With the exception of California, state governments generally increased their funding by about 5%. The extra money came at a time when schools had seen an influx of Asian and Latin-American immigrants, resulting in eight consecutive years of enrollment increases. Texas enrolled more than 100,000 new public-school students in the early 1990s, and New Jersey, New York, Pennsylvania, Florida, Georgia, Louisiana, North Carolina, and Tennessee also had large numbers of new students. Total enrollment in public schools reached 42,550,000.

      Declaring that in some school districts "the wrong combination of clothes can get you killed," California passed a bill giving public schools the authority to require students to wear uniforms. The new law, which came into force as a result of a petition drive started by an eighth grader, allowed all decisions about uniforms or dress codes to be made by local school officials and made provisions for those families who could not afford uniforms.

Health and Welfare.

      While the federal government's attempts to reform health care and welfare fell apart, the states continued their role as the real innovators in these areas. Many governors and state legislators, who viewed themselves as being on the front lines, had never really counted on Washington to solve their problems. With Washington's failure, however, the impetus to develop policy at the state level grew even more urgent.

      Oregon began a five-year experiment extending Medicaid to 91,000 people who were not eligible for other medical programs; two-thirds were families with children. Tennessee's new plan, known as TennCare, included people with chronic illnesses, 803,000 former Medicaid recipients, and 335,000 people with no health insurance. The federal government gave permission for Florida to conduct a Medicaid experiment that officials hoped would provide coverage for 1.1 million uninsured Floridians. At least a dozen other states applied or had plans to apply for federal waivers of Medicaid law, enabling them to develop their own reforms.

      With a record 15 million people on assistance, the eagerness with which states applied for federal waivers to deal with welfare reform was, if anything, even more intense. In all, more than 30 states had requested waivers, but plans for reform differed drastically. Oklahoma, for example, began a three-year pilot program to make children and teenage parents enrolled in the Aid to Families with Dependent Children (AFDC) program stay in school or have their benefits reduced. The state's Learnfare program followed several other state experiments to make welfare recipients stay in school or be properly immunized in order to keep their benefits.

      Oregon received a federal waiver and launched a pilot welfare-reform program called Jobs Plus, designed to help welfare recipients work for their benefits. One thousand families in six counties would be affected. Participants were to receive cash in lieu of food stamps and would be expected to work for private employers for up to nine months at the minimum wage. Employers were to be reimbursed by the state with money that previously had been distributed as welfare benefits.

      Jobs Plus participants who had not been hired after six months got one day a week to look for an unsubsidized job. If after nine months they were still not employed, they would be offered another government-funded job. In addition, a $1-per-hour educational fund was to be established for every worker to be used for community college classes or job training. Jobs Plus required employers to develop training programs and allowed welfare recipients to work without losing their health and child care benefits. Benefits would be reduced for anyone failing to participate or dropping out of the program.

      Los Angeles county became the first place in the nation to require fingerprint checks for parents applying for welfare for their children. More than 850,000 people in the AFDC program would be affected. State officials estimated that first-year savings in Los Angeles county alone would be $4.2 million. If the program proved successful in combating welfare fraud, it would be implemented statewide, where savings could be as much as $750 million.

Laws and Justice.

      With crime the number one issue on voters' minds, punishment took top priority in many states. In just one year after voters in Washington state approved the Persistent Offender Act—commonly known as Three Strikes You're Out—about half of all the states had introduced similar legislation. Thirteen states—California, Colorado, Connecticut, Georgia, Indiana, Kansas, Louisiana, Maryland, New Mexico, North Carolina, Tennessee, Virginia, and Wisconsin—passed new "three-strikes" laws. In addition, seven others—Alaska, Illinois, New Jersey, Ohio, Pennsylvania, South Carolina, and Vermont—had legislation pending.

      Although the basic premise was the same, there were variations in sentencing, prison terms, and the number and types of crimes to which the laws applied. Connecticut, Kansas, and Maryland, for example, permitted judicial discretion; elsewhere, courts were required to impose mandatory sentences as defined by statute. In Maryland and Virginia, prisoners 65 and older who had served a certain number of years were eligible for a "release mechanism." California, New Mexico, and Colorado offered parole eligibility after 25, 30, and 40 years, respectively, but other states had no provision for parole.

      The perception that juvenile crime was not only on the rise but also more violent led to legislative action in several states. A Florida law created the Department of Juvenile Justice, as well as a basic-training program for youthful offenders in the Department of Corrections, including postrelease plans and a recidivism-tracking system. North Carolina created a boot-camp-style program for 16- to 25-year-olds. A new Washington law established the Learning and Life Skills Program for juvenile offenders.

      Lawmakers also showed a heightened awareness of and sensitivity to domestic violence, with several states increasing penalties for abusers. New York enacted the omnibus Family Protection and Domestic Violence Act, and Maryland passed three new domestic-violence laws. Colorado passed five domestic-violence bills, including one that mandated arrest for the violation of a restraining order and jail time for a second offense. Virginia passed a number of laws with stiffer penalties for domestic violence, while Michigan had 14 new laws that would help in prevention and prosecution.

      Gun-control measures on the ballot in several cities failed to pass, but Alaskans voted to amend their constitution to allow citizens to bear arms, and Tennessee became the 18th state to permit adults to carry concealed handguns. Georgia and Utah joined at least 13 other states in making car jacking a crime. The death penalty was reinstated in Kansas as a possible sentence for anyone 18 or older convicted of capital murder.

Ethics.

      Judge Rolf Larsen became the first state Supreme Court justice ever to be impeached in Pennsylvania. By a two-thirds vote, the Senate also barred Larsen from holding public office again. One charge to which Larsen admitted was a scheme to have tranquilizers prescribed in the names of Supreme Court employees in an effort to conceal his own battle with depression. The judge said that he feared disclosure of his illness would destroy his career.

      The former director of the Michigan House Fiscal Agency was convicted in both state and federal courts of embezzlement, conspiracy, racketeering, and tax evasion. John Morberg was sentenced to 6 1/2 years in federal prison and 6-10 years in state prison. The federal court judge ordered Morberg to repay the state $406,200, but two days later a county judge ordered him to pay $834,000, saying, "You have destroyed something money cannot replace—public trust in government."

      The results of a November 1993 state Senate election in Pennsylvania were invalidated by a federal court judge in February when evidence of vote fraud was uncovered. The court found that campaign workers for Democrat William G. Stinson had stolen the election from Bruce Marks by engaging in "massive absentee ballot fraud, deception, intimidation, harassment and forgery" in Philadelphia's 2nd Senatorial District. Stinson himself was later acquitted of election-law violations, despite his testimony that he had helped unlock voting machines and opened sealed absentee ballots. Pennsylvania's state Senate reverted to Republican control when Stinson was stripped of his seat.

Prisons.

      Total state appropriations for corrections grew 9.7% in fiscal year 1994, the biggest percentage increase in any spending category. In the decade from 1982, state corrections budgets went from $6 billion to $20 billion. As mandatory sentencing laws got tougher, the financial implications of lengthy or lifetime imprisonment drew increased scrutiny. An aging prison population guaranteed higher health costs, for example, and in Connecticut part of the double-digit increase in the 1994 corrections budget went to pay for more health care facilities. Overcrowding also continued to plague the penal system. The U.S. Department of Justice reported that the average state-prison population exceeded institutional capacity by at least 18%.

      Not content with longer, harsher sentences, politicians in at least nine states found additional ways to placate citizens' rage. In Wisconsin the governor ordered an end to prisoners' use of free weights and to their access to tennis. California gave prison officials the authority to bar inmates from receiving what were considered obscene publications, and Florida, Louisiana, New York, North Carolina, Ohio, and South Carolina proposed various measures banning amenities such as network television, cable television, basketball, weight rooms, boxing, and wrestling.

      By far the worst place to get locked up was Mississippi, where Republican Gov. Kirk Fordice expressed the desire to make his state "the capital of capital punishment." In a special legislative session called to address prison overcrowding, debate centred on such punitive measures as caning. A law banning private television sets, radios, tape or compact disc players, computers, and weight-lifting equipment was passed. In a move reminiscent of the days of chain gangs, prisoners also were to be dressed in striped uniforms with the word "convict" written on the back.

Gambling.

      Gambling initiatives were on more state ballots than any other issue in 1994, but their luck in winning passage was mixed. Florida voters rejected the Proposition for Limited Casinos; off-track betting lost in Minnesota; and various other proposals were rejected in Colorado, Rhode Island, and Wyoming. In South Dakota voters revived the state's video lottery, which had been ruled illegal by the state Supreme Court. Missouri approved the use of slot machines on riverboat casinos, and New Mexico approved a state lottery and video gambling. State legislators in Connecticut overrode the governor's veto and gave themselves the final authority on gambling contracts between the state and Connecticut's Indian tribes.

Equal Rights.

      Ten states attempted to put antigay initiatives on their ballots during 1994. Most proposals were based on the measure that had passed two years earlier in Colorado prohibiting antidiscrimination laws protecting gays and lesbians, a measure that was subsequently declared unconstitutional. Only in Idaho and Oregon did the petition drives succeed. Backers in Arizona, Maine, Missouri, Nevada, Ohio, and Washington did not get the required number of signatures. In Florida the ballot language was ruled invalid, and in Michigan backers were forced to abandon their effort when it was determined that the measure contained the same language that had been declared unconstitutional in Colorado. In Idaho and Oregon voters rejected measures that would have restricted civil rights protection for homosexuals. Vermont became the first state to offer health insurance to domestic partners of state workers without regard to whether they were heterosexual or homosexual. (MELANIE ANNE COOPER)

▪ 1994

Introduction

      Two months into his presidency, onetime governor Bill Clinton met with 100 state legislative leaders in the state dining room at the White House. "I'd be hypocritical," he told them, "if I changed my position just because I am no longer governor." The president would not be the first hypocrite in high office, but state officials were hopeful that the new administration understood their problems and was more inclined to do something about them. Indeed, there was evidence of progress in at least two areas where states had felt strangled. The National Performance Review, established for the purpose of "reinventing government," made recommendations to alleviate the burden of unfunded mandates, the method by which Washington makes state governments institute or maintain various programs without providing money to run them. In addition, federal waivers were more forthcoming, allowing states to experiment in such areas as welfare and health-care reform. There was, finally, a consensus among state leaders that an era of partnership had begun, that they could participate in making government responsive and effective, and that having a soul mate in the White House certainly could not hurt.

Party Strengths.

      The November elections brought few changes in state party strength, primarily because there were not many races. But the returns were a tonic for the Republican Party one year after losing the White House. In addition to winning important mayoral races in New York City and Los Angeles, the Republicans captured the only two gubernatorial contests, New Jersey and Virginia. The results were widely interpreted as a continuation of the protest vote by voters angry about high taxes and soaring crime rates.

      In New Jersey incumbent Democrat James Florio was defeated by Republican Christine Todd Whitman, the first woman to be elected governor in the state. Her slim victory was seen less as an affirmative endorsement than a rejection by voters angry with Florio over his $2.8 billion tax increase in 1990. Whitman capitalized on the antitax backlash by pledging to reduce state income taxes by 30% over three years, a pledge even many Republicans believed she would be unable to redeem. Her victory celebration was immediately overshadowed by allegations of campaign dirty tricks.

      In Virginia conservative Republican George Allen trounced former state attorney general Mary Sue Terry to succeed the Democratic governor, Douglas Wilder, who by law was barred from running for another term. A former congressman and son of the late coach of the Washington Redskins football team, the 41-year-old Allen put Terry on the defensive with a platform stressing family values and economic development and striking a hard line on law and order. Terry's moderate stance on most issues was ultimately regarded as too liberal by a conservative electorate in which fundamentalist Christian voters demonstrated surprising strength.

      Despite the loss of two governorships, Democrats remained in control of 28 statehouses, compared with 20 Republicans and 2 independents. Legislative strength was essentially unchanged; the Democrats continued to control both houses of the legislature in 25 states, while Republicans held 9 and 15 others were split. (Nebraska has a unicameral, nonpartisan legislature.)

      In New York City a bitter mayor's race saw incumbent Democrat David Dinkins ousted by Republican Rudolph Giuliani, a former federal prosecutor. Winning by approximately 45,000 votes, Giuliani became the first Republican to defeat an incumbent Democratic mayor in 60 years and the first Republican mayor since 1974.

      Four other veteran big-city mayors left office voluntarily during the year. Democrat Tom Bradley was succeeded by Republican businessman Richard Riordan in Los Angeles. In Detroit, Mich., Coleman Young was succeeded by Dennis Archer, a former state Supreme Court justice. City councilman Bill Campbell won a runoff to succeed Mayor Maynard Jackson in Atlanta, Ga., and in Minneapolis, Minn., City Council president Sharon Sayles Belton became the city's first black and first female mayor, succeeding Donald Fraser. Popular black incumbent mayors in Cleveland, Ohio, and Seattle, Wash., were reelected by comfortable margins. Acting mayor Thomas Menino became Boston's first Italian-American mayor and the first non-Irish-American to lead the city in more than 60 years.

Government Structures, Powers.

      The 1996 presidential-selection process was significantly reshaped by the legislative action of two large states to move their presidential primaries forward. California's delegate-rich primary was changed from the first Tuesday in June to the last Tuesday in March, while in Ohio the primary was shifted from May to the same Tuesday in March as the Illinois and Michigan primaries. Political experts concluded that the glut of primary contests in March would virtually ensure an early end to nomination battles for the presidency.

      In dozens of referendums and ballot initiatives, voters signaled their disaffection by imposing term limits on state and municipal officeholders, turning down various tax-increase proposals, and insisting upon tougher measures to fight crime in the streets.

      Voters in Maine approved a measure limiting state legislators and elected officials to a maximum of four consecutive two-year terms. An eight-year limit was imposed on the mayor and other top elected officials in New York City. Seven states planned ballot initiatives on term limits in 1994, and several others were expected to do likewise. In New Jersey a constitutional amendment was approved allowing voters to recall any elected official, including representatives and senators. The constitutionality of such action by states against federal officials, however, remained in doubt.

      A desire to curb the spending authority of legislators was demonstrated by Washington state voters, who approved an initiative limiting future increases in government spending to the rates of population growth and inflation. A related but more stringent measure to roll back state taxes and spending to 1992 levels was rejected as too draconian.

      A widely publicized ballot measure in Washington showed that voters overwhelmingly supported a so-called Three Strikes You're Out proposition requiring mandatory life sentences (in prison) for felons convicted three times. Similar proposals were expected to be on the ballot in California and a few other states in 1994. Staten Island, one of the five boroughs of New York City, voted to declare its independence and secede. The action could not proceed without the approval of the state legislature and the governor.

Finances.

      A modest national recovery from recession, combined with sizable spending cuts in 1991 and 1992, made it a bit easier for beleaguered states to balance their budgets. Higher revenue collections as a result of economic growth compensated in part for the ongoing revolt by voters resistant to expanding state taxes. The National Conference of State Legislatures estimated that state tax changes would generate a net increase of $4.1 billion in the 1994 fiscal year, a modest increase from 1993.

      Taxes were raised in 22 states, 26 had no significant change, and 2 states reduced taxes. Personal income taxes rose in 12 states, corporate taxes in 11, and sales and use taxes in 10. Arizona, Maine, Mississippi, and Vermont were the only states to reduce personal income taxes. Major income tax increases were implemented in New York, which postponed a scheduled reduction in tax rates; Illinois, which made a 1989 increase permanent; and Ohio, which added a new top rate.

      Users of cigarette and tobacco products were hit hard by a sixfold increase in taxes levied by 16 states. Sixteen states increased taxes on health-care providers, and 15 states raised waste and environmental taxes. Michigan effectively repealed its state inheritance tax. Several jurisdictions raised revenues by broadening their tax bases. Alaska imposed a salmon-marketing tax. New Hampshire began taxing hospital rooms and meals. Illinois repealed its controversial "granny tax" on nursing homes, but Ohio imposed a similar levy. Arkansas enacted a tax on gross receipts from bingo. New York imposed a surcharge on area code 900 telephone calls, while Ohio began taxing carbonated beverages.

      States required to submit proposed tax increases before the voters were for the most part disappointed. Taxpayers in Oregon and Montana voted down attempts to enact sales taxes, leaving those states, along with Alaska, Delaware, and New Hampshire, as the only five states without a sales tax. In Washington, however, voters rejected a bid to roll back $1 billion in alcohol and tobacco taxes enacted in 1992 to fund comprehensive health-care reform. A companion measure was adopted that would tie future tax increases to the rate of inflation and population growth. In recession-wracked California, where major spending cuts were enacted for the second year to balance the budget and avert a fiscal crisis, voters nevertheless approved a half-cent hike in the sales tax, with proceeds earmarked for law enforcement and fire fighting. Texas voters decreed that any future proposed state income tax be submitted to a plebiscite.

Education.

      In big cities and small towns alike, there was grim evidence that U.S. schools were falling apart after years of neglect. In New York City one million students were left stranded as 115 schools were unable to start the school year because of possible asbestos contamination. Some schools were closed for nearly three months, and more than 300 others operated with some of their facilities closed indefinitely. A study by the American Association of School Administrators disclosed that nearly one-third of the country's 84,000 schools were more than 50 years old and another 43% were more than 30 years old.

      Illinois approved a $410 million bailout plan for the state's debt-ridden public schools; the funding crisis forced Chicago to cancel the first week of classes in the country's third largest school system.

      Declining confidence in the performance of educational bureaucracies prompted some jurisdictions to try radical approaches in search of reform. The Minneapolis school board hired a private consulting firm to take over management of the city's 75 schools and $220 million budget. California turned over control of the country's largest public school system to a businessman specializing in rescuing troubled corporations by aggressive cost cutting.

      California voters decisively rejected Proposition 174, a plan to give every student a $2,600 voucher that could be used to help pay tuition at private schools. Supporters argued that the measure would improve educational quality by forcing all schools to compete for students; opponents, led by the state teachers union, said it would be the death knell for public education. The voucher concept appeared to be gathering support nationwide; bills similar to that in California were pending in the Pennsylvania legislature and in Jersey City, N.J.

      Acting just days before a June 1 court deadline that would have cut off state funds to school districts, Texas ended nearly 25 years of wrangling and approved a plan to slash the disparity on spending per student between rich and poor districts. The 100 wealthiest districts would be required to lower their taxable property base per student, with the excess transferred by one of four methods to poorer jurisdictions. Three previous wealth-sharing plans had been invalidated by state courts.

      Financing systems were in flux elsewhere as well. The Massachusetts Supreme Court ordered the state to create a new school financing plan not pegged to property taxes. In Michigan, Gov. John Engler signed legislation eliminating property taxes as a source of school funding.

      Virginia attempted to stem violence in the schools with a law requiring parents registering children for school to disclose whether the youngsters had ever been expelled from another jurisdiction. The names of juveniles convicted on weapons or drug offenses would also have to be disclosed to school superintendents.

Health and Welfare.

      Unwilling or unable to wait for national health-care reform, legislatures in 40 states considered health-care proposals, and many instituted reforms of their own with federal approval. Maryland changed state insurance laws to make coverage affordable for small businesses and established a Health Care Access and Cost Commission to write a standard benefit plan. In Tennessee a five-year demonstration project called TennCare would take one million Medicaid recipients and 500,000 uninsured residents and cover them all in a single insurance program. Participants would choose from managed-care networks. Costs such as premiums and deductibles would be based on income levels, and preventive services would be free. Hawaii decided to combine its three public health programs into one managed-care system. Known as Hawaii Health Quest, the plan would create one large purchasing pool. Quest participants would then be offered a choice of enrollment in a managed-care system.

      Florida instituted reform using the theory of managed competition, the idea that when businesses pool their purchasing power, they can obtain health insurance at reasonable prices. The plan called for 11 purchasing alliances across the state, including businesses with up to 50 employees, state workers, and Medicaid recipients.

      Maine became the first state to pass legislation shielding doctors from malpractice suits provided they agreed to adhere to state-approved guidelines. The "medical liability demonstration project" covered only four specialties—obstetrics and gynecology, radiology, anesthesiology, and emergency medicine. Doctors helped write the checklist of explicit treatment protocols, and more than 90% of eligible physicians enrolled in the project.

      For the first time since New York began releasing tens of thousands of the less seriously ill patients from state mental hospitals in the mid-1950s, officials found a way to allocate funds to care for the mentally ill in the communities in which they live. For years, thousands of former patients had to fend for themselves with little if any public aid, and many became homeless. The new plan would use about $200 million to provide rehabilitation and vocational training and to care for the homeless.

      Maryland began a primary prevention initiative program that rewarded welfare clients with small bonuses for getting physical exams and prenatal care. The project withheld $25 from welfare parents whose children did not get regular checkups and immunizations and were not regularly attending school. Arkansas passed the "home infusion therapy" law, the first of its kind in the nation, enabling patients to receive intravenous drugs at home. Providing this service for AIDS sufferers or patients requiring continuous medication could cut $9 million a year in Medicaid costs.

      Michigan allocated more than half the funds in its family-planning programs to providing Norplant in its clinics. Norplant, a synthetic hormone released by thin capsules surgically implanted in a woman's arm, effectively prevents conception for up to five years. Lawmakers in 13 other states who attempted programs requiring Norplant for poor or drug-addicted women had been met with charges of genocide and social engineering.

      Vermont, Florida, and Wisconsin appropriated an idea offered by Clinton during his presidential campaign to put a time limit on welfare benefits. Vermont imposed a 30-month limit with the guarantee of a job with either the government or a not-for-profit agency. In Wisconsin, where the plan would be tried in only two counties, there was no job guarantee, but officials said that training, child care, and other assistance would be provided.

Abortion.

      Violence against abortion clinics escalated, culminating in the shooting death of a Florida doctor outside his office. Clinics in Texas, Florida, Idaho, and Montana were destroyed, and facilities in other states were vandalized. Connecticut and Colorado passed laws protecting access to abortion clinics, and more than 20 similar bills were introduced in a dozen other states. Congress voted to make it a federal crime to attack abortion facilities and to assault or obstruct people who use them.

      The Clinton administration announced that the Medicaid program would be instructed to pay for abortions for low-income women who were victims of rape. The U.S. Supreme Court let stand a Mississippi law requiring women under 18 to obtain both parents' permission before having an abortion.

Law and Justice.

      The national disgust over crime turned to national embarrassment after the widely publicized slayings of several foreign tourists in Florida. A special session of the state legislature voted without dissent to ban possession of firearms by juveniles and to make parents responsible if their children were caught with a gun. Virginia passed a law limiting individuals to the purchase of one handgun per month. According to the Bureau of Alcohol, Tobacco and Firearms, 26% of traceable guns seized in New York City and 36% of those in Washington, D.C., were bought in Virginia. Indeed, in New York City, 90% of the guns seized were purchased out of state. Law-enforcement officials in New York state established a three-member gun-tracing operation to coordinate joint investigations with federal officials and police departments in other states to curb gun trafficking.

      Connecticut joined New Jersey and California to become the third state to pass a comprehensive ban on assault weapons. Owners of the newly banned weapons had to register them and provide proof that they had been purchased before the law took effect on October 1. Both houses of the New Jersey legislature voted to overturn the state's ban on assault weapons, but Republicans in the legislature failed to override the Democratic governor's veto.

      The West Virginia Supreme Court invalidated 10 years' worth of blood tests used in criminal cases when it was discovered that the state police serologist had lied about test results in such a way as always to win a conviction. The court's ruling opened the way for new trials for at least 134 prisoners, many convicted of murder or rape. The serologist's work aroused suspicion during a 1987 rape case when the first DNA sample to be admitted in a state court proved that the defendant could not have been guilty.

      In the first action of its kind by a state, Vermont passed a sweeping no-smoking law. The first stage, begun in July 1993, affected all public buildings and some private concerns such as stores and video arcades. In July 1995 the ban would apply to restaurants, bars, and hotels. Florida became the only state after New York to legalize breast-feeding in public. The law amended Florida's statutes on lewd and lascivious behaviour and indecent exposure.

Ethics.

      Gov. Guy Hunt of Alabama was convicted on a felony charge for violating a state ethics law. He was accused of appropriating $200,000 from an inaugural fund for personal use. Hunt became the fourth governor in U.S. history to be convicted of a felony while in office. He resigned immediately after his conviction; his appeal was denied. Gov. David Walters of Oklahoma became the state's first sitting governor found guilty of a crime when he admitted accepting an illegal contribution during his 1990 campaign.

      A special session of the Kentucky legislature created a Legislative Ethics Commission and introduced tough new campaign finance laws, both the result of an ongoing FBI probe into public corruption. The investigation focused on an expansion of gambling in the racing industry. The former speaker of the house was convicted of racketeering and extortion; five former legislators were convicted on various charges; and a sitting senator was indicted.

Prisons.

      Debate over the politics of imprisonment intensified as evidence mounted that the get-tough era of minimum mandatory and harsher sentences plus more prison construction was simply too costly and did nothing to lower the crime rate. North Carolina, Arkansas, and Kansas considered new sentencing policies as well as the placement of nonviolent criminals in nonprison settings, and at least seven other states were moving in that direction.

      Many states were ordered by federal courts to relieve overcrowding by releasing prisoners early or finding new space for them. In Arizona drunk drivers were moved into tents to open up cells for more dangerous criminals. Though states allocated $15 billion to run corrections departments, Arkansas eliminated 1,000 prison jobs, 13 other states also cut jobs, and 20 states were unable to add new jobs.

      More death sentences and less public money available added up to a severe shortage of lawyers representing inmates on death row. One-third of California's 350 death row prisoners did not have lawyers, and 48 of the 376 inmates in Texas were not represented. As many as 40% of all death sentences were typically reversed by federal and state courts.

Gambling.

      Expansion of South Dakota's $1 billion gambling industry was halted, thanks to the efforts of a small-town grandmother. Her fierce opposition to gambling forced the legislature to schedule a special-ballot referendum in which voters reversed legislation that would have dramatically raised the stakes in the historic Black Hills town of Deadwood. The legislation, known unofficially as the "Costner bill," had given actor Kevin Costner and his brother the go-ahead to build a $65 million casino resort and would have raised the betting limit from $5 to $100. Most farming counties east of the Missouri River opposed the expansion, while voters in the western part of the state supported the measure. Deadwood's part-time mayor expressed his town's deep resentment, saying, "Obviously, we do dance to the east river tune."

      Nearly 70 Indian tribes in 20 states took in about $6 billion in gambling revenue. New York agreed to let the St. Regis Mohawk tribe open a casino on the Canadian border, the state's second, and Connecticut signed an agreement with the Mashantucket Pequot Indians permitting slot machines at their casino in Ledyard in exchange for a minimum $100 million yearly contribution to a state fund for poor cities.

Environment.

      Almost half the states missed the deadline imposed by the Clean Air Act requiring them to submit plans to the Environmental Protection Agency for reducing air pollution from stationary sources. California, Illinois, and Indiana were warned they could face sanctions for not enacting laws for stringent pollution inspections for cars.

      A Michigan ban went into effect prohibiting the disposal of yard wastes from all government facilities into landfills or municipal incinerators. The ban, which applied to weeds, grass clippings, shrubs, leaves, and branches, would not apply to homeowners until 1995.

Equal Rights.

      A lower court's injunction against Colorado's controversial Amendment 2 was upheld in the state Supreme Court and later ruled unconstitutional. Approved by voters the previous year, the law would have invalidated existing gay rights laws and prohibited new ones. In Cincinnati, Ohio, and Lewiston, Maine, voters repealed local antidiscrimination laws against homosexuals. In Portsmouth, N.H., voters rejected an antidiscrimination law. Hawaii's Supreme Court struck down a ban on marriage by same-sex couples.

      A largely ignored 1972 federal civil rights law received renewed attention. The law, Title IX, required colleges and universities to provide equal opportunity for men and women to participate in intercollegiate sports. In California a lawsuit was settled against the state university system when it was agreed that women at the 20 member campuses would be offered basically the same varsity sports opportunities as men by the 1998-99 academic year. Florida passed a "female sports equity law," requiring sports programs for men and women to be equal or risk fines. The National Collegiate Athletic Association scheduled a conference for January 1994 to address what it called "gender-equity guidelines."

      Although Wisconsin bars housing discrimination on the basis of marital status, the state's highest court ruled that a landlord could refuse to rent to unmarried couples. The court asserted that "living together is 'conduct,' not 'status,' " and that public policy in Wisconsin promoted marriage.

Consumer Protection.

      Twenty-three states, including New York, Connecticut, Virginia, Florida, and California, joined forces to investigate whether major cable television companies were taking advantage of loopholes in a new federal law. The law was designed to control prices, but many consumers saw their bills rise. The subsequent disclosure of an internal memo from one cable company prompted a swift investigation. "We cannot be dissuaded from the charges simply because customers object," it said. "The best news of all is we can blame it on reregulation and the government. Let's take advantage of it!" (MELANIE ANNE COOPER)

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