Special interests shift from lobbying to litigating
 
The key to protecting one's interests during the state budget process has long been having well connected lobbyists at the Capitol. But interest groups are increasingly turning to another means of defending their turf: hiring top-notch litigators.
 
This year, Medi-Cal doctors in CALIFORNIA managed to roll back over a billion dollars in cuts to their reimbursements approved by lawmakers in July 2008 by convincing a federal appeals court the reductions violated minimum federal standards for the program. And challenges to the $24 billion budget signed last month by Gov. Arnold Schwarzenegger (R) are also in the works. Even Senate Leader Darrell Steinberg (D), who helped negotiate that budget, has filed a lawsuit, contending the governor illegally cut more than $500 million from the plan. 
 
The suits aren't confined solely to CALIFORNIA. The WASHINGTON Health Care Association and seven owners of nursing facilities have sued to block $19 million a year in cuts ($46 million with federal cash added) to nursing homes. WASHINGTON's state ombudsman for long-term care, Louise Ryan, is also challenging a $1.1 million-a-month cut in adult day health services. 
 
"We've suffered for years with rates that didn't cover costs...We're at the tipping point here for long-term care funding in general," said Gary Weeks, executive director of the WASHINGTON Health Care Association. He said the lawsuits "may be a last ditch effort, but facilities that provide long term care...can't do it anymore." 
 
Some view the special-interest lawsuits less sympathetically. 
 
"We are seeing more lawsuits and more victories by the groups filing them," said Bob Hertzberg, a former CALIFORNIA Assembly speaker who is now chairman of CALIFORNIA Forward, a think tank that focuses on fiscal reform. "They don't want to compromise...It's easier to hire lawyers than lobbyists, and you probably get better outcomes." 
 
The lawsuits in CALIFORNIA are seizing on state laws passed in rosier economic times — some by citizen initiative — that created new programs or expanded existing ones and included language locking in the additional spending. Michael Cohen, a budget expert at the nonpartisan Legislative Analyst's Office, said the court losses the state is now suffering are a product of "trying to navigate a budget that has become more and more complicated and more and more difficult to make changes in." Unfortunately when lawmakers and voters are considering etching ironclad funding assurances into law, he said, they "can't always see the future in terms of changing priorities or different circumstances that might come along later." 
 
Others attribute the rise in litigation not only to a lack of foresight but also to lawmakers' desperate budgeting. 
 
"All of the easy solutions are gone," said Jean Ross, executive director of the CALIFORNIA Budget Project, which analyzes the effects of government spending policies on low-income Californians. "The choices are hard, the gap is wide. People look to riskier and riskier options to come up with savings." 
 
The rationale for approving measures of dubious legality is that it buys time for economic conditions to improve. 
 
"These cases can go on for a while," said Daniel J.B. Mitchell, a professor of public policy at UCLA. "It's a way of pushing liabilities into the future." (LOS ANGELES TIMES, OLYMPIAN)

Financial disclosure
 
Twenty states received a failing grade in the Center for Public Integrity's annual ranking of financial disclosure among legislators. VERMONT, MICHIGAN, and IDAHO tied for last place because they have no financial disclosure laws for lawmakers. Some in those states say their state's small size and strong community ethics are sufficient protection against corruption, and requiring financial statements would discourage potential candidates. Disclosure advocates, however, hold that the information allows citizens to make educated decisions about their lawmakers. The top three states in the center's rankings were LOUISIANA, WASHINGTON, and HAWAII, which all received an "A" grade.

ECONOMY TAKES TOLL ON STATE GOVT APPROVAL RATINGS: State budgets aren't the only thing suffering as a result of the economic downturn. State government approval ratings appear to have taken a hit too. 
 
Overall, 50 percent of the public currently holds a favorable view of their state government, down from 59 percent a little over a year ago, according to the Pew Research Center for the People & the Press. 
 
The size of an individual state's decline in favorability largely coincides with the size of its budget shortfall. In the 12 states with the biggest budget gaps, only 38 percent hold a favorable view of their state government, while 58 percent have an unfavorable view, according to a national survey conducted by Pew in late July. A survey done in April 2008 found that public opinion in those states was evenly divided (48 percent favorable, 47 percent unfavorable). 
 
Governments of states with moderate budget gaps didn't fare much better. Public opinion in those states was favorable by a slim majority (52 percent to 40 percent). But the margin was considerably wider last year: 64 percent to 35 percent. 
 
By contrast, public opinion has remained relatively stable in the states with the smallest budget gaps. The ratings were 66 percent favorable, 29 percent unfavorable a year ago and 60 percent favorable, 30 percent unfavorable last month. 
 
Approval ratings for local governments haven't changed much either. They were nearly two-to-one favorable last year (63 percent to 33 percent) and largely remain that way (60 percent to 32 percent). The ratings for the federal government, meanwhile, actually improved. Last year they stood at their lowest point in a decade: 58 percent unfavorable and 37 percent favorable. Now they are 50 percent unfavorable and 42 percent favorable. (PEW RESEARCH CENTER FOR THE PEOPLE & THE PRESS) 
 
BUDGETS IN BRIEF: Nine thousand public employees in at least six states — CONNECTICUT, MAINE, NEW YORK, OKLAHOMA, LOUISIANA and VERMONT — have been offered incentives to retire early. The buyouts will allow the states to cut spending without hurting morale or raising the ire of public employee unions, but they could end up costing the states more if the jobs are refilled too quickly or if too many experienced employees accept them (STATELINE.ORG). • A NEW YORK state audit found that $30,000 in unemployment insurance benefits was paid to 11 individuals who were incarcerated in prison (NEW YORK DAILY NEWS). • After failing to green-light a Dec. 8 special election urged by ARIZONA Gov. Jan Brewer (R) to consider a temporary sales tax increase, the Republican-controlled Senate revived the budget plan the governor vetoed several weeks ago. The plan balances the budget by cutting $600 million from state programs, selling state buildings and relying on federal stimulus dollars (ARIZONA REPUBLIC [PHOENIX]). • State and local government revenues derived from commercial casinos was down 2.2 percent in 2008, according to the American Gaming Association. Fourteen states also saw year-over-year drops in lottery revenues for the fiscal year that ended in June, according to the Rockefeller Institute (WALL STREET JOURNAL). • CALIFORNIA has received more than half of the federal stimulus money allocated to it, while 10 other states, including ALASKA, NEW HAMPSHIRE and WYOMING, have been paid less than a quarter of their allotments (USA TODAY).

IS PATERSON CANDIDACY LIABILITY FOR NY DEMS? The political missteps and dismal approval ratings of NEW YORK Gov. David Paterson (D) have some Democrats questioning whether he should run for election next year. But it's not just his job they're worried about. 
 
"I'm cautious because there is uncertainty at the top of the ticket," said U.S. Rep. Michael E. McMahon, a Democrat who is running for a second term in a district with a strong Republican presence and which has been hit particularly hard by Wall Street job losses. "It's inherently a difficult district for Democrats." 
 
McMahon's apprehension is shared by U.S. Rep. Dan Maffei, a Democrat who won a Republican-held seat in the Syracuse area last year. 
 
"Already we have a situation that is challenging," he said. "We can't afford to get stuck in the mire of state politics." 
 
McMahon and Maffei are two of at least a half-dozen Congressional Democrats whose fate national Party leaders are concerned about. And it's not just House seats that are at risk. 
 
Republican leaders are trying to persuade former Gov. George Pataki to challenge Democratic U.S. Sen. Kirsten Gillibrand, who was appointed by Paterson to fill the seat vacated by Hillary Rodham Clinton. They believe having Paterson in the 2010 gubernatorial race would only help their cause. 
 
"Paterson at the top of the ticket would open up opportunities for Republicans at a variety of levels," said one GOP strategist. "That is sort of what we are banking on." 
 
The Democrats' biggest fear is that Paterson will present such an enticing target that a prominent Republican, like former Mayor Rudolph Giuliani, will decide to challenge him, galvanizing the party and motivating Republican voters. 
 
For his part, Paterson has shown no signs of foregoing next year's election. And a spokeswoman for the governor took exception to the suggestion that he was a liability for the Democrats. 
 
"These concerted attempts to undermine the governor, in the form of rumor-mongering, potshots and freelancing, do not serve the people of the state well and certainly do not reflect well on those who are participating in it," she said. "No political sideshow will sway him from continuing to make decisions, however difficult, in the best interests of the people of NEW YORK." 
 
According to a spokesman for the Democratic Congressional Campaign Committee, Democratic incumbents are simply concentrating on making their own campaigns as strong as possible. 
 
"Our members are focused on serving their constituents and representing their districts," he said. "And we're confident their focus will lead to successful re-election campaigns next year." 
 
But as U.S. Rep. Maffei put it, in order for NEW YORK's Democratic incumbents to be comfortable, "we need to see the governor politically rehabilitate himself or step aside and let another come in." (NEW YORK TIMES) 
 
POLITICS IN BRIEF: ALASKA's Legislature voted last week to override former Gov. Sarah Palin's (R) veto of $28 million in federal stimulus money for energy relief. But the vote was close, exceeding the 75 percent margin needed for passage by just over a percentage point (ANCHORAGE DAILY NEWS). • MONTANA State Auditor Monica Lindeen called for an independent investigation to determine if her staff violated state ethics laws. Her action was spurred by allegations that Deputy State Auditor Walt Schweitzer solicited campaign contributions from subordinates in his state office and that former Assistant Deputy Insurance Commissioner Laura McGee was fired after initiating a grievance complaint against the brother of Gov. Brian Schweitzer (D) (GREAT FALLS TRIBUNE). • The son of NEW YORK Sen. Pedro Espada Jr. (D) agreed to resign from his new Senate job last week after aides to Attorney General Andrew Cuomo revealed they were investigating whether the hiring violated state law. Pedro G. Espada, 35, was hired on Aug. 6 as the Senate's deputy director of intergovernmental relations, a $120,000-a-year job that didn't previously exist. Sen. Espada, whose return to the Democratic Caucus last month ended a month long stalemate in the Senate, denied his son's hiring was part of a deal with Democrats (NEW YORK TIMES).

HUNTSMAN URGES HERBERT TO RESIST INTOLERANCE: Now-former UTAH Gov. Jon Huntsman Jr. (R) officially resigned from office last week after he was confirmed by the U.S. Senate as the nation's new ambassador to China. But before leaving, Huntsman advised new Gov. Gary Herbert (R) to resist the "most intemperate, intolerant voices," who he says don't speak for the majority of Utahns. 
 
In a letter, Huntsman urged Herbert to focus his energies on the "2.7 million Utahns who don't have a lobbyist, who don't have a special interest representative, who just want good, competent, ethical leadership" rather than the "self-appointed arbiters of morality and virtue," who he says merely "are the loudest" and who provide "a lot of the cacophony that tends to consume our political dialogue." 
 
Whether Herbert heeds that advice remains to be seen. In his inauguration speech, his tone was decidedly more conservative than the moderate Huntsman. He outlined his "core principles," including freedom, limited government, fiscal responsibility, self reliance and states' rights. He also urged the state to resist the "temptation to let Washington take care of us in a variety of ways," adding that "We should never forget that we, as a nation of united states, created the federal government, not the other way around," a line that drew a large ovation form the capacity crowd.  
 
Herbert is likely to do more than just talk tougher than his predecessor. Huntsman irked many in his own party in recent years by supporting efforts to combat global warming, including UTAH's participation in the Western Climate Initiative and greater incentives for renewable energies like wind and solar power. Herbert, conversely, has openly questioned whether global warming exists and is anything but an advocate for renewable energy programs. Last session, Huntsman also endorsed an ultimately failed legislative proposal to adopt civil unions for same-sex couples, something Herbert adamantly opposes.  
 
"There's no question he's going to be more conservative on the budget and on social issues," said House Majority Leader Kevin Garn (R). "He's a true conservative and I think that will come through loud and clear."  
 
That likelihood makes Democratic leaders like Senate Minority Leader Pat Jones (D) wary, particularly in regard to how Herbert may go about trying to help resolve the state's $700 million budget shortfall. But Jones says most people will take a wait-and-see approach before evaluating Herbert, who is expected to seek the office on his own in 2010.  
 
"I think we've had a very, very popular governor. I think his shoes will be very difficult to fill," Jones said. "But I think the people are ready and willing to give him a chance and see what course he's going to follow." 
 
Huntsman may prove to be a tough act to follow on several levels, not the least of which is his personal charisma. As the ceremony was winding down, he took off his suit jacket, donned a helmet and rode off on a black Harley Davidson motorcycle, accompanied by a bevy of state police...and dirtbikers. (SALT LAKE TRIBUNE, DAILY HERALD [PROVO])  
 
PATERSON EASES RULES PROCESS: Citing a need to spur economic growth, NEW YORK Gov. David Paterson (D) last week issued Executive Order No. 25, a far-reaching directive that allows a handpicked group of top aides to repeal state regulations they deem outdated or overly burdensome to businesses. The order gives Paterson and his inner circle far greater control over the Empire State's sprawling bureaucracy, while diminishing the influence of local commissioners and other state agency officials.  
 
Paterson's directive establishes a regulatory review and reform committee, made up of five senior members of his cabinet and led by his secretary, Lawrence S. Schwartz, that will require public agencies to invite public comment on whether any existing rules and regulations are "unnecessary, unbalanced, unwise, duplicative or unduly burdensome." The newly-formed committee would then reconsider rules that have generated the most criticism.  
 
While business groups hailed the order, others condemned it. "All this will do is tie agencies up in knots at a time when they have fewer resources than ever to carry out their essential functions," said Laura Haight of the NEW YORK Public Interest Research Group. "This is a backdoor assault on NEW YORK's laws to protect our health, environment and safety, which is sure to be greeted with cheers from NEW YORK's business community."  
 
The order particularly outraged environmental groups, who were shocked that Paterson issued it one day after he proposed ambitious targets for reducing the state's carbon emissions. "Yesterday they were asking us for a quote in support of the climate change proposal. Today they release this, and they didn't even give us a heads-up," said Robert J. Moore, executive director of Environmental Advocates of NEW YORK. "Talk about cynical."  
 
Paterson spokesperson Morgan Hook, denied that the order would undermine consumer and environmental regulations, saying "Just because there is this process by which we will review regulations does not mean that we are going to repeal or change regulations that the governor supports or that are working." (NEW YORK TIMES) 
 
GOVERNORS IN BRIEF: An ALASKA judge ruled that former Gov. Sarah Palin's (R) use of personal e-mail to conduct state business is legal. Superior Court Judge Jack W. Smith said in his ruling there is no provision in Last Frontier State law that bars the use of private e-mail accounts when conducting state business (ANCHORAGE DAILY NEWS). • ILLINOIS Gov. Pat Quinn (D) asked all trustees for the University of ILLINOIS to resign in the wake of a critical report about the school's ongoing admissions scandal. A report from the state Admissions Review Commission revealed that over the last five years the university gave special consideration to as many as 800 applicants with powerful patrons, including lawmakers and university trustees. Three of the nine trustees have already submitted resignation letters, two of which Quinn has accepted (CHICAGO TRIBUNE). • OHIO Gov. Ted Strickland (D) said last week that he supports SB 77, a bill working its way through the Buckeye State Legislature that would give more prisoners access to DNA testing and strengthen requirements for retention of biological evidence (COLUMBUS DISPATCH). • Lawyers with the administration of WISCONSIN Gov. Jim Doyle (D) are reviewing the legal work of one of the governor's former top aides, who recently resigned after it was revealed she did not have a law license (MILWAUKEE JOURNAL SENTINEL).

BUSINESS: NEW HAMPSHIRE Gov. John Lynch (D) signs SB 40, legislation that requires companies with 75 or more full time employees to give those workers and the state 60 days notice of mass layoffs or plant closings. It goes into effect on January 1 (CONCORD MONITOR). • CALIFORNIA Gov. Arnold Schwarzenegger (R) signs AB 63, legislation that requires Golden State retailers that issue a service contract or extended warranty to maintain a copy on file for the life of the contract. The law also requires the retailer to make that copy available to a consumer within 10 days of a request (WHITTIER DALY NEWS). • NEW YORK Gov. David Paterson (D) signs SB 3762, legislation that require retailers to more clearly define and post refund policies, including restocking and other fees. The measure also allows customers with a receipt to return any item for a full refund for up to 30 days from the date of purchase should the retailer fail to post a refund policy (ALBANY TIMES-UNION).  
 
CRIME & PUNISHMENT: CALIFORNIA Gov. Arnold Schwarzenegger (R) signs AB 58, which changes the penalty for participation in a non-commercial or office sports betting pool from a misdemeanor, punishable by fines up to $1,000, to a minor infraction punishable by a fine not to exceed $250. The law was spurred by the case of a 76-year-old bartender who was arrested and fined for running a $5-per-person football betting pool at the bar where she worked (LOS ANGELES TIMES). • Still in CALIFORNIA, Schwarzenegger signs AB 412, which makes it a misdemeanor to hang a noose in order to terrorize a person who owns, occupies, attends school at or is employed at the property where the noose is hung (LOS ANGELES TIMES). • NORTH CAROLINA Gov. Bev Perdue (D) signs SB 461, a bill that makes the Tar Heel State the second to allow defendants and inmates to challenge death sentences by presenting statistical evidence of racial bias. KENTUCKY has a similar statute (CHARLOTTE OBSERVER). • ILLINOIS Gov. Pat Quinn (D) signs SB 141, which makes it a felony to recruit minors to join a street gang. Violators could face up to 15 years in prison (CHICAGO TRIBUNE).  
 
EDUCATION: ILLINOIS Gov. Pat Quinn (D) signs HB 272, legislation that allows Prairie State schools to test high school athletes for performance enhancing drugs at any time during their sport's season. Previous law allowed testing only during the post season (CHICAGO TRIBUNE). • Still in ILLINOIS, Quinn signs HB 2352, a measure that bars credit card companies that promote their products on college campuses from giving students gifts as an incentive to sign up for a card. The measure further requires any Prairie State college or university that allows credit card marketing on campus to also provide students with financial education so they understand the consequences of using credit (CHICAGO TRIBUNE). 
 
ENVIRONMENT: CALIFORNIA Gov. Arnold Schwarzenegger (R) signs SB 670, which places a moratorium on suction dredge mining in the Golden State. Dredge mining opponents claim the practice pollutes rivers and harms fish populations (CONTRA COSTA TIMES [WALNUT CREEK]). • ILLINOIS Gov. Pat Quinn (D) signs SB 1919, legislation that bars health care institutions from flushing medicines that haven't been used into public wastewater systems. Violators face fines (STATE JOURNAL-REGISTER [SPRINGFIELD]).  
 
HEALTH & SCIENCE: NEW YORK Gov. David Paterson (D) signs AB 9036, legislation that extends the Empire State's freeze on medical malpractice insurance rates for another year (NEWSDAY [NEW YORK CITY]). • NEW JERSEY Gov. Jon Corzine (D) signs SB 735, which will allow Garden State residents to obtain a court order to compel a family member to attend a mental health outpatient treatment program. The law will be phased in over three years (STAR-LEDGER [NEWARK]). • Still in NEW JERSEY, Corzine signs AB 2539, which requires health insurers to reimburse obstetrical providers in installment payments for maternity services provided over the term of a woman's pregnancy, rather than in a lump sum after the birth of the child (STAR-LEDGER [NEWARK]). • Also in NEW JERSEY Corzine signs SB 2231, which adds nurse midwives to the list of medical professionals authorized to certify the medical condition of individuals under the state's disability laws (STATE NET). • Finally, Corzine signs AB 2238, legislation that requires NEW JERSEY health insurers to cover up to $36,000 annually in care for children with autism that are 21 years of age or younger (NEWJERSEYNEWSROOM.COM). • MASSACHUSETTS health officials deputize dentists, paramedics and pharmacists to help administer vaccines against both the seasonal and swine flu. Health regulators also direct Bay State hospitals and clinics to provide vaccine to all their workers and some volunteers in order to keep the medical workforce healthy and prevent doctors and nurses from passing the disease on to patients (BOSTON GLOBE).  
 
IMMIGRATION: U.S. Homeland Security Secretary Janet Napolitano pledges $30 million in additional federal funding for state and local police agencies along the U.S.-Mexico border. The money will be distributed amongst, in order, TEXAS ($12.8 million), CALIFORNIA ($7.4 million), ARIZONA ($7.2 million) and NEW MEXICO ($2.6 million), and is intended to help pay sheriffs' departments and local and tribal police pay for personnel, overtime and travel costs associated with cross-border crime (SAN ANTONIO EXPRESS-NEWS). 
 
SOCIAL POLICY: ILLINOIS Gov. Pat Quinn (D) signs HB 3925, a measure that gives parents up to 30 days after their child is born to drop the baby off at a hospital, a fire station or a police department without penalty. Previous law allowed only seven days (CHICAGO TRIBUNE).  
 
POTPOURRI: CALIFORNIA Gov. Arnold Schwarzenegger (R) signs SB 39, which gives civil immunity to emergency service volunteer workers who perform disaster services during a state of emergency. The governor also signs AB 83, which immunizes Good Samaritans from civil liability when they help others at the scene of an emergency, regardless of whether the care provided is of a medical or nonmedical nature. The measure exempts assistance acts made in a reckless or grossly negligent manner. The measures stemmed from a court ruling last year that said a state law shielding citizens from liability in giving emergency care did not include rescue attempts (METROPOLITAN NEWS ENTERPRISE [LOS ANGELES]). • Still in CALIFORNIA, Schwarzenegger signs AB 124, a bill that allows a court to appoint a temporary manager to maintain private cemeteries when they are neglected or abandoned by their owners (KFSNTV.COM [FRESNO]).

ONE DISTORTED VIEW: Some lessons are simply best learned the hard way. Today's case in point comes from NORTH CAROLINA, where a legislative aide to Rep. Laura Wiley recently forwarded a YouTube video decrying President Barack Obama's proposed health care overhaul. As the Charlotte News & Observer reports, the aide gave the video only a cursory glance before sending it on. Had she bothered to look a little closer, she would have seen it claimed the proposal would enact mandatory euthanasia for seniors (a claim the AARP has called "a gross, cruel distortion"), comparing it to a Nazi prison camp featuring graphic photos collected by an officer at Auschwitz. The video eventually wound up in the inbox of someone who was more than a bit outraged, sending the aide and Wiley into full-on spin control...and likely ensuring a far more thorough examination of future e-mails and videos. 
 
GUITAR HERO IT AIN'T: Speaking of such kafuffles, CALIFORNIA Assemblyman Chuck Devore and U.S. Sen. Barbara Boxer long ago took their spat to video. As the Sacramento Bee reports, the two have been sniping at each other all year, a byproduct of DeVore, a Republican, challenging Democrat Boxer for her Senate seat. The war of words heated up earlier this year over a parody video DeVore made that transforms Don Henley's 1983 hit "All She Wants to do is Dance" into "All She Wants to do is Tax." That brought Henley into the fray, who says using his songs — including another parody that uses Henley's "Boys of Summer" to rip President Obama — infers he backs DeVore, which Henley does not. The production company dropped a lawsuit, but DeVore added a disclaimer to the video anyway, which acknowledges that Henley doesn't support him — and that the feeling is mutual. 
 
NO MORE DONUT DEATH! That was the message handed down recently when FLORIDA officials forced Dr. Jason Newsom from his $140,000 a year job running the county health department. Newsom's crime was apparently his devotion — some would say overzealousness — to healthy eating. As the Associated Press reports, he often made his point by posting messages that railed against sugary and high fat foods on an electronic sign outside the department's offices. Winners included: "Hamburger (equals) Spare Tire" and "French Fries (equals) Thunder Thighs." But when Newsom took on the all powerful donut lobby with a message that said, "America Dies on Dunkin'," a few local donut shop owners, including a pair of lawyers who owned a Dunkin' Donuts franchise, threatened to sue. That led state officials to ease Newsom out. The good doc, who now works in the prison system, says, "I have never been known for my subtlety."  
 
SPEAKING OF A LACK OF SUBTLETY: PENNSYLVANIA Gov. Ed Rendell probably didn't make a lot of friends in the Legislature last week when he joked that the state might be better off if lawmakers working on the long-overdue budget met up with a little poison gas. As the Philadelphia Inquirer reports, Rendell was expressing frustration with the slow pace of the negotiations, and particularly with what he views as a lot of unnecessary bickering and political posturing from a joint budget conference committee, when he referenced a 1960s James Bond movie in which the villain uses poison gas to snuff out an entire room of adversaries. Erik Arneson, a spokesman for one of the committee members, wasn't amused. "No one has ever said that the governor's sense of humor is one of his strong suits," huffed Arneson.