• Economic Development and Commerce Committee (EDC) – Economic Stewardship: State Response to Market Disorder
• Education, Early Childhood and Workforce Committee (ECW) – Human Capital: Innovative Business and State Strategies for K-12 Educators
• Health and Human Services Committee (HHS) – Reintegrating Our Troops Returning from Deployment
• Natural Resources Committee (NR) – Options for a Secure and Affordable Energy Future
• 2007-08 Chairman Minnesota Gov. Tim Pawlenty’s Initiative: Securing a Clean Energy Future
• Centennial Session Discussion Subjects: “A Legacy of Leadership”; “A Legacy of Innovation”

Centennial Session Points of Interest: The meeting began with a day of activities celebrating NGA's centennial. Governors and former governors were introduced individually in the order in which their states joined the Union. After the airing of a video on NGA's history, two discussions among governors and former governors, moderated by presidential historian Richard Norton Smith and ABC correspondent Cokie Roberts, focused on gubernatorial leadership and gubernatorial and state innovation.

Richard Norton Smith opened the session on gubernatorial leadership by asking governors to speculate on what our nation would be like if there were no states, as Alexander Hamilton had envisioned. Governors pointed to the positives that states provide, including closeness to the people, laboratories of innovation, efficiencies of scale, and diversity suited to the needs of the citizens in different parts of the country. But former Governor Michael Dukakis of Massachusetts made note of one specific issue—civil rights—in which the states may be viewed as having been obstacles to progress. In the discussion that ensued, former Governor Linwood Holton of Virginia spoke of the trailblazing role he played in smoothing the way for the integration of his state's public schools in the face of massive resistance.

Other issues discussed in the session on leadership included (1) the extent to which, as chief executives, Governors often must make unpopular decisions for the public good; (2) ways in which management of crises—which may require sacrifices generally not expected, can be applied to day-to-day policymaking, and how government leaders might become more proactive rather than reactive in the policymaking arena; (3) the need for balance between (a) state/federal cooperation and the development of national strategy in areas such as alternative energy and education; and (b) securing flexibility for states in the application of federal funds; and (4) why polls have found that state government receives better marks than the federal government. Governors and former governors were vocal about the need to better prepare Americans for competition in a globalized economy, and about what roles are appropriate for the states and for the federal government in establishing and applying education standards. They also noted that there is less partisanship, and greater consensus-building, at the state level than at the federal level, as well as closer liaison with the citizenry, accounting for the public having higher regard for state than for the federal government. Also receiving considerable attention was the subject of the pros and cons of term limits. The majority of governors and former governors who spoke on the subject expressed opposition to term limits, arguing that rapid turnover of political officials translates to a loss of the experience necessary to be effective, and that term limits reduce the opportunity for political officials to build the kinds of relationships with one another that help move laws and policy forward. However, Governor Mark Sanford of South Carolina expressed support for term limits, arguing that loss of experience is offset by greater innovation and less likelihood that politicians will grow comfortable with a status quo that may be counter to the public good. Governors also were asked by the moderator about their role in depoliticizing the reapportionment process. Former Governor Tom Vilsack of Iowa noted that in his state, redistricting is now computer-driven to prevent political bias.

The centennial session on gubernatorial and state innovation began with a film on the nation's education crisis, following which moderator Cokie Roberts asked Governors for their thoughts on why, given the amount of effort that has been devoted to improving the education system in the 25 years since A Nation at Risk was published, progress appears to have been limited. Governors argued that there had been failures primarily in three areas: (1) promoting a culture of parental responsibility for children's interest in learning; (2) recognizing the value of teaching and reward quality teaching with higher pay; and (3) providing incentives for educational innovation. Governors differed on the extent to which parental involvement could be ensured and how—if it could not be—schools might best inspire children's interest in learning. And Governors' views differed somewhat on the definition of innovation, with Governor Sanford of South Carolina arguing that it is difficult to encourage innovation in a system of public schools that is essentially monopolistic. There was agreement, however, on the recognition that good teachers are under-rewarded.

Governors also exchanged information about innovative efforts in their own states, including programs to expand early childhood education. Governor Mike Beebe of Arkansas argued that it should be impressed upon parents of more educationally advanced children that taxpayer investment in pre-school education ultimately will help all children—their own included—by ensuring that elementary school teachers do not have to devote as much special attention to those who have lagged behind.

When asked who is most helpful to Governors in managing their education systems, the largest percentage of Governors and former Governors attending the session cited the business community, followed by chief state school officers, and then higher education leadership and teachers unions.

Governors also discussed the crisis in health care and health care costs. In response to an expression of concern that the states cannot be the insurers of last resort, Mike Leavitt, current Secretary of the U.S. Department of Health and Human Services and former Governor of Utah, argued that the federal government has a profound role to play in the management of health care in this country, but it should be as an organizer, not as an insurer. He argued that federal legislation has been far too prescriptive and that states must be given the tools to innovate with respect to the provision of health care and the control of health care costs. Governors discussed some of the specific innovations they have undertaken, many of them focused on preventive care, wellness programs, and the management of chronic disease as a means of controlling costs. Governor Ruth Ann Minner of Delaware, for example, pointed out that in the face of a high incidence of cancer, her state began providing free cancer screening for life, with the promise that the state would pay for two years of treatment. The state has also instituted healthy rewards and weight watchers programs for state employees. And these efforts toward preventive care and early treatment are being funded to a large extent from Delaware's share of the tobacco settlement. Governor Joe Manchin of West Virginia argued that one of the largest problems associated with health care costs is that we do not have the opportunity to ‘shop' for health care as we do for other goods and services, as a result of which we don't know what we're going to be charged in advance. Governors argued in favor of uniform billing, as well as more efficient electronic health records systems to help avoid duplicate diagnostic tests.

Centennial keynote speaker Bill Clinton, 42nd President of the United States, former Governor of Arkansas, and past Chairman of the National Governors Association, praised NGA for providing Governors with the opportunity to exchange ideas developed in their ‘laboratories of democracy' and to help build bipartisan consensus for change. He laid out three major challenges we face today that are ideally suited for action by the states, given their innovative capacities: (1) persistent and profound inequality in income, employment, education, and health care; (2) identity, meaning that our similarities notwithstanding and in spite of our celebration of diversity in this country, we have become more insular, choosing to segregate into communities of like-mindedness; and (3) energy and global warming—subjects we must address in a way that does not undermine the effort to mitigate inequality and segregation.

President Clinton offered ideas for Governors and the states to pursue in addressing these three challenges. First, with respect to inequality, he offered the example of the poor in this country spending literally billions of dollars in check cashing and pay-day loan transactions that would be better invested in financial institutions, something the states can help to promote. States can also encourage participation in the Food Stamp program, which is now about 40% underenrolled relative to eligibility. Clinton urged change in the No Child Left Behind Act, which has helped the lowest achieving schools but harmed higher-achieving schools by compelling them to shift money away from important education programs and toward actions necessary to meet the law's administrative requirements. And governors can help promote wellness programs designed to prevent illnesses such as Type 2 diabetes among children.

The identity challenge differs from state to state, making states the ideal laboratories in which to study ways in which we can promote better community relations and ensure that we remain both a nation of laws and a nation of immigrants.

With respect to natural resources, President Clinton offered the suggestion of joint state projects for the development of clean coal technology, and the construction of a much-needed interstate network to enable wind-generated electricity. He also pointed out that states, which have a primary role to play in job creation, can in fact create jobs by promoting green buildings through retrofitting. He provided the example of a process through which banks make loans for retrofitting that are repaid by the energy savings that result.

In closing, President Clinton quoted from President Theodore Roosevelt's opening speech at the first Governors Conference in 1908, in which with great foresight Roosevelt argued that the continued economic health of our nation depended on our wise use of natural resources. Said Roosevelt: "We have become great in a material sense because of the lavish use of our resources, and we have just reason to be proud of our growth. But the time has come to inquire seriously what will happen when our forests are gone, when the coal, the iron, the oil, and the gas are exhausted, when the soils shall have been still further impoverished and washed into the streams, polluting the rivers, denuding the fields, and obstructing navigation. These questions do not relate only to the next century or to the next generation. One distinguishing characteristic of really civilized men is foresight; we have to, as a nation, exercise foresight…and if we do not…dark will be the future!"

Plenary Session Discussion Subjects: Creating a Diverse Energy Portfolio, and Clean Energy Technology: What's Here and What's Coming

Plenary Session Points of Interest: NGA Chairman Minnesota Governor Tim Pawlenty began the opening plenary session with a review of activities associated with his Chairman's Initiative, "Securing a Clean Energy Future" (SCEF). He announced a new state-industry partnership between his initiative and General Motors to help states increase availability of E-85 (an alternative fuel consisting of 85 percent ethanol and 15 percent gasoline) at fueling stations. Under the partnership, GM will provide technical assistance to states in developing strategies for installing E-85 pumps in key locations. Governor Pawlenty also announced the release of four publications to help ensure that the work of the SCEF Initiative continues: "Opportunities for States in Clean Energy Research, Development & Demonstration," "A Governor's Guide to Clean Power Generation and Energy Efficiency," "Clean and Security State Energy Actions—2008," (which catalogs what the states and territories are doing to advance a cleaner, more security energy future), and "Greening State Government: ‘Lead by Example' Initiatives."

Robert A. Malone, chairman and president of BP America, discussed the opportunities that businesses and states have to moderate the growing demand for energy, advance a diverse portfolio of resources, and create long-term opportunities for research and development. Malone began by pointing out how—in the years since the 1973 OPEC embargo sent oil prices skyrocketing and access to gasoline plummeting—every President has launched ambitious efforts to reduce if not eliminate our nation's dependence on foreign oil by a target date, starting with Richard Nixon's "Project Independence." Yet renewable forms of energy have not displaced or materially reduced the use of fossil fuels. And while biofuels hold great promise, production of renewable energy in the U.S. has increased just 10 percent in the last 20 years while energy consumption has increased by 30 percent, requiring a tripling of imports from 3 million to 10 million barrels of oil a day, to the extent that we currently rely on the global oil market for 60 percent of our oil needs. The U.S. accounts for just 5 percent of world oil production but 25 percent of its consumption. And the cushion of worldwide oil supply that once kept prices under control has begun to be reduced by rising demand for energy in developing economies such as China's. In turn, the rapid increase in energy prices has left Americans and American industries, as well as the public sector, struggling to cope with rising fuel costs.

Malone argued in favor of four measures to address this problem. First, energy conservation should be made a national priority, targeting, among other things, greater use of mass transit, production and use of higher mileage vehicles, and development of green building standards. Second, a continued supply of energy must be ensured, while at the same time responsible development and wise use of our own nation's resources should be encouraged. Malone noted that today, one-fourth of all U.S. oil production comes from the 15 percent of the U.S. outer continental shelf that is open to exploration and production. BP believes that it is time to open the rest. And he went on to say that the perfection of clean coal technology will help meet fuel needs with less environmental impact. Third, Malone argued in favor of creating a financial, regulatory, and physical infrastructure to kickstart the growth of alternative energy, including solar and wind, as well as biofuels that are made from nonfood sources. Fourth, the use of nuclear power should be expanded. And last, the challenge of climate change must be addressed.

Vijay Vaitheeswaran, a correspondent for Economist magazine and author of Zoom: The Global Race to Fuel the Car of the Future, spoke of three pillars of instability that underlie the need for change in the energy system. They are links between energy and: (1) poverty; (2) environment; and (3) geopolitics. With respect to poverty, he noted that the modern energy system does not reach fully one-third of humanity, and many impoverished people are forced to use methods of energy that release life-threatening indoor pollution. With respect to environment, Vaitheeswaran referred to the challenges we face in transforming to a low-carbon energy system that makes the best use of existing resources but with advanced technologies such as sequestration that preserve environmental integrity and slow the process of global warming. Finally, with respect to geopolitics, the reality is that oil has a monopolistic grip on transportation, and this monopoly, amounting to two-thirds of the world's proven reserves of conventional oil, is in the hands of five nations in the Persian Gulf—Saudia Arabia, with a quarter share, and Kuwait, Iran, Iraq, and the United Arab Emirates, each with a tenth share. Given that the rise of nations such as China will result in greater competition for oil, the U.S. must move in a different direction with respect to energy usage.

Vaitheeswaran went on to discuss three megatrends that give him hope for an energy renaissance, including liberalization of markets, a bottom-up environmentalism bubbling up from state and local governments and environmental organizations that is smarter and more pragmatic than the environmentalism of the 1970s, and a confluence of technologies and technological innovations. He pointed out that the energy industry has tended to invest too little in research and development, and argued that market liberalization is what will drive increased investment. He noted that the environmental movement that began in the ‘70s was successful at eliminating or reducing a large percentage of pollution, but more nuance—the use of externalities taxation and trading instruments, for example—is required to attack what remains.

Vaitheeswaran stressed that oil became central to our energy system not out of necessity but out of a confluence of circumstances, among them Rockfeller's nationwide distribution of oil, Henry Ford's innovation of the assembly line—which made gasoline-powered automobiles affordable, and the speed with which gasoline-powered vehicles could move compared with electric- and steam-powered vehicles. He argued that what we need now is to think not in terms of speed or the winning technology but rather in terms of climate, cleanliness, and reliability.

Dr. Richard Lester, professor of nuclear science and engineering at MIT, spoke at the Governors' closing plenary session, addressing the role of technological innovation in solving our nation's energy problems and the important policy role for state governments and the federal government in accelerating the innovation process.

Lester emphasized that their lack of popularity notwithstanding, nuclear power and coal-fired electricity with carbon capture and storage—because of their abundance as energy sources—will be critical to meeting our energy needs for the next half-century as greater efforts are placed on developing solar, wind, biomass, and other innovative energy sources. And the effort toward innovation cannot be left entirely to market forces, due to the fact that the major impetus for energy innovation comes from outside the marketplace.

Lester questioned the frequently-presented argument that what we need is a crash program by the federal government—something like the space program or Manhattan project—for energy innovation. With such programs, there has been only one customer—the federal government, and cost has been no object, neither of which is the case with energy innovation. Some experts believe the best strategy for achieving uniform energy prices is to make sure that the full costs of energy provision are incorporated in the market price paid by consumers. But Lester argued that pricing is neither simple nor sufficient on its own, because it won't address the rest of the energy innovation system, including—among other factors—incentives, support, regulations, research institutions, codes, standards, and markets within which new technologies are developed and taken up by energy suppliers and users. He offered the idea of funding energy innovation by industrial sales—via small fees to end-users, rather than by general tax revenues. This would generate a revenue stream far larger than what is currently contained in the Department of Energy budget. In turn, participating energy firms might organize into groups, each assigned a different energy innovation for which they would request proposals to fund research. Such an idea would solve problems associated with the federal appropriations process and underinvestment by private free riders. Another idea would be to find opportunities for combining energy services with other services and products so as to enable smaller entrepreneurial firms to participate in the energy innovation process.

Although neither of these ideas can be implemented without leadership at the federal level, Dr. Lester argued that requirements for the regulation of utilities, land use decisions, and building codes and zoning decisions, as well as support for public education, reside at all levels of government and will therefore call for state involvement. Lester envisions whole new industries developing in support of energy transition and innovation, thus creating jobs. He referred to the shift broadly as one from the Manhattan Project metaphor to a domestic Marshall Plan.

As the meeting came to a close, Governors recognized Nolan Jones, NGA's Deputy Director, who is retiring after 30 years of service with the organization.

As a prelude to the Governors’ centennial session discussion of states and innovation, in a video on the crisis in our nation’s education system, Ron Wolk, Founding Editor of Education Week, said: “It’s a very far-sighted and noble politician who says ‘I’m not going to be around to get credit for this but we’re going to do it anyway because sixteen years from now it’s going to have made an enormous difference; it’s going to have changed the world, and that’s the kind of Governor I want to be.’”

With respect to the need for a sound energy policy, Robert Malone of BP Energy said: “When I was 21, Richard Nixon promised me a different energy future. When my son was 21, President Clinton promised him a different energy future. I have a 9-month-old grandson and I can only wonder now what our energy future will be if we don’t act now. We have a responsibility to do a better job than we have in the past because history has shown us that the choices…we…make today are going to have an enormous impact on this nation and its people tomorrow.”

Selected Policy Positions Adopted:
(1) identifying programs and initiatives implemented by Governors to address the behavioral health needs of youth in the child welfare system, prevent penetration in the juvenile justice system, ensure that a risk and needs assessment effectively matches at-risk youth to appropriate interventions, and ensure that programs are culturally relevant, appropriate, and offered in multiple languages; calling on the federal government to support and partner with states in a number of endeavors, including services to address the needs of youth dually involved in the juvenile justice and child welfare system, and initiatives that encourage the participation of citizens in developing community responses to wrongdoing and that offer viable education, mental health services, and work-related opportunities for those youth returning to their communities, in order to prevent youth recidivism; and recommending that any additional federal reporting requirements be supported by increased federal funding; (2) calling for streamlining the Department of Veterans Affairs disability system, supporting the Wounded Warriors Act of 2008, applauding Congress and the Administration for providing notice to deploying service members 30 days in advance of deployment, and encouraging Congress to extend recognition programs for employers of the National Guard and Reserve to their spouses; (3) calling for reform of the Title IV-E program (which provides for federal payments to the states for foster care maintenance and adoption assistance payments made on behalf of certain eligible children); (4) in accordance with recommendations of the State Alliance for e-Health, calling on the federal government to use its leverage through Medicare and other programs to promote e-prescribing utilization and support adoption by providers and calling for the Department of Justice to work with e-health leaders to address e-prescribing of controlled substances in a manner that ensures ease of e-prescribing while also protecting against unlawful access to those medications; (5) establishing that federal clean water laws should not supersede state laws, addressing the state role through the Underground Injection Program in the regulation of carbon sequestration, calling for federal assistance in addressing climate change impacts on water resources, addressing emerging water contaminants, and supporting the establishment and implementation of a National Levee Safety Program that can be delegated to states with appropriate incentives to build state capability; (6) addressing the need for federal support of states as they increase their role in conservation programs such as the Conservation Reservation Program, calling on the Environmental Quality Incentives Program (EQIP) and Wildlife Habitat Incentives Program to support the implementation of alternative manure or treatment technologies and conversion to organic-agriculture incentive payments, supporting the U.S. Department of Agriculture giving farmers in each state the option of permanent easements for conservation, and supporting nutrition programs for the elderly; (7) addressing the reason action is needed with respect to global climate change while addressing concerns about potential economic costs; updating recommendations for domestic policy to include the need for a federal program to address greenhouse gas emissions, a strong federal and private sector research program to develop low-Greenhouse Gas emission energy sources, and a federal-state partnership to address climate impacts on water resources; calling for the promotion of the national goal of increasing our nation’s energy security while meeting demand; and calling for the U.S. to establish itself as a leader in achieving emission reductions by engaging in international discussions and better demonstrating our nation’s successes; (8) promoting the development of jobs in the energy field and the development of hybrid vehicles; calling for an investment in renewable energy infrastructure, smart grids and net metering technologies, and for funding for advanced clean coal and renewable energy technologies; seeking the promotion and expansion of the Energy Star program, prompt implementation of appliance standards, and the promotion of walkable communities and alternatives to single-occupancy vehicles; and supporting improved coordination among the Department of Energy, Department of Homeland Security, Department of Transportation, and the states in overseeing the security of the nation’s energy infrastructure; and (9) calling for greater consultation with states during pipeline safety inspections, urging the federal government to work with states to exchange data on ways to improve inspections of intrastate pipelines and to acknowledge the relationship between the Department of Homeland Security and the Department of Transportation regarding infrastructure security, and urging completion of the Department of Transportation assessment of actions taken to implement the Memorandum of understanding between their department and the Department of Homeland Security concerning their respective security roles in pipeline safety.