State News
Kentucky Plan Seeks to Balance Medicaid Budget
Kentucky Governor Steve Beshear has announced a plan to rebalance a gap in Kentucky's Medicaid budget. The plan seeks to solve the problem over a two-year period with minimal impact to Medicaid recipients; without additional general funds; and without impacting education or other state programs.

A key feature of the plan is the expansion of public-private partnerships to implement innovative cost saving measures and improve health outcomes. Requests for information are being issued for strategies used by other states to manage health care costs. The plan emphasizes the importance of including explicit limits on how contractors can spend state money in contract language to prevent fraud by private groups.
(Contact: Caryn Marks)

Montana Pilot to Reduce Medicaid Spending with Care Coordination
Montana Governor Brian Schweitzer unveiled plans to save money in the state's Medicaid program, while improving the quality and efficiency of care. The proposal is designed to address administrative costs and management fees paid by the state for contracts through the state's existing Medicaid program. 

A five-county pilot, proposed by the governor, would examine how a consolidation of contracts would increase coordination of care and infrastructure and allow the state to negotiate for discounted services. The increased coordination is also hoped to prevent life-threatening and costly emergencies by allowing access to more preventative care.
(Contact: Molly Voris)

Massachusetts Considers Cost Control Plan for Health Care
Massachusetts Governor Deval Patrick has put into action plans to develop legislation that would control health care costs in Massachusetts. Already, the Secretary of Health and Human Services has convened a working group of representatives of medical care providers, insurers, employers and consumers to design a proposal. Governor Patrick hopes to deliver a "global payment" plan, which would replace the current fee-for-service system, to the legislature in January. Under this arrangement, providers would form partnerships, called accountable care organizations, and work to stay within a budget for each patient's care.

In 2006, Massachusetts implemented a universal health care law, creating an online insurance exchange to help people obtain coverage. The group hopes to reach a consensus on how to protect this expansion with cost control plans, possibly through a state-run panel to monitor outcomes and regulate prices.
(Contact: Brad Finnegan)

California Partners with BofA to Provide Services During a Disaster
The California Emergency Management Agency and Bank of America have entered into a public-private partnership that will incorporate the bank into the state's disaster response system. Under the memorandum of understanding, Bank of America will deploy mobile ATM's and set up temporary branch locations in the event of a disaster. In addition, the bank will provide, if necessary, a team of volunteers trained in first aid to assist in response and recovery efforts.
(Contact: Carmen Ferro)

Wisconsin Considers Changes to School Funding
Wisconsin is considering changes to the state's school funding formula in an effort to reform the management and distribution of school funding, while maintaining fiscal support for schools in difficult economic times. The plan, Fair Funding for our Future, was recently submitted by the state's superintendent. Major components of the plan include:

  • Guaranteeing a minimum amount of state aid to each school district by linking funding to students. Under the plan, districts would receive $3,000 per student and additional funds for students identified as living in poverty to help mitigate the impact of property value on district revenue;
  • Changing the state's funding formula to better support rural school districts where student enrollment has declined; and
  • Ensuring no school district loses over 10 percent of state aid each year.

The plan also proposes consolidation of specific aid categories, such as funding for transportation, without increasing taxes. Implementation of the plan would incur small costs initially; however, the structural changes to the funding formula are projected to have long term benefits that inlcude protecting school aid, more efficiently distributing state aid and building human capital by producing increasing numbers of highly educated citizens.
(Contact: Stephanie Shipton)

Iowa Study Finds Prescription Drug Abuse on the Rise
Iowa's Drug Policy Coordinator recently released the 2011 Drug Control Strategy that examines current trends in drug abuse and outlines a strategy to combat rising drug use, particularly prescription drug abuse, through coordinated state and local prevention, treatment and enforcement actions. The report identifies the fastest growing form of substance abuse in the state as prescription and over-the-counter medication. Additional report findings include:

  • Adults seeking substance abuse treatment for methamphetamine use increased from 7.8 percent in 2009 to 8.8 percent in 2010. In addition, the number of reported meth labs rose by 50 percent in 2009 with the state on track to meet that percentage again in 2010;
  • From 2003 to 2009, adults seeking substance abuse treatment for alcohol increased to 30.5 percent;
  • Synthetic marijuana (also known as K2 or Spice) is the newest drug being used; and
  • Marijuana continues to be the most abused drug, as one-fourth of all adult substance abuse treatment clients and more than 60 percent of juveniles in treatment are admitted users.

To help mitigate substance abuse within the state, the report provided several recommendations such as requiring health care professionals to participate in the Iowa Prescription Drug Monitoring Program, developing a meth-offender registry, allowing the continuous use of alcohol monitoring devices and regulating synthetic drugs.
(Contact: David Henry)

Michigan DOT Shortens Welcome Center Hours to Reduce Costs
To help address a 20 percent budget reduction this fiscal year, the Michigan Department of Transportation (MDOT) will cut back the hours of operation at 14 state welcome centers and close some welcome centers during weekends. The department considered the impact on visitors and tourism when determining the most appropriate days to close each welcome center and to maximize cost savings from staffing reductions and lower operations costs. MDOT is keeping restrooms open at most closed welcome centers.

Operation of the welcome centers was transferred from the Michigan Economic Development Corporation (MEDC) to MDOT on Oct. 1. Welcome center operations had been provided by MDOT before 1997, at which time their operation and staff were transferred to MEDC. Since that time, ownership, maintenance and funding of the facilities have remained an MDOT responsibility.
(Contact: Andrew Kambour)

Washington Reports on Agency Reform Progress
The Washington Office of Financial Management recently released a progress report on agency reforms initiated last year as part of the state's government efficiency efforts. Specifically, Governor Chris Gregoire directed the state's natural resources agencies in 2009 to collaborate on a common goal of increasing overall efficiency, reducing costs and improving customer service without compromising their core missions.

The progress report finds that as of fall 2010, eight of the 11 initiatives undertaken since the governor's directive have been completed, and progress has been made in meeting the remaining three. High-impact changes include legislative action, which has resulted in:

  • The consolidation of five environmental hearings boards into two;
  • The simplification of environmental appeals; and
  • Greater sharing of information technology and data among agencies.

In addition, agencies have expanded their use of multi-agency teams to make it easier for permit applicants to get the answers for complex projects.

One of the most visible reforms is the agencies' new online service, One Front Door to Washington's Outdoors, which combines the state's natural resources information in one place. To achieve this, the website provides information by subject area, instead of by agency, so citizens and businesses will find what they need faster and more intuitively. For example, it's now possible to use the search term "grants" to locate grant programs housed in any of the state natural resource agencies, and there is a single point of entry for reporting environmental problems.
(Contact: Andrew Kambour)

Maine Finds State Tax Expenditures Exceed Spending
A study requested by the Maine State Legislature has found that tax expenditures exceed other state spending by $1 billion every year. The study required several state agencies to review their tax expenditure programs and recommend a regular review process for the future, which is suggested to occur every four years. A total of 11 programs were identified for further analysis and oversight.

Maine's tax expenditures total $6.6 billion for the current two-year budget period. The state has 141 personal and corporate income and property tax reimbursement programs and 133 sales tax and excise tax exemptions, among others. The study was chaired by the Finance Commissioner in partnership with representatives from Maine Revenue Services, the Maine State Planning Office and other agencies.
(Contact: Lauren Stewart)
 

Colorado Hopes to Boost Degree Completion
Colorado Governor Bill Ritter recently launched Complete College Colorado, a campaign to increase postsecondary degree attainment in the state. The campaign emphasizes the importance of postsecondary degrees for Colorado's economic future and for the prosperity of individuals within the state. It will focus on four primary themes:

  • The impact of degree attainment on Colorado's workforce and economy;
  • Financial aid resources available across the state to help individuals afford higher education;
  • The P-20 education reform movement, which is designed to address public education improvement from pre-school through higher education; and
  • Programs and services available statewide to assist adults in returning to school to complete their degrees.

(Contact: Erin Sparks)

Utah Education Reform Proposals Aligned with Common Core
Utah Governor Gary Herbert's Governor's Education Excellence Commission recently adopted eight recommendations for state leader action to increase the number of Utahns ages 24-64 with a postsecondary credential. The Commission's recommendations focus on college and workforce readiness. The recommendations include:

  • Implementing the Common Core State Standards and adopting a new assessment system based on the Common Core State Standards that expands computer-adaptive, formative assessments and college- and career-readiness assessments;
  • Funding an initiative to provide high school seniors with opportunities to complete college credits built on the Common Core State Standards; and
  • Implementing a funding system for institutions of higher education that is mission driven.

These recommendations are part of an overall plan that includes a vision statement and five education imperatives, all of which have been endorsed by the State Board of Regents, the State Board of Education and the Utah College of Applied Technology Board of Trustees.
(Contact: Stephanie Shipton)

Washington Reduces Prison Costs with One-Day Lockdowns
Washington's largest prisons will begin one-day lockdowns, keeping prisoners in their cell all day except during meals, as part of the Department of Correction's budget cutting strategy. The savings will be realized through reductions in staff, security and programmatic costs because education classes, treatment services and work experience programs will be closed on lockdown days. The strategy will last through the end of the budget cycle on June 30, 2011.

Washington state agencies have been required to reduce across-the-board spending by six percent between now and the end of the budget cycle. For the Department of Corrections, six percent equals $53 million. A total of eight prisons will be affected, housing 16,000 offenders.
(Contact: Lauren Stewart)

Other News
Report: IEA Releases Annual World Energy Outlook with New Policy Scenarios
The latest World Energy Outlook from the International Energy Agency (IEA) shows that world energy demand is expected to increase by 36 percent between 2008 and 2035, or 1.2 percent per year on average. Furthermore, the report indicates that world oil prices are set to rise as a result of a growing insensitivity in both demand and supply to price. The average IEA crude oil price will rise from just over $60 in 2009 to $113 per barrel (in 2009 dollars) in 2035. Oil demand will continue to grow steadily, reaching about 99 million barrels per day by 2035.

Fossil fuels remain the dominant energy source with oil being the largest proportion of energy use, with coal coming in second. However, the overall energy mix is expected to change in favor of a greater proportion of renewable energy sources and nuclear power. In this scenario, non-OECD countries account for 93 percent of the projected increase in world primary energy demand. China, which IEA data suggests overtook the United States in 2009 as largest energy user in the world, is expected to constitute 36 percent of the projected growth in global energy use.
(Contact: Greg Dierkers)

Study Offers Lessons on Accountable Care Organizations
A paper released by the Integrated Healthcare Association addresses obstacles policymakers may face with implementation of Accountable Care Organizations (ACOs), which are designed to bring together providers and reward them for controlling costs and improving quality. ACOs are a major platform for delivery system reform included in the Patient Protection and Affordable Care Act.

The authors draw on California's experience with provider collaboratives, which are similar to ACOs, and have been in use in the state for over thirty years. The paper identifies key takeaways for successful ACO design and operation. The lessons learned include:

  • As a method of payment, capitation can be effective at encouraging coordinated care, but payment methods should vary across ACOs depending on an organization's ability to assume risk;
  • Regulation of the financial solvency of provider organizations is important to ensure market stability;
  • Consumer protections from capitated provider organizations need to be balanced, not overburdening.

(Contact: Brad Finnegan)

DOJ Reports on Identity Theft in the U.S.
The U.S. Department of Justice recently issued a report titled Identity-Related Crime: A Threat Assessment, detailing the depth of identity-theft related crimes in the U.S. and Canada. The report identifies the most problematic features of identity theft and strategies to combat it. This assessment focused on five aspects of identity-theft related crimes, such as the scope and extent of the problem, the purposes of identity-related crime, the categories of individuals who engage in or are victimized by identity-theft, the methods and techniques that criminals use to commit identity-related crime and law enforcement's response to the problem.

The report details the following recommendations to combat identity-theft:

  • Improving document and data integrity and security;
  • Increasing detection of fraudulent identification documents and data;
  • Enhancing coordination of intelligence-sharing and law enforcement cooperation; and
  • Improving awareness and availability of victim assistance tools and remedies.

Contact: David Henry)

Public Procurement Can Spur Innovation
The Information Technology and Innovation Foundation released a report identifying ways government can use procurement practices to spur innovation. Since governments are the largest purchaser within a country or state, the report suggests that they think strategically about accounting for innovation when buying goods and services. In many countries, the government has used innovation within the procurement process by making innovation an explicit metric when awarding public sector contracts.  Some of the recommendations the report makes include:

  • Making innovation a central requirement in government contracts across the board;
  • Aligning agencies around innovative procurements;
  • Implementing rules and metrics that make innovation a part of the procurement process; and
  • Expanding one-stop e-procurement websites that have e-quoting, which will allow firms to easily locate and apply for government contracts.

(Contact: Erin Sparks)

Report Offers Cost Savings Options for Teacher Pension Systems
A special issue of Education Finance and Policy provides state policy actions to reform teacher pension systems and the impact on school finance and teacher quality. The journal articles in this volume provide background on teacher pension systems, describe the variation in retirement benefits and consider options for reforming these systems, while taking into account teacher preference, political context and legal restrictions. The volume is based on the findings from a conference held last year and is considered the main source of research to date on this issue.

Teacher pension systems are structured to provide specified monthly payments after retirement and comprise a significant portion of state education funding. The economic crisis has called into question the sustainability of these programs as they currently exist. For example, private industry has moved away from this pension structure to a plan that ties benefits to employee and employer contributions, as opposed to years of service.
(Contact: Stephanie Shipton, Tabitha Grossman)

What's New
Washington Gov. Chris Gregoire Elected Chair of NGA
Washington Governor Chris Gregoire has been selected by her peers to take on the role of NGA Chair. She was named NGA Chair after a vote by the NGA executive committee.

Gov. Gregoire also announced that she will continue the 2010-2011 NGA Chair's Initiative, Complete to Compete, which focuses on increasing the number of students in the United States who complete college degrees and certificates and improving the productivity of the country's higher education institutions.

She becomes the second woman to chair the association and replaces West Virginia Gov. Joe Manchin, who was elected to the United States Senate. Her term as chair will continue through the NGA Annual Meeting in Salt Lake City in July 2011.
(Contact: Lauren Stewart)

NGA Center Publishes Governors Guide on Homeland Security
To guide the large incoming class of newly elected governors, as well as incumbent governors, in the critical task of organizing and operating homeland security and public safety systems in their states, the NGA Center released new report, A Governor's Guide to Homeland Security.

  • Coordinating the state's homeland security and emergency management agencies;
  • Defining the role and authority of the governor's homeland security advisor;
  • Coordinating emergency response plans with the current threat environment;
  • Organizing the state fusion center and its intelligence products; and
  • Developing a successful approach to the future of public safety communications.

(Contact: Carmen Ferro)

Forty States Have Adopted Common Academic Standards
As of November 19, 2010, 40 states and territories and the District of Columbia have adopted the Common Core State Standards. Those states and territories include: Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Georgia, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, U.S. Virgin Islands, Utah, Vermont, Wisconsin, West Virginia, and Wyoming.

The NGA Center and the Council of Chief State School Officers released the Common Core State Standards in June. The standards define the knowledge and skills students should gain in K-12 education to graduate high school fully prepared for college and work.
(Contact: Stephanie Shipton)