Stateline Midwest

T h e M i d w e s T e r n O f f i c e O f T h e c O u n c i l O f s T a T e G O v e r n M e n T s

StatelineMidwest vo l . 2 1 , n o. 1 2 • d e c e m b e r 2 0 1 2

Stateline Midwest is published 12 times a year by the Midwestern Office of The Council of State Governments.

annual subscription rate: $60. To order, call 630.925.1922.

CSG Midwestern Office StaffMichael h. Mccabe, DirectorTim anderson, Publications Managercindy calo andrews, Assistant Director ilene K. Grossman, Assistant Directorlisa r. Janairo, Senior Policy Analystlaura Kliewer, Senior Policy Analyst Gail Meyer, Office Managerlaura a. Tomaka, Senior Program ManagerKathryn Tormey, Policy Analyst/Assistant Editor Kathy Treland, Administrative Coordinator and Meeting Planner

INSIDE• Upgrades planned for Midwest passenger-rail lines

• State policies encourage livestock operations

• Trade barriers remain between U.S., Canada

• States fund water-infrastructure improvements

CSG Midwest Issue Briefs 2

Around the Region 4“Right to work” debate expands to Michigan; a look at legislative turnover in Midwest

Question of the Month 5What Midwestern states require exit exams for high school students?

CSG News & Events 10

Capitol Clips 12• Five of nation’s 10 best-run states in Midwest

• Indiana surplus triggers refunds to taxpayers

• Illinois boosts license-plate fees to fund parks

• Lawsuit to block Asian carp hits legal snag

Profile 8Illinois Rep. Tom Morrison

FirstPerson 9Kansas Rep. Tom Sloan on how states can help make renewable fuels more reliable

Because a highly educated and skilled workforce is fundamental to national economic competitiveness, this slowing in educational attainment has significant implications.

By 2018, the nation will have a shortage of at least 3 million work-ers who possess the postsecondary degrees or cre-dentials to meet e mpl oye rs’ d e -mands, according to the Georgetown University Center on Education and the Workforce . And two-thirds

of U.S. jobs will require some form of postsecondary education.

Today, about 38 percent of workers hold college degrees or credentials. Without corrective action, this skills shortage will compromise the economic

Under a new set of recommendations in Ohio, half of the state’s funding for higher-education institutions would

be based on how well they contribute to a key economic goal: boosting the number of college graduates in the workforce.

In late November, Ohio Gov. John Kasich and a state panel released a higher-education finance framework designed to give greater weight to degree completion in determining funding for the state’s public colleges and universities.

Under the plan, 50 percent of the state’s funding for higher education will be determined by degree completion — up from the current 18 percent allocated on the basis of performance measures.

And while the details will not be laid out until the governor releases his budget early next year, this shift is part of an ongoing effort in Ohio to graduate more citizens with postsecondary degrees and credentials. It also is part of a growing trend within almost every state in the nation.

“College completion has really come to the forefront in terms of state policy,” says Larry Isaak, president of the Midwestern Higher Education Compact, a 12-state regional organization established to assist states in advancing higher educa-tion through interstate cooperation and resource sharing. “And people are framing the conversation in the context of what can be done to ensure that we have an educated workforce that can drive a suc-cessful economy.”

Sometimes referred to as the “comple-tion agenda,” efforts to increase educational attainment levels of Americans have been linked to the need to maintain the nation’s economic competitiveness, to provide the skilled workers needed by businesses, and to drive personal and national economic growth.

“The issue that we are facing as a coun-try — and particularly here in the Midwest — is that the societal demand for talent is increasing quite rapidly,” says Jamie P. Merisotis, president and CEO of Lumina

Foundation. Lumina, whose mission is to increase students’ access to and success in postsecondary education, has been a leader in advancing the completion agenda with its Goal 2025 — to increase the percentage of Americans who hold high-quality degrees and cre-dentials to 60 per-cent by 2025.

“Talent is the currenc y of the modern economy, and our ability to develop and employ that talent is going to become increas-ingly important,” he says. “The labor market is hungry for people with skills, and those skills are demonstrated by those with [higher education] credentials.”

For the first time in U.S. history, the current generation of young adults is pro-jected to be less educated than its parents.

Aiming higherStates look for ways to produce more-educated populations to feed economic demand for skillsby Laura Tomaka ([email protected])

PLeASe TURn To PAge 6

Educational attainment for ages 25-64 (2010)

State

High school graduate

(including equivalent)

Some college,

no degree

Associate’s degree

Bachelor’s degree

Graduate or professional

degree

Residents with at least an associate’s

degree

illinois 25.5% 22.0% 8.0% 21.1% 12.2% 41.3%

indiana 33.7% 22.0% 8.6% 16.5% 8.2% 33.2%

iowa 29.8% 23.0% 11.9% 19.3% 8.5% 39.7%

Kansas 25.0% 25.0% 8.4% 21.3% 10.9% 40.5%

Michigan 29.0% 25.7% 9.4% 17.2% 9.8% 36.4%

Minnesota 24.4% 23.6% 11.4% 23.6% 10.8% 45.8%

nebraska 24.8% 25.2% 10.5% 22.0% 9.5% 42.0%

north dakota 24.8% 25.0% 13.9% 22.8% 8.3% 44.9%

Ohio 33.2% 21.7% 9.1% 17.2% 9.5% 35.8%

south dakota 29.2% 22.4% 11.9% 21.0% 7.8% 40.8%

wisconsin 30.8% 22.4% 10.8% 18.9% 9.3% 39.1%

United States 27.0% 22.1% 8.4% 19.2% 10.7% 38.3%Source: U.S. Census Bureau

• MLC names new leaders for 2013

• CSg Legal Task Force follows key court cases

• Health policy summits held in november

• MLC executive Committee meets in Austin

Percent of adults ages 25-34 with an associate’s degree or higher

45.3%

37.2%

36.1%

41.3%

45.5%

49.8%

42.3%

44.2%

42.2%

50.8%

Source: National Center for Higher Education Management Systems

38.0%

2 STATELINE MIDWEST December 2012

CSG MidweSt Issue Br IefsIssue Briefs cover topics of interest to the various groups and policy committees of CSG Midwest, including the Midwestern Legislative Conference, Great Lakes Legislative Caucus, Midwest Interstate Passenger Rail Commission and Midwestern Radioactive Materials Transportation Committee.

Passenger rail service in the Midwest is grow-ing and improving, with record numbers of people taking the train and upgrades to

service under way.Amtrak ridership on “corridor” service (shorter-

distance routes typically financed by states) once again saw record growth during fiscal year 2012. The number of passengers on the nine regional routes (see chart) rose to 3.16 million, an increase of 3.5 percent over the previous year and 35 percent since 2007.

Most of these routes have multiple frequencies each day, making round-trip travel more conve-nient. The two most popular routes, Chicago-to-Milwaukee and Chicago-to-St. Louis, now offer seven and five round-trips daily, respectively.

Since the Midwest Interstate Passenger Rail Commission began using Amtrak statistics in 2004 to look at corridor growth in the region, ridership on these routes has risen 99 percent. MIPRC, whose staff is provided by CSG Midwest, also tracks long-distance routes serving the Midwest (not financed by states).

While the number of passengers on the typically once-daily overnight service has not grown as dramati-cally, more than 2.6 million people rode on one of the

region’s eight long-distance routes during FY 2012 — a 21 percent five-year growth rate and a 7 percent gain over the previous year. The Empire Builder service — which starts in Chicago and travels through Wisconsin, Minnesota and North Dakota before continuing west — remains Amtrak’s most popular long-distance route; its ridership rose nearly 16 percent during the year.

The region is also seeing the first of a series of planned improvements to routes, paid for through grants from the federal High Speed Intercity Passenger Rail program.

In February, the Michigan Department of Transportation and Amtrak received approval to begin 110-mph service between Porter, Ind., and Kalamazoo, Mich., on the Chicago-Detroit and Chicago-Port Huron routes — the first at that speed outside of the Northeast Corridor. In May, Michigan also received federal ap-proval to acquire about 135 miles of right-of-way along the route, for eventual upgrading to 110-mph speeds.

In October, Illinois gave Chicago-to-St. Louis riders a first taste of the faster service it is planning; a test run on a 15-mile stretch reached 111 mph. By 2015, about 75 percent of the route is expected to run at high speed, improving current travel times by almost an hour.

Other ongoing projects on Midwest routes include work along the St. Louis-to-Kansas City route to increase on-time performance and allow for higher speeds; completion of environmental work for proposed

Passenger Rail

additional service between Chicago and Minneapolis/St. Paul.; a study to determine a preferred route for new service between Chicago and Omaha, Neb.; and estab-lishing initial service between Chicago and Moline, Ill.

Upgrades planned for Midwest routes as ridership sets records

Brief written by laura Kliewer, director of the Midwest interstate Passenger rail commission, which was formed by an interstate compact agreement and now includes 10 member states. laura can be reached at [email protected]. illinois rep. elaine nekritz serves as the chair of MiPrc; more information is available at www.miprc.org.

What is the economic impact of a single dairy cow?

An analysis by South Dakota State University put it at $14,000, and in Nebraska, the state estimates that a 2,000-cow dairy operation generates 20 jobs and pays more than $200,000 in property taxes.

Animal agriculture is big business in the Midwest, and in recent years, states such as Nebraska and South Dakota have begun new initiatives to encourage its expansion.

Nebraska’s efforts began in 2003 with legislation giv-ing counties the chance to be deemed “livestock friendly.” Under the program, the state reviews the county’s use of its zoning powers to ensure that they are applied in a clear and consistent manner to livestock operations.

The program started slowly because counties were mistakenly concerned that it could infringe on their home-rule power to set zoning standards. But as the pro-gram has matured and gotten continued support from leaders such as Gov. Dave Heineman, more counties are enrolling. And Nebraska’s livestock industry (which makes up about half of the state’s farm sector) is growing, mostly through expansion of existing operations.

Today, more than one-third of the grain produced in Nebraska is fed to the state’s livestock — an example of how one part of a state’s agricultural community helps

the business of another. From feed mills to veterinary services, livestock operations produce ancillary busi-ness opportunities for local communities, says Steve Martin, agriculture promotion coordinator in Nebraska.

Meanwhile, in South Dakota, Gov. Dennis Daugaard, who grew up on a dairy farm, has been participating in shows such as the World Ag Expo with one goal in mind: Attract more dairies to the state.

“South Dakota has the reasonably priced land and feed that livestock operations need,” says David Skaggs, the state’s director of dairy development.

Perhaps more important, he says, South Dakota is a state that has realistic regulations and an end market.

Agriculture & Natural ResourcesThe state is home to more than 90,000 cows, but new and planned processing facilities there could use the milk from almost twice that number. Over the last seven years, 17 new dairies have been built in South Dakota.

In addition to assisting with farm expansions and re-locations, South Dakota helps immigrant entrepreneurs apply for the federal Immigrant Investor Program. The state has also started its own age and source verification program for beef cattle farmers, providing an alternative for meeting U.S. country-of-origin labeling rules.

Both Skaggs and Martin say there have traditionally been two big obstacles to expansion: the permitting process and local residents’ objection to new livestock facilities. The objections are often a result of concern over odors, but Skaggs says new construction methods and siting restrictions are helping minimize this problem.

In Iowa, meanwhile, a partnership of producer associations is addressing these concerns. The Coalition to Support Iowa’s Farmers has developed a process called Community Assessment Modeling, which determines the best location for new farms by studying the kind of livestock barn to be built, the direction that winds usually blow, the terrain and the proximity of neighbors.

Through the efforts of Nebraska, South Dakota and Iowa, the Interstate 29 corridor is becoming an economic cluster that is attracting new dairies, building businesses that supply livestock farmers, and enticing companies that process milk.

States’ initiatives helping livestock operations thrive

Brief written by carolyn Orr, staff liaison to the Midwestern legislative conference agriculture and natural resources committee. she can be reached at [email protected]. The Mlc committee’s co-chairs are north dakota sen. Tim flakoll and Kansas sen. carolyn McGinn.

Passenger rail ridership in Midwest, 2007-2012

Route (round-trips per day)

Total ridership, FY 2012

Change, 2011-2012

Growth, 2007-2012

chicago-st. louis (5) 675,295 +10.8% 41%

Kansas city-st. louis (2) 195,885 +5.3% 68%

chicago-Milwaukee (7*) 838,355 +2.3% 41%

chicago-detroit/Pontiac, Mich. (3) 484,138 -3.8% 8%

chicago-Grand rapids, Mich. (1) 109,321 +2.5% 4%

chicago-Port huron, Mich. (1) 189,193 +1.1% 48%

chicago-carbondale, ill. (3) 374,268 +5.2% 42%

chicago-Quincy, ill. (3.5) 265,307 +4.2% 36%

chicago-indianapolis (4 per week) 36,669 -1.6% 39%

Midwest totals 3,168,431 +3.5% 35%* six per day on sunday

Source: Amtrak; Midwest Interstate Passenger Rail Commission calculations

92,779

34,728

119,853

35,382

84,877

Jobs produced by livestock operations in Midwestern states

Source: U.S. Department of Agriculture

93,754

99,023

16,913

28,538

41,96543,976

3STATELINE MIDWEST December 2012

Every year, billions of gallons of raw sewage, trash and personal hygiene products flow into the Great Lakes. And as a 2012 report

by the Alliance for the Great Lakes notes, this problem poses not only environmental and health risks (due to the bacteria, viruses and pathogens in untreated sewage), but has economic costs as well (the forced closure of beaches, for example).

Upgrading the Great Lakes basin’s water infrastruc-ture would go a long way toward fixing this problem.

Financing the upgrades is becoming increasingly difficult due to fiscal constraints at all levels of govern-ment, but a mix of new legislative proposals and initia-tives provides some hope that progress can still be made.

In Illinois, Gov. Pat Quinn announced that his state would provide an additional $1 billion in assistance over the next two years to communities wanting to improve their wastewater and drinking water systems.

The state’s Clean Water Initiative will be financed through a sale of bonds by the Illinois Finance Authority. The new program will not increase general obligation debt for the state. Instead, Illinois will leverage federal grant funding through an existing loan program, along with loan repayments by communities that receive project funding.

In Michigan, under a package of bills that in November appeared likely to pass by the end of the year (SB 1155-1158), communities would be given more flexibility in how they use dollars from the state’s Great Lakes Water Quality Bond Fund. The legislation would also make it easier for “disadvantaged commu-nities” (defined in part by income levels of residents) to apply for State Revolving Fund loans and grants.

State Revolving Funds provide assistance, in the form of low-interest loans, to communities to improve their water infrastructure. These funds are administered by the U.S. Environmental Protection Agency and state governments.

At the federal level, there currently is no dedicated revenue source for State Revolving Funds. Legislation proposed this summer (HR 6249) calls for the creation of a federal Water Protection and Reinvestment Fund. The money would come from a new tax on the makers or sellers of pharmaceuticals, water-based beverages and items disposed of in wastewater.

Great LakesSewage pollution problem sparks 2 state infrastructure initiatives

Brief written by Tim anderson, who can be reached at [email protected]. csG Midwest provides staffing services to the Great lakes legislative caucus, a nonpar-tisan group of lawmakers from eight u.s. states and two canadian provinces. Minnesota sen. ann rest serves as caucus chair. More information on the caucus is available at www.greatlakeslegislators.org.

Brief written by ilene Grossman, who serves as staff liaison to the Midwestern legislative conference Midwest-canada relations committee. she can be reached at [email protected]. The committee’s co-chairs are Kansas sen. ray Merrick and saskatchewan Mla wayne elhard.

Midwest-Canada Relations

Whether making cars or producing and refining oil, the Canadian and U.S. economies are closely integrated.

“We are less and less trading partners, and more and more business associates,” says Christopher Sands, a senior fellow at the Hudson Institute, noting that the two countries’ businesses are increasingly building things together and selling the fin-ished product domestically and around the world.

Colin Robertson cites products stamped with the “Made in Canada” label as a prime example.

“Forty percent [of them] cont ain U.S . -made con-tent, an indication of the fact that we do more than trade across borders — we make things together,” says Robertson, vice president of the Canadian Defence and Foreign Affairs Institute and a former Canadian diplomat.

The two countries have the largest trading relationship in the world ($689 billion worth of trade in 2011), and the Midwest’s 11 states and four Canadian provinces to the north are at the center of it.

Last year, this region’s exports to Alberta, Manitoba, Ontario and Saskatchewan totaled $82 billion; imports totaled $120 billion (both figures in Canadian dollars; see table). The higher level of U.S. imports from Canada is due in part to the region’s heavy reliance on its neighbors’ energy resources. Illinois, for example, imports more oil from Alberta than any other U.S. state.

Still, the majority of Midwestern states export more products to Canada than they import. The reasons for the positive trade balances vary be-tween states and provinces. Canada, for example, is a large consumer of U.S. agricultural machinery and goods, as well as of heavy equipment for mining and energy development.

Nationally, for every dollar that the U.S. spends on Canadian products, Canadians spend 78 cents on U.S. products.

Sands calls this “a reasonably profitable, mutually beneficial relationship, especially as compared with the 50 cents Europeans spend and 20 cents Chinese spend for each dollar [in goods] they sell to the U.S.”

Often, this trade is circular. Alberta is a major source of oil for the Midwest, where Canadian crude is refined. Yet some of this oil goes back to Alberta in the form of refined oil products such as engine addi-tives. Cattle and other animals also cross the border, sometimes several times, as they move between the farm where they were born to feeding and slaughter.

Because of the countries’ integrated economies,

trade numbers are sometimes difficult to track. Parts may come from both countries, but the export is credited to the country from which the final, assembled product is shipped overseas. Yet part, or perhaps well more than half, of the product may come from companies on the other side of the border.

That is true for products such as automobiles as well. By the time a car is finished being manufactured, the various parts each may have crossed the border

seven times. In fact, cross-border supply chains are in place throughout the manufacturing process, which accounts for more than 40 percent of daily trade between Canada and the U.S.

R e c e nt e f f o r t s t o include “Buy America” provisions in proposed federal legislation (and successfully included in the American Recovery and Reinvestment Act) pose a challenge to these supply chains.

Some U.S. companies, most notably those want-ing to sell pipe to local governments for use in Recovery Act-funded wa-ter/sewer projects, had to

sever their connections with long-time, reliable and less expensive parts suppliers in Canada in order to meet the Buy American provisions.

Robertson says, “‘Buy American’ is a tax on consumers [because projects don’t always get done in the most cost-effective way], and it only encourages bad behavior on the other side.”

The new bridge scheduled to be built between Detroit and Windsor has a “Buy North American” content rule, which could be a new standard for future public works projects.

State and provincial governments have a direct role to play in improving and expanding the bilateral trade relationship. They are, for example, responsible for building and maintaining the roads, bridges, pipelines and airports that move products between the two countries.

“Because of the way we produce things,” Sands says of the U.S.-Canada trading partnership, “we are highly dependent on infrastructure.”

States and provinces are also in a position to encourage cross-border travel and tourism. For example, some border jurisdictions have begun to offer “enhanced driver’s licenses,” a low-cost alterna-tive to a passport that can be used at land borders.

The two federal governments, meanwhile, are now negotiating over how to improve regulatory coopera-tion. Current regulatory standards differ between the two countries — regarding everything from the size of trucks to the weight of soup cans. Eliminating these differences or moving toward mutual recognition of standards, Sands says, would minimize paperwork and compliance issues for businesses.

U.S. and Canadian economies closely intertwined, but barriers to optimal trade remain an issue

Sewage overflow into Great Lakes from select Midwest cities, 2011

MunicipalityEstimated discharge

(# of gallons)

chicago 2.3 billion

cleveland 4.5 billion

detroit 6.9 billion

Grand rapids, Mich. 49 million

hammond, ind. 1.2 billion

Milwaukee 170 million

Toledo, Ohio 1.7 billionSource: Alliance for the Great Lakes

Trade with northerly neighbors: Alberta, Manitoba, Ontario and

Saskatchewan (2011)*state imports exports

illinois $35.2 billion $14.7 billion

indiana $6.2 billion s10.0 billion

iowa $2.8 billion $3.3 billion

Kansas $1.4 billion $1.8 billion

Michigan $44.0 billion $21.3 billion

Minnesota $11.4 billion $5.3 billion

nebraska $548 million $1.6 billion

north dakota $2.3 billion $1.9 billion

Ohio $13.4 billion $16.0 billion

south dakota $339 million $426 million

wisconsin $2.9 billion $5.8 billion

Midwest totals $120.5 billion $82.1 billion

* Totals in canadian dollars (canadian and u.s. dollars are of nearly equal value).

Source: Canadian provincial government data

4

Around The r egIon

State controlled by Republicans

Seats controlled by Democrats

Partisan control in Midwest’s states entering 2013 legislative sessions

Democratic control of legislature, governor’s office

Republican governor, split control of legislature

Republican control of legislature, governor’s office

Republican governor, nonpartisan legislature

Winning % of incumbents in 2012 general election; # of new members and

turnover in state legislatures for 2013

State% of

incumbents who won1

# of new members2

Turnover in legislature2

illinois 97.1% 42 23.7%

indiana 94.9% 29 19.3%

iowa 92.6% 38 25.3%

Kansas 87.3% 69 41.8%

Michigan 94.1% 28 18.9%

Minnesota 91.7% 65 32.3%

nebraska 88.2% 11 22.4%

north dakota 91.7% 24 17.0%

Ohio 98.0% 19 14.4%

south dakota 94.0% 41 39.0%

wisconsin 95.9% 30 22.7%1 does not include races in which incumbents ran against each other2 includes individuals returning to the legislature or switching legislative chambers

STATELINE MIDWEST December 2012

‘Right to work’ spreads to 7th Midwest state

Early in 2012, Indiana became the first Great Lakes state to adopt so-called “right-to-work” legislation (dubbed “right to work

for less” by opponents).It didn’t take long for a neighboring state to

follow suit.Michigan was expected to have a law in place by

the end of the year that prohibits employer-union agreements in which individuals are required to become a member of a labor organization and to pay dues to it.

In some parts of the country (including parts of the Midwest), right-to-work laws have been in place for decades, but not in the Great Lakes region — a part of the country with a traditionally strong manufacturing and union base. But as the figures below show, union membership has declined significantly over the past three decades, with one result being less political clout for unions.

The political impact of the actions in Michigan, if any, remains to be seen. In Indiana, the right-to-work bill was passed in February by a Republican-led legislature and signed by a GOP governor. This November, Hoosiers handed the party a supermajority in the House and elected a new Republican governor.

New year, new faces: Legislative turnover high in some states

The 2013 legislative sessions in the Midwest wil l begin soon with hundreds of new lawmakers taking office, but with a balance

of power between the two major political parties that remains largely unchanged.

In 10 of the region’s 11 states, partisan control is the same as it was following the 2010 elections, with the lone exception being Minnesota, where Democrats picked up 21 legislative seats and majori-ties in the House and Senate.

Minnesota and Illinois are the only Midwestern states where Democrats have full partisan control of government.

For the most part, the GOP was able to hold on to its big election gains of 2010, when the party had a net seat gain in legislative seats of nearly 200 (see line graph). And it even built on those gains in Indiana, a state where, only a few years ago, the 100-member House was a near partisan split. Now, Republicans hold a 28-seat edge.

Overall, 15 of the 20 partisan legislative chambers in this region are controlled by Republicans.

One consequence of the 2010 wave election was that the GOP controlled the redistricting process in most of the Midwest, a lever of power that political analysts say helped the party maintain its hefty partisan seat advan-tage by protecting vulnerable seats and incumbents.

This year’s election results in Kansas and Minnesota provide another example of the power of redistricting. In those two states, judges, rather than legislators, drew the new political boundaries. The result: New political maps that did not protect incumbents, that threw many current legislators into races against one another, and that ultimately contributed to a high rate of legislative turnover.

Kansas will have more new legislators in the upcoming year than any other Midwestern state (see table). A panel of federal judges drew the political maps in Kansas due to the Legislature’s inability to finalize a redistricting plan. Of the 125 districts in the state House, 23 had more than one incumbent and 25 seats were vacant, The Wichita Eagle reports.

In Minnesota, a five-member panel of state judges drew the new districts after the Republican-led Legislature and Democratic Gov. Mark Dayton could not agree on a redistricting plan. That state’s new map

400

600

800

1,000

2013

2011

2009

2007

2005

2003

2001

1999

1997

1995

1993

Number of seats held by two major parties in Midwest’s 20 partisan

legislative chambers (1993-2013)

Sources: CSG’s “The Book of the States” and CSG Midwest research

Seats held by RepublicansSeats held by Democrats

DEM +10

GOP +1

DEM +5

DEM+12

GOP +2

Net party seat gains in state legislatures in 2012 elections*

N/A

Even

Even

DEM +5

GOP +9

GOP +1

* based on uno�cial results and does not include special elections being held in December in Iowa and Wisconsin

Democratic gains

Republican gains

paired nearly 50 incumbents against one another.Legislative turnover in Kansas and Minnesota will

be 41.8 percent and 32.3 percent, respectively. Across the Midwest, about one in four state legislators in 2013 will be new to the position.

States with laws that ban union-security agreements requiring union

membership and payment of union dues

In statute only (as of early December, Michigan’s right-to-work bill had not yet been approved, but passage was likely)

No law

Part of state constitution

Sources: U.S. Department of Labor and CSG Midwest research

Trends in union membership: % of private sector workers in

unions, 2011 and 1983

State 2011 1983 Change

illinois 10.6% 21.5% -50.7%

indiana 8.9% 25.0% -64.4%

iowa 6.5% 14.6% -55.5%

Kansas 4.6% 12.2% -62.3%

Michigan 11.9% 25.3% -53.0%

Minnesota 7.8% 17.1% -54.4%

nebraska 3.8% 9.7% -60.8%

north dakota 3.8% 9.5% -60.0%

Ohio 8.6% 22.5% -61.8%

south dakota 2.7% 8.0% -66.3%

wisconsin 7.0% 19.8% -64.6%

United States 6.9% 16.5% -63.6%

Source: Barry T. Hirsch and David A. Macpherson (www.unionstats.com)


Q u E S T i O n o F T H e M o n T H

QuESTiOn: What Midwestern states require exit exams for high school students?

The Question of the Month section highlights an inquiry received by this office through its Informa-tion Help Line, a research service intended to help lawmakers, legislative staff and state officials from across the region. To request assistance through CSG Midwest’s Information Help Line, call 630.925.1922 or send us an e-mail at [email protected].

According to the Center on education Policy, indi-ana, Minnesota and Ohio are among the 26 U.S. states that require students to pass an exit exam before they are awarded a high school diploma.

The number of states requiring these exams has increased over the past decade; as a result, two-thirds of the nation’s high school students must now take them.

Minnesota and ohio are among the 17 states that administer comprehensive exit exams: standards-based tests that assess multiple subjects and that are taken by all students at a particular grade level — typically 10th or 11th grade.

other states instead choose to have their schools administer end-of-course exams, which are given to students as they complete a specific course in order to measure mastery of the subject.

With the graduating class of 2012, Indiana schools transitioned from comprehensive exams, which had been administered since 1997, to end-of-course exams. (A handful of states require stu-

dents to take both types of exams.) Before insti-tuting its exit exams in 2004, ohio had required students to pass a ninth grade Proficiency Test in order to graduate, starting in 1994.

Most states offer remediation and opportunities to take the test again when a student doesn’t pass the exam.

Many states also offer alternatives for meeting gradu-ation requirements. For example, students in Indiana can be eligible to graduate if they meet a set of re-quirements, including retaking the test, maintaining a 95 percent attendance rate and maintaining a C average. ohio similarly provides an alternate path that takes attendance, grade point average, retesting and other requirements into account.

Proponents of the exit-exam requirement say it ensures that students have mastered curriculum standards, boosts student performance and im-proves the value of a high school diploma.

Because the exams typically test for skills mastered through the 10th grade, they have traditionally not been considered a good measure of college

readiness.

However, some states (eight of the 26, though none in the Midwest so far) have recently changed their exit or end-of-course exams so that they align with Common Core State Standards: a set of common educational standards for english language arts and mathematics that 45 of the 50 states (all but Minnesota and nebraska in the Midwest) have chosen to adopt.

The Common Core was designed to reflect the knowledge and skills that young people need for success in college and the workforce.

Midwestern states requiring exit exams for high school graduation

State Type of exam Subjects tested

Year first administered/

first class required to pass

indianaend-of- course

algebra, english

2009-10 school year/class of

2012

Minnesota comprehensiveMath, reading,

composition

Phased in from 2007-2009/

class of 2010

Ohio comprehensive

reading, writing, math, science, social

studies

2004 (reading, math); 2005

(science, social studies, writing)/class

of 2010


Cover sTory

States use new funding models and other reforms to boost degree-completion rates ConTInUeD FRoM PAge 1

competitiveness of the United States, experts warn.And at the individual level, the benefits of a

college education have long been documented: higher wages and less risk of unemployment, even during economic downturns. During the most recent recession and the current recovery, college-educated workers were less likely to be unemployed, reports the Georgetown University Center. Nearly all the jobs gained in the recovery went to those with degrees and credentials beyond high school.

With the link between educational attainment and economic competi-tiveness so clearly estab-lished, it’s no wonder that state policymakers have made it a priority to help students complete post-secondary degrees. The Midwest, with a history of strong public support for higher education, is no exception.

“It’s not surprising that we’ve seen so many of the Midwestern states focusing so clearly on completion,” Merisotis says. He cites the shift in state economies away from traditional manu-facturing and agriculture to a more knowledge-based economy, including advanced manufacturing and scientific approaches to agriculture that require higher levels of skills and education.

Reforms focus on completion ratesImproving access to educational opportunities beyond high school has received a lot of attention in recent years. As a result, college enrollment has been steadily increasing for the past decade. But degree attainment and college completion rates

have not.Nationwide, 50 percent of students who start at

a four-year institution do not complete a degree; the dropout rate is even higher at two-year institutions.

According to Isaak, the problem with higher-education attainment in the Midwest does not lie in access to education. The bigger challenge is college readiness and success.

“Alongside the importance of getting more people into college is making sure they get through success-

fully,” Isaak says. “I think we are in a good position to reach those [comple-tion] goals. We have a solid higher-education enterprise when you look at the entire Midwest for access.”

That goal has been a key part of reforms in Indiana, where less than one-third of four-year college students graduate on time. Only slightly more than half graduate after six years.

“The imperative to increase the education level of Hoosiers has never been more impor-tant than it is now,” says Teresa Lubbers, com-missioner of the Indiana Commission on Higher Education and a former

Indiana state senator. Indiana is the most manufacturing-intensive

state in the nation, and not long ago a worker with only a high school diploma could find a job to sup-port a comfortable middle-class lifestyle. That is no longer realistic, she says.

“For many reasons, we are focused on evolving our ‘access’ agenda in higher education to a ‘success’ agenda,” Lubbers says. “The worst possible scenario for our students is that they begin the college experi-

ence, [but] they aren’t successful — and they have no credential and significant debt.”

Indiana uses new funding model

Indiana is trying to align how the state funds higher education with what the state needs and values. “What we value is more students com-

pleting postsecondary education, especially those [degrees] tied to workforce needs,” Lubbers says.

The idea of paying for what the state values most is a driving motive behind the shift in higher-education funding to one that rewards the state’s colleges and universities for student success.

Most states traditionally have based funding decisions on prior appropriations and a measure of current enrollment. Under performance-based funding, money once distributed based on enroll-ment is instead based on graduating students.

Indiana has had some form of performance-based funding since 2003, and its proportion of the higher-education budget has been on the rise; allocations are now based on a more refined set of metrics.

In the current budget cycle, Indiana is basing 5 percent of its higher-education budget — or $61 million — on the performance metrics, Lubbers says. That allocation will increase to 6 percent in fiscal year 2014 and 7 percent in fiscal year 2015.

“It’s still a relatively small amount of money, but we no longer reward schools based on enrollment,” Lubbers says. “... If you ask any university president or leadership if performance funding matters to them, you get a resounding ‘yes’. They know that their dollars are now based on these metrics, so it is guiding what they do.”

The two basic measures that now determine the performance-based funding to Indiana’s higher-education institutions are degree completion and on-time completion. Based on the individual institution’s mission, metrics such as STEM degree production (at research institutions), student progress toward degrees (at regional campuses) and remediation (at community colleges) also are included in the funding allocation.

State allocations based on successIn the Midwest, Indiana is surrounded by states that have moved to performance-funding formulas, in-cluding Illinois, Ohio and, most recently, Michigan. Like Indiana, Ohio’s performance-funding formula focuses on course and degree completion, and also differentiates based on institutional mission.

In 2011, Illinois established a new funding formula that allocated less than 1 percent of the state’s higher-education budget to performance funding in fiscal year 2013. The allocation formula looks at a number of factors, including degree completion and the amount of money spent on each degree produced.

Indiana’s neighbors to the north have also moved the completion agenda to the forefront of higher-education funding. When lawmakers in Michigan approved funding for the state’s public universities in the 2012-13 budget earlier this year, they included performance measures.

The final budget bill boosts funding for the state’s 15 public universities a total of 3 percent, or an additional $36 million. The new funding formula, which is tied to graduation rates, also includes incentives to conduct more research and development and to improve degree completion in

Wisconsin rolls out first-of-its-kind ‘flexible’ degree programIn the quest to have higher rates of workers with college degrees and credentials, states cannot rely solely on high school graduates to enter and complete college, many experts say.

Instead, states and colleges will need to look to their adult populations — both those who have never earned college credits and those who have attended college but have not earned a degree — to boost completion rates.

Among its many efforts, Lumina Foundation places a strong emphasis on adult education and getting more adults back into higher education. According to Jamie P. Merisotis, president and Ceo of Lumina, one out of every five American adults has gone to college but never completed a degree or credential.

“That means that 37 million Americans have gone to college and have nothing to show for it,” Merisotis says. “I think that represents a huge opportunity for us in re-engaging those people and helping them complete [degrees].”

earlier this year, Wisconsin gov. Scott Walker announced a plan to help boost the education levels — and ultimately the employment opportunities — of approximately 700,000 working adults in Wisconsin who have some college credit but no degree.

The new online-based “flexible” degree program will be the first adopted statewide by a public uni-versity system. It will allow students to earn college credits by passing assessments that demonstrate knowledge and skills they have obtained through prior coursework, training, work experience, military training and other learning experiences. Students will be allowed to take courses at their own pace with flexible beginning dates.

The goal of the competency-based education program is to reduce the cost and time it takes for adult workers to complete their degrees and increase the education level of the state’s workforce. The program is being rolled out by state institutions.

Change in higher-education funding levels and graduation rates for

Midwestern states

State

Change in funding

for higher education, 2006-2011

3-year graduation

rate, associate’s

degree

6-year graduation

rate, bachelor’s

degree

illinois +1.7% 25.2% 58.6%

indiana -21.2% 24.9% 56.4%

iowa -25.3% 32.8% 62.9%

Kansas -15.1% 34.4% 53.2%

Michigan -23.6% 15.2% 54.8%

Minnesota -21.4% 29.6% 60.2%

nebraska -6.2% 30.3% 55.1%

north dakota +17.8% 37.0% 46.9%

Ohio -18.1% 27.1% 54.7%

south dakota -3.7% 60.7% 44.8%

wisconsin -2.5% 34.7% 58.0%

United States -12.5% 29.2% 55.5%Sources: State Higher Education Executive Officers Association, National

Center for Higher Education Management Systems


FeAture sTory

critical skills areas such as science, technology, engineering and math.

“For too long, government has operated under a model where we measure inputs and not outcomes,” says Michigan Sen. Tonya Schuitmaker, chair of the Higher Education Appropriations Committee.

“Before, the discussion always centered on how much money [an institution] received, not on how well it produced. We have tried to change that philosophy. All across the state, we have begun measuring results.”

The plan also includes $9 million to be distributed to those universities that keep tuition increases below 4 percent. According to Schuitmaker, this

is part of larger efforts in the state to encourage the state’s universities to hold down the cost of higher education.

“The long-term needs of the state include an economy that is growing and producing,” Schuitmaker explains. “The performance metrics allow us to see how well our money is being put to use in the higher-education community. It also incentivizes universities to examine their operations costs and look for any opportunities to realize efficiencies.”

This year, the South Dakota Legislature approved $3 million for a performance-based funding pilot

program and required the money to be matched by the state universities. Allocation will be based on degree completion and the graduation of students in high-priority fields.

A call to action for policymakers

Regardless of the method for reform, Merisotis points out that when the current economic realities are taken into account — international

competitors with soaring educational rates, the growing disconnect between what employers need and the skills possessed by workers, and a rising demand for talent — the need to transform the system is apparent.

But Schuitmaker adds that state government can only do so much. “We desperately need students to understand the importance of education,” she says.

Lubbers agrees that the responsibility for im-proving education rates must be shared. She says that the state has an obligation to adequately fund higher education. The institutions must foster student success, remove obstacles and embrace innovative models. And students have to do everything they can to stay on target to graduate.

“The consequences of the failure to achieve [educational attainment goals] obviously are pretty troubling for the country,” Merisotis adds. “It means a lower quality of life, less economic capacity, and certainly a less productive economy going forward.”

a number of campuses of IndIana’s ivy Tech college are piloting an accelerated associate’s degree Program, which allows students to obtain a two-year associate’s degree in one year. The program, designed especially for students in low-income households, helps achieve the state’s overall goals of improving on-time graduation rates and helping students keep down education-related costs and debt.

This year, Iowa community colleges banded together to begin the iowa community college completion initiative. The goal is to work collaboratively to increase the number of higher-education credentials earned by iowa community college students. The initiative was formalized in april, and community college leaders first met in august to review and advance goals.

in Kansas, nearly one-fourth of the adult population has some college education but has not earned a degree. The state mandated that the Board of regents and other education leaders work to re-engage these college dropouts. The initiative will target working adults who have earned substantial credits but have not yet earned a credential or degree.

in 2010, the MInnesota state colleges and universities system implemented the raPid (returning adults to Progress in degree) completion Program, a statewide outreach campaign for adult workers who never completed degrees. The program provides information on how students can complete degrees by taking online courses, enrolling in accelerated programs with flexible start dates and receiving course credits for work experience.

until last year, many degree programs in nebrasKa were requiring 125 credit hours or more. The unintended result of this “credit creep” was to increase the completion time and cost of obtaining a degree. a new policy guarantees that students can graduate with a bachelor’s degree by taking a full course load of 120 credit hours.

Between legislative sessions, north daKota’s interim higher education committee studied issues affecting higher-education funding. The committee heard recommendations regarding performance-based models from the state Board of education and a governor’s task force. One of the recommendations was to allocate funding for a performance-based funding system beginning in 2015. legislators will likely consider performance-based models during the 2013 session.

ohIo’s statewide efficiency council was established by the state university system to share innovative business practices and establish efficiency standards across institutions. The savings generated from these moves, estimated to exceed $100 million, will increase the capacity to graduate more Ohio residents and help control tuition costs.

MIchIgan’s 2011 education budget (hB 4325) encourages the state’s community colleges to explore ways of increasing collaboration with universities on transferability of credits. it also creates a committee tasked with improving the transferability of core college courses between institutions. The bill calls on universities to work with community colleges to enable the awarding of credentials or associate’s degrees through reverse-transfer agreements.

south daKota’s Board of regents has adopted a performance-based funding pilot program. The legislature approved $3 million in state funds, which are to be matched with another $3 million from the state’s six public universities. The money will be reallocated based on the schools’ graduation rates, as well as the number of higher degrees awarded and students graduating in high-priority fields.

in early 2012, wIsconsIn Gov. scott walker established the college and career readiness council, which is tasked with better aligning the state’s education system and workforce needs. at the end of the year, the council will release recommendations to reduce dropout and remediation rates; increase the overall number of degrees and certificates awarded; expand opportunities for high school students to earn college or workforce-training credits; design shorter, less-costly degree programs aimed at filling high-need positions; and ease transitions between systems and institutions, specifically through the transfer of credits and the awarding of credit for prior learning.

Midwest at a glance: State efforts to promote educational attainment

in IllInoIs, steps ahead (attaining higher education Through academic development) aims to increase the number of low-income students who attend and succeed in higher education. Program components include early-intervention educational services, academic support, career exploration programs, college-preparation assistance and scholarships. The program also seeks to increase parental involvement and foster collaboration between colleges and local schools.

States have policy options for boosting degree completionIn addition to reforming the way in which institutions of higher learning are funded, states have a variety of other policy options to improve educational attainment rates. They include

• offering accelerated learning that shortens the time necessary to complete a degree;

• creating adult education programs that re-engage college dropouts and encourage low-skill workers to earn degrees and credentials;

• implementing college- and career-readiness efforts that prepare students for success in higher education;

• enhancing financial aid and affordability, especially for low-income and first-generation college students;

• offering remediation education;

• trying new delivery models that use technology;

• putting in place policies that increase the trans-fer of credits and degrees between institutions and ultimately reduce time to earn a degree and the cost of higher education; and

• offering rewards for productivity and efficiency that result in cost savings and allow schools to serve more students.

Sen. Tonya Schuitmaker


StAteLine ProfILe

unified around social issues, and you’ll find those with very conservative, moderate or completely apathetic views on those topics.

Virtually every Tea Party supporter agrees, however, that taxes have a limit. Federal, state and local governments have to curb their appetites to spend money and pass on unmanageable debt to future generations.

Q: You have said that the first step to solving Illinois’ fiscal crisis is addressing the state’s

underfunded pension system. Why is it the top fiscal priority?

A: One of the skills I learned in the disaster cleanup business is the process of properly

stabilizing the structure, thoroughly mitigating the damage, and then beginning the restoration efforts — in that order. It’s a waste of effort to replace the drywall and paint if water is still gushing in — the building’s condition will worsen until the underlying issue gets resolved.

Our pension liabilities are continuing to grow geometrically, and it’s forcing us to crowd

out other important state responsibilit ies such as infrastructure maintenance and improvement, public safety, education and social safety nets.

For too long, legislators have promised too much to the government employee unions and have papered over the growing pension liabilities to the taxpayers. Pension plans were sweet-ened — reduced retirement age, annual compounded

COLAs (cost-of-living adjustments), etc. — without fully accounting for the increased costs. Over the years, we’ve “balanced” our books by borrowing more money and had our state’s credit rating dropped to near junk-bond status. …

Even with the 2011 state income tax hike, our spending problems go unsolved. We still have multiple billions of dollars in unpaid bills, and the pension liability continues to grow. We also risk losing investment and revenue over the long haul because individuals and businesses are reluctant to remain in or move to a state with such an enormous unfunded liability.

Q: What would you like to see enacted to fix the pension crisis?

A: Elected officials are largely responsible for creating this crisis, so we should start

on ourselves. The legislative pension system must be dramatically reformed or even eliminated to lead the way on the other state-run systems. Several of us have already voluntarily opted out of the General Assembly Retirement System, and many incoming freshmen will as well. Reform that starts at the top has and will help mitigate

understandable resentment among government employees and the taxpayers at large.

Ultimately I’d like to see a move away from defined benefit retirement plans to defined contri-bution plans like 401(k)s. In the interim, we cannot afford to ignore current workers or even retirees. For example, a hybrid plan could lock in defined benefits that current workers have accrued to date. The retirement age should be gradually increased along with employee contribution rates. COLAs for retirees should be tied to the CPI (consumer price index) rather than automatically compounded annually. Perhaps we’ll need to consider capping public pensions or taxing them above a certain level.

The longer we wait on meaningful reforms, the harder our eventual changes will need to be. At best, our state’s unfunded pension liability alone exceeds $100 billion. If investment returns remain weak, it could exceed $200 billion.

Q: In terms of fixing the state’s fiscal health, what else would you like the legislature to

do in the upcoming session?

A: The state needs more revenue, but extend-ing our increased tax rates will continue to

drag down our economy. Our state’s relatively high cost of living and dismal employment prospects have contributed to a loss of 700,000 citizens over the past decade. Illinois must compete with other states to remain attractive to large and small employers, employees, young families, retirees — all types of taxpayers. Revenue growth from high tax rates won’t last long because private capital will gradually move toward more favorable jurisdictions elsewhere.

We can build our revenues with economic growth. Illinois as a location still offers a lot to businesses and individuals, but there’s definitely a lack of confidence that our state government will reverse detrimental policies soon enough.

We have unfinished business on further reforms to our workers’ compensation and unemployment insurance systems. Despite major cuts this year, our Medicaid system is still in deep fiscal trouble and would benefit from more accountability and free-market reforms.

Q: You have said that the makeup of legislatures has changed in the last few years. What do

you mean?

A: Perhaps this is just my perception, but it seems that you’re getting more people into

these positions who haven’t spent a lifetime in politics. Various election dynamics have evolved and made it easier for candidates to bypass the traditional party hierarchy and instead gain support directly from voters. Consequently, they’re less likely to care about toeing the party line on specific issues. They seem to be authentic, high-caliber candidates who are finally getting engaged in the process, not for the title but for the opportunity to solve problems for their state and our country at such a crucial time.

by Kate Tormey ([email protected])

Illinois Rep. Tom Morrison began his career as a broadcaster with a unique goal: becoming the next Paul Harvey.

But to make it in journalism, Morrison had to pay his dues by first working in smaller markets and covering less-desirable stories. He decided broadcast-ing wasn’t for him when he was asked to cover a fire while working at a station in Dubuque, Iowa.

“I was shoving a microphone in a woman’s face as she watched all of her worldly possessions go up in flames,” he says. “I thought, ‘I just can’t do this. If this is what it takes to be successful in this business, then it’s not for me.’ ”

It turns out that covering disasters isn’t Morrison’s passion — but fixing them is. He went on to operate a cleaning business specializing in disaster recovery.

The experience handling crises has come in handy, he says. Morrison, a Republican, first ran for the legislature in 2010. He says the state was in a very dire fiscal situation — and he wanted to be a part of fixing the problem.

He knocked on about 6,500 doors in the months leading up to the primary election.

“I genuinely enjoy people and I enjoy talking about issues, so even if I had lost, it was worth it,” he says.

Morrison won the elec-tion, and is about to be sworn in for his second term in the Illinois House. As a supporter of the Tea Party movement, Morrison says he went to Springfield with one major priority.

“The fiscal issues in Illinois are paramount,” he says. “We are probably in the worst crisis we have faced as a state.”

As a former fifth-grade teacher and a member of the Elementary and Secondary Education Committee, Morrison is also a strong proponent of charter schools and educational vouchers.

“If the parents have a choice, then they are going to be much more engaged,” he says. “... The more parents are empowered, the better off students will be.”

Over the next few years, he plans to focus on the state’s fiscal health as well as two social issues that are important to him: preserving a traditional definition of marriage, and enforcing a state law that requires parental notification for minors to undergo abortions.

CSG Midwest talked with Morrison this fall about his legislative priorities and vision for Illinois’ future. Here are some excerpts from the interview.

Q: You are a member of the Tea Party, a move-ment that has had a large influence on politics

at all levels of government in recent years. What does the movement mean to you?

A: The driving principle behind the Tea Party is the acronym for “tea,” which is Taxed

Enough Already. It’s that simple. The Tea Party isn’t

Illinois Rep. Tom MorrisonFormer teacher poised to start second term in legislature; fiscal issues and fixing underfunded pension system are top priorities

Bio-sketch of Rep. Tom Morrison first elected to the illinois house in 2010

represents the northwest suburbs of chicago

owner of a cleaning business specializing in disaster cleanup

taught fifth grade for six years at his grade school alma mater

married father of two children


Submissions welcomeThis page is designed to be a forum for legislators and constitutional officers. The opinions expressed on this page do not reflect those of The council of state Governments or the Midwestern legislative conference. responses to any firstPerson article are welcome, as are pieces written on other topics. for more information, contact Tim anderson at 630.925.1922 or [email protected].

the Federal Energy Regulatory Commission have led to a more integrated electric grid, so too the success of the proposed wind-solar-storage project will transform how renewable energy is produced and made available nation-ally. Locally produced distributed generation, energy efficiency and conservation, and integrated renewable generation with storage are potential “game changers” for electric grid operations over the next 20 years.

Legislators key to U.S. energy future

The experience of lawmakers involved with the Kansas project and the CSG compact shows that legislators have major roles to play in our

nation’s energy future:• Innovators — Proposing the wind-solar-storage

concept is a “first of its kind” opportunity. While not all of our ideas may be feasible, they can drive discussion and innovation. Thus, states and state legislators remain the incubators of ideas, partnerships and progress.

• Facilitators — Bringing stakeholders together is something with which we legislators are very familiar, and there is little difference between doing so locally and on the state, regional and national levels. The Kansas project involves enlisting the participation of a renewable-energy development company, a large retail customer, the electric utility, state regulators, the energy storage industry, the governor’s administration, federal agencies, and more.

• Leaders — Change is often difficult for people to consider, but progress does not occur without a willingness to take risks. Legislators can show leadership by advocating for new technologies to solve current problems. The proposed project demonstrates the rewards that can come from thinking “big” in the long term, taking into account political trends, and creating a common vision from which multiple benefits can arise.

• Constituent communicators — Innovation, lead-ership and facilitation provide opportunities for legislators to inform our constituents about what we are doing on their behalf, and to improve the quality of life both today and tomorrow. Whenever I speak of the proposed project, my constituents applaud my commitment to their well-being, economic development (including jobs), and attempting to change the debate over renewable energy vs. fossil fuels through the use of new technologies.

Kansas rep. Tom sloan, a republican from lawrence, was first elected in 1994. he also co-chaired the drafting team for csG’s electric Transmission line siting compact.

FirSt PersonFirSt PersonA F O R U M F O R L E G I S L A T O R S A N D C O N S T I T U T I O N A L O F F I C E R S

S tate legislators are confronting increasingly complex energy policy issues as governments, regulatory agencies and the public strug-

gle to define what types of energy-production technologies will be acceptable in the near future. This process demands that integrated research and analysis of options, costs and benefits be supplemented with innovative, strategic thinking.

As a member of the U.S. Department of Energy’s (DOE) Electricity Advisory Committee and four of its subcommittees, I have the opportunity to learn as well as to contribute to discussions about the nation’s electric grid operations, technological innovations and public policy-making options.

This opportunity also stimulates my thinking about what my state’s and our nation’s energy future can be. The following discussion explores a scenario that may not be “right” for all states, but may lead readers to think creatively about possible energy policies for their states.

Arguments continue to rage nationwide on whether fossil-fuel electricity-generation units should be constructed, retrofitted or retired; whether nuclear generation plants (large or modular) should be con-structed or retired; and whether energy conservation and management programs and technologies (such as smart grid) can reduce or replace the need for generation units.

Renewable energy is endorsed by a large percentage of the public, but legislators recognize that the sun does not always shine, the wind does not always blow, and large-scale hydroelectric plants are not viable in most parts of the country. The intermittency of solar and wind generation today is largely addressed through natural gas-fired units that supplement the system during times of peak demand and by “backing down” baseload plants so they do not operate at full capacity during times of lesser demand. Renewable energy without reliability is neither cost-effective nor efficient for providers or customers.

Technological advances in electricity storage devices (such as sodium-ion, lithium-ion or flow bat-teries, Compressed Air Energy Storage systems, etc.) are helping utilities address transmission, distribution and frequency-regulation issues across the country.

Renewables’ intermittency a problem However, until recently there has been no concerted effort to address renewable energy’s intermittency problems. In a few cases energy storage has been paired with wind turbines or solar-collection systems, but no proposal had been advanced to truly convert renewable energy (available when the wind blows or sun shines) into energy capacity (available on demand via dispatchable power).

This is particularly important in regard to power quality. A cloud passing over a solar collector or a brief drop in wind speed reduces the amount of electricity generated and can cause the electronics in a home or business to turn off. But just as a battery in our electric clock radio can keep it running when the outside power fails or changes, so too can commercial-sized storage devices provide the power quality that is necessary.

A project has been proposed in Kansas that would construct a 100-megawatt wind farm, a 20-MW solar

farm and a 15-MW storage facility that would be coordi-nated to create renewable energy capacity. This would be the first reliable non-hydro renewable generation that is truly dispatchable, does not rely on peaking units for sup-port, approaches the concept of “baseload” capabilities, and is cost-competitive with other modes of generation.

As the initiator of the discussion about this type of project, I brought the concept to the governor of Kansas, the Kansas Corporation Commission, and a major national retailer with some 70 stores in the state. The projected project developer, Electricity Storage Association executives, the retailer and the state’s largest electric utility are researching whether the plant can cost-effectively meet the retailer’s statewide electric load.

This project would be a quantum leap in the use of energy storage to provide dependable renewable energy and as such may ultimately be included in a DOE demonstration or other type of federally assisted project.

The project also complements a recent effort involv-ing The Council of State Governments. A group of state legislators, transmission industry and public utility commission representatives, and CSG staff has worked for 18 months drafting a proposed Electric Transmission Line Siting Compact (see article on page 10).

The compact’s purpose is to facilitate the siting of high voltage transmission lines across state boundaries in a way that retains state sovereignty and jurisdictional responsibilities, while simplifying the review, public input and approval/rejection process for all parties.

The demonstration that wind- and solar- generated electricity, with energy storage, can be as reliable as hydro-power will increase the need for transmission lines to deliver this clean, affordable power to consumers across the nation.

Just as Thomas Edison’s work led to the development of vertically integrated electric utilities and decisions by

Making renewables doableKansas project to make wind, solar power more dependable also highlights legislators’ important role in energy policyby Kansas Rep. Tom Sloan ([email protected])

% of electricity generation from renewable sources in Midwest, 2011*

15% or more of net generation from renewable sources

11%-14% of net generation from renewable sources


Less than 1% of net generation from renewable sources


Source: U.S. Energy Information Administration* Excludes hydroelectric power


The council of state Governments was founded in 1933 as a national, nonpartisan organization to assist and advance state government. The headquarters office, in lexington, Ky., is responsible for a variety of national programs and services, including research, reference publications, innovations transfer, suggested state legislation and interstate consulting services. The Midwestern Office supports several groups of state officials, including the Midwestern legislative conference, an association of all legislators in 11 states: illinois, indiana, iowa, Kansas, Michigan, Minnesota, nebraska, north dakota, Ohio, south dakota and wisconsin. The canadian provinces of alberta, Manitoba, Ontario and saskatchewan are Mlc affiliate members.

CSG MidweSt news & eVen Ts

This year was a busy one for The Council of State Governments’ Legal Task Force. A committee of 12 legislators representing all four CSG regions,

the task force decides whether to file amicus briefs advocating the principles of federalism with federal courts. The task force has signed on to six briefs and authorized an additional brief to be drafted this year, with more to consider before the end of December.

The first brief CSG signed, in the case U.S. v. Pleau, was filed in the U.S. Court of Appeals for the First Circuit. The case involved a battle between Rhode Island and the federal government over the custody of an inmate. The inmate had signed a plea deal with the state, but the federal government pushed for custody.

CSG’s brief sided with Rhode Island and argued that an interstate compact drafted by CSG prevented the federal government from obtaining custody. The First Circuit, however, ruled in favor of the federal government. This was not the end of the line, though. Rhode Island appealed the decision to the U.S. Supreme Court, and CSG signed another brief in favor of the appeal. The U.S. Supreme Court has accepted the case, but it has not set a date for oral arguments.

CSG joined two briefs concerning interpretation of the Clean Water Act before the Supreme Court. In Decker v. Northwestern Environmental Defense Center, a dispute arose over how to handle storm water runoff from logging roads in an Oregon state forest. Lower courts ruled that federal permits were required for the storm water discharge, even though the EPA disagreed.

The second case, LA County v. Natural Resources Defense Council, is about the discharge of polluted storm water runoff into four rivers regulated by the Clean Water Act. The lower courts considered this to be a violation of the California county’s federal permits.

CSG joined briefs in both cases spearheaded by the State and Local Legal Center, a nonprofit organization that prepares briefs on cases before the U.S. Supreme Court on behalf of the “Big Seven” state and local government organizations, including CSG.

In the two Clean Water Act cases, the briefs were supported by the six other state and local government associations. The documents argued that state laws in Oregon and California adequately regulate the issues raised.

In November, the Legal Task Force signed off on two more State and Local Legal Center briefs in

cases before the Supreme Court. In Delia v. EMA, CSG agrees with North Carolina’s view that it is impractical for states to become involved in every settlement negotiation when a Medicaid recipient files a lawsuit, and that states should have flexibility when crafting Medicaid tort laws, since Medicaid is primarily administered by states.

In another case, Arlington v. FCC, CSG argued that federal agencies should not be able to determine their own jurisdiction unilaterally; when it clashes with a state’s interest — in this case the state of Texas — such determinations should be left to Congress and the courts.

Lastly, the State and Local Legal Center is drafting a brief in McBurney v. Young, a rare case that does not fit the usual federalism mold.

However, it does involve an important issue to states concerning the privileges and immunities and commerce clauses of the U.S. Constitution, and whether they prohibit states from limiting public records requests to a state’s residents, as is the law in Virginia.

article written by Jc hendrickson, a federal policy analyst in The council of state Governments’ washington, d.c., office. he can be reached at [email protected].

CSG’s Legal Task Force considers issues before federal courts that affect states

The Counci l of State Governments hosted two Health Policy Academies in November on health-related topics.

The two summits, which brought together policymakers to share ideas on key health policy topics, focused on early-childhood health and diabetes.

Early childhood healthAt the first Health Policy Academy, legislators focused on issues such as flu vaccination, the development of biologics and the prevention of premature births.

Dr. Mitchell Goldstein, a neonatologist, emphasized the importance of reducing prema-ture births. He said the “old days” of believing babies were ready to be born at 34 or even 37 weeks of pregnancy are gone. Research clearly shows that brains and lungs are developing up to full-term gestation of 40 weeks.

Another threat to early-childhood health re-spiratory syncytial virus (RSV), a very common virus that leads to mild, cold-like symptoms in adults and older healthy children. However, it can be more serious in young babies, especially those born prematurely. No vaccine is available to prevent RSV, but there is a biologic available to young children during the virus season that is effective in reducing the impact of RSV.

Advances in seasonal flu prevention were also discussed, including a successful program in Texas to vaccinate children in schools.

State diabetes policyIn late November, CSG held a second Health Policy Academy in conjunction with its national meeting in Texas.

A panel of experts shared strategies for better treating 26 million Americans with diabetes and preventing progression of the disease among the 79 million people considered “prediabetic.”

S e v e r a l p r o m i s i n g state initiatives were high-lighted: partnering with communit y YMCAs to increase physical activity opportunities, encouraging appropriate care models in schools for children with diabetes, and ensuring timely screening for gestational diabetes.

In May, CSG hosted a workshop on diabetes prevention and treatment at its National Leadership Conference. Among the speakers was Illinois Rep. Mike Tryon, who helped form a bipartisan diabetes caucus in his legislature.

For more information about CSG’s Health Policy Group, visit www.csg.org/health.

CSG holds health academies for state legislators

CSG’s Washington, D.C. OfficeFor more than 70 years, The Council of State governments’ Washington, D.C., office has worked to advance state interests in the national and international arenas. The office works with CSg’s national and regional lead-ers to advocate for the states in the nation’s capital. Its services include

• managing CSg’s policy resolutions,

• advocating for regional policy priorities,

• analyzing federal legislation and com-municating with CSg members on bills that affect states,

• keeping tabs on key court cases that impact state-federal relations,

• promoting state exports and

• facilitating international leadership-development programs.

For more information, visit www.csgdc.org.

Cases taken on this year by Legal Task Force

Case At issue

U.S. v. Pleau interstate compacts and state-federal battle over inmate custody

Decker v. Northwestern Environmental Defense Center clean water act and rights of states and local governments

LA County v. Natural Resources Defense Council clean water act and rights of states and local governments

Delia v. EMA flexibility for states on Medicaid tort laws

Arlington v. FCC who determines limits of jurisdiction and authority of federal agencies

McBurney v. Young state public records laws

Illinois Rep. Mike Tryon


A lice Hausman, a 22-year veteran of the Minnesota House, has officially begun her term as chair of the Midwestern Legislative

Conference.The MLC is a nonpartisan association for all

1,550 state legislators in the 11-state Midwest. CSG Midwest provides staffing services to the group, which also counts four Canadian provinces as affiliate members.

Rep. Hausman took over as chair in December, when the MLC Executive Committee met in conjunction with CSG’s 2012 National Conference.

In all, four officers oversee the work done by the MLC on behalf of state legislators. Joining Hausman as MLC leaders are Nebraska Sen. Beau McCoy, first vice chair; North Dakota Sen. Tim Flakoll, second vice chair; and Ohio Rep. Armond Budish, immediate past chair.

Among Rep. Hausman’s duties for the new year will be leading Minnesota’s efforts to host the MLC Annual Meeting — the premier event for state legislators from the Midwest that attracts hundreds of people from across the region. The four-day event includes a mix of public policy sessions and nationally renowned speakers, as well as the chance for legislators to work with and learn from one another on key issues in state government.

The meeting’s social events for attendees and their guests also give the meeting’s hosts the chance to showcase their home state.

Throughout the year, too, the MLC provides

C A L E N D A R

UPCOMING MIDWESTERN LEGISLATIvE CONFERENCE AND COUNCIL OF STATE

GOvERNMENTS EvENTS

APPLIC ATION DEADLINE: BOWhAY INSTITUTE FOR LEGISLATIvE LEADERShIP DEvELOPMENT

april 8, 2013

contact: laura Tomaka ([email protected])630.925.1922

www.csgmidwest.org/BILLD/default.aspx

CSG MIDWESTERN RADIOAC TIvE MATERIALS TRANSPORTATION

COMMIT TEE MEETINGMay 14, 2013

Buffalo, new York

contact: lisa Janairo ([email protected])920.458.5910

www.csgmidwest.org

68Th ANNUAL MEETING OF ThE MIDWESTERN LEGISLATIvE

CONFERENCEJuly 14-17, 2013

st. Paul, Minnesota

contact: Gail Meyer ([email protected])630.925.1922

www.csgmidwest.org

19Th ANNUAL BOWhAY INSTITUTE FOR LEGISLATIvE LEADERShIP DEvELOPMENT (BILLD)

august 9-13, 2013Madison, wisconsin

contact: laura Tomaka ([email protected])630.925.1922

www.csgmidwest.org

ThE COUNCIL OF STATE GOvERNMENTS hENRY TOLL FELLOWShIP PROGRAM

august 16-21, 2013 lexington, Kentucky

contact: Kelley arnold ([email protected])859.244.8258

www.csg.org/LeadershipCenter

ThE COUNCIL OF STATE GOvERNMENTS 2013 NATIONAL CONFERENCE

september 19-22, 2013Kansas city, Missouri

contact: Kelley arnold ([email protected])859.244.8258

www.csg.org/events

MLC’s plans for biennium include new education committee, more in-state training for legislators

Four state lawmakers tapped to lead Midwestern Legislative Conference in 2013

Building on its reputation as a reliable source for information sharing and legislative train-ing, the Midwestern Legislative Conference

has established five interstate policy committees for 2013-14 and also plans to sponsor more professional- development workshops inside state capitols.

The MLC Executive Committee approved the plans in December.

Four of the five policy committees have been in place now for several years: Agriculture & Natural Resources, Economic Development, Health & Human Services and Midwest-Canada.

For the new biennium, MLC leaders also chose to add a legislative committee on education.

The goal of these bipartisan groups of legisla-tors is to provide a forum for sharing policy ideas and, when appropriate, facilitating interstate cooperation and action. Committee appointments are made by legislative leadership in each of the region’s 11 states. Legislators from four Canadian provinces — affiliate members of the MLC — take part in the committees as well.

The MLC Executive Committee has also decided to bring more services directly to state capitols. This in-state programming began in 2012, with legislative workshops in Michigan and Wisconsin early in the year on effective com-munication and a December seminar in Ohio on

how to improve civility inside statehouses.Programming will now be expanded to more

states. The subject of the training will be based on input and recommendations from legislators in each state. For more information, please contact CSG Midwest director Mike McCabe at [email protected] or 630.925.1922.

support to legislators through: • programs such as the Bowhay Institute for

Legislative Leadership Development, a professional-development training program designed exclusively for new legislators from the Midwest;

• publications, newsletters and policy re-sources such as Stateline Midwest; and

• interstate committees on public policy (see story below).

Minnesota Rep. Alice Hausman, chair

Nebraska Sen. Beau McCoy, 1st vice chair

MLC officers in 2013

North Dakota Sen. Tim Flakoll,

2nd vice chair

Ohio Rep. Armond Budish, immediate

past chair

Nebraska Sen. Beau McCoy and Ohio Rep. Armond Budish, two officers of the Midwestern Legislative Conference, take part in this fall’s MLC Executive Committee, where the group laid out its plans for the next two years. (photo: Rodney Margison)

State

line

Mid

west

nO

n-P

ROFi

T O

RG.

u.S

. PO

STA

GE

PAiD

CHiC

AG

O, i

L

PERM

iT n

O. 7

706

State

line

Mid

west

Dec

embe

r 201

2 Th

e Co

unci

l of S

tate

gov

ernm

ents

Mid

wes

tern

offi

ce

701

e. 2

2nd

Stre

et, S

uite

110

Lom

bard

, IL

6014

8-50

95

Phon

e: 6

30.9

25.1

922

Fax:

630

.925

.193

0

e-m

ail:

csgm

@cs

g.or

g

ww

w.c

sgm

idw

est.o

rg

CH

An

ge

SeRV

ICe

ReQ

UeS

TeD

CAPitoL CLIPsNational study puts North Dakota on top of list of best-run states five of the nation’s 10 best-run states are in the Midwest, a study by the financial news service 24/7 wall st. concludes, led by North Dakota and its oil-fueled economic boom.

The state rankings are based on a host of fac-tors, but most center on fiscal and economic conditions — for example, state credit ratings, unemployment rates, GdP growth, and levels of debt relative to personal income and state rev-enue. On those measures and others, north dakota ranks above most or all other states.

states with agriculture-driven economies tended to place high on the list, including:

• Nebraska (ranked third), which has the second-lowest unemployment rate and debt per capita in the country.

• Iowa, (ranked fifth) which has a low debt burden and a high credit rating; and

• South Dakota (ranked seventh), which has low taxes and a pension system that is funded at close to 100 percent.

Minnesota rounded out the top-10 list, thanks in large part to that state’s low poverty and crime rates, as well as the relatively high per-centage of residents who have health insur-ance and a high school diploma.

Indiana law, surplus trigger automatic refund for taxpayerswhen the state closed its books on the 2012 fiscal year, Indiana had the largest budget reserves in its history.

and thanks to a law enacted one year earlier, two things happened automatically: half of the $721 million budget surplus went to shore up state pension funds, and the other half will be delivered to residents when they pay their 2012 income taxes. The refund, allocated on a per capita basis, will result in a $111 income tax credit for single filers and $222 for joint filers, The Indianapolis Star reports.

under a state law passed in 2011, the extra payments to the pension system and the tax refund occur for state reserves exceeding 10 percent of spending. (under legislation passed this year, hB 1376, the automatic trigger in future years will be reserves of 12.5 percent.)

indiana’s new approach is an alternative to the tax-and-expenditure limitations typical-ly instituted by states — restricting yearly revenue increases or spending growth. Wis-consin, for example, has a cap on spending tied to personal income growth in the state. Michigan limits state revenues to a propor-tion of total personal income (9.49 percent), and in Ohio, year-over-year spending can increase by no more than 3.5 percent.

Illinois OKs hike in license fee to bolster state parks fundingconcerned about the condition of the state’s parks, Illinois lawmakers voted in november to boost funding for the system through a $2 increase in license-plate fees.

Over the past 10 years, the Chicago Tribune reports, staffing and budget levels for the illinois department of natural resources have been cut by more than half. along with the additional dollars that will come from the higher license-plate fee, the dnr is exploring other revenue options as well, including charging out-of-state visitors to the parks. illinois is one of three Midwestern states (along with Iowa and Ohio) that don’t charge park entrance fees, according to a 2012 national association of state Park directors survey.

The same survey found that every state uses a unique mix of revenue sources to fund its parks. Michigan, for example, is the only state in this region where general fund dollars are not used. it instead relies largely on park-based revenue, including a $10 “recreation passport” that motorists can purchase when renewing their vehicle licenses. The passport allows entry into all Michigan state parks. in Minnesota, a significant portion of the state parks budget comes from lottery sales. in addition, some proceeds from a sales tax hike approved by Minnesotans in 2008 go to state parks.

Legal attempts to force Asian carp action hit another barriera group of states wanting to wall off asian carp entry into the Great lakes via the chicago area waterway system have run into another legal stumbling block.

in december, The Washington Post reports, a federal judge threw out a lawsuit brought by Michigan, Wisconsin, Minnesota, Ohio and Pennsylvania. Those states want to force the u.s. army corps of engineers to physically separate the Great lakes from the Mississippi river system, where asian carp have spread and already wreaked ecological havoc. The two water systems are currently connected via a network of rivers and man-made canals in the chicago area.

The decision is the latest in a string of legal defeats for states seeking a way to require immediate action by the army corps. The corps is conducting a study on how to prevent the spread of asian carp and other invasive species between the Great lakes and Mississippi river.

earlier this year, too, the u.s. congress passed legislation requiring the corps to release a study on asian carp prevention by 2013. That study will include options for preventing carp from entering the Great lakes via the chicago area waterway system as well as other possible points of entry in the region.

Documents

Stateline Midwest