Connecticut’s week ahead

The following comes by way of Dentons50 Connecticut partner James Woulfe.

Comptroller Kevin Lembo shocked the Connecticut political world last week when he abruptly announced he would be suspending his exploratory campaign for governor and would instead run for reelection.

Lembo, seen as the front-runner in the race before dropping out, made the decision to run for reelection following a ten day “gut check.” “Sometimes the grass isn’t greener,” Lembo said referring to the Governship. Speculation began immediately after the announcement that Lembo’s decision was tied to a decision by Lt. Governor Nancy Wyman to throw her hat in the ring – Lembo had promised to step aside if she decided to enter the race. The Lt. Governor, who is away for the long weekend with family, is reportedly still considering her options, and has not made a final decision. Middletown Mayor Dan Drew, former federal prosecutor Chris Mattei, and former Consumer Protection Commissioner Jonathan Harris still remain in the race on the Democratic side of the aisle. The Governor’s Week

Despite assurances from House and Senate Democrats that a vote on a budget is imminent, Governor Malloy is still pessimistic about the chances of a budget bill getting to his desk any time soon. In an hour-long meeting with the Hartford Courant’s editorial board, the Governor said:

““Whatever the House passes, in line with what they’re talking about, wouldn’t get through the Senate. So, we really have made almost no progress. … It’s clear to me that they’re not dealing with the budgetary reality. I think, quite frankly, they’re grasping for straws in an attempt to cobble together a budget.” Without a budget deal by October 1st, a series of significant cuts in state aid  to cities and towns will go into effect.

General Assembly

The House and Senate will convene next for a special session to take a vote on the budget. The dates and times of the sessions will be announced when a final budget has been negotiated and agreed upon.

D.C. Happenings

Speculation is heating up about a 2020 presidential run by Connecticut’s junior U.S. Senator, Chris Murphy.  Axios AM reported this morning that Sen. Murphy is one of three potential candidates who have begun the search for campaign staff. Sen. Murphy, a frequent and vocal critic of President Trump, was quoted as recently as June saying he had no interest in running for the oval office.

The Week Ahead

Monday, September 4th

State Holiday – Building Closed (CAPGRDS)

Tuesday, September 5th

9:00 am – DPH: Mobile Integrated Health Work Group Meeting (1D)

Wednesday, September 6th

9:00 am – The CT Juvenile Justice Alliance Conference (310) 5:30 pm – CEO: Monthly Commission Meeting (1C)

Thursday, September 7th 

10:00 am –  Rep. Albis: CT Racial Profiling Prohibition Board Meeting (1C) 11:30 am –  Commission on Equity & Opportunity: Brazilian Flag Raising Ceremony (CAPGRDS) 12:00 pm –  Commission on Equity & Opportunity: Brazilian Flag Raising Ceremony Reception (JUDRM)

Friday, September 8th

9:30 am -Medical Assistance Program Oversight Council (1E) 1:00 pm –  Task Force to Study Rare Diseases Meeting (1C)

MN judge reverses Dayton’s budget veto

Ed. note: the following comes by way of Dentons 50 Partner Todd Hill

A Minnesota county district judge this week reversed Governor Mark Dayton’s veto of the Legislature’s budget, saying the governor had overstepped this constitutional authority in his attempts to pressure lawmakers on tax policy.

In his opinion, Ramsey County District Judge John Guthmann wrote Wednesday that the governor’s line-item veto of the House and Senate budgets had the impact of “effectively eliminating a coequal branch of government,” and that the action had therefore violated the Minnesota Constitution.

Accordingly, the judge wrote, the governor’s vetoes were “null and void.”

Because the governor did not object to the actual appropriations for the House and Senate, and instead issued the vetoes in an attempt to seek changes on unrelated policies, Guthmann found the governor had “improperly used his line-item veto authority.”

Dayton has directed his attorney, former Supreme Court Justice Sam Hanson, the appeal the decision to the Minnesota Supreme Court.

Washington’s week ahead: July 17

In the latest of a string of setbacks, ObamaCare reconciliation vote delayed in the Senate as Arizona Senator John McCain is treated for a blood clot… Don Jr., and others, met with Russian promising “very high level and sensitive information”… Approps Omnibus package gains steam – pre whip count – in House… POTUS celebrates Bastille Day in Paris with French President Macron… Federal Judge in Hawaii loosens Trump temporary travel ban… CBO says Trump ’18 budget will not balance in a decade, contrary to WH estimates… FBI nominee Wray testifies before Senate Judiciary Committee… House Appropriations Committee releases spending bill with $1.6 bill for border wall… Former FBI Director Comey signs book deal… POTUS approval rating after six months in office is the lowest of any president in the past 70 years, according to a new poll… And K Street scrambles to rebook flights out of town as Leader McConnell takes back 2 weeks of recess…

THE WEEK AHEAD:   The White House dubs this “Make in America Week”… CBO score due for repeal 2.0..House Budget Committee to mark up… House whips Approps Omni package…

POTUS:   POTUS  announced the appointment of Ty Cobb–no not that one: a veteran Washington lawyer with experience as a federal prosecutor and defense attorney–as special counsel at the White House

CONGRESS:  The House Dress Code gets an update. The conservative firebrand credited with pressuring then-Speaker John Boehner (R-Ohio) to resign in 2015 issued a warning Thursday to Senate Majority Leader Mitch McConnell (R-Ky.) and his establishment allies.. Rep. Brad Sherman (D-Calif.) formally introduced an article of impeachment against President Trump on Wednesday.

THE COURT:   Partisan map makers beware, the Supreme Court is set to take a serious look at partisan gerrymandering with a case that could jeopardize voter maps across the country and help Democrats regain control of Congress

APPROPRIATIONS:  House GOP leaders will return to Washington this week with hopes of passing a budget resolution and a 12-bill omnibus before leaving town for the August recess.

CYBER:  Major technology companies and tech advocacy organizations are banding together in a last-ditch effort to save the Federal Communication Commission’s net neutrality rules.

ENERGY:  House appropriators diverged from President Donald Trump’s budget proposal by minimizing cuts to the Interior Department and the EPA’s budget as part of the energy and water appropriations bill.

ENVIRONMENT:  The Environmental Protection Agency asked for a 52-day delay from having to enforce the Obama-era regulation for the venting and flaring of methane, a critical greenhouse gas, after a court ruled against the agency. The U.S. Court of Appeals for the District of Columbia Circuit granted a 14-day stay while the EPA considers further legal action.. A bipartisan group on the House side protected the need to study climate change as part of national security as part of the National Defense Authorization Act, striking down an amendment that opposed it.

HEALTH:  It’s unclear whether Senate Republicans have the votes to win on a key procedural motion that would allow them to debate the new healthcare bill they released on Thursday.  Here is what has changed in the new version and a look at who got what. 

RUSSIA INVESTIGATION: Trumpland lawyers up… Calls for Kushner to loser his security clearance have mounted, as congressional investigators probe whether the Trump campaign’s digital operation — run by the president’s son-in-law — coordinated efforts with Russian bots spreading fake news about Hillary Clinton.  The Federal Election Commission (FEC) is sharply divided over how the election watchdog agency should respond to Russian interference in the U.S. election as more revelations come to light about foreign meddling during 2016.

RUSSIAN SANCTIONS:  Lawmakers are growing increasingly frustrated with a series of procedural spats that are stalling new Russia sanctions in the House amid mounting concerns about Moscow’s election meddling.

TRADE:  Energy Department Secretary Rick Perry visited his counterpart in the Mexican government to discuss trade relations and cross-border electricity transmission as part of a broader discussion on North American energy strategy.

TRAVEL BAN: The Trump administration asked the Supreme Court on Friday to block a federal judge’s ruling that grandparents of U.S. citizens and refugees already being processed for resettlement are exempt from President Trump’s travel ban. 

CONFIRMATION UPDATE: Office for Regulatory Affairs  PREVIOUSLY CONFIRMED- FEMA Administrator  Deputy Secretary of State, Associate Attorney General, Deputy Secretary of Transportation,  Sec. of Air Force, FDA Commissioner, US Trade Representative Chairman of the SEC,  Sec of Agriculture, Sec of Labor   Associate Justice of the Supreme Court , Amb. To Israel  Admin of CMS, Director of National Intelligence, Sec. of HUD, Sec. of Energy, Sec of Interior,  Sec. of Treasury, OMB Director,  Attorney General, Sec. of Education, Sec of Veteran’s Affairs , EPA Administrator, Small Business Admin, Sec. of HHS, Sec. of State, Sec of Transportation, Director of CIA, Sec. of Defense, Amb. to the UN, Sec. of Homeland,  Sec. of Commerce  

PRESIDENTIAL MEMORANDUM & EXECUTIVE ORDER TRACKER:   Presidential Memoranda Cuba  Jerusalem Embassy Act  Stabilization of Iraq  Aluminum Imports    Offshore Drilling, VA Accountability, Local Control of Education, Review of Antiquities Act, Rural American Prosperity : Orderly Liquidation Authority, Financial Stability Oversight Council, Steel Imports and Threats to National Security  Executive Branch Re-Org    Travel Ban 2.0 Memo for USSS, USAG, USSHS     Fiduciary Duty RuleNational Security Council,  Defeat ISIL,   Pipeline Construction, American Pipe,  Domestic Manufacturing,  TPP, Hiring Freeze, Mexico City (Abortion), Memo to Executive Departments and Agencies  Executive Orders: North Korea   Western Balkans Cyber security    Election Integrity   Promoting Free Speech & Religious Liberty Identifying Tax Burdens, Buy American and Hire American  Principles for Reforming the Military selective Service Process  Climate,   Addiction & Opioid Crisis , Report on Trade Deficits,  Trade Enforcement Travel Ban 2.0  Regulatory Reform Task Forces,  Crime Reduction, Drug Cartels, Law Enforcement protection, DOJ Succession,  Dodd Frank,  2 for 1 Reg,    Border and Immigration Enforcement, ObamaCare, Public Safety, Expediting Environmental Review Process, Visa Restrictions

 

With election on horizon, new extension of Calif.’s cap and trade program remains uncertain

The California legislature last Friday failed to approve language to extend the state’s Cap and Trade program beyond its current 2020 expiration. The self-imposed deadline was intended to take advantage of Assembly member Jimmy Gomez’ presence before he was sworn in to replace now-Attorney General Xavier Becerra in the US House of Representatives on July 11.  Governor Jerry Brown had presented a compromise plan earlier in the week but the proposal was regarded unfavorably by nearly every party, and many close to the issue believed that language was designed to help identify the truly significant issues still remaining on both sides of the argument.

In 2010 California voters enacted Proposition 26, sponsored by the California Chamber of Commerce and others, which more stringently defined what constitutes a “tax” and therefor requires a two-thirds vote of the legislature. Based on the language of Prop 26 any extensions of the state’s Cap and Trade program will require a two-thirds vote and therein lies the problem.

While Democrats held 54 of the 80 seats in the Assembly – exactly what’s needed for the Cap and Trade extension to pass – the legislature now needs Republican votes because, with Gomez’ departure last week, the Democrats no longer hold a two-thirds majority. On top of that, the progressive Democrats and moderate wing of the party cannot agree on the terms of the extension.  It is believed that a coalition of moderate Democrats and central leaning Republicans will be needed to satisfy both industry and the environmental communities.

Now that the pressure of the Gomez departure has been lifted, the legislature has until the beginning of Interim Study Recess on September 15 to achieve a resolution. Any extension will require new regulations that will take 18-24 months to promulgate, and next year is an election year, a time when risky, controversial votes don’t come easy.

Time will tell if in the next two months the legislature can come to agreement on the details of a program that is supported in broad strokes by both environmental groups and industry.

TN task force begins probe of juvenile justice system

The following comes by way of Dentons50 partner Adam Nickas of Capitol Resources.

Tennessee’s Blue Ribbon Task Force on Juvenile Justice began its work last week with the goal of closely examining, “from top to bottom,” the juvenile justice system and recommend policy changes heading into the 2018 legislative session.

In coordination with Pew Charitable Trust and their technical team, the task force will review data and research to identify what Tennessee is doing well and what needs to be done differently to-

1) protect public safety;

2) effectively hold juvenile offenders accountable;

3) contain costs; and

4) improve outcomes for youth, families, and communities in Tennessee.

The task force is chaired by Speaker of the House Beth Harwell and Senate Majority Leader Mark Norris and consists of 19 members, including representatives from the Department of Children’s Services, Administrative Office of the Courts, Department of Mental Health and Substance Abuse Services, Gov. Bill Haslam’s office, the Shelby County Juvenile Court, and Metro Nashville Police Department’s Youth Services Division.

Pew Charitable Trust, which has previously spearheaded similar efforts in 7 other states, will take the lead in reviewing data, statutes and court rules and will share impressions with task force members.  Pew will also share research and experiences from other states whom they have partnered with, including Alabama who began their study a couple weeks ago. The Crime & Justice Institute (CJI) is also partnering with Pew on this effort.

Much of the discussion today centered around the cost and effectiveness of out-of-home placement for juvenile offenders compared to community-based supervision. Each one of the seven states that Pew has previously worked with was initially spending large amounts of money on out-of-home/residential placements. Despite that, they were not seeing a return on public safety; in fact, they were experiencing high recidivism rates (65% recidivism in Georgia).

Two findings from Pew’s national research show that community-based alternatives result in greater reductions in rearrests; and longer lengths of stay in out-of-home placements do not reduce the likelihood of being re-arrested.

According to a Pew survey, 85% of voters agree that preventing crime is more important to them than how long juvenile offenders are incarcerated.

As a result of reforms made in Georgia, since 2014, their state has invested $37 million in county-based grant programs, resulting in a 36% decrease in population in state secure facilities and a 46% decrease in state commitments.

The next meeting of the Tennessee task force will be on July 26th.

Greiten’s tax commission releases findings

In January of this year, Governor Eric Greitens issued an executive order establishing the Committee on Simple, Fair and Low Taxes.  The mission of the committee was to review the state’s tax code and tax credit system and to produce a report and recommendations by June 30, 2017.

The committee, which was comprised of ten members appointed by the Governor, Speaker of the House and President Pro Tem, began meeting in February and held a series of town halls to gather information and input from Missourians.

The full report can be read here and a summary of the report’s recommendations are below.

Missouri Works

As the state’s number one incentive tool for expansion and retention, this program helps businesses access capital through withholdings or tax credits to embark on facility expansions and create jobs.  This program can also help businesses purchase equipment to maintain its facility in Missouri.

Recommendations:

  • The Committee recommends maintaining current funding levels.  There is no annual limit on the retained withholding taxes.  Tax credits issued for the program are capped at $116 million annually.
  • The Committee recommends removing the distinction within Missouri Works Training between “new” and “retained” jobs.  Incentives would now be considered for all jobs seeking training assistance.
  • The Committee recommends giving the Director of the Department of Economic Development the discretion to deny an application for a project that does not have a positive fiscal return as measured by a REMI analysis.  Discretion would also be granted to deny applications for projects that fail the “but for” test – where the jobs would be created without the incentives.  Finally, discretion would be granted to deny an application for a project that could not reasonably be brought to fruition.
  • The Department would have 5 days to issue a rejection of an application.

Low Income Housing Tax Credit

Missouri’s Low-Income Housing Tax Credit (LIHTC) is designed to supplement the federal LIHTC and provides a state tax credit to investors in affordable housing.  The LIHTC can be used each year for 10 years and is allocated to the owner of an affordable housing development.  Tax credits must be used for new construction, rehabilitation, or acquisition and rehabilitation.

Recommendations:

  • The Committee recommends restructuring the program as a “soft loan” instead of a tax credit. The loans could be repaid, extended, or forgiven as needed to complete a project.
  • The program would have a $50 million annual cap.  The program issued $101 million in tax credits in Fiscal Year 2016.
  • The Committee recommends the creation of a tax credit clearing house to buy up existing tax credits from this program.
  • The Committee recommends that this program’s funding be subject to the annual appropriations process of the General Assembly.

Historic Preservation Tax Credit

This program incentivizes developers to maintain the integrity of Missouri’s historic buildings, giving them new life.

Recommendations:

  • The Committee recommends combining the Historic Preservation tax credit program with the Brownfield Remediation tax credit program.
  • The combined program would have a $50 million annual cap.  The annual cap for the Historic Preservation program is currently $140 million. The Brownfield Remediation program does not currently have a cap.  That program issued approximately $10 million in tax credits in Fiscal Year 2016.
  • The Committee recommends that this program’s funding be subject to the annual appropriations process of the General Assembly.

Greitens OKs budget, withholding $251mm

Late Friday afternoon Governor Eric Greitens signed Missouri’s nearly $28billion fiscal year 2018 budget into law.  At the same time, he announced he would be withholding $251 million to help balance the budget, as revenue has not grown as quickly as expected.  Fiscal Year 2018 begins July 1.

Most of the withholds are from the Department of Social Services and the Department of Higher Education, including an additional withhold from the higher education core funding which brings the core funding for higher education to 9 percent  below FY2017.

He did not withhold any funds from the foundation formula.  As a result, the formula is expected to be fully funded.  He did withhold some funds from K-12 transportation funding.

You can read the withholds here and here.

Governor Greitens Vetoes Fund Sweep Legislation

The governor also announced he was going to veto House Committee Bill 3 which would have directed the Commissioner of Administration to sweep funds from state funds into general revenue to pay for long-term care and nursing homes.

Proponents of the legislation felt it was a necessary to keep vulnerable Missourians in their homes.  Opponents felt it was an unconstitutional one -time fix to a long-term problem.

Governor Greitens Signs Workplace Discrimination Legislation

Governor Greitens also signed Senate Bill 43 (Gary Romine-Farmington).  This legislation will raise the standard of proof for employment discrimination cases under the Missouri Human Rights Act, exempts supervisors and managers who are not employers from being sued for discriminatory conduct, and set caps on damages awarded to successful plaintiffs.

Supporters of the bill believe it will improve the state’s economic climate and foster job growth. Opponents of the bill say it guts the Missouri Human Rights Act.

Governor Greitens Announces Plans on Minimum Wage Preemption

Lastly, Governor Eric Greitens announced that he would allow the legislation that will prevent municipalities from raising the minimum wage to become law without his signature.  The law will go into effect on August 28, 2017.  Currently, the City of Saint Louis is the only municipality with a minimum wage higher than the state’s minimum wage.  Therefore, on August 29, the minimum wage in Saint Louis City will go from $10/hour back down to $7.70.