States Act on Congressional Goals
Local Legislation Advances Faster

By Dale Russakoff
Washington Post Staff Writer
Sunday, January 21, 2007

The newly Democratic House may think it responded swiftly to the populist message of the November elections with passage of Speaker Nancy Pelosi's 100-hour agenda. But out in the heartland, many state legislatures and governors hope to leave Congress in the dust.

Paying heed to voters' economic anxieties, governors of both parties and in all regions opened legislative sessions with proposals such as eliminating sales taxes on groceries, providing public kindergarten for low-income children, targeting tax relief to low- and moderate-income families and investing state dollars in job training for a new economy.

Stepping ahead of the Democratic-controlled House in attending to the growing gap between rich and poor, lawmakers in 17 states are moving to raise the minimum wage sooner or more than Congress proposes, or to tie it to inflation so it continues to rise. Under the House bill, the federal minimum wage would not reach its target of $7.25 an hour for more than two years and would not rise with inflation.

And California Gov. Arnold Schwarzenegger (R) was hardly the sole governor calling for universal health insurance. His counterparts in Kansas, Illinois and Colorado did the same, while governors in Arizona, New Mexico, Indiana, New York and elsewhere called for covering hundreds of thousands of low-income, uninsured families.

"If you ask voters what do you want your state to do, that takes federal issues like the war in Iraq and the deficit off the table," said Bernie Horn of the Center for Policy Alternatives, which supports liberal policies in state legislatures. "So economic insecurity is the top issue."

While this partly reflects Democratic gains in the November elections in state legislatures and in governors' offices, it is hardly a one-party phenomenon.

Politicians of both parties are moving to eliminate state sales taxes on groceries in the cause of economic fairness. In his State of the State address, newly elected Arkansas Gov. Mike Beebe (D) invoked "a moral charge to rid our state of its most regressive tax, the state sales tax on food." A similar measure failed last year, but Beebe said 25 of 35 state senators are co-sponsoring his plan to halve the 6-cent tax this year and eventually eliminate it.

In Wyoming, the Republican-controlled House Revenue Committee passed a grocery tax exemption last week that would cost the state $50 million, rejecting alternative tax relief measures that would benefit the wealthy. And in Idaho, Gov. C. L. "Butch" Otter (R) called for a grocery tax credit for low-income residents.

Lawmakers in 17 states are moving to raise their minimum wages despite the pending congressional action. The majority-Democratic Mississippi House of Representatives passed a measure to raise the state minimum wage to $7.25 an hour by next January, at least a year ahead of the federal increase, and to index it to inflation so that it rises with the cost of living.

"I thought we needed to index it because Democrats control Congress now, but if Republicans ever get back even one house of Congress, they'll never raise the minimum wage again," said Mississippi state Rep. Ricky Cummings (D), sponsor of the measure, which faces strong resistance in the narrowly Democratic state Senate and from Gov. Haley Barbour (R).

Barbour said the indexing provision would eventually raise Mississippi's minimum wage above that of neighboring states, which he argued would drive jobs away. "Alabama, Arkansas, Louisiana, Tennessee must be laughing up their sleeves," he said.

Ray Keating, chief economist at the Small Business and Entrepreneurship Council, said businesses are concerned about the populist mood in legislatures, particularly surrounding minimum wage indexing and health care.

"The minimum wage indexing is especially troubling," he said. "You'll see it most clearly when the economy slows down and job creation slows down. States that pushed to get their minimum wage ahead of the federal wage are going to feel it."

Minimum wage indexing bills are pending in Kansas, Nebraska, Indiana, North Dakota, Minnesota, Rhode Island, Texas, Utah, Virginia and Wyoming, but analysts said it is too early to tell whether any of them will be enacted.

As for universal health care, Keating said it is not "the type of proposal we'd hope to come from Republicans, who usually believe in restrained government, lower taxes and less regulation." He was referring to Schwarzenegger and former Massachusetts Gov. Mitt Romney (R), who steered a mandatory-coverage measure through his legislature and now is considering running for president.

The free-market approach is alive and well in some states, however. In Georgia, where Gov. Sonny Perdue (R) and Republican majorities in both houses were re-elected by large margins, Perdue has proposed solving the health-care crisis by emphasizing preventive care, exercise, healthful diets and access to cost and quality comparisons for medical care. He also called for tax incentives to develop more health care in underserved rural areas.

Arizona Gov. Janet Napolitano (D), who chairs the National Governors Association, said its annual meeting next month will focus on how to use government, particularly public schools and colleges, to foster an "innovation economy" that expands opportunity for people of all incomes.

Governors have called for expanded job training, pre-kindergarten and college scholarships for low-income students, all in the name of equipping more people to compete for higher-wage jobs.

In Arkansas, Beebe called for spending $111 million to provide preschool for all children whose families earn up to twice the poverty level. He also proposed scholarships for students in families earning under $25,000 a year. Colorado Gov. Bill Ritter (D) proposed a similar plan.

Napolitano linked health insurance to education in her State of the State address, saying healthy children are better learners and calling for state-subsidized coverage for children in families making up to $60,000. Republicans who control the legislature called the plan too generous and expensive.

"What I sense out there," Napolitano said, "is people asking: Where are we going as a country? What is the economic future that we're going to have? Are we really going to be the generation that hands off an economic future less bright than the one we were handed?"