In many statehouses in 2014, expansion will be discussed alongside revisions in how Medicaid is delivered and accessed. There could also be proposals to cover more low-income populations without expanding Medicaid, as Oklahoma and Indiana have done. But the idea of fitting Medicaid to needs and political dynamics within individual states is as old as Medicaid itself.

Ten governors last year floated income tax cuts, most with the rationale that these would help their states remain economically competitive. North Carolina Republicans successfully shifted to a lower, flat income tax. The North Carolina actions were watched by GOP legislators across the country, so look for more efforts along similar lines this legislative year.

President Obama’s effort to raise the federal minimum wage to $9 per hour is going nowhere, but this could increase the pressure on states and localities to take action. Spurred by federal stalemate, economic trends and public sentiment, several states will consider increases in 2014.

Courts and voters will play key roles in answering the next big question facing public pensions: Are current retirees immune to cuts? Mayors of five California cities facing large pension costs are seeking to get an initiative on the 2014 ballot that would give government’s authority to negotiate changes to existing employee pensions. Retiree health benefits would be affected as well.

In 2013, the U.S. Senate passed a comprehensive bill that linked enhanced border security with a pathway to citizenship for the country’s estimated 11 million undocumented immigrants. So far the proposal has languished in the House. But whether or not a new immigration law is enacted by Congress this year, the issue will remain a top priority in state capitals.

States’ experiments with immigration legislation largely involve bills to increase access to higher education. Lawmakers are also warming to the idea that states should issue driver’s licenses to noncitizens in the interest of public safety. Last year at least 10 states and the District of Columbia decided to grant driver’s licenses to undocumented immigrants, with the eligibility criteria varying by state. The move was largely a response to a new legal status proffered on some immigrants by President Obama’s 2012 executive order known as the Deferred Action for Childhood Arrivals (DACA) program. The federal order protects young undocumented immigrants from deportation, so long as they meet certain qualifications related to age, education, noncriminal status and military service. Since DACA went into effect, at least 25 states have considered proposals to extend driver’s licenses to this population.

State and local governments are grappling with how to care for their neediest residents amid diminished federal aid. The overall unemployment rate has fallen significantly over the past two years, but the economic recovery is leaving behind those at the bottom. The sequester that went into effect last March included a cut of $854 million to the Section 8 voucher program that helps low-income families pay their rent. If the sequester cuts are not reversed this year, the center estimated, the number of affected families could ballon to 185,000 by the end of 2014.

Given still-tight budgets, states may further examine ways to increase efficiency and help students graduate sooner, such as pushing universities to accept more transfer credits from community colleges. With rising student debt, financial aid changes should also loom large this year. In particular, talks could focus on finding a balance between merit and need-based student aid.

States that enacted extended pay freezes and benefit cuts in recent years might soon have an opportunity to reduce the pinch on state workers as revenues rebound. One of the more prominent issues is finding the right mix of pay and benefits. Although most states still offer competitive benefits, their cash compensation often lags so far behind the private sector that it’s difficult to attract and retain talent.

For all the talk about the importance of investment in infrastructure, the feds have kept transportation funding at stagnant levels. This fall, MAP-21—the federal legislation that decides how much the country will spend on transportation and where the money will come from—is set to expire.

As it stands, the use of drones is allowed by the Federal Aviation Administration (FAA) on a case-by-case basis, largely for public and research use by law enforcement agencies and universities. 2014 could see a great deal of drone legislation, as states try to draw up new laws to balance the security opportunities and privacy concerns that come with heightened drone use.

Best regards
und viele Grüße aus Charlotte
Reinhard von Hennigs
www.bridgehouse.law