In 2023, all 50 state legislatures will convene, including biennial legislatures. Nationwide, state legislatures will spend months grappling with policies that will impact their state and constituents. And although each state legislature’s political makeup differs, several policy issues will trend, like inflation and the economy, infrastructure, women’s health and reproductive rights, health care, education, data privacy, cybersecurity, corporate social justice and environmental, social and governance, broadband and public safety.
Below is a readout of five policy issues that states have already pre-filed legislation on and will address this upcoming 2023 session.
Inflation. Inflation has impacted nearly every American nationwide and continues to be a dominant issue for federal and state lawmakers. President Biden recently signed the Inflation Reduction Act to combat the rise of inflation. The act aims to curb inflation by reducing the deficit, lowering prescription drug prices and investing in domestic energy production while promoting clean energy.
Currently, 19 states are offering a one-time tax rebate or credit to help residents adjust to the rising cost of living. States can provide tax rebates or credits because many have recorded a significant budget surplus. Tax rebates and credits aim to relieve Americans from the looming aftereffects of the pandemic and offset the rise in gas prices and the cost of children and child care. In 2022, Colorado sent tax rebates of $750 to individual tax filers and $1,500 to joint filers. Florida residents received a one-time payment of $450 per child as part of the Hope Florida—A Pathway to Prosperity program run by the Department of Children and Families. Colorado issued individual tax filers a $750 rebate and joint filers a $1,500 rebate. Oregon issued taxpayers who received the earned income tax credit on their 2020 state tax return and lived in the state for six months $600, and California distributed a Middle Class Tax Refund of up to $1,050 to qualified residents.
However, other states pending gas rebates, direct stimulus check payments, grocery tax cuts and income tax rebates for their residents are Kentucky, Montana, North Carolina and Pennsylvania. Kentucky’s Senate approved a $1 billion rebate for taxpayers in the state’s budget, but unfortunately, the measure has stalled in the House chamber. The rebate would distribute a one-time payment of up to $500–$1,000 per eligible household. In Montana, Republican lawmakers called for a special session to spend part of the state’s estimated $1 billion-plus surplus and authorize a rebate of up to $1,000 for homeowners and up to $1,250 to residents who paid state income tax instead of waiting for 2023. The legislature voted against holding a special session to consider the measure, so it remains unclear how the state will allocate dollars to their residents. North Carolina is debating how to issue benefits to its residents. With a $6.5 billion budget surplus, Democratic lawmakers would like to allocate $200 checks, while Republicans would like to see long-term tax reductions rather than a one-time rebate. Lastly, in Pennsylvania, a bill that would provide direct assistance to help pay for child care and household expenses is pending in the state legislature. The measure would provide households with an income of $80,000 or less a one-time $2,000 payment, and payments would be funded with the state’s surplus. But many Republican lawmakers oppose this approach and argue it would worsen inflation. As inflation concerns rise and states continue allotting budget surpluses, rebates and tax credits will likely be discussed in 2023.
State legislatures will also continue to tackle inflation by introducing legislation related to the minimum wage. Many states have already increased the minimum wage to $15 per hour, but now some states are considering advancing legislation that would raise the minimum wage. Hawaii’s Gov. David Ige (D) signed Act 114, which institutes a series of minimum wage increases. The minimum wage will increase by $2 every two years until it reaches $18 an hour on Jan. 1, 2028. Californians will vote on a ballot measure in 2024 to increase the state minimum wage to $18 an hour over several years. Several states also have an automatic minimum wage increase if the cost of living were to increase. Given the slow inflation decline, many states have already pre-filed measures addressing inflation and minimum wage increases.
Price gouging-related legislation will also be an avenue state lawmakers take to try and address inflation. In 2022, several states introduced fuel price gouging-related legislation, and some governors signed executive orders that banned fuel retailers from incrementally increasing the cost of fuel over a short period. In California, Gov. Gavin Newsom has convened a special session to address the high cost of gasoline and advanced a proposal to impose a financial penalty on “excessive” oil industry profits. Although fuel was the primary focus of price gouging in 2022, if inflation continues to rise, state lawmakers are likely to introduce price gouging measures that will also help prevent increases in energy, food and other essential commodities in 2023. Over 20 bills related to price gouging have been pre-filed in 2023, and many focus on the cannabis industry, fuel and prescription drugs.
Women’s Health. In June 2022, the Supreme Court of the United States (SCOTUS) made a historic decision to reverse Roe v. Wade. The ruling declared that the constitutional right to abortion no longer existed, and states were permitted to regulate reproductive health care. SCOTUS’ ruling was deemed problematic for abortion advocates and Democrats because GOP-controlled state legislatures either had a supermajority, where a legislative body has veto-proof majority status, one party that controls either three-fifths or two-thirds of both chambers, or automatic abortion “trigger-laws,” which is a legislation to ban abortion immediately, should Roe be overturned.
In Kentucky, Republicans have a supermajority in both chambers over Democratic Gov. Andy Beshear and an automatic abortion trigger law. So SCOTUS ruling to overturn Roe made abortion illegal in Kentucky from fertilization on Aug. 1, 2022, and any bills to reverse the current policies were likely dead on arrival, despite the governor’s support for abortion rights. Kanas is similar in that the state has a supermajority GOP control over Democratic Gov. Laura Kelly. And although constituents voted down the abortion ballot measure by 59% in 2019, it remains to be seen if state legislatures will introduce bills in the upcoming session. In 2022, 13 states had automatic abortion trigger laws: Arkansas, Idaho, Kentucky, Louisiana, Mississippi, Missouri, North Dakota, Oklahoma, South Dakota, Tennessee, Texas, Utah and Wyoming; however, several states are likely to introduce measures that will further limit access to reproductive health care. States that have pre-filed bills for 2023 that would prohibit doctors and physicians from performing an abortion and further limit access are Montana, New Hampshire and Texas.
On the contrary, some states will try to enact or strengthen laws to protect a woman’s right to choose, a doctor or physician’s medical license and funding for abortion clinics. State legislatures in New Jersey have pre-filed several bills to address funding and access concerns for reproductive health care. Additionally, governors’ races in Pennsylvania and Michigan sealed the fate of reproductive rights. Post-victory, Pennsylvania Governor-elect Josh Shapiro (D) maintained his pledge to protect reproductive rights in an all-Republican-controlled legislature, and Gov. Gretchen Whitmer (D) of Michigan said she “will fight like hell for reproductive freedom.” Pennsylvania and Michigan do not have a supermajority in both or either chamber. On the heels of a successful ballot measure effort to enshrine reproductive rights in the state constitution, California legislators will look to expand access and protections for out-of-state individuals seeking abortion services across state lines.
Other women’s health legislation that may trend in 2023 will be related to maternal health, particularly among racial and ethnic minority groups, veterans and other vulnerable populations.
Corporate Social Responsibility and Environmental, Social and Governance. Corporate Social Responsibility (CSR) and Environmental, Social and Governance (ESG) were trendy topics in 2022, and any legislation that did not advance last year is likely to resurface in 2023.
CSR and ESG combine self-regulating business models and standards that help a company be socially accountable for its behavior and actions and to its employees and the public. However popular, these issue items can sometimes be challenging to pinpoint, as they cover a broad landscape but more commonly include environmental and social impact policies, sustainability, LGBTQ+- and civil rights-related issues, voting rights and firearms regulations.
A wave of CSR and ESG-related issues can be expected in 2023 given the federal government’s recent bipartisan passage of the Respect for Marriage Act, legislation that codifies same-sex marriage nationwide and strengthens other marriage-equality protections, President Biden’s second announcement to ban assault weapons post the mass shooting in Colorado Springs, SCOTUS’ ruling to overturn Roe and on New York State Rifle & Pistol Association v. Bruen, which struck down restrictions to concealed carry and the demand to advance the John R. Lewis Voting Rights Advancement Act, a bill that would enhance voting rights by expanding and strengthening the government’s ability to respond to voting discrimination.
Some states may be more inclined to advance other kinds of incentives that better suit their constituents. Texas recently banned 10 financial firms from doing business in the state after discovering that the companies were avoiding investments in the oil and gas industry in favor of renewable energy companies. The ban is in response to recently enacted legislation that prohibits local governments and most state agencies from contracting with firms that have disassociated and cut ties with carbon-emitting energy companies. And Texas does not stand alone. Oklahoma lawmakers are considering a proposal that would have agencies dump investments in companies that eschew fossil fuels, and West Virginia is debating a bill that would let the state treasurer cease business with financial firms that boycott petroleum. Other states that have introduced or are considering anti-CSR and ESG bills are Louisiana, Kansas, New Hampshire and Wyoming. However, not all states are following in Texas’ footsteps. Last year, Maine enacted a law requiring the state to divest public funds from fossil fuel stocks, becoming the first state in the country to mandate disinvestment through legislation. Lawmakers in New York, Oregon, Virginia and Vermont are also taking up fossil fuel divestment legislation, highlighting the risks for climate change, while Massachusetts is tackling a bill that would require public pension fund divestment from ammunition and firearms.
Infrastructure. President Biden has signed two of the most transformative investment bills in America, the Build Back Better Act and the Infrastructure Investment and Jobs Act. The Build Back Better Act aims to lay the foundation for economic growth by improving access to family care and health, combatting the climate crisis and creating good-paying jobs to enable more Americans to join and remain in the labor force. The Infrastructure Investment and Jobs Act provides funding to modernize the nation’s roads, bridges, transit, rail, ports, airports, broadband and drinking water, and wastewater infrastructure, creates good-paying, quality union jobs and does not raise taxes. Additionally, the investments made in the legislation, combined with the Build Back Better Act, will add roughly 1.5 million jobs each year for the next decade, help reduce carbon pollution and improve air and water quality.
What is so unique about the Build Back Better Act and the Infrastructure Investment and Jobs Act is that both measures have historical and first-of-its-kind funding for electric vehicle (EV) fleets and EV charging stations and infrastructure. That, paired with most of the automobile industry’s new corporate pledge and goal to be carbon dioxide neutral in the next 15 to 20 years and EV sales climbing north of $6 million in FY21, means legislation related to EVs and developing infrastructure can be highly anticipated in 2023.
More than a hundred EV and EV charging station state bills have already been pre-filed for 2023 in states like Oklahoma, Montana, New Jersey, Nevada, Tennessee, Texas, Virginia and Wyoming. However, only some of the filed measures support the emerging market. In 2022, constituents and lawmakers who opposed legislation related to EVs and EV charging stations expressed concerns about range limitations and anxiety, cost, performance and infrastructure and opposed phasing out gas-powered vehicles in the years ahead. Additionally, several lawmakers expressed concerns about charging deserts in Black and Latinx communities and noted that such disconnection would further the wealth gap, increase disproportionate exposure to air pollution and relegate minority drivers to diesel-fueled vehicles.
To that end, the federal government’s most recent investments in the climate crisis and EVs industry could challenge those notions. Research shows that nearly two-thirds of Americans support incentives to increase the use of electric and hybrid vehicles, and 42% say they are very or somewhat likely to seriously consider purchasing an EV. Additionally, the U.S. departments of Transportation and Energy announced that all 50 states and the District of Columbia had submitted EV infrastructure deployment plans as required by the National Electric Vehicle Infrastructure (NEVI) Formula Program established and funded by the president’s infrastructure law. The submission of plans demonstrates the widespread commitment from states to build out EV charging infrastructure to help accelerate the adoption of EVs, create good jobs and combat the climate crisis.
On a global front, the U.S. remains focused on competing in the worldwide transition to clean transportation, which many lawmakers argue would ultimately lead to a safer, more affordable, cleaner mobility future. Legislation related to EVs and EV charging stations will likely try to address connectivity concerns across supply chains, facilitate the adoption of transformational technologies throughout mobility networks, identify the efficient use, substitution and recycling of certain materials in vehicles, seek to advance biofuel technologies and create good-paying, clean jobs.
State lawmakers and relevant agencies will also focus on allocating and, in some cases matching funding from the Infrastructure Investment and Jobs Act. For example, the federal legislation offers $65 billion in funding for broadband expansion and access, and states that are interested in participating in federally funded programs, like the Broadband Equity, Access and Development Program, must submit a letter of intent, initial proposal and final proposal and contribute at least 25% of the project costs. In 2023, states will remain focused on resolving connectivity concerns that the pandemic has exacerbated, particularly for low-income and rural communities, and pose barriers to employment, education and health care.
Amid nationwide water droughts, declining water quality and ongoing water crises, like in Jackson, Mississippi, and Flint, Michigan, state legislatures will also focus on improving water infrastructure in 2023. Like federal broadband funding, clean water programs require states to match federal dollars. The Infrastructure Investment and Jobs Act allocates $11.7 billion to the Drinking Water State Revolving Fund (SRF), a program aimed to assist public water systems in financing the cost of drinking water infrastructure projects needed to achieve or maintain compliance with the Safe Drinking Water Act (SDWA) requirements. States interested in participating must match 10% of funding for the first two years, and the percentage rises for projects approved over two years after funding becomes available. Currently, almost 50 pre-filed bills attempt to address water infrastructure in 2023.
Whether on the federal, state or local level, health care is top of mind for lawmakers nationwide, and it can be highly anticipated that bills related to combating the opioid epidemic, telehealth, mental health, Medicaid and Medicare, drug pricing and insulin will be introduced in 2023.
Coming off an almost two-year health pandemic, COVID-19 has wholly changed the nation’s response to public health emergencies (PHE), and, unfortunately, the pandemic has had long-lasting impacts on the nation’s health care system, one being Medicaid eligibility. During the pandemic, in qualifying states, the federal government provided increased Medicaid funding, which prohibited states from terminating most Medicaid enrollee’s coverage until after the PHE ended, meaning millions of Americans could stay covered without interruption to their plan. However, once the PHE ends, states will be required to “unwind” and review all of their enrollee’s eligibility for Medicaid, a process that is expected to last months. Although states were promised a 60-day warning when the unwinding process would begin, no such timeline has been announced. In 2023, state legislatures will grapple with a health care cliff and may also consider legislation expanding or contracting Medicaid and funding for the program.
The pandemic also impacted access to health care, which led to a sharp rise in telehealth. Telehealth allows long-distance patient and clinician contact, care, advice, education, intervention, monitoring and remote admissions and helps rural and remote communities. States like Montana, Missouri, New Jersey, Nevada, Texas, Virginia and Wyoming have pre-filed bills to expand telehealth access to their constituents.
Drug pricing and Medicare will also be front and center during the 2023 session. The Inflation Reduction Act contained a provision allowing Medicare to negotiate drug prices on medications with no generic equivalent and capped out-of-pocket spending for Medicare beneficiaries at $2,000 per year beginning in 2025. Although the states do not administer Medicare, it will significantly impact the cost of drugs like insulin. Currently, 20 states have passed legislation that caps insulin copayments. Meanwhile, California continues to move forward with a plan to manufacture its own generic version of insulin. Although beneficial to patients and consumers, not all lawmakers see the effectiveness of such policies. The political makeup of each state will ultimately determine what health care policies are introduced and enacted.
Our thanks to Brownstein Hyatt Farber Schreck for this report.
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