State Government Relations Network Newsletter – January

Tips for Navigating the Safety and Economic Impacts of COVID-19 During 2021 Sessions

[vc_toggle title=”Ed Griesmer and Liz Malm, MultiState”]2021 will be another notable year for state budgets. States aren’t sure what a federal aid package might look like, making it difficult to plan. However, while revenue forecasts were dire at the start of the pandemic, they have steadily improved. We now rank nearly half of the states as having a “stable budget outlook,” with only a handful “facing significant challenges” (see our recent state revenue survey). Even so, we expect states to experiment with tax policy. Government relations professionals should keep an eye out for several policy trends: taxes on digital advertising or use of consumer data, taxes on high-income earners and wealth taxes, taxes on foreign business income (and continued conversation about the CARES Act and TCJA), and measures targeting executive pay.[/vc_toggle][vc_toggle title=”Pierce Haley, Serlin Haley”]Such a big challenge and so little time. While some states are seeing improved deficit predictions, state economies remain battered, state coffers are drained, and the continuing threat of COVID-19 poses logistical challenges to already-complex budget protocols. Many states are struggling with how to balance increased demands on their biggest budget items (education, Medicaid, unemployment, and other social services) without burdening their local employers and workforce with increased taxes and fees. What’s more, aid to state governments was largely cut from the most recent federal stimulus package. Can the new administration push through another, more generous appropriation, and will it do so before hard decisions must be made at the state level? This will be a key determinant in future budget negotiations.[/vc_toggle][vc_toggle title=”Michael Behm, Stateside Associates”]State legislative leaders and governors face the dilemma of quickly providing economic relief while also making necessary revenue adjustments that ensure fiscal health – such as targeted tax increases. But that range of actions could also include evaluating current tax incentives, legalizing new markets (gaming, cannabis, etc.), adjusting state tax codes to capture service-based economic activity, taxing high-earning individuals and industries, and looking for government program savings, especially in public health care. Many state actions will be dependent on the possibility of a federal stimulus. This means that governors’ budget proposals might suffer some dramatic changes based on whether more federal money is made available.[/vc_toggle] [vc_toggle title=”Ed Griesmer and Liz Malm, MultiState”]State policymakers will be stretched thin this year, so finding a way to stand out will be vital. In addition to the changes in lobbying wrought by COVID-19, there are many new legislative leaders and committee chairs. If government affairs professionals do not already have relationships with these lawmakers, they won’t currently have the traditional opportunities to establish them. As a result, consider (re)joining state associations, hiring on-the-ground support in key states, or experimenting with virtual advocacy approaches. For example, one firm in our network hosted virtual meet-and-greets during the 2020 elections between candidates and clients. The candidates appreciated the opportunity to “meet” business stakeholders, and the business community valued establishing relationships with future lawmakers.[/vc_toggle][vc_toggle title=”Pierce Haley, Serlin Haley”]Even more so than usual, state budgets will take precedence over all else on the legislative calendar, leaving other issues gasping for oxygen. Look for more stress on attaching legislation to must-pass budget bills. Messaging, such as maintaining viability and stressing what role an organization and/or its members play in a state’s economy via existing taxes and fees is key right now. And get creative with special sessions, which in many states should operate with a freer hand than usual.[/vc_toggle][vc_toggle title=”Michael Behm, Stateside Associates”]Manage your expectations! The 2021 session season is probably not going to be the year for expansive proactive advocacy efforts. There will certainly be the usual group of legislative issues (and challenges) that we see introduced every session, but the issues mentioned in question one are likely to consume the agenda. How you fit your priorities within these issues will be key to making progress and measuring success. Managing expectations among your leadership, internal and external clients should be among your first orders of business. This is going to be a season of singles and doubles and fewer homeruns.[/vc_toggle] [vc_toggle title=”Ed Griesmer and Liz Malm, MultiState”]Most states are following a hybrid model — lawmakers may be there “in person,” but many states aren’t allowing visitors in legislative buildings and are requiring lobbying and testimony to take place virtually. Many companies may still be hesitant about employee travel. At our last count, a little less than half of state legislatures are open to the public, but things are constantly in flux as states receive new information and case numbers evolve. MultiState is tracking state activity in this area here.[/vc_toggle][vc_toggle title=”Pierce Haley, Serlin Haley”]Half the states in 2020 made provisions for virtual sessions or proxy voting, and 30 states conducted at least some of their committee hearings online. Legislatures are now reconvening – and adopting new rules – in the midst of a post-holiday surge in COVID cases. The vaccine roll-out has varied widely from state to state, and those that allow in-person meetings will continue to be limited. Expect the trend toward virtual hearings to accelerate, at least until September.[/vc_toggle][vc_toggle title=”Michael Behm, Stateside Associates”]At the moment, less than 20 states will allow some kind of in-person committee participation (lobbying, testifying, etc.).  Most states will push virtual or remote testifying, but it is a fluid situation depending upon the severity of the pandemic. We also know that 22 state capitol buildings are currently closed to the public (including lobbyists) and that number is expected to increase as legislators begin convening. We also count 28 states in which the legislature is currently meeting or planning to meet in person. These numbers may change if state legislators test positive for COVID or if a vaccine rollout is accelerated in the next couple of months.[/vc_toggle] [vc_toggle title=”Ed Griesmer and Liz Malm, MultiState”]Pre-pandemic, the backbone of state advocacy was in-person meetings. If you needed to engage in the state legislature, you could travel there and build personal and organizational relationships. That’s a lot more difficult when you can’t travel. For many professionals, this means adjusting strategy in states restricting public access. Lawmakers have reported “Zoom fatigue,” or being overwhelmed by the amount of requests for virtual meetings, so on-the-ground representation is often key. In instances where you used to hop on a plane, you may have to hire local counsel to get the job done.[/vc_toggle][vc_toggle title=”Pierce Haley, Serlin Haley “]Expect to see more emphasis on grassroots campaigns, as advocates substitute a numbers game for face-to-face persuasion. Clients’ agendas will also adapt, becoming tighter and more focused. Policy makers and staff are now adept at utilizing virtual tools, and virtual client fly-in events often yield more participants than those done in-person. It’s an excellent way to keep key stakeholders engaged.[/vc_toggle][vc_toggle title=”Michael Behm, Stateside Associates”]In addition to limited access to capitol buildings, the fellowship among government affairs professionals and elected officials has been lost. Networking opportunities have evaporated over the last six months, with group meetings, campaigning and even receptions and fundraisers gone digital. The traditional post-session day activity of debriefing at the bar or a restaurant in a state capital is likely gone for this session as well. And so many government affairs managers – the road warriors – are grounded. This is a real problem because Government affairs is a relationship business; it’s a people business.[/vc_toggle] [vc_toggle title=”Ed Griesmer and Liz Malm, MultiState”]If you are unable to conduct in-person meetings, the best way to stand out in the crowded session is to find in-state representation. If that’s not a feasible option, you should build relationships with lawmakers before you need them. Start introducing yourself (even from afar) to those lawmakers that are important to your issues, and be sure to touch base with prior contacts to keep the relationship fresh. Building relationships with on-the-ground stakeholder groups can also go a long way.[/vc_toggle][vc_toggle title=”Pierce Haley, Serlin Haley”]We all have to be sensitive to each other’s risk tolerance levels and accept that there will be limits to what can be done in 2021 until vaccines are widely available. In statehouses that are open, if you are unable to participate in a way that you feel comfortable, try to schedule a follow-up call or Zoom meeting. For multi-state SGR professionals with wide territories there always has been the potential that hearings in different locations conflict, so use similar strategies or on-the-ground lobbyists and grassroots to reinforce your messages after an event.[/vc_toggle][vc_toggle title=”Michael Behm, Stateside Associates”]Lean on your contract lobbyist. Those with great relationships with leadership, committee chairs and key staff are going to be the real heroes in the upcoming session season. Lean heavily on the state elected officials’ organizations you participate in, such as policy-oriented groups and the 527 organizations. Ask the staff of groups you belong to connect you and warm up cold calls to elected officials.[/vc_toggle]

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