The National Association of Legislative Fiscal Offices (NALFO) released its preliminary forecast of the top 10 critical issues facing legislatures in the next five years. The prediction is hot, hot, hot for many of the issues that are important to the AFT and its divisions, including AFT Public Employees.

Kathy Schill, a fiscal analyst for the Minnesota Fiscal Analysis Office and past president of NALFO, reviewed the NALFO forecast during a roundtable discussion with lawmakers and NALFO members at the National Conference of State Legislatures annual meeting in July in Salt Lake City.

#1 Healthcare Cost Containment

#2 Funding for K-12 Education

#3 Adequate Public Funding for Higher Education

#4 Constitutional Revenue and Spending Restrictions

#5 Tax Reform

#6 Impacts of Term Limits for State Legislators

#7 Retirement of Key Legislative Staff

#8 Prison Crowding and Demographic Changes in the Prison Population

#9 Financing and Replacing the Aging Public Infrastructure

#10 Changing Demographics in Society, Including Privatization of Government Services

None of the above issues should come as a surprise to members of AFT Public Employees, who have felt the effects of the state budget crisis. Nevertheless, the roundtable discussion provided insights into the direction state fiscal offices are preparing to go.

In general, overall healthcare cost containment, including prescription drugs and healthcare for the uninsured, will be a top issue, according to NALFO. The states’ burden for addressing healthcare cost containment will largely depend on what action the federal government takes or does not take. State fiscal offices will be monitoring congressional action on Medicaid programs—changes in mandates and participation—that will have an effect on state budgets.

Schill noted during the discussion that “the federal government’s favorite thing to do is clump things together, block grant it and cut it,” which creates funding challenges for states.

“Preserving legislative authority over arbitrary [revenue and spending] limits,” such as Taxpayer Bill of Rights initiatives, will also be among the critical issues, according to NALFO.

Many lawmakers attending the session also talked about the need for implementing legislation at the state level for the Streamlined Sales Tax Project (SSTP), which is a state-initiated effort to simplify sales and use tax collection and administration. Several dozen states support the SSTP in response to the federal sales tax ban on retail purchases made over the Internet, which is costing states countless millions in sales tax revenues.

But one participant from California acknowledged that pressure continues to be placed on state lawmakers not to raise taxes. “Grover Norquist sent a team last year to monitor every session where they thought the ‘t’ word would come up,” he said, referring to the president of Americans for Tax Reform, an anti-tax organization based in Washington, D.C. (Norquist is arguably “Washington’s leading right-wing strategist,” according to a May 2001 article in The Nation. “My goal is to cut government in half in 25 years to get it down to the size where we can drown it in the bathtub,” Norquist told The Nation.)