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Ridesharing Debate Heating Up

A revolution in personal transportation is underway in many major cities across the US, led by technology companies such as Uber, Lyft and Sidecar– collectively referred to as Transportation Network Companies, or TNCs. All of the major TNCs follow a similar model: a person uses an app on his or her smartphone to request a car. The driver receives notification of the ride request through the app, picks up the passenger in the driver’s personally owned vehicle, and takes the passenger to the desired destination. The passenger pays through the app using saved credit card information, and may then rate the driver and service.

The services have been described by users as simple, efficient, cheap and pleasurable – a stark difference from how many would describe the experience of trying to hail a taxi in any large metropolis. However, states, cities, regulators, lawmakers and insurance companies are trying to determine whether a person that works part- or full-time as a driver for a TNC is performing professional activities or personal activities with the vehicle. Proponents for TNC services refer to it as “ride-sharing”, while the growing opposition maintains that TNC services are nothing more than unregulated cab driving.

According to Robert Callahan California’s executive director of The Internet Association, via The Sacramento Bee, “The sharing economy and those who are disrupting established business models are definitely drawing the ire of traditional special interest groups, in this case in the transportation sector,” Callahan’s group represents a number of these TNC’s as they work their way through the legal and political fights that have popped up against them around the nation.

In addition to the many perceived quality-of-life benefits these companies provide, the Washington Post is reporting that the industry may have had a hand in reducing the number of DUIs in the Philadelphia area – a city which coincidently has banned these companies from operating. Such evidence has also been seen in Seattle, Washington, and San Francisco, California. Opposition groups, however, have referred to the services as both unsafe and unregulated; an argument echoed by many taxi companies who bemoan that the regulations they must adhere to do not apply to TNCs. As a result, regulators have been increasingly setting their sights on these new companies.

Over the past year oppositional attempts to regulate TNCs have begun to snowball – Arizona, California, Colorado, the District of Columbia, Florida, Georgia, Illinois, Maryland, New Jersey, Oklahoma, Pennsylvania and West Virginia all saw bills relating to these services during the 2013-2014 biennium. In Virginia, Uber and Lyft, the two largest TNCs received cease and desist notices from the state’s Attorney General, while Maryland’s Public Service Commission has proposed to regulate these businesses as a taxicab company, a move that would surely stifle their growth and innovation. With many of the large municipalities that TNC’s operate in also taking regulatory steps, it may be in their best interest to push for more lenient state-level regulation rather than a patchwork of municipal ordinances.

 

Arkansas Special Session

Arkansas Governor Mike Beebe called for a special session of the Arkansas General Assembly to discuss jail overcrowding and public school employee health insurance.  This session will begin on Monday June 30 at 4:00 p.m.
The proposed pieces of legislation include changes such as providing revenue to open 600 additional beds in Department of Correction facilities and the Pulaski County Jail and eliminating part-time employees from the Public School Employee Life and Health Insurance Program.

State Legislators Await New FAA Drone Rules

Legislation and regulations relating to usage of unmanned aircrafts, or drones, has been introduced in almost every state since 2013 in an effort to keep up with quickly advancing technology and to get ahead of federal regulators who are taking their time to define guidelines. Drones are typically used by the military and the Federal Aviation Administration (FAA) currently bans commercial drone use, but the FAA is expected to draft new rules by November.

The majority of the bills introduced focus on safety and privacy issues in connection with law enforcement using the drones to conduct surveillance, but the issues have broadened as more and more industries want to take advantage of the devices.

Already, numerous companies are looking to use drones for everything from agriculture, package and food delivery, facility surveillance, filming and even real estate sales. Web based giants Google has been in on the technology for some time, using it across the globe as a tool to map towns and cities as part of its maps and earth GPS projects used by millions.

The Association for Unmanned Vehicle Systems International, a trade association of unmanned aircraft and robotics companies, has urged the FAA to move quickly and allow exemptions for some industries. The group expects nearly 80 percent of commercial drones to eventually be used for agricultural purposes. Farmers use drones to monitor and collect data on the growth of their crops, fertilizer and pesticide effectiveness and even disease outbreak. On the other side of the issue, some cattle farmers are concerned with drones used to monitor their land for environmental issues.

To date, California, Illinois, Indiana, Iowa and Tennessee have all passed privacy related restrictions on the use of drones, likely to be one of the key issues that legislators will zero in on following the announcement of FAA rules. Similar bills are currently pending in 24 other states.

While states wait until the fall on the FAA’s draft rules, legislators are expected to work on their own proposals for the upcoming legislative biennium and companies will continue to engage and request exemptions.

Demystifying State Expansions of Medicaid

On Sunday, Virginia’s political world was rocked with the news that Sen. Phillip Puckett, D-Tazewell, would be resigning his seat in the Senate, allegedly in exchange for a GOP promise of high-profile jobs for both him and his daughter, who is awaiting confirmation to the state judiciary. Senator Puckett’s resignation and its potential implications roiled state Democrats, including the Governor who had pledged to expand Medicaid as a major part of his campaign platform .The resignation effectively handed the GOP full control of both legislative chambers, allowing them to pass a budget without an expansion of Medicaid. McAuliffe’s chances of expanding Medicaid now look slim – his only option now appears to be unilateral action, bypassing the state legislature, the legality of which is murky and would undoubtedly be questioned in court.

Virginia is not the only state that has gone through dramatic political theatre over the question of Medicaid expansion, and it likely will not be the last. The debate boils down to the question of what does the expansion of Medicaid mean for states and why are some so adamantly and steadfastly opposed to it? It starts and ends with money – Medicaid is a hugely expensive program that already takes up a massive proportion of state budgets. According to NASBO, the National Association of State Budget Officers, it accounted for 24.4 percent of all state budgets in FY 2013, ranging from a high of 35.8 in Missouri to a low of 7 percent in Wyoming.

Participation in Medicaid has historically been limited to specific low-income groups, including pregnant women, children, the elderly and the disabled. The program is partially funded by state governments, and partially by the Federal government. The Affordable Care Act, or Obamacare, sought to expand participation in Medicaid to all citizens who make less than 138 percent of the federal poverty level – a massive expansion that would inflate the number of those covered by the program by an estimated 17 million Americans. The cost to do this would be huge and, under the ACA this expansion was mandatory for all states.

The Supreme Court’s ruling in National Federation of Independent Business v. Sebelius found the section of the law requiring states to expand Medicaid to be unconstitutionally coercive of states, which in practicality left the expansion optional for the states. While the federal government has pledged to fully fund the cost of this expansion through 2020, following which it would fund 90 percent of the expansion, many states are skeptical and have pushed back, claiming that there is simply no room in their budgets to do so, with others doubting the federal government’s commitment to fund the program. To date, 26 states have opted for expansion, 20 have declined and four are currently considering proposals. The District of Columbia has also chosen to expand the program.

Predictably, the question of expansion has largely fallen under party lines – many of the states that have chosen not to do so tend to have conservative state legislatures and governors. This has left many of the so-called purple states, with divided governments such as Virginia and Maine, caught in the middle of bitter partisan battles. With the political landscape likely to shift following November’s elections, expect this debate to rage on through the 2015 legislative sessions.

Students Paying More and Getting More Out of Higher Education

Ask any parent you know who has or is considering sending a child to college and you will likely hear a similar reaction: the cost of it is prohibitively expensive and consistently on the rise. Many students are forced to take out massive loans to the extent that it has been called a crisis, with total student debt reaching upwards of $1 trillion. This spiraling growth of college cost and the necessity for student loans to cover these costs is inevitably leading families to the question: is it worth it?

Absolutely, according to The College Board’s 2013 report on trends in college pricing that highlights numerous trends in higher education, including the variation in tuition and fees charged by schools, enrollment patterns, institutional finances and college affordability. The report notes that the median income for families headed by a four-year college graduate is more than twice that of a family headed by a high school graduate. The New York Times concurred with this assessment, noting that Americans with four-year college degrees made 98 percent more per hour than those without four-year degrees; this figure is up from 64 percent more per hour in the early ‘80s. With the need for a college education glaringly apparent in today’s highly competitive economy, states are beginning to take the lead in finding ways to make school more affordable for those who most need support to surmount higher education’s financial obstacles.

Stateline has complied some of the most effective measures states have taken so far to get more students in school and on the path to graduate. Since 2008, states have increased their total financial aid spending by 28 percent in an effort to offset rapidly increasing tuition prices. Colorado recently implemented a six percent annual cap on tuition increases, while Iowa took this a step further and froze all tuition increases at state colleges and universities. NCSL has also compiled a list of states that are moving from a traditional enrollment-based funding model to a performance-based funding model that rewards colleges and universities for meeting specific goals such as graduating students on time.  It’s clear that states have begun to notice both the growing need for higher education to stay competitive in this country and the growing cost of tuition and fees gradually pushing more prospective students away from these important institutions. In the upcoming 2015-2016 biennium, expect more state legislators to begin to confront this issue head-on.

Some other major takeaways from The College Board’s report:

  • The average annual rate of increase in in-state tuition for public colleges and universities from 2003 to 2014 was 4.2 percent; for private nonprofit schools this figure was 2.3 percent.
  • From 2008 to 2014, increases in in-state tuition at public, four-year institutions ranged from 5 percent in Missouri to 70 percent in Arizona.
  • From 2002 to 2012, declines in family income ranged from 13 percent for the bottom quintile to 0.5 percent for the top quintile.
  • From 2001 to 2011, enrollment in public institutions grew by 48 percent in Georgia and Florida to 11 percent in Louisiana.