By the end of this decade, Governor Ned Lamont wants Connecticut to become the first state to deliver all government services digitally. Governor Kristi Noem anticipates that the advent of fifth-generation wireless technology will allow South Dakota to eliminate nagging gaps in internet service. And Governor Steve Sisolak intends for Nevada to develop into a model center for secure data storage, known as blockchain.
Around the country, state leaders are pursuing innovation because of its potential to reshape their economies. Even before state revenues were hit by the fallout from the coronavirus pandemic, most state economies were growing at a slower rate than before the past decade. Going forward, state revenue is likely to be restrained while service demands increase. The federal government, mired in trillion-dollar deficits and stymied by partisanship, is limited in how much it can help, notably in building infrastructure and combating the effects of climate change. That leaves it up to states to fill the void.
“Coming out of the Great Recession, it was hard for most states both to recover revenues and to catch up on the latest innovations,” says Michael Thompson, a Pew vice president who heads the government performance group. “Now, states are likely to encounter the same challenges until the fallout from the coronavirus settles. On the other hand, ignoring the advances in tech and data will only set states back further.”
The cast that will confront these changes will be unlike the one in 2010. Eight governors and 5,000 legislative seats are up for election this fall in voting that also will determine which party draws the legislative district maps next year. The Nov. 3 federal election also could have a bearing on how state lawmakers set policies on pressing national issues, and how they interact with Washington.
Shift From Coal to Fiber Brings Jobs Back to Western Colorado
In Delta County, Colorado, a rural area five hours west of Denver, two coal mining companies closed between 2014 and 2016. Nearly 1,000 jobs were lost, a devastating blow for a close-knit community of 31,000 residents—and the equivalent of losing 30,000 jobs in the Denver metro area.
Jobs, and people, had already been leaving Delta County before the mines closed: Between 2010 and 2014, the county experienced the largest population decrease in western Colorado. Meanwhile, lack of access to broadband kept new businesses from establishing themselves in the county—and forced some existing businesses to abandon the county, just as the coal companies did.
Colorado divides itself into economic development regions and, in 2015, Region 10, which includes Delta County, received a grant from the state Department of Local Affairs to prepare a broadband implementation plan for the county.
Region 10 partnered with the Delta-Montrose Electric Association (DMEA), a local electric cooperative that connects fiber to members’ homes, which awarded a contract to Lightworks Fiber & Consulting, a locally owned business, to build the network. Lightworks hired and trained former coal miners to lay fiber-optic cable. The company has become the largest private employer in Delta County, with about 100 workers—more than 80 percent of whom had been employed by coal companies.
Now, with robust broadband access, Delta County finds its population growing. People from urban areas seeking a quieter lifestyle can move to Delta County and work from home or from a co-working site. Maybe best of all, says Virgil Turner, Region 10’s broadband project director, some people who left the county are returning. “The kids who left to find a job are coming back home now,” he says. “And they’re bringing their friends.”
As in the past, The Pew Charitable Trusts will attempt in the 2020s to play a role supporting innovators. A decade ago, as the Pew Center on the States was taking off, Pew began helping states set policy on issues such as public-sector pension funding, corrections costs, and effective budget management. That work will continue as the organization embraces new challenges facing tomorrow’s generation, from improving access to the civil justice system to new protections for flood-prone areas.
For their part, state officials are asserting their influence over innovation policy with a sense of urgency. Gov. Phil Murphy entered office in 2018 with an ambitious plan to foster what he called a culture of innovation in New Jersey government, including a 10-course training program for state workers. Maine Gov. Janet Mills, saying that innovation drives growth, has established a “department of the future” to help carry out the state’s first economic development makeover in more than 20 years. Hawaii Gov. David Ige has dubbed his plan for embracing technology and innovation a “trajectory change,” aimed in part at generating all of the state’s electricity from clean, renewable sources in 25 years.
State leaders say they’re aggressively pushing new ideas because, as Ige says, “It seems that each year, change happens faster and faster.” When the 2010s began, Michigan lawmakers gave General Motors tax breaks so that the automaker would build an electric vehicle called the Volt at a Detroit plant. This year, also with state tax incentives, that same plant began producing an electric self-driving shuttle and a battery-powered, zero-emissions Hummer. The trend to driverless vehicles may reshape state economies and government revenues as fewer cars and parts will be manufactured, sold, and driven, reducing transportation-related jobs, motor fuel and vehicle tax collections, and income from driver fees as the autonomous vehicles change how many government services are delivered in everything from public safety to transporting schoolchildren.
Data will have the same impact on innovation.
Up to now, state officials have used data and evidence to evaluate performance outcomes, often tying funding to programs proven to work. Beginning in 2010, Results First, a project founded by Pew and The John D. and Catherine T. MacArthur Foundation, was instrumental in getting state and local governments to think differently about using data to inform their policy and funding decisions.
As this decade begins, the explosion of data is striking, and state officials are only beginning to grasp its power to inform their decision-making. The data is found in the routine administrative records that state agencies collect every day, from birth and death records to Medicaid participation to use of social services to vehicle registrations; add to that the ubiquitous personal data from smart devices, social media posts, web pages, crowdsourcing, GPS, and cloud computing, among other technologies.
As a result, almost overnight the ability of state officials to identify and analyze datasets has become a necessity in government. “Data is fast emerging as an asset as valuable if not more valuable than cash,” says Beth Blauer, executive director at the Johns Hopkins University Centers for Civic Impact. “In the next 10 years, government will begin to redefine public service and assign more and more value to people who have basic data use skills.”
Oregon and Other States Give Workers a Chance to Save for Themselves
Three years ago, more than a third of workers in Oregon didn’t have access to an employer-sponsored retirement plan. Small-business owners generally shied away from providing the plans, saying they were too costly to run.
So, Oregon policymakers decided to create a statewide pool that covers small businesses if they do not have their own plan and enables their employees to save their earnings through individual retirement accounts, known as auto-IRAs. Privately managed, the program, known as OregonSaves, sets a default employee contribution of 5 percent, and eligible workers are automatically enrolled, although they can opt out. The whole idea is to make retirement saving easier for workers and to help businesses offer a no-cost, low-burden benefit to their employees.
Although Oregon rolled out its program first, California, Connecticut, Illinois, Maryland, and New Jersey have developed similar plans, and at least four other states have created voluntary programs for employers. During the first year in Oregon, only 29 percent of eligible workers opted out, and the latest trends show increasing participation. The success has helped spur new legislation at the federal level to make it easier for businesses to join the pools and offer retirement plans to their employees.
“We all know just relying on Social Security as a vehicle for retirement income is not enough,” says Saleem Noorani, who owns three liquor stores in Oregon and served on an advisory committee representing business owners’ views to state lawmakers. “Any retirement savings plan is just another line item. I wanted to make sure for any small-business employer that this is as easy as it possibly can be.” He says that most small-business owners use simple payroll computer programs and that adding retirement deductions should be easy. “From then on it’s automatic—they won’t even see it.”
Data analysis could reveal trends, patterns, and connections in state services that would improve air and water quality, disaster response, public safety, traffic management, tax collection, and child care—and help fight the spread of disease. Data from multiple Texas agencies assisted authorities in determining which areas of Houston needed the fastest response during Hurricane Harvey in 2017. Data from jails and emergency rooms are behind a current effort in Connecticut to find permanent housing for people languishing in a cycle of jail, detox, emergency rooms, and homelessness.
The surge in data also could help state and local governments detect cyberattacks at a time when these threats are increasing. Last year, hackers with ransomware attacked governments in Louisiana and Texas, among other places. New Jersey has implemented a statewide monitoring system in which sensors detect network threats in all 21 counties and alert authorities of malicious activity. Officials say more innovative ideas will be needed. “We are on the front lines of a new battle, every day, in every state,” says Governor Doug Burgum of North Dakota. “We are under attack by hackers trying to access our infrastructure systems.”
Other pressing state problems—some old, some new—also are benefiting from novel thinking. The recent wildfires in the West, the rash of hurricanes, chronic flooding, and other violent natural disasters are putting an emphasis not only on costs, response, and mitigation, but also on how states take action on climate change. In a first, California Gov. Gavin Newsom is asking California voters to approve a $4.8 billion “climate resilience bond” in November to address risks from natural disasters, drought, sea level rise, and higher temperatures. Massachusetts started a Municipal Vulnerability Program, in which state officials award grants to local communities that assess their climate weaknesses and develop response plans.
How Utah Is Opening Its Civil Court System to Better Serve Citizens
By the time H. Dickson Burton, president of the Utah State Bar, sent his letter to the state Supreme Court, Utah’s civil legal system had broken down. Thousands of Utahans were on the losing side of problems with debt collection, disputes with landlords, foreclosure, and other small claims. Most did not hire a lawyer because they did not know how to find one or believed that the court costs would exceed the value of the case.
“Access to justice in Utah remains a significant and growing problem,” Burton said in his August 2018 letter. “There are times well before a court action when some simple advice from an attorney could prevent a problem or resolve a conflict.”
Out of Burton’s letter came one of the nation’s most ambitious efforts to reimagine the way the judiciary regulates legal services. The state Supreme Court named a working group that concluded that the legal community needed to find “disruptive innovations” to increase citizens’ access to legal services at an affordable cost.
The court established a new profession called the LPP, or licensed paralegal practitioner, who can charge lower fees than an attorney for carrying out many of the same tasks but cannot appear in court. The court also set up a pro bono system and recommended that lawyers provide at least 50 hours of free legal services a year to low-income Utahans.
The court and bar also recognized that advances in technology are driving a new market for legal services handled by nontraditional providers. “Technology, especially online legal services, exponentially increases the potential to improve access to justice,” said the working group.
Utah’s small claims courts were the first in the nation to pioneer online dispute resolution, or ODR, in which two parties settle disputes via communication on a computer or mobile device without having to hire a lawyer, take time off from work or show up in court. And now ODR projects exist in governments in two-thirds of the states and Canada, China, and Mexico.
Utah Supreme Court Justice Constandinos Himonas says if ODR proves successful, the digital platform could be used in traffic cases and misdemeanors, saving time for clerks, judges, and defendants. “The mind shift we have to get around here is, courts should be a thing, not a place,” he says.
Stephen C. Fehr spent three decades reporting about state government for The Kansas City Star and The Washington Post before joining Pew’s state fiscal team.
The rising interest in innovation policy coincides with daunting challenges for America’s youngest and oldest citizens. Vaping is addicting another generation, as smoking cigarettes did in previous generations. Youth suicide rates are rising at alarming rates, putting a focus on access to mental health care; Iowa, in response, has created a separate mental health system for children, and Ohio is pouring $675 million into K-12 mental health counseling and other wellness services. At the other end of the life span spectrum, state officials are preparing for an increasingly older population. By 2030, Californians over 60 will outnumber children under 18 for the first time. Gov. Newsom has called for a “master plan on aging” that addresses the growing demand for in-home care and transportation at a time of a nursing shortage.
Nurses are not the only workers needed in the innovation economy: States are undergoing a transformation of the workforce that requires higher levels of skills and postsecondary education in cybersecurity, sustainable agriculture, renewable energy, and bioscience. So, officials are thinking differently about how to train adults and teenagers. Alabama has created a School of Cyber Technology and Engineering for high school students. Vermont has enlisted Microsoft to help expand the state’s digital skills training. Indiana is using a grant from Google to offer coding training to people who are incarcerated to prepare them for jobs when they
are released.
One potential roadblock to implementing change is that the push for states to innovate comes at a time when angry differences between the political parties have seeped into many statehouses. These rifts could hamper progress on problem-solving, political leaders warn. “Let’s not allow anything dividing our nation to divide our state,” Republican Gov. Gary Herbert of Utah said in his 11th and final State of the State address in January. The goal is to put governance first by using data that promotes bipartisan, meaningful policy debates that lead to solutions.
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