2017 Election Recap

By Danny Restivo and Brett Goldman (Posted 11/8/17)

Virginia

Democrat Ralph Northam defeated Republican Ed Gillespie with 53.9% of the vote to win the Virginia Governor’s seat Tuesday night. The Virginia race remained tight until Election Day. Several polls showed Gillespie and the Lieutenant Governor tied or within the margin of error days before the election.

800

Northam led in a RealClearPolitics poll by six points less than a month ago; it dropped to two points a week before the election. While both candidates refrained from personal attacks for the majority of the race, television advertisements with race-baiting and fear-mongering messages flooded the airwaves weeks before the election. Gillespie, a former Republican Party Chairman, ran advertisements blaming Northam for an increase in violence from MS-13 street gangs. Another television advertisement insinuated Northam would pass legislation to help restore gun rights for pedophiles. Meanwhile, Northam’s team tried to connect Gillespie to white nationalists who turned violent in Charlottesville, Va., over the summer.

On the policy side, Northam pledged to make community college and apprenticeships free for high demand fields like cyber security and early childhood education if they commit to a year of paid public service. In addition, Northam said he would create a $15 minimum wage and create a tax credit for small businesses that offer paid family leave. Northam said he wants to reinvest in traditional public schools. As a former Army doctor and a pediatric neurologist, he made healthcare a critical part of his campaign. He wants to expand Medicaid coverage to 400,000, but doesn’t want a universal system. However, he’s made comments suggesting a public option in the Commonwealth.

Northam intends to allow state agencies to create plans that limit carbon emissions, as well as joining state alliances with others states. Gillespie said he would provide a 10-percent state income tax to help grow business. The Republican placed immigration and public safety at the center of his campaign. Republican state legislators pledged to provide Gillespie with $1.5 million to support the Northern Virginia Regional Gang Task Force against gangs such as MS-13. Instead of expanding Medicaid in Virginia, Gillespie wanted to create interstate compacts that allow insurance companies to sell across state lines, a plan lobbied for by Republicans in Congress.

Both Northam and Gillespie said they would raise teacher pay, but Gillespie wanted to increase the number of publicly funded and privately-operated charter schools. Gillespie’s plan included an education savings account that allowed parents to transfer their children from public schools and receive 90-percent of the funding, something that did not appear to resonate with voters in VA.

Former Secretary of State Hillary Clinton won Virginia by five points in 2016, forcing Gillespie to distance himself from President Trump, who did not make campaign appearances in nearby Virginia. While Gillespie hinged his campaign on cultural issues like the preservation of Confederate monuments, Northam made the election a repudiation of Trump.

Governor-Elect Northam will now inherit a Republican-dominated state legislature.

In the Lieutenant Governor’s race, Democrat Justin Fairfax defeated Republican Jill Vogel. The Virginia’s Governor’s race overshadowed the Lt. Governor’s race, which runs on a separate ticket. Fairfax is a white collar attorney from Fairfax County, while Vogel has served as a lawyer from Fauquier County who’s worked on a number of GOP projects.

The lieutenant governor is a part-time office, which presides over the Senate and breaks ties when needed. The lieutenant governor also sits on various state boards and commissions, and can advocate for various causes.

New Jersey

Democrat Phil Murphy, a former ambassador to Germany and Goldman Sachs executive, defeated Republican Lieutenant Governor Kim Guadagno to win the 2017 New Jersey Gubernatorial election. 5114477740001_5638281926001_5638240949001-vs

Governor-Elect Murphy defeated Guadagno with 56% of the vote. This margin lined up with Murphy’s 14% lead a week prior to the election. Historically low approval ratings for Republican Governor Chris Christie hamstrung Guadagno’s campaign. Murphy tried to connect Guadagno to Christie while repeatedly characterizing the election as a repudiation of President Trump. Meanwhile, Guadagno tried to distance herself from the current Governor and the President. Guadagno tried to portray Murphy as an out-of-touch Wall Street liberal who only wants to tax middle income earners. The Lieutenant Governor said she would cut property taxes to help the middle class in New Jersey, who face some of the highest taxes in the country.

“Anybody who knows me, knows I’m not Chris Christie,” Guadagno said during an October debate. “I’m running on my own record.”

Murphy raised $13.3 million during the campaign, compared to Guadagno’s $3.9 million.

Governor-Elect Murphy seeks to increase taxes on wealthy individuals and companies to help pay for education programs, government retirement funds and transportation infrastructure. Governor-Elect Murphy’s progressive platform also included a public bank of New Jersey to help spark small business growth. He says his plan will not increase taxes on the middle class.

Serving as Murphy’s Lieutenant Governor is Sheila Oliver, the former Democratic Assembly Speaker. The Essex County native is the first African-American woman to ever hold the post in New Jersey and only the second African-American woman in America to become Speaker of a State House. In 2013, she ran in the Democratic primary to fill U.S. Senator Frank Lautenberg’s seat. She finished fourth in a primary that ultimately went to Corey Booker.

Key Legislative Races in NJ

LD-2
Republican Assemblyman Chris Brownousted Democratic incumbent Colin Bell, who had been appointed to fill the final few months of the late Senator Jim Whelan’s term after Whelan died unexpectedly.
The candidates and outside special interest groups spent more than $4.6 million on the race — the second-most of any legislative election this year.
Assemblyman Vince Mazzeo (D) retained his seat, and Democrat John Armato filled the open seat vacated by Brown.
 LD-3
 
State Senate President Stephen Sweeney,considered to be the most powerful lawmaker in the state, stood up to non-stop attacks from the state’s largest teachers union to hold on to the seat he’s held in this rural south Jersey district since 2002. Senate President Sweeney defeated Challenger Republican Fran Grenier.
The New Jersey Education Association spent more than $5 million in an effort to unseat Sweeney, helping the race become the most expensive legislative contest in New Jersey history.
LD-7
In the 7th district, Democratic Assemblyman Troy Singleton won the state Senate seat being vacated by Republican incumbent Diane Allen, who is retiring. Singleton was highly favored to win over Republican John Browne
 LD-11
Democrat Vin Gopal, the former Monmouth County Democratic Party chairman, ousted Republican Senator Jennifer Beck, a veteran lawmaker, to win the Senate seat in this Monmouth County district.
 LD-13
Republican Assemblyman Declan O’Scanlon defeated Sean Byrnes in the race to replace retiring State Senator Joe Kyrillos. As O’Scanlon moves up to the Senate, Monmouth County Freeholder Serena DiMaso (R) will fill the open Assembly seat. Incumbent Assemblywoman Amy Handlin will also retain her seat in the coming term.
 LD-16
Incumbent Republican State Sen. Kip Bateman repelled Democratic challenger Laurie Poppe.
In the race for the district’s two Assembly seats, incumbent Democrat Andrew Zwicker and his running mate, Roy Freiman, defeated Republicans Donna Simon and Mark Caliguire in one of the most hotly contested races in New Jersey. Assemblyman Zwicker ended up with 27% of the vote with nearly all 182 precincts reporting in.

Georgia

In Georgia’s of Representatives, Democrats gained three legislative seats following Tuesday’s special elections. 

Deborah Gonzalez beat Houston Gaines to represent the 117th Legislative District, representing the Athens area. Gonzalez replacing former Athens Republican Rep. Regina Quick, who resigned her post after being appointed to a judgeship in August.

In Georgia’s 119th Legislative District, also in the Athens area, a four-way race to replace retiring Republican Chuck Williams went to first-time Democratic candidate Jonathan Wallace. Wallace, a software engineer, fought off three Republicans to win the seat outright in the traditionally conservative district. Williams was appointed in August to head the Georgia Forestry Commission.

In Atlanta’s 6th Senate District, Democrats Jaha Howard and Jen Jordan topped a field of eight candidates in the race to replace former Sen. Hunter Hill. Hill, a Republican from Smyrna resigned from the Senate to run for governor. Democrats Jaha Howard and Jen Jordan will now face off in a runoff election on December 5th, 2017. Regardless of the outcome, the seat will fall into control of the Democrats, propping the party up for what will no doubt be an eventful 2018 in Georgia.

Philadelphia Municipal Elections

In 2017, Philadelphia saw some of the highest turnout for an off year municipal election in recent memory.

In a heavily contested race to replace disgraced former District Attorney R. Seth Williams, Progressive Democrat Larry Krasner came out as the victor against Republican Beth Grossman with nearly 75% of the vote. Krasner made headlines during the 2017 primary with his agenda focusing on reducing the prison population and focus on bail reform (among other issues). Couple with a large infusion of cash from Billionaire George Soros, Krasner managed to handily win the 7 way primary. Many political insiders believe that even with a mandate, Krasner will have an uphill battle moving his agenda forward especially with a currently adversarial relationship with the City’s police union.  

In addition to the Office of the District Attorney. Philadelphia saw a major change during the 2017 Democratic Primary when Rebecca Rhynhart ousted City Controller Alan Butkovitz. Rhynhart’s unprecedented and unexpected victory was seen as a major blow to the City’s already reeling democratic machine.  During the general election, Rhynhart, a former member of the City’s Finance Department, easily beat Republican Mike Tomlinson.

Ohio Ballot Measure Fails

79% of Ohio voters rejected a ballot measure that sought to curb prescription drug prices paid by the state for prisoners, injured workers and poor people. An estimated $70 million was spent by in opposition of Issue 2, the Ohio Drug Price Relief Act.

Opponents led by the Pharmaceutical industry said it would reduce access to medicines and raise prices for veterans and others. Supporters led by the California-based AIDS Healthcare Foundation, spent close to $17 million, arguing that it would save the state millions of dollars and could force the industry to reduce prices elsewhere.

Maine Medicaid Expansion Passes

59% of voters in Maine decided on Tuesday to expand access to Medicaid under the Affordable Care Act, making the state the first in the nation to settle the issue by referendum.

Maine is among 19 states whose Republican governors or legislatures have refused to expand Medicaid under Obamacare. States such as Utah and Idaho that have been staunch hold outs are watching this initiative closely, as newly formed groups are working actively to get a Medicaid expansion question on next year’s ballot in both states. This outcome may offer insight about how this issue resonates for votes in next year’s midterm congressional elections.

Election Security at the State and Federal Level

 By Danny Restivo & Christopher Biermann (Posted 11/6/17)

 In late September, the Department of Homeland Security (DHS) notified election officials in 21 states they were targeted by Russian hackers during the run-up to the 2016 election. While DHS officials previously said cybercriminals had attempted to breach state databases, they never identified the states. After contacting election offices in all 50 states, the Associated Press confirmed the states; they include swing states like Florida, Ohio, Pennsylvania, Wisconsin and Virginia.  Other states targeted were Alabama, Alaska, Arizona, California, Colorado, Connecticut, Delaware, Illinois, Iowa, Maryland, Minnesota, North Dakota, Oklahoma, Oregon, Texas and Washington.

While the hackers did not manipulate voting machines, they did access voter registration files in two states. In Illinois, they breached a voter database and compromised the identities and personal information of 90,000 voters. In Arizona, hackers stole the username and password of a single election official. Nineteen other states reported they were targeted but no information was breached.

The DHS announcement raised the ire of elected officials charged with investigating claims of Russian meddling in the 2016 election.

“It’s unacceptable that it took almost a year after the election to notify states that their elections systems were targeted, but I’m relieved that DHS has acted upon our numerous requests and is finally informing the top elections officials in all 21 affected states that Russian hackers tried to breach their systems in the run up to the 2016 election,” said Sen. Mark R. Warner (D-Va.), vice chairman of the Senate Intelligence Committee.

In lieu of mounting public pressure, local and state officials, including the National Association of State Secretaries (NASS), have begun working with the FBI, the Department of Homeland Security and other federal agencies to improve communications between local, state and federal entities. Since former President Barack Obama designated elections as critical infrastructure in 2016, states can now access federal cybersecurity tools and intelligence briefings from federal agencies.  On October 15, the DHS organized a meeting with top election officials from around the country. The 28-member group called the Government Coordinating Council hashed out communication lines between local, state and federal agencies.

In September, the U.S. Election Assistance Commission—the federal commission created by Congress following the 2000 election controversy—along with the National Institute of Standards and Technology, announced an overhaul of voluntary guidelines for states purchasing new voting equipment. The guidelines aim to create a trail for electronic votes, data interoperability among voting systems, logging of user access for election tools and limits on who gets access and under what circumstances. These measures tighten up physical security by making sure any attempt to tamper with voting gear leaves evidence. The goal is to improve security and reliability for non-government vendors involved in the election process, specifically the small number of companies that manufacture polling equipment. All these initiatives intend to support state governments overseeing the election process. Several state secretaries have voiced concern over perceived encroachment by the federal government but remain committed to securing the integrity of their elections.

“The DHS designation of our election systems as critical infrastructure was a controversial move that NASS opposed last February,” said NASS President Connie Lawson, who serves as Indiana’s Secretary of State. Her statements came after EAC guidelines were released and the Government Coordinating Council convened earlier this month. “However, we have worked hard with DHS and the EAC to set up this coordinating council and ensure that the designation does not have a negative impact, thereby helping to increase public confidence in our elections process,” Lawson said.

The U.S. does not have a federalized voting system—relying instead on 9,000 different voting jurisdictions and more than 185,000 individual precincts. Under these circumstances, some believe a successful hacker will have a limited effect on the vote, but questions regarding the vulnerability of voting records, registration and vote tallying-machines linger.

In June, more than 100 cybersecurity professionals, election administration, bipartisan lawmakers, professors, tech and business experts, sent a letter to congress on behalf of the National Election Defense Coalition. The NEDC urged congress to take action to secure elections and maintain confidence in the democratic process. They offered three recommendations:

  1. Establish voter-verified paper ballots as the official record of voter intent.
  2. Safeguard against internet-related security vulnerabilities and assure the ability to detect attacks.
  3. Require robust statistical post-election audits before certification of final results in federal elections.

“While there has been encouraging progress to improve election security in recent years, too many polling stations across the nation are still equipped with electronic machines that do not produce voter-verified paper ballots. Many jurisdictions are also inadequately prepared to deal with rising cybersecurity risks,” the letter read. “We are writing to you as members of the computer science and cybersecurity communities, together with statisticians and election auditing experts, to convey our concern about these and other vulnerabilities in our voting system and to urge you to take the following simple, straightforward, and cost-effective actions to set meaningful standards to protect American elections.”

In early October, Sen. Ron Wyden (D-OR) wrote a letter to election technology manufacturers. Wyden asked the companies to detail their protocols, and whether they used outside experts who follow best practices. He sent letters to Dominion Voting, Election Systems & Software, Five Cedars Group, Hart InterCivic, MicroVote and Unisyn Voting Solutions. Wyden also sent letters to two voting system test laboratories accredited by the U.S. Election Assistance Commission.

“As our election systems have come under unprecedented scrutiny, public faith in the security of our electoral process at every level is more important than ever before,” Wyden said in his letter. “Ensuring that Americans can trust that election systems and infrastructure are secure is necessary to protecting confidence in our electoral process and democratic government,”

In April, Rep. Hank Johnson (GA-D) reintroduced the Election Infrastructure and Security Promotion Act of 2017 (H.R. 1907).  The bill would require the Department of Homeland Security to maintain a critical infrastructure designation for all voting systems, while also limiting the purchase of any new systems that do not provide voter-verified paper ballots. It would force compliance with standards developed by the National Institute of Standards and Technology for operational security and ballot verification. Johnson’s bill, which has 34 Democratic co-sponsors, would also establish programs that promote research and innovation in voting technologies. While federal lawmakers and agencies provide assistance, several states have initiated their own programs to strengthen security.

West Virginia

 In September, Republican Secretary of State Mac Warner announced a partnership with the West Virginia Air National Guard to assess election systems and monitor cyber security. The State Division of Homeland Security and Emergency Management has helped facilitate a partnership, which aims to “to anticipate, to prevent, and monitor criminal and terroristic activities in the state.”

“We will use every resource available to protect our democratic process, ensure voting accuracy, protect voter’s private information, and give the confidence that our state agencies are working together to combat every threat,” Warner said, West Virginia has a host of state and federal seats open in 2018, including a U.S. Senate seat.

Illinois

 Illinois experienced the most serious voting records breach in September. As a result, the state legislature approved a law on October 26 requring notification of cybersecurity breaches to residents within five days. The bipartisan legislation also requires government organizations or agencies to report breaches to the Chief Information Security Officer in the state technology office within 72 hours. However, the CISO can withhold information regarding a breach if an investigation deems it necessary. Illinois has also passed laws mandating cybersecurity training for state employees while announcing a strategy designed to unify cybersecurity operations across 62 state agencies.

Virginia

 The Commonwealth has a gubernatorial race in 2017 that could significantly impact the nation’s political landscape. Virginia was among those targeted by Russian hackers in 2016. While authorities say nothing was breached, election officials have begun taking steps to mitigate vulnerabilities. In September, the Virginia Board of Elections ordered 22 counties and towns (VA has 95 counties) to adopt paper-backed balloting machines before the November 2017 election because of outdated electronic machines.  The decision stems from a 2017 cybersecurity convention in Las Vegas when hackers breached the state’s voting system. Governor Terry McAuliffe had tried to replace the Commonwealth’s outdated voting machines in 2014, but the Republican-controlled legislature had cut funds from the state budget. Virginia has also provided cybersecurity training to detect phishing attacks and protect passwords. The state has also begun working with federal agencies, including the DHS.

Colorado

 In mid-July, Colorado became the first state to enact a post-election auditing system that cyber security experts have long-supported. Known as a “risk-limiting” audit, the Colorado State legislature approved a law in 2009 mandating the procedure, but after several years of testing, it extended the deadline to 2017. The audit allows state officials to sample and compare paper ballots to electronically cataloged results of those ballots.

In a risk-limiting audit, state officials select a sample of paper ballots — usually the margin of the outcome — and compare them using statistical methods to ballots cast electronically. The audits aim to determine whether a comprehensive recount is justified. Digital security experts have applauded Colorado’s program for its accuracy, as well as its state-focused approach, which does not include federal oversight. Colorado will publish its auditing software under a free license so other states can download and modify for their own use.

Rhode Island

 Rhode Island has taken several steps to shore up election security. In April, the state hired its first cybersecurity officer. The new officer, Mike Steinmetz, will develop a comprehensive state strategy and serve as Governor Gina M. Raimondo’s cybersecurity advisor. In September, the Rhode Island state legislature approved a bill giving the Board of Elections power to conduct risk-limiting audits, similar to the initiative in Colorado. In mid-October, cybersecurity experts convened a forum to share tools and expertise on how to guard against cyberattacks.

Washington

 In late September, Washington director for elections said the state was embarking on a pilot program to improve the elections process. The program, which will partner with the DHS and the Multi-State Information Sharing & Analysis Center, aims to improve the assessment of vulnerabilities and identify mitigation plans; improve the sharing of information; improve the reliance on DHS for local in person support, and reporting of incidents or threats. Washington has employed a paper-based system which includes voter verifiable audit trials. There’s also an emphasis on having pre and post-election audits as well as independent testing.

Other Efforts

 While state and federal agencies work to improve security at the polls, President Donald Trump has launched a Voter Integrity Commission to investigate claims of voter fraud. However, a lack of evidence has sparked intense pushback from both Democrats and Republicans who want to keep the focus on foreign meddling in election process. The Commission also threatens to undermine state efforts by requesting sensitive voter information, further increasing vulnerabilities, as well as reallocating scarce resources. “As states try and create programs to enhance security, some cash-strapped governments may require federal assistance,” says Eric Martins, DMGS Managing Director.  Martins added “however, if the White House is focused on voter fraud allegations, states in desperate need of secure IT infrastructure could become incredibly vulnerable for future elections.”

The Rise of Cities in NJ: Part 1

By Danny Restivo (posted 10/30/17)

New York City’s cost of living is 120 percent higher than the rest of the country. With 8.3 million people and an average home price of $501,000 (average home price in United States is roughly $181,000), prices have begun to push city dwellers from Brooklyn and Manhattan into less-expensive areas that remain within close proximity to the city. As a result, portions of New Jersey—specifically North Jersey—have turned into prime real estate markets.

Many of these locations have transformed from working class neighborhoods to destinations for young professionals. Economic realities and shifting demographics have fueled this migration. Millennials, with an interest in keeping their living space, work space, and social lives in close vicinity to one another, have rebooted places like Hoboken, Newark, and Jersey City. However, the conflict between urban pioneers moving-in, and long-time residence seeking affordability, has pushed affordable housing into the 2017 gubernatorial debate.

Democratic candidate Phil Murphy has proposed using hundreds of millions of dollars from the Department of Justice’s Residential Mortgage-backed Securities (a multi-billion dollar reparations account funded by Wall Street fines) to pay off the state’s housing loans, and then turning those newly paid-off homes into affordable housing. Republican candidate Kim Guadagno has pledged to cut property taxes in the Garden State, which has one of the highest in the country. Guadagno’s property tax ‘Circuit Breaker’ would cap the school portion of a homeowner’s tax bill at 5-percent of their household income.

It seems neither plan will stymie development in North Jersey. Although many have welcomed the change, some local officials have begun pushing back on plans to develop portions of North Jersey. Michael McPartland, the Mayor of Edgewater, a 3.5-mile stretch of land along the Hudson River, stopped a 2014 plan to develop 1,863 apartments in five high-rise buildings. McPartland said the proposal was far too big, and would increase congestion while also straining the community’s limited infrastructure. Since 1990, Edgewater’s population has nearly tripled from 5,000 to 13,000, with most residents coming from newly developed regions in Northern New Jersey, like Hoboken and Newark. The developers have now taken the city of Edgewater to court.

With prices in New York City continuing to rise, many Manhattan and Brooklyn residents continue to seek more for less in North Jersey. Here are some cities in New Jersey harnessing real estate interest to improve their respective communities, while also protecting middle and working class residents from increased property taxes and rents.

Jersey City

In early 2017, the New York real estate blog Curbed voted Jersey City as the best neighborhood of the year. From 2010 to 2014, Jersey City experienced a 6-percent population increase, reaching 262,000. Many of these newcomers include millennials.

Mayor Steve Fulop claims 650 small businesses have opened over the past three years (many of them include bars and restaurants); and it makes sense: It’s a 10-minute train ride to the World Trade Center Transportation Hub in Manhattan, fueling Jersey City’s appeal among city workers. In 2016 there were more than 7,000 units of housing under construction with more than 19,000 already approved, more than any other city in New Jersey.

According to Trulia, an online real estate website, median rent for one-bedroom apartments in the city’s four largest zip codes rose from $1,395 in October 2014, to $1,590 in September 2017. Jersey City’s housing affordability has emerged as a key issue in the 2017 mayoral race. Mayor Fulop has said the city will not support tax abatements for development projects that do not include affordable housing. Fulop had tried to include an ordinance requiring 20 percent affordable housing for any development receiving tax abatements, but many developers pushed back forcing the measure to stall.

Former City Attorney Bill Matsikoudis, Fulop’s mayoral challenger, has written a policy paper outlining affordable housing plans in Jersey City. His policy would require that all development plans include affordable housing, while also revising rent control laws for buildings with fewer than five units. Matsikoudis also wants to open a city office for affordable housing to help connect residents with vacant units.

Hoboken

Hoboken’s revitalization began in the late 1970s and early 1980s when the working class area used state funds to refurbish historic brownstone homes to improve housing options.  With one of the shortest commutes into Manhattan, and one of the smallest towns by area at 1.275 square miles, Hoboken has turned into a destination for Manhattan families seeking more space for their dollar. In 2016, the median value of a home cost more than $747,000, a 12-percent jump from 2015 to 2016.  Since 2000, Hoboken’s population has increased 28 percent with roughly 15,000 newcomers in the past 16 years. Hoboken’s growth stems from corporations like Goldman Sachs and Ernst Young moving across the Hudson River to take advantage of lucrative Garden State tax credits.

 

To keep Hoboken a mixed income community, city officials announced plans to create 115 affordable housing units in February 2017. Affordability requirements are based on income and household size. The announcement was born from an ordinance that requires 10 percent affordable housing for resident construction projects with over 10 units when an increase in density is provided. Hoboken has also adopted the Affirmative Fair Housing Marketing Plan and a guidebook for policies and procedures that placed eligible families into housings units.

“Dozens of new affordable housing units under construction throughout our city will help to ensure that Hoboken remains a vibrant mixed income community,” Hoboken Mayor Dawn Zimmer said after the affordability requirements were announced. “We have created procedures to make sure that these affordable housing units are available to those who need it most through a fair and open process.”

Newark

Once a symbol of urban decay, crime, and poverty throughout the 1980s and 1990s, New Jersey’s most populous city has turned into a vibrant metropolitan area.

In 2016, there were $2 billion in commercial and residential development with 1,500 units of housing under construction and another 4,000 in planning. After more than 60 years of population decline Newark finally had a 1.7 percent increase in population in 2010, with subsequent increases the following years (Newark’s peak hit 438,000 in 1950, but dipped significantly in 1970 and 1980). Part of the revitalization stems from business investments by Prudential Financial and Goldman Sachs, which have invested $368 million and $500 million into the city, respectively.

Vacant lots across the city have now turned into real estate projects, including a $94-million mixed use facility that houses a grocery store, retail shops and residential space. A large scale department store built in 1901, which sat vacant for nearly 30 years, became a 160-room-luxury apartment space and home to Newark’s first Whole Foods after a $174 million investment. A few blocks away, a developer has partnered with Prudential to restore a 20-story tower built in 1929 for the New Jersey Bell Telephone Company. The building will now serve as a 260-unit rental apartment building.

While some city leaders have lauded the turnaround and future potential, Newark Mayor Ras Baraka has introduced policies to keep a city with one of the highest poverty rates in the country affordable.  Baraka’s plan, titled Newark 2020, aims to hire 2,020 unemployed residents at full-time jobs with living wages over the next three years. The city has partnered with Prudential, RWJBarnabas Health, United Airlines and Audible. In early October, The Newark City Council, with the Mayor’s support, approved an ordinance that ensures new projects with 30 or more residential units maintain 20 percent affordable housing.

“This is a groundbreaking step in housing development in Newark and a pioneering step for all of America’s cities,” Baraka said after the vote. “Once again, Newark is leading the way, defining to the nation how a city cares for its residents, and what a city should be.”

Weehawken

 At 1.4 square miles and bordering Hoboken to the North, Weehawken has experienced a 25 percent increase in median home values over the past year, the largest increase in the Garden State. Like many other North Jersey communities along the Hudson River, Weehawken’s growth stems from home buyers priced out of markets in New York City, as well as Jersey City and Hoboken. The explosive growth along the city’s waterfront includes construction of a 589-rental unit building, 177 condominiums and two apartment buildings with more than 500 units. Subsequently, home values have reached a median cost of $757,000, compared to $488,000 in 2012. Real estate website Zillow projects that number to reach $809,000 by 2018. Historically, Weehawken’s residential communities were atop the 180-foot high cliffs known as the palisades, but development below along the Hudson River waterfront has created a viable living space for those commuting into New York City via ferry or the Lincoln Tunnel.

The development has also lead to an increase in taxes for a community that has the highest bill in Hudson County. Moreover, a state judge ordered Weehawken to complete a new tax map in 2015. The suit says a failure to conduct a revaluation on older properties, while assessing new ones at market value has created an unfair tax burden on waterfront property owners.  With a judge’s order, older residents could see their property taxes increase starkly, making affordable housing in Weehawken a looming issue.

Future Housing Trends in New Jersey

 

According to a 2017 report released by research advocates New Jersey Future, while the Garden State’s millennial population is declining, the 22-34 old demographic has fueled much of the real estate growth in places like Hoboken, Newark, and Jersey City. However, due to the cost increases, the report has indicated a potential for those areas to lose more millennials in the future. The report, and many others like it, finds millennials are more inclined to live in walkable, compact urban areas, compared to previous generations that settled for more suburban, car-focused locations.  The NJ Future report urges the state to encourage more development of housing in compact or urban regions in an effort to retain younger people. Fortunately, The Garden State has many comparable locations that could support such housing. This shifting focus raises questions on what happens to regions with older residents where millennials aren’t interested in home buying. Some believe older residents could ultimately move into more compact areas with amenities or services. In any event, New Jersey’s urban and suburban landscapes could look drastically different in the coming years.

Note- This is the first in a multi-part series on the rise of Cities in NJ. Next time, we’re going to take a deep dive into Camden.

The Future of Smart Cities

By Danny Restivo (posted 9/18/17)

In 2015 a New Orleans home fire killed three children, a mother, and a grandmother. Because the family did not have a smoke detector, the New Orleans fire department wanted to create a program to accurately identify vulnerable neighborhoods with homes that may not have the devices. With the help of a New York-based tech firm, the New Orleans Office of Performance and Accountability began using analytics to identify vulnerable areas.

The team gathered information on neighborhoods with young children, elderly populations and dilapidated homes. While the fire department had issued smoke detectors previously, they were only offered to people who requested them. Under the old program, the fire department gave away 800 smoke detectors. The new analytics program helped install 18,000 smoke detectors since beginning in 2015. A few months after the program began, fire trucks arrived at a residence with 11 family members outside their burning home. They were awakened by a smoke detector recently installed by the outreach program.

Image result for city data

The New Orleans smoke detector program illustrates the benefits of using data to increase public safety. The advent of new technical applications has given municipal administrators access to information on public health, housing, transportation, crime, infrastructure and more. Additionally, the data provides administrators with the ability to increase efficiency and improve essential services. As population’s increase, and more citizens flock to larger urban areas, cities will need to ensure efficient allocation of resources for healthy and sustainable communities.

According to the United Nations, 54 percent of people lived in cities in 2014, but that’s projected to grow to 66 percent by 2050. Cities have turned to analytics and digital applications to streamline government services while reducing costs. With dramatic population increases, it’s estimated that cities around the globe will invest $40 trillion in infrastructure upgrades over the next 20 years, according to Smart America, an Obama-era initiative for solving regional problems with innovative solutions. Furthermore, spending on smart technology has grown from 0.7 percent of city IT budgets in 2005 to 4.1 percent in 2015. That percentage is expected to grow to 7.5 by 2025, according to Deltek, an information solutions provider for government contractors.

Smart City remains a broad term, but using data to improve operations constitutes a key ingredient. For the most part, cities with IoT (Internet of Things) applications like sensors, smart lights or other advanced technologies, offer insight into population patterns, infrastructure usage and public services. Moreover, the growth of cloud technology, digital information storage and other computing services has made it easier to compile and analyze data. As a result, administrators can better track pollution levels, gunshots, foot traffic and other pertinent statistics to help streamline resources.

In September 2015, President Obama announced a $160 million Smart Cities Challenge to help regional communities research and leverage new technology collaborations for tackling traffic congestion, crime, economic growth and improving the delivery of overall services. Roughly $115 million went towards unlocking new solutions in safety, energy, climate preparedness and transportation with grants coming from various federal agencies.

“Every community is different, with different needs and different approaches.  But communities that are making the most progress on these issues have some things in common.  They don’t look for a single silver bullet; instead they bring together local government and nonprofits and businesses and teachers and parents around a shared goal,” Obama said in a statement during the program’s announcement.

After receiving 78 applications from communities around the country, the Smart Cities initiative selected Columbus, Ohio, in June 2016 to receive $40 million to help prototype the future of urban transportation. Four months later, Transportation Secretary Anthony Foxx announced $65 million in grants for advanced transportation technologies, including $11 million in Pittsburgh for smart traffic lights, and $6 million in Denver to help alleviate traffic congestion during rush hour.

In addition to the federal government’s support, universities, private companies and nonprofits have played a large role in driving technology-enabled solutions. These entities have worked together to support Smart City initiatives around the country. Among the highest profile partnerships includes a collaboration among Microsoft, the Global Initiative for Inclusive Information and Communication Technologies, and World ENABLED, a nonprofit that advocates disabled people. The collaboration, which was announced in May, aims to help disabled and aging populations access Smart City technology throughout the country.

As more cities invest in smarter technology, funding growth will continue. In 2015, global investment in IoT applications grew by $14 billion from 2015 to $36 billion, according to Business Insider. Bank of America Merrill Lynch released a report in March that estimates a $1 trillion investment in Smart City technology by 2020, with infrastructure driving much of the increase.

As cities figure out the best way to leverage IoT applications in support of their needs, a number of communities have already invested in technology to help improve their respective cities. Here’s a snapshot of what some cities have done to improve sustainability.Map of the United States

Columbus, Ohio

After beating out 77 other cities, including Austin, Pittsburgh, Portland and San Francisco, Columbus received $50 million in grant funding from the federal government to help develop intelligent transportation systems. In addition to the grants, private companies and other organizations have pledged $277 million in matching funds. The Smart Cities Initiative in Columbus also gathered an additional $90 million in federal funding for a total of $417 million. Among the biggest contributors includes American Electric Power, which has pledged $181 million to help implement 894,000 smart meters that send readings electronically. With the funding, Columbus aims to bring more electric vehicle charging stations, street lights that act as wireless Internet hubs, emergency vehicles that interact with traffic signals, and driverless shuttles. The plan also calls for introducing 780 electric vehicles into the city’s public and private sectors by 2020. The Ohio State University will also provide $64 million in research initiatives. In July, the Columbus Transit Authority said it was going to update its fare boxes on buses to allow payments with a phone. Riders will also be able to update their fare cards online. Columbus also plans to market electric cars around the city, while also expanding power stations to 305 from 108 in the seven-county region. Columbus has until 2020 to use all the funds.

San Francisco

Although San Francisco lost out to Columbus, the U.S. Department of Transportation awarded the city with a $10 million grant to help alleviate traffic congestion. The funding supports six transportation projects with the help of the San Francisco County Transportation Authority and the University of California Berkeley: more high-occupancy vehicle lanes for buses and carpools, more curb space for carpool pickups and drop offs, smart traffic signal systems to help improve flow and safety, connect corridors for pedestrians and bicyclists, create connected electronic toll systems, and deployed testing of autonomous electronic shuttles on Treasure Island.

As a hub for innovation, San Francisco has already begun leveraging tech applications to solve other metropolitan issues. San Francisco utility companies provide mobile access to near-time energy use data, as well as advice on how to save money. The city also began using sensors to help monitor parking spaces, while another application helps drivers find available parking spaces in city garages. As part of their Smart City application, San Francisco wants to phase out single occupancy vehicles by adopting ACES vehicles (Autonomous, Connected, Electric and Shared vehicles). Ultimately, the city wants to turn parking spaces into green spaces or locations for affordable housing.

Chicago

The Windy City received a $3.1 million grant as part of the Smart Cities Challenge to fund the Array of Things Project, which helps the city monitor environmental and infrastructure activity. With the grant, Chicago installed more than 500 nodes throughout the city to capture data on air quality, climate, traffic and other urban features. The partnership with the Argonne National Laboratory, the University of Chicago and the city hopes to create an environment that improves public safety, decrease traffic congestion and the region’s carbon footprint. Chicago hopes to use the data to help create sustainable solutions.

While many cities have used high tech gadgetry as part of their Smart City initiatives, Chicago has used simple tools to create sustainable solutions. Chicago’s water department has spent $6 million over two years to give away 123,000 rain barrels to residents. The 55-gallon barrels, which attach to rain spouts, reduces the amount of water going into the sewer system and allows residents to use the water for gardening or other needs. With roughly 40 percent of Cook County impermeable due to concrete structures, the rain barrels are an asset in storm water management.

Pittsburgh

Like San Francisco, Pittsburgh was among the finalists for the Federal Government’s Smart City Challenge. In lieu of the grant, the Steel City received $11 million in funds from USDOT. Four months before the USDOT granted the funding, the Pennsylvania Department of Transportation offered $11 million in support for the city’s traffic project. All told, local, state and federal sources have pledged $30 million to help support a traffic management center and create adaptive traffic signals that can read conditions at 126 intersections. These signals can use cameras and radar to read traffic on side roads, including bicyclists, and change according to the amount of traffic. The funds will also help city administrators gather information for future traffic decisions. When the program is finished, Pittsburgh will have the largest adaptive traffic signal system in the United States.

Pittsburgh’s Department of Public Works has also announced plans to add nearly 1,200 smart trash cans throughout the city. The trash cans are equipped with sensors that self-monitor garbage levels and inform city workers if receptacles need to be emptied. According to the Department of Public Works, the smart trashcans will allow the department to reallocate 15,000 working hours towards other city projects.

Denver

Like Pittsburgh and San Francisco, Denver was among several finalists in the Smart City Challenge. The U.S. Department of Transportation awarded Denver County with a $6 million grant to help implement traffic management technologies. Denver is working with the mobile application called Waze, a mobile navigation tool to help motorists identify road closures, congested traffic, construction and other traveler information. Denver hopes to build a communication network among 1,500 city vehicles which will alert each automobile of accidents in hopes of reducing crashes by 30 percent in certain locations.

Denver has also partnered with Panasonic, Xcel Energy and the Department of Energy to help create a mixed use facility with 1.5 million square feet of office space, 500,000 square feet of retail and 2,500 square feet of housings units. The community will also contain smart lighting and parking, electric vehicle charging stations, environmental sensors, high-speed WiFi and autonomous electronic vehicle shuttles.

Kansas City

Kansas City opened an online portal in early 2017 to help drivers find parking spots in downtown. The digital application also shows traffic speed and real time location of the city’s street car. As part of the initiative, Kansas City has installed sensors along the streetcar’s 2.2-mile light-rail line, allowing the portal to track the streetcar’s movements and gather information. The sensors will also capture foot traffic, giving nearby entrepreneurs and small business owners valuable information. Kansas City plans to invest $3.7 million in high-tech innovations, with another $12 million pledged from private companies, including Sprint Cisco Systems. Ultimately, the city wants increase the sensors from 2.2 miles to 10 miles.

Louisville, Ky.

In 2015, Louisville began working with a respiratory health startup and the Institute for Healthy Air Water and Soil to help gather information on local air quality.  The coalition helped supply 1,000 inhalers to Louisville residents suffering from asthma. The inhalers had censors installed to help officials map where poor air quality had triggered usage. In one instance, the city was able to identify a portion of town that had three times as much use compared to other locations.  Further analysis revealed a significant level of congested traffic in the neighborhood. As a result, the city has planted a belt of trees separating the road from nearby neighborhoods to reduce particle matter in the area. Doctors were able to take the data from the censors and tailor treatment plans for individuals, with patients experiencing significant improvement.

Other Cities

A host of other cities has implemented a number of initiatives, giving citizens information and methods into critical matters. These municipalities have indirectly served as test labs for other local governments seeking improved services. Coupled with proof of success and budget limitations, public-private partnerships have emerged as a viable path toward innovative solutions. These private entities could provide a wide degree of expertise and flexibility in supporting such endeavors. Although ensuring improved services and increased efficiency while creating a profit-incentive can create challenges, IBM, Cisco and Microsoft, and a host of others, have begun working with municipalities across the country.

Smart City methods also raise a number of legal questions, especially concerns about government surveillance, personal privacy and cyber security. Because many Smart City initiatives and digital programs use complex algorithms, there’s a fear that programs based off analytic data could create unintended consequences. As civic leaders witness the benefits of Smart City initiatives, it will become paramount for other administrators aiming to improve their communities to responsibly implement IoT applications. Moreover, with a trove of data stored in cloud technology, critical data concerning infrastructure and citizens must remain secure from cyber threats.

In early August, Senators Mark Warner (D-VA), Steve Daines (R-MT) and Corey Gardner (R-CO) introduced the Internet of Things Cybersecurity Improvement Act of 2017. The bill would require IoT devices sold to government entities to meet certain requirements, including no fixed passwords and no known security software vulnerabilities.

“The Internet of Things (IoT) landscape continues to expand, with most experts expecting tens of billions of devices operating on our networks within the next several years,” said Gardner in a release. “As these devices continue to transform our society and add countless new entry points into our networks, we need to make sure they are secure from malicious cyber-attacks.”

Another question centers on the President’s agenda. Donald Trump pledged to reinvest in America’s infrastructure during his 2016 presidential campaign, but his domestic legislative agenda has stalled. However, if President Trump does get renewed investment in infrastructure approved in Congress, smart technology could help sustain bridges, roads, utility lines and other critical structures for the next several generations. Furthermore, if America wants to maintain its mantle as a leader in innovation and technology, it must keep pace with places like Barcelona, Berlin, Singapore and Hong Kong, all cities which have made significant investments in smart technology to improve infrastructure. In any event, if supporters believe that Smart Technology can transform our cities in healthy and sustainable communities, it will take a significant federal investment to ensure an equitable distribution benefits.

Industry Overview: P2P Banking

By Danny Restivo (posted 8/29/17)

Peer-to-peer mobile payment application Venmo reported $8 billion in transactions for the second quarter of 2017, doubling its 2016 second quarter numbers. With this trajectory, analysts believe Venmo could process nearly $85 billion in transitions by 2019. Whether its sending money to a roommate for rent or paying a friend for a night out, P2P mobile payment applications enable faster exchanges, but the numbers also illustrate a growing trend in consumer behavior.

IMG_8741

A 2016 survey sponsored by the American Bankers Association reported payments by mobile technology will double to $62.5 billion in 2017, before exceeding $314 billion by 2020. Finance industry research firm Aite Group estimates roughly $146 billion in digital P2P transfers in 2017, compared to $100 billion in 2016.

The statistics underscore consumer affinity for mobile transactions, with only a few applications dominating the market. According to a Morning Consult poll released in July, PayPal remains the primary choice for online payment. The poll surveyed 2,000 people, with 27 percent saying they used PayPal a few times a year. Moreover, PayPal reported 210 million active users during its second quarter earnings, with 6.5 million added. Overall, the company increased revenue to $3.13 billion in the second quarter, an 18 percent increase from the previous quarter.

While PayPal holds the largest share on the market, Venmo (a PayPal owned subsidiary) could challenge their dominance. According to Morning Consult, 11 percent of millennials say they use Venmo several times a day. Coupled with its popularity among a younger generation, and its recent increases, Venmo has positioned itself for tremendous growth in the coming years. Because of a social media component similar to Facebook or Twitter feeds, users can see transfers among friends that include customizable messages (Venmo does allow users to make their transfers private). A transparent payment record on social media has also piqued the interest of marketers and retailers salivating for data on consumer behavior.

Venmo has partnered with a dozen other applications and companies, including White Castle and Munchery, a food delivery service. Like credit cards, the merchants will pay a fee, but Venmo allows users to see who purchased what and where, heightening a company’s social media profile. As its popularity increases, Venmo’s fee may serve as a tiny price for access into a larger market.

In lieu of rising mobile transactions, several banks have banded together to create their own P2P mobile payment platform. In June, Bank of America, JP Morgan Chase, PNC, Wells Fargo, Capital One and 14 other financial institutions, launched Zelle, an application available to 86 million customers. Unlike Venmo, which is a standalone mobile application, Zelle operates within a mobile banking applications. Zelle ensures transactions are instantaneous with an email address and a phone number, whereas Venmo could take a day or two to show on an account. Zelle offers a tighter security structure compared to Venmo, but does not allow non-participating bank members to enroll.

Conversely, the P2P application Square Cash allows users to store money without having to connect to a bank account. Square Inc., a financial services and mobile payment operator started in 2009, launched Square Cash to help business owners and individuals send money via the Square application. Square Cash recently released a physical card allowing users to keep cash on the platform and spend directly from their respective account. Square Cash charges a one-percent fee for those wanting instant access to their funds.

During its World Developers Conference in June, Apple unveiled plans to create a mobile P2P platform via iMessage with iOS 11. Currently, iMessage allows P2P applications–such as Venmo—to send or receive payments. This marks Apple’s first attempt at its own P2P system. Apple’s application will let users send and receive payments through iMessages or their Apple Pay account, using a credit and debit card already stored in their virtual wallet. While the technology may prove convenient for Apple users, those with Microsoft, Samsung, Android, or other non-Apple devices will need a third-party application to send or receive payment from apple users.

As the market shifts towards P2P mobile payment applications, businesses will continually evolve to accommodate consumers. Although not all consumers are ready to cut cash or debit cards.  In the Morning Consult survey, 35 percent expressed a reluctance to use P2P applications because of security concerns.

A California man said he was scammed out of $4,300 worth of camera equipment in July after he used Venmo. According to a news report, the man posted his camera equipment for sale before a buyer contacted him. After agreeing to purchase the equipment, the buyer used Venmo to send a series of $100 payments to the sellers Venmo account. After the money was received, the buyer picked up the camera equipment. A day later the seller was contacted by Venmo saying the transaction did not go through. Venmo also told him he was in violation of the company’s policy and they couldn’t recoup the money. According to Venmo’s terms, personal accounts may not be used to receive business, commercial or merchant transactions, unless otherwise specified.

On the international stage, mobile P2P applications may serve a larger purpose, especially for rural “unbanked” populations. The GSM Association, a trade body that represents mobile operators worldwide, reported that mobile banking accounts surpassed traditional banking accounts in Sub-Saharan Africa in 2016.

 

According to the report, more than 40 percent of the population uses mobile money in seven sub-Saharan countries. The statistic in Africa highlights potential financial opportunities for poorer populations around the world. Peer-to-peer applications could give communities with limited financial resources the ability to access savings accounts, loans, money transfers, or remittances.

In the United States, Rep. Patrick McHenry (R-NC) introduced H.R. 6118, the Financial Services Innovation Act. McHenry’s bill aims to support financial technology while also creating investment opportunities for regions with a dwindling number of small businesses. McHenry’s bill would ensure loose guidelines for financial technology and innovation, while presenting different possibilities for the public and private sector.

“New financial technologies already make it easier to pay friends, save for college, or access credit needed to start and grow a business,” McHenry said in statement when the bill was introduced in September 2016. “Continued innovation will only further that progress, making it easier and cheaper for all Americans to access our financial system.”

“Peer-to-peer banking technology has created a conducive atmosphere for transactions, but as financial technologies evolve, institutions must keep pace with new platforms to appease consumer demand,” says Brett Goldman, DMGS’s Manager of Special Projects, “As this is all happening, financial regulators must maintain a framework that encourages growth while protecting consumers.” DMGS will continue to monitor the growth of mobile banking technologies in the US and abroad.

Legislative Insight: The Opioid Epidemic

By Danny Restivo (Posted 7/28/17, Updated 8/4/17)

It’s difficult to find an area of the country that has been untouched by the scourge of opioids. According to the Center for Disease Control, opioid-related deaths quadrupled from 1999 to 2015. Several states have suffered disproportionately—West Virginia, Ohio, Kentucky, Rhode Island and New Hampshire have the highest per-capita overdose rates in the country. With more than 33,000 opioid-related deaths in 2015, the epidemic has forced itself in into the national spotlight.

Both Democratic and Republican lawmakers at the federal and state level have presented a host of tools to help communities fight opioids. Whether it’s tightened drug enforcement, harsh prison sentences, or better access to treatment, officials have introduced comprehensive policies to help stem a complex problem. While many experts believe in a multi-faceted policy, one CDC statistic starkly illustrates the epidemics core problem: as opioid-related deaths have quadrupled over the past 15 years, the rates for prescription pain killers have tripled. Although prescription rates for painkillers peaked in 2010 before decreasing by 18 percent, there were more than 236 million opioid prescriptions written in 2015 in the United States—that’s about one bottle of opioids for every American adult. Moreover, as communities and healthcare providers increase oversight, addicts have turned to heroin or fentanyl, a cheap and dangerous synthetic opioid.

In March 2016, the CDC released guidelines for prescribing opioids, which said opioid treatment for non-traumatic, nonsurgical acute pain is rarely needed for more than seven days. The guidelines include a host of recommendations; The guidelines include 12 recommendations that are broken into three main categories:

  • determining when to continue or initiate opioid use for patients suffering from chronic pain;
  • determining opioid selection, dosage, duration, follow-up and discontinuation;
  • assessing the risk and addressing harms of opioid use.

The recommendation calls for doctors to check prescription tracking systems to make sure patients weren’t receiving medication anywhere else. A few months after the guidelines were released, West Virginia—which had the highest rate of opioid overdoses with 41.5 per 100,000 people—announced the state would begin implementing some of these policies.

“These new guidelines will give physicians and patients the facts they need to make more informed decisions about treatment,” West Virginia Governor Earl Ray Tomblin said in a statement. “With more than 600 opiate-related overdose deaths in West Virginia last year, we must continue making every positive change we can to break the cycle of addiction.”

Federal Action

Shortly after his inauguration, President Donald Trump created the President’s Commission on Combating Drug Addiction and the Opioid Crisis. Trump tapped New Jersey Governor Chris Christie (R) to serve as chair of the panel. Other commission members include Massachusetts Gov. Charlie Baker (R), Gov. Roy Cooper of North Carolina (D), former Rhode Island Rep. Patrick Kennedy and Dr. Berta Madras, a professor of psychobiology at Harvard Medical School.  The commission aims to study the federal government’s response and offer recommendations to stem the opioid epidemic. On August 3rd, 2017, the Commission published their interim report. The final report is expected later in the Fall of 2017.  Among the recommendations, is a proposal to waive the prohibition on using Medicaid funds to pay for residential substance abuse treatment. 

In December 2016, then President Barack Obama signed the 21st Century Cures Act. The bipartisan legislation provides $6.3 billion to the National Institutes of Health, with $1 billion in grants to help states fight the opioid epidemic for two years. Eighteen months prior, Obama signed the Comprehensive Addiction and Recovery Act, which authorizes $181 million in treatment and recovery services, as well as prevention services. Furthermore, the Department of Health and Human Services created the Substance Abuse Prevention and Treatment Block grants. The program provided $1.85 billion in funding for state alcohol and drug authorities in 2016, with $371 million allocated for primary prevention services in 2017.

New York Senator Kirsten Gillibrand (D) introduced the Opioid Addiction Prevention Act of 2017 in early April.  Co-sponsored by Arizona Senator John McCain (R), the proposed legislation gleans from the CDC’s guidelines, requiring medical professionals to adhere to a policy that limits opioid prescriptions for acute pain that does not exceed a seven-day supply. The law does not impact patients using opioids for chronic pain, cancer care, hospice or end-of-life care.

“Too many lives have been destroyed, too many families have been torn apart, and too many communities all over New York and suffering because of this tragic epidemic,” Gillibrand said in a release. “The Opioid Addiction Prevention Act would target one of the root causes of the opioid addiction crisis, which is the over-prescription of these powerful and addictive drugs for acute pain. I am urging my colleagues in Congress to pass this measure to help curb the growing opioid crisis.”

The debate over Obamacare repeal and Medicaid funding has further complicated opioid prevention measures. Currently, Medicaid expansion under the Affordable Care Act has allowed hard hit states like West Virginia, Kentucky and Ohio to provide expanded treatment services. According to the Kaiser Family Foundation, Medicaid covers 3 in 10 people addicted to opioids. Medicaid expansion has helped decrease the number of uninsured hospital visits due to behavioral health from 20 percent to 5 percent from 2013-2015. To help curb treatment gaps created by an Obamacare repeal, Republican Senators have a proposed $45 billion over 10 years for substance abuse treatment as part of their healthcare replacement plan.

Democratic and Republican Senators from opioid-plagued states have said the funding falls well short of what’s needed.

“I have serious concerns about how we continue to provide affordable care to those who have benefited from West Virginia’s decision to expand Medicaid, especially in light of the growing opioid crisis,” said West Virginia Senator Shelley Moore Capito (R) in a statement on July 18. “All of the Senate health care discussion drafts have failed to address these concerns adequately.

State Action

In lieu of federal funding, 47 state legislatures considered 536 bills in 2016 related to drug abuse prevention, according to the National Conference of State Legislators. Many of these proposals deal with comprehensive programs that establish prescription drug monitoring programs, tighter pain clinic regulations and legislation that ensures first responders have access to lifesaving drugs for overdosed patients. While many opioid experts believe in comprehensive efforts, they believe limiting prescriptions can have a significant impact on the epidemic. A 2009 study by the National Institute of Health revealed 86 percent of drug users had used prescription pills nonmedical before moving to heroin. These addicts said they primarily received their pills from prescriptions written for them, or for friends and family. As a result, states have targeted prescription guidelines.

Opioid map

We have compiled a list of key states that have introduced prescription pain killer reform in 2016 and 2017 (note that this list is not exhaustive):

States Introducing or Approving Opioid Legislation in 2017

Alaska

Both the Alaska State Senate and House approved legislation restricting opioid prescriptions in June. The legislation, which was proposed by Governor Bill Walker (I), limits first-time opioid prescriptions to a week with certain exceptions. Under current law, doctors can provide up to a month of prescription pain killers. The new law also effects dentists, veterinarians, and eye doctors. Healthcare providers must also receive pain management and opioid abuse education, while monitoring prescription rates. Since 2006 opioid overdose rates have quadrupled in Alaska. Ninety-five Alaskans died of opioid overdoses in 2016 from heroin and prescriptions. Studies also revealed a majority of Alaska’s heroin users became addicted to prescription opioids before moving on to heroin.

Connecticut

The State Legislature approved a comprehensive piece of opioid legislation with a unanimous vote which Governor Daniel P. Malloy (D) signed on June 30th. The bill increases prescription oversight, expands data sharing between state agencies, limits maximum prescription for minors from seven to five days, and requires individual and group health insurers to cover necessary treatments. The bill also requires prescribers to inform patients about the dangers of opioids and mandates electronic prescriptions instead of written. “Opioid addiction and prescription drug abuse is a disease that is impacting nearly every community and people of every background,” Governor Malloy said after signing. “It is a complex crisis that does not have one root cause, nor does it have a simple solution, but we need to do everything in our power to treat and prevent it.”

Florida

Opioids, including heroin and synthetic opioids like fentanyl, killed an average of 14 people a day in Florida during the first half of 2016. The Sunshine State has experienced a long history of opioid issues with an aging population and a higher number of pain management clinics than most states. While Florida has worked to close unregulated pain clinics, many addicts have turned to heroin and fentanyl, increasing overdose rates.

In May Governor Rick Scott (R) declared a state of emergency because of the opioid crisis. He then issued orders for mandatory minimums on fentanyl; 4 grams will receive a minimum of three years, 14 grams will receive 15 years and 28 grams will net 25 years. The bill also allows prosecutors to charge fentanyl dealers with homicide if they sell a fatal dose of the drug.

Indiana

Governor Eric Holcomb (R) signed legislation in June limiting opioid prescriptions to adults and children to seven days. The law also expands treatment access for pregnant women and mothers, expands treatment facilities throughout the state, creates a treatment center for non-violent drug offenders and removes barriers for starting a needle sharing program.

Indiana has the 17th highest rate of overdose deaths of any state, but is among the hardest places to find treatment, according to the CDC.

Kentucky

A law passed by the Republican-majority prohibits prescribing patients with acute pain for controlled substances for no more than three days. The law, which was implemented in June, exempts prescribers giving patients a larger supply to treat chronic or cancer-related pain. While the three-day limit is the toughest in the nation, the Kentucky Board of Licensure must develop regulations to implement the rule. The new law includes harsher penalties for heroin and fentanyl, while also broadening the definition of synthetic opioids.

Louisiana

Governor John Bel Edwards (D) signed three bill in June to help fight Louisiana’s increasingly deadly opioid epidemic. One of laws implements a seven-day limit on for first-time prescriptions for acute pain. Another bill requires prescribers to check a database before prescribing an opioid to help prevent against doctor shopping. Another piece of legislation creates a 13-member advisory council on heroin and opioid prevention to help create policy recommendations for the state. According to data from the CDC and DrugAbuse.gov, the Bayou State had the sixth highest opioid prescription rate.

Michigan

Governor Rick Snyder (R) has spearheaded an effort to curb opioid prescription abuse. In April, the Department of Licensing and Regulatory Affairs announced a new prescription monitoring system that allows prescribers to see which schedule 2-5 substances have been prescribed to patients. Two months later the assembly approved a package of bills recommended by Snyder’s opioid task force. One of those proposal allows Medicaid to pay for treatment and detox services. Another bill allows pharmacists to refuse opioid prescriptions if they believe the patient forged or received an improper prescription.

New Hampshire

From 2013 to 2015, the number of overdoses in New Hampshire doubled from 200 to 400. In January, the New Hampshire Board of Medicine and the Board of Nursing adopted several regulations to stem the state’s opioid epidemic. One of those regulations includes a risk assessment before doctors prescribe an opioid. Doctors can now check a database in the state’s prescription drug monitoring program to ensure patients are seeking drugs from multiple doctors. Furthermore, opioid prescriptions in emergency rooms, urgency care settings, or walk-in clinics cannot exceed seven days.

New Jersey

The Garden State established one of the most stringent pieces of opioid legislation in 2017, thus far. Governor Chris Christie (R) signed a law in February that limits opioid prescriptions from 30 days to five days, and requires insurance companies to accept opiate addicts without delay. The Medical Society of New Jersey strongly opposed the law. Following Christie’s signature, the organization released a statement. “Unfortunately, statutory medication limits decrease the quality of care and life for pain patients. The Medical Society of New Jersey opposes such intrusions into the practice of medicine, especially if they do not take into account individual patient circumstances, like medication tolerance or access to insurance, transportation or alternative treatments.” Nonetheless, the bill received 64-1 support in the state assembly.

New Mexico

A New Mexico law implemented on January 1 requires health care providers to screen new and extended opioid prescriptions against a statewide electronic database. In April, New Mexico became the first state to require all local and state law enforcement to provide officers with opioid antidote kits to help curb overdoses. New Mexico also became the first state to dispense naloxone without a prescription, while also requiring all licensed clinicians to undergo extra training for prescribing painkillers. New Mexico had the second highest overdose death rate in the nation in 2014, but recent CDC statistics show it dropped to 44th.

New York

In June 2016, Governor Andrew Cuomo (D) signed comprehensive legislation limiting opioid prescriptions and increasing access to treatment services. Cuomo’s legislation limits opioid prescriptions from 30 to seven days, while adding 270 beds for treatment and 2,335 program slots for substance abuse.  A year later, Cuomo signed another piece of opioid legislation that invests more than $200 million to support prevention, treatment and recovery programs throughout the state. The funding requires mandatory prescriber education. Nearly three quarters of the funding is earmarked for community-based providers. “This comprehensive investment addresses each component of heroin and opioid addiction – prevention, treatment, and recovery – to help individuals and families break this cycle of misery, save lives and create a stronger, healthier state for all,” Cuomo said in a release.

Ohio

Governor John Kasich (R) announced new rules for prescribing opioids in March 2017. With the approval of the Ohio Attorney General, Kasich’s order says doctors, dentists and nurses can’t prescribe more than seven days of narcotic pain killers, and only five days for minors. The law comes after a series of restrictions on pain pills began in 2012. Those restrictions cut down on pills prescribed in Ohio by 20 percent, from 2012 to 2016. Policymakers believe the new law will reduce the number of pain pills dispensed by 109 million a year.

Rhode Island

Governor Gina Raimondo (D) gave authorities greater enforcement ability in the fight against opioids after signing three bills in June. The new legislation allows law enforcement to access prescription painkiller databases, requires doctors and nurses to discuss the risk of addiction when writing opioid prescriptions, and expands the type of pharmaceuticals prescribed with electronically. The law comes a year after Raimondo approved a bill to limit initial opioid prescriptions for adults to 30 milligrams equivalents per day for a maximum of 20 doses. The law applies to acute pain from injuries and surgeries, but does not apply to chronic pain. The law also requires pharmacies to transmit opioid prescriptions to a state database within one business day of dispensing.

Virginia

The Commonwealth approved four bills as part of a comprehensive plan to fight the state’s opioid epidemic. Among those bills includes a regulation mandating electronic prescriptions to pharmacies by 2020. The law also stipulates a workgroup must study how best to implement this policy. Governor Terry McAuliffe (D) also signed laws that allows community organizations to dispense naloxone. The law also encourages needle exchange programs and a plan to help families suffering from opioid addiction access help from local organizations.

(Several other state legislatures, including Georgia, Washington, Oregon, North Carolina and Hawaii have introduced comprehensive legislation to help curb the opioid crisis in 2017.)

States Passing Notable Legislation in 2016

Arizona

Governor Doug Ducey (R) issued an executive order in October 2016 prohibiting initial opioid prescriptions from lasting more than seven days. The order limits all opioid prescriptions for children, but only effects adults with insurance provided by the state or Medicaid. The order does exempt those afflicted with cancer, chronic disease and traumatic injury.  “In 2015, 401 people in Arizona—more than one a day—died from prescription opioid overdoses. And in 2013 there were enough prescription pain medications dispensed to medicate every adult in Arizona around the clock for two weeks,” Ducey said in a statement following his signing of the executive order.” He added, “The large prescriptions of highly addictive substances are incredibly dangerous, and we have to take action now. By limiting the fills of prescriptions for all state health plans, we hope to encourage private companies to consider similar action.”

Massachusetts

In 2014, Massachusetts had the highest rate of emergency room visits due to opioid-related issues. According to information from the Healthcare Cost and Utilization project, 450.2 per 100,000 people visited the hospital in the state, while the national average hovered around 177.7. A law signed by Governor Charlie Baker (R) in March 2016 limits initial prescriptions for opioids to a seven-day supply, but those receiving treatment for cancer or chronic pain remain exempt. The law says a mental health professional must provide a substance abuse evaluation to anyone entering an emergency room from an opioid overdose, while requiring doctors to check a statewide database each time they make a prescription. It also allows schools to verbally screen students to help identify those at risk of drug addiction.

Maine

The CDC reported in 2014 that Maine had the highest prescription rate for long-term extended release opioids, the most abused prescription opioid according to experts. In 2016, Republican Governor Paul LePage unveiled a comprehensive reform to opioid prescriptions. The law limits most patients to 100 milligrams a day, while exempting those with long-term pain or cancer diagnosis. Another aspect of the law limits opioid painkiller prescriptions to seven days for acute pain and 30 days for chronic pain. A year after its implementation, opioid prescription rates fell by 30 percent in seven of Maine’s eight counties. However, skeptics of new law claim that it could force addicts into heroin.

Edited by Brett Goldman

State Budget Showdown

By Danny Restivo and Brett Goldman (posted 7/10/17)

As the fiscal year ends on June 30th, nearly all 50 state governments across the United States (with the exception of Vermont) are required to maintain a balanced budged whether by statue/law, constitutional amendment, or judicial decision. From state to state, the requirements vary from the simple introduction of a budget, to a balanced budget, to budgets that are based off of the available cash on hand by the state.

There are three general kinds of state balanced budget requirements, according to the National Conference of State Legislatures:

  • The governor’s proposed budget must be balanced (43 states and Puerto Rico).
  • The legislature must pass a balanced budget (39 states and Puerto Rico).
  • The budget must be balanced at the end of a fiscal year or biennium, so that no deficit can be carried forward (37 states and Puerto Rico).

Unfortunately, 2017 has seen a situation where 11 states did not pass their budgets by the June 30th deadline. In some states, such as New Jersey or Rhode Island, political differences between legislators created a budget impasse; whereas in other states, such as Illinois, budgets have not been passed in nearly three years. We have compiled a breakdown of states that saw budget impasses in 2017. Please note that some of these are still undergoing budget negotiations and as such the situation may evolve.

New Jersey- (Status: Resolved)

On Monday, July 3rd, Governor Chris Christie signed a $34.7 billion budget ending a three-day government shutdown that sparked a backlash against the governor.

While the publicity focused on Christie’s Sunday trip to the beach, the shutdown stemmed from a plan to restrict the state’s largest health insurance provider, Horizon Blue Cross Blue Shield of New Jersey. Christie had approved of the Democratic-controlled Assembly and Senate’s other appropriations, including $325 million in additional funding from Christie’s proposed budget from February, which include $150 million in additional school funding. However, he wanted lawmakers to sign off on a bill capping Horizon’s reserves, while using the excess funding to pay for drug treatment and other care for the poor and uninsured. In the insurance industry, reserves are often called risked-based capital, which helps hedge against unexpected healthcare payouts.

Essentially, Christie wanted to cap Horizon’s reserves, and giving an estimated $300 million for the expansion of drug treatment programs. He also wanted to give the assembly the control to appoint two members to Horizon’s 15-member board. Assembly Speaker Vincent Prieto (D-Hudson) pushed back against Christie’s plan, calling it “extortion” as Horizon initially had nothing to do with the state’s budget.  As a result, Christie pledged to line-item veto democratic-backed spending if lawmakers didn’t pass the Horizon cap. Meanwhile, Senate President Stephen Sweeney (D. Gloucester) posted S4 (the “Horizon Bill”) to the Senate’s June 29th schedule, where it was passed. Speaker Prieto, however, refused to post S4 to the Assembly schedule and instead posted the budget (A5000) for a vote. The vote on A5000 became deadlocked, and Speaker Prieto refused to remove the bill resulting in the state-government shutting down.

Legislators worked through the holiday weekend to come to a resolution on the Horizon Bill and budget impasse. On Monday, July 3rd, Speaker Prieto, Senate President Sweeney, and Governor Christie emerged with a resolution and the state government reopened for business as usual.

The following is an excerpt that was sent to our NJ clients regarding the resolution of the shutdown:

“Part of this Budget compromise is contingent on a new Horizon bill— (S2) —that will address issues that were raised with S4. Horizon Blue Cross Blue Shield of NJ executives spent the weekend meeting with Speaker Prieto, Senate President Sweeney, and other legislators. Following tonight [July 3rd)’s budget vote on A5000, the Assembly then voted on S2, which resolved many of the issues with S4 including:

  • ​Establishing an appropriate range of reserves for Horizon, requiring a minimum of 550% of risk-based capital reserves and a hard cap maximum of 725%, sufficient to cover claims for all of its policy holders in the event of a catastrophic medical emergency such as hurricane Sandy, when regular premium payments from policy holders were delayed;
  • Requiring the state department of Banking and Insurance (DOBI) to commission independent annual audits to determine Horizon’s reserve level, which would be paid for by Horizon;
  • Creating a process for Horizon to submit a plan to DOBI to determine how excess reserves above the 725% level should be used to reduce future policy holder premiums or otherwise benefit policyholders.
  • Requiring the appointment of two additional public members with a background in healthcare, finance, or insurance to the horizon board—one each by the senate president and speaker—bringing the total board membership to 17, including 11 members currently appointed by Horizon and four by the Governor;
  • Requiring DOBI to establish requirements for health services corporations to provide detailed financial reporting information, including executive compensation, and to post this information on the department website.
  • Removing “insurer of last resort” language.”

 Pennsylvania- (Status: In Progress)

On June 30th, the Pennsylvania State Legislature approved a $31.99 billion budget for the 2017-2018 year. While the budget received bipartisan support, lawmakers have yet to agree on a funding package and remain in negations at the time of publication.

The bill awaits Governor Tom Wolf’s (D.) signature until lawmakers can solve a $2 billion deficit. If the Governor does not veto the bill, it will automatically become law without his signature. In 2016, Wolf vetoed the legislature’s budget, but the government kept spending money. As a result, schools, counties, and nonprofits began taking out loans to stay afloat, and not until local governments threatened to withhold taxes and schools said they would remain closed after the holiday break did lawmakers finally approve a budget.

This year, lawmakers have debated several options for funding the deficit, including borrowing up to $1.5 billion against future revenues from a 1998 multistate settlement with tobacco companies. While Wolf and Senate Republicans have supported the idea, House Republicans have opposed it adamantly. House Republicans have suggested leveraging 40,000 video gaming terminals at bars, taverns and other establishments for more tax revenue. Senate Republicans have pushed back, saying it will cut into casinos which already contribute a large sum to government coffers. Some Democrats have lobbied for a tax on Marcellus shale drilling, but the Republican majority has strongly refused to bring tax increases to a floor vote. Other options include expanding privatized liquor operations while reassessing the sales tax on purchases of alcoholic drinks. Senate President Joe Scarnati, (R. Jefferson) has said he’s working on legislation to expand casino gambling in the state, but few details have emerged.

The 2017-2018 proposed budget is roughly 1.6 percent higher than the $31.5 billion budget in 2016-2017. Unfortunately, the budget faced a $1.1 billion shortfall in 2016 due to an underestimation of human services and corrections needs. The budget became law without Wolf’s signature when lawmakers delivered a $1.3 billion package in additional funding centered on cigarette tax increases.

As of publication, the House and Senate were in session over the weekend to move various pieces of legislation needed to complete the budget process.  Both the House and Senate returned on Monday, July 10th at 11:00 a.m. for another long day of negations.

Other states with Budget Impasses

Connecticut (Status: Unresolved)

Democratic Governor Daniel Malloy took executive control of the state’s finances on June 30 after lawmakers failed to agree on a budget. Despite having one of the highest per capita incomes in the country, the nutmeg state could run a $2.3 billion deficit in 2017-2018, roughly 12 percent of the state’s budget. Lawmakers haven’t submitted a budget to Malloy who has requested a three-month provisional budget that includes cuts and modest tax hikes. Democrats have a 79-72 edge over Republicans in the House.

As Connecticut moves into day 10 of its budget crisis, state parks, beaches, campgrounds, and museums are beginning to feel the pinch.  Statements from Governor Malloy’s office indicate that a resolution may be found by the July 18th session of the legislature, but a path forward remains to be seen.

Delaware (Status: Resolved)

Budget gridlock had lasted for months over issues including a Democratic push to raise

the personal income tax and disagreement over changes to the prevailing wage for state construction projects. As a result, the Delaware legislature missed its June 30th budget deadline for the first time in decades. Spending the weekend hunkered down in the state house, legislators reached a deal that included a new spending plan on July 2nd. The budget restores cut funding to nonprofits, public health programs and schools, and raises taxes on real estate transfers, tobacco and alcohol. Gov. John Carney (D) signed the budget early on Monday July 3rd.

Illinois (Status: Resolved)

 The Democratic-controlled House overrode Republican Governor Bruce Rauner’s veto and implemented a $36 billion budget for 2018, which includes $5 billion in tax increases. The Democratic-controlled Senate sent the bill to Rauner on Tuesday. The Governor vetoed the bill before the Senate quickly overruled him. The bill then moved to the House where Democrats overrode the Rauner’s veto. With a $6.2 billion annual deficit and $14.7 billion in overdue bills, credit-rating houses have threatened to downgrade Illinois’s credit rating to junk. Meanwhile, the United Way has predicted the demise of 36 percent of Human services agencies within the state.

Massachusetts (Status: Resolved)

Slumping tax revenue has left the bay state with a $430 million hole. By July 6th, lawmakers said they had agreed upon a $40 billion budget but had not held a vote. The state approved an interim $5.2 million budget last month. Marijuana legalization remains a point of conflict among lawmakers. The Senate has proposed a 12-percent tax (which voters approved in November) while the state house has proposed increasing it to 28 percent.

On July 7th, both houses of the Massachusetts legislature approved the budget. The compromise trims spending by about $400 million to $500 million from spending plans previously approved by the House and Senate. It also takes other steps to account for a $733 million reduction in anticipated tax revenues for the 2018 fiscal year that began July 1,

Oregon (Status: Resolved)

State lawmakers have passed multiple bills to keep the government operating, however, a couple items remain unfunded. Lawmakers have debated ways to best solve a $1.8 billion budget gap, which threatens hundreds of thousands of people on Medicaid and child welfare services. Governor Kate Brown (D) has pledged to rein in spending by instituting a hiring freeze for state employees, as well as taxing hospitals and insurance plans. One proposal introduced by lawmakers would cut $424 million over the next two years by halting automatic inflation increases in the budget while eliminating unfilled government jobs; however, legislators failed to find votes to reform Oregon’s tax system and public pension costs, leaving the toughest decisions to future sessions.

Rhode Island (Status: Unresolved)

The Rhode Island assembly ended abruptly on June 30th with the state’s $9.2 billion budget in limbo.

Senate President Dominick Ruggerio (D) and House Speaker Nichoas Mattiello (D) aren’t on speaking terms and Gov. Gina Raimondo (D) says she has been in touch with both but isn’t getting into the middle of the rupture or offering to mediate it. While there be no state “government shutdown” due to a 2004 provision whereby the state operates on the previous year’s budget, tensions remain high. Most state beaches, parks and government agencies—including law enforcement—will remain open until a resolution is reached. According to a memo, state budget officials will meet with individual department leaders to help balance their books and find an additional $25 million in unspecified cuts called for in the proposed budget. However, hiring and staffing of agencies will not be impacted, assuming a budget is passed in the coming months.

Wisconsin (Status: Unresolved)

 After missing a June 30 deadline to pass a budget, Wisconsin lawmakers remain committed to approving a smaller budget. Republican lawmakers control the legislative and executive branch. They have asked for a smaller budget that increases support for rural school districts without raising taxes. Lawmakers have also struggled to reach a deal on how to plug a $1 billion transportation hole. Earlier this year, Governor Scott Walker (R) asked lawmakers for $500 million for road construction over the next two years. He later dropped that request to $300 million. In an effort to assuage lawmakers leery of transportation costs, Governor Scott walker released a proposal on July 6, which tapped federal spending to subsidize construction costs. Walker believes federal aid will allow the state to borrow an additional $300 million for the projects.

 

Danny Restivo and Brett Goldman Contributed to This Report