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

Net Neutrality 2017: The Battle Continues…

By Danny Restivo (posted 7/6/17)

On July 12, 2017, a number of website landing pages will display “blocked,” “please upgrade,” or “paying customers only” banners. Fortunately for active users, the banners will only last 24 hours. These protest banners (example below) will be part of The Day of Action”, which is supported by the likes of Netflix, Amazon, Facebook, Twitter, GitHub, Reddit, OKCupid, Etsy, and a broad coalition of tech, media/social media, e-commerce, and other companies that peg their livelihood to the internet. The campaign aims to raise awareness regarding the Federal Communication Commission (FCC)’s proposed plan to roll back net neutrality measures later this summer.

Just two years ago, the FCC classified internet service providers as carriers under Title II of the Telecommunications Act. The decision forced ISPs to face regulatory measures like public utilities, while ensuring all ISPs treat content equally. Under President Donald Trump’s guidance, the FCC has targeted the regulation, drawing a number of large companies into a fray that may decide how online audiences view content.

The FCC’s net neutrality establishes three rules:

  1. Broadband providers can’t block access to legal content, applications, services or non-harmful devices.
  2. ISP’s can’t impair or reduce lawful internet traffic on the basis of content, applications, services or non-harmful devices.
  3. They may not favor some internet traffic over other internet traffic in exchange for consideration of any kind—no paid prioritization or fast lanes.

“The Internet is the most powerful and pervasive platform on the planet. It’s simply too tom_wheeler_fccimportant to be left without rules and without referees on the field,” said Tom Wheeler, the former chair of the Federal Communications Commission, following the FCC’s 3-2 vote in favor of Net Neutrality in 2015. “Today is a red-letter day for Internet freedom, for consumers who want to use the Internet on their terms, for innovators who want to reach consumers without the control of gatekeepers.”

Since its implementation, the vote has drawn the ire of internet companies such as AT&T, Comcast, Oracle and Verizon. These industry leaders have cited government overreach, as well as limits to free speech and free market principles. Because net neutrality designates ISPs as “common carriers,” such as telephone companies, they are open to a host of other government regulations.

GOP leadership blasted the FCC ruling on similar grounds after it was approved in 2015.

“Overzealous government bureaucrats should keep their hands off the Internet,” Former House Speaker Rep. John Boehner (Ohio-R) said in a statement after the ruling. “More mandates and regulations on American innovation and entrepreneurship are not the answer, and that’s why Republicans will continue our efforts to stop this misguided scheme.”

Image result for net neutrality

Cable companies spent $44 million in lobbying efforts (including other issues besides net neutrality) during the 2015 showdown. Meanwhile, neutrality proponents like Amazon, Facebook and Alphabet Inc (formerly Google), paid $35 million in lobbying efforts that year.

Following his inauguration in January 2017, Trump enlisted the help of three net neutrality opponents to assist his FCC transition from Democratic to Republican control. On January 23, Trump appointed Ajit V. Pai to Chairman of the FCC. The former attorney for Verizon was one of two Republican votes against the 2015 decisions (Pai and Michael O’Rielly were the lone dissenters in the commission’s ruling).

Shortly after the transition, Congress overturned Obama-era internet privacy protections—a Republican bill removed regulations requiring individual permission before ISP’s could sell users data. Only a few days later, White House Press Secretary Sean Spicer announced the President’s goals for reversing net neutrality during a March 30 press briefing. A month later, Pai unveiled plans to loosen government oversight of the internet during a speech at the Newseum in Washington, D.C.

“Two years ago, I warned that we were making a serious mistake,” said Pai. “It’s basic economics. The more heavily you regulate something, the less of it you’re likely to get.”

On May 18, the FCC voted 2-1 in favor of moving forward with rolling back the Obama administration’s Net Neutrality regulation. “The Restoring Internet Freedom Notice of Proposed Rulemaking” does not include specific details on how the FCC will remove Net Neutrality regulations, however the proposal does allow for a 90-day public comment period. The FCC will stop receiving comments on July 18, but will allow a second 30-day commenting period for replies ending on August 18.

The FCC’s proposal includes three key tenants.

  1. Removes Title II classification from ISP’s
  2. Returns classification of mobile broadband internet carriers to private mobile service
  3. Eliminates “the catch all internet conduct standard created by the Title II order”

Mignon Clyburn, a Democrat who previously voted for net neutrality, remained the lone dissenter during the May 18 vote.

“If you unequivocally trust that your broadband provider will always put the public interest over self-interest or the interest of their stockholders, then the ‘Destroying Internet Freedom’ [proposal] is for you,” she said after the vote.

Since FCC announced its proposal, the President has tapped two more members to serve on the commission. On June 14, Trump nominated Democrat Jessica Rosenworcel, who previously served as commissioner until her term ended in 2016. Two weeks later, Trump nominated Republican Brenda Carr, a former FCC aide to chairman Pai.  Carr’s selection solidifies a 5-person commission. According to the rules, no more than three members of the commission may be of the same political party; if both Carr and Rosenworcel are confirmed, Republicans would have a 3-2 majority.

In conjunction with the commission’s plan, Sen. Mike Lee (Utah-R) introduced S. 993: “the Restoring Internet Freedom Act “in early May. With nine other cosponsors, the proposed legislation would prohibit the FCC from classifying Internet Service Providers as Title II carriers ever again. The bill—Lee introduced an identical version nearly a year ago—would require legislative action to implement net neutrality in the future. The bill has been referred to the committee on Commerce, Science and Transportation.

Lee, along with Senate cosponsors Ted Cruz (Texas-R) and Ron Johnson (Wisc.-R), penned an opinion piece about internet freedom in the Washington Post on May 4.

“We reject the idea that the federal government should control the Internet. That’s why we have introduced the Restoring Internet Freedom Act, which will complement Pai’s efforts to repeal the 2015 Internet takeover by preventing the FCC from issuing any similar regulations in the future.”

Meanwhile, 13 Democratic Senators signed a letter supporting the FCC’s Net Neutrality rules which was published in Tech Crunch on May 17.

“By proposing to take away the existing net neutrality protections, President Trump’s FCC is threatening to take away your ability to have free and open use of the internet. This proposal will have profound impacts on the way all of us watch movies, listen to music, do homework, talk to family, consult with a doctor, pay bills, and conduct business. Taking away these rules benefits no one except cable, telephone, and wireless broadband companies.”

The Internet Association, which represents Facebook, Google, Amazon, Netflix and other internet giants, released a white paper titled “Principles to Preserve and Protect an Open Internet” on June 21.  The paper outlined the “substance of the underlying rules” behind the FCC’s Net Neutrality. The paper contains “six principles and policies for preserving a free and open internet by which all proposals and potential changes to the rules will be judged.”

Principles to Preserve and Protect and Open Internet:

  1. Net neutrality rules preserve the success of the internet in driving economic growth.
  2. The FCC’s 2015 rules are working and the entire broadband internet ecosystem is thriving.
  3. Forecasting rules remain necessary to preserve and protect an open internet.
  4. Specific net neutrality rules are needed to preserve an open internet. These rules include: no blocking, no throttling, no paid prioritization, no unreasonable interference or disadvantaging of content by ISPs, and transparency and disclosure requirements.
  5. Open internet protections should apply to broadband internet access providers on a platform-neutral basis.
  6. Strong and effective enforcement by the FCC of net neutrality rules is critical to ensuring that the benefits of the rules are realized.

The paper also states, “a free and open internet remains vital to preserving and protecting the virtuous circle of broadband innovation that benefits edge-based innovators and entrepreneurs, businesses, ISPs, and, above all, consumers.”

It also said, “undoing the existing light touch rules will create uncertainty among edge providers, innovators, and consumers, and would threaten to unravel the most dynamic segment of our economy. Instead, policymakers should seek to preserve the current rules and ensure that they remain on a firm legal footing.”

In addition to large companies supporting net neutrality, more than 800 startups, innovators, entrepreneurs and investors from all 50 states sent a letter to Pai and the FCC.

“Without net neutrality, the incumbents who provide access to the Internet would be able to pick winners or losers in the market,” the letter reads. “They could impede traffic from our services in order to favor their own services or established competitors. Or they could impose new tolls on us, inhibiting consumer choice…Our companies should be able to compete with incumbents on the quality of our products and services, not our capacity to pay tolls to Internet access providers.”

If net neutrality gets abolished, companies like Verizon, Comcast, Oracle and AT&T have said they can now reinvestment on infrastructure and broadband technology in communities throughout the United States.

“We also support Chairman Pai’s proposal to roll back Title II utility regulation on broadband,” Kathy Grillo, Verizon senior vice president and deputy general counsel, public policy and government affairs, said in a statement released on April 26. “Title II (or public utility regulation) is the wrong way to ensure net neutrality; it undermines investment, reduces jobs and stifles innovative new services. And by locking in current practices and players, it actually discourages the increased competition consumers are demanding.”

AT&T Chairman and CEO Randall Stephenson echoed Grillo’s comments.

“AT&T continues to support the fundamental tenets of net neutrality. And we remain committed to open internet protections that are fair and equal for everyone,” he said. “The bipartisan, light-touch regulatory approach that Congress established at the internet’s inception brought American consumers unparalleled investment in broadband infrastructure, created jobs and fueled economic growth. It was illogical for the FCC in 2015 to abandon that light-touch approach and instead regulate the internet under an 80-year-old law designed to set rates for the rotary-dial-telephone era.”

While many Silicon Valley tech companies have voice opposition to the FCC plan, the multinational computer corporation Oracle has levied support. In a letter sent to the FCC in early May, Oracle said “the stifling open internet regulations and broadband classification that the FCC put in place in 2015 – for just one aspect of the internet ecosystem – threw out both the technological consensus and the certainty needed for jobs and investment.”

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Whether or not Pai and the FCC cement their proposal, the Net Neutrality rules will remain in effect through 2018.

Members of the public have until July 17 to comment on the FCC’s net neutrality proceeding. Reply comments will then be due on August 16, unless the FCC extends the process. After that, a final FCC decision on the net neutrality rollback could take several more months.

DMGS will continue to monitor this and provide updates as it develops.

Brett Goldman edited this report.

“Ni de droite ni de gauche”: A Primer on the French Legislative Election

By: Emily Beiser (Posted 6/21/17)

La République En Marche, the party of the newly elected French president Emmanuel Macron, won 306 of 577 seats in the National Assembly (lower house) on Sunday, June 18th, 2017, giving it a majority of 53%. En Marche, or On the Move, in English, was only founded as a social-movement-cum-election-campaign last April and officially declared a party upon the election of President Macron (who shares his initials—E.M.—with that of the party) this May. En Marche’s win in this election has come at the downfall of the parties which historically held the majority: Le Parti Socialiste on the left, and Les Républicains, on the right. An estimate by the French Newspaper Le Monde suggests just 148 of the representatives (called deputies) elected in 2012 were reelected this year, making this not only an assembly of a new party, but also an assembly of freshmen deputies – three quarters of the assembly.

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What do the results of this legislative election mean for France?

First, we must understand how French elections work. The French term, called the quinquennat, lasts five years. The presidential and legislative terms overlap nearly perfectly, save the six weeks between the presidential election and the legislative election.  Each election is two rounds; the first round requires a majority to win. If no candidate has the majority, which is generally the case, the two candidates with the most votes face off a week later in a second vote. This presidential election cycle was divisive: with each of the top four presidential candidates getting between 19% and 25% of the vote in the first round, though Macron won with a hefty 66% in the second round against the far-right Marine Le Pen. The legislative elections which followed six weeks later showed En Marche’s prominence yet also had the lowest turnout of any legislative elections in the history of the 5th Republic, with just 42% of registered voters voting. By contrast, the previous election, in 2012, saw a 57% turnout rate. The low turnout, unusual for France, means many deputies won with approval from less than 30% of the registered voters.

President Macron claims that his party is “ni de droite, ni de gauche,” or “neither left nor right, but firmly centrist”.

Though a former head of economy for the socialist and deeply unpopular President Hollande, Macron’s economic policy is seen as leaning to the right due to his past work at an investment bank and his support of what he calls the “uberization” of the economy – namely, a flexible workforce which receives fewer protections. En Marche and Macron claim centrism due to leftist standings on social issues including “the family”, refugees, and gender equality. This support of gender equality is reflected in Macron’s choice of gender parity within the cabinet and in En Marche’s selection of legislative candidates, of which over 50% were women. While En Marche lost just 17 of the seats where they ran candidates, the French legislative assembly is at a record of 38% women, up from the previous assembly’s 26%.

The French left has seen a sharp reduction in deputies and a new leftist party, La France Insoumise (or Rebellious France), has proposed a new political system via a 6th Republic. Yet La France Insoumise only won 17 seats. The Parti Socialiste, the established left wing party of former President Hollande, won just 29 seats, making the election a devastating loss compared to the 258 won in 2012. This loss may be due in part to the extreme unpopularity of former President Hollande. Near the end of his time in office, a poll by Le Monde found just 4% of respondents were satisfied with his actions. A former member of cabinet for Hollande—though never a member of Le Parti Socialiste—President Macron retains support for parts of the fading party, endorsing another former Hollande cabinet member, Myriam El Khomri, in a legislative race in which En Marche had no candidate. En Marche’s majority suggests neither collaboration nor cohabitation will be necessary, but it remains to be seen how Macron will lead his new party.

On the right, Les Républicains, formerly known as L’Union pour un Mouvement Populaire in the 2012 election, won 113 seats, a decrease of 72 seats from 2012, despite scandal surrounding party leader François Fillon’s use of public money while Prime Minister. As the party with the second most seats in the Assembly, it remains a significant stronghold of the right. The far-right Front National has a high profile and power to move debate towards the right, especially after Marine Le Pen, the party leader, was in the second round of the presidential elections against Macron. It won just eight seats, but saw an increase compared to winning two seats in 2012.

En Marche’s majority in the National Assembly may not be paralleled by the Senate; just half of the Senate is up for election in September, and it is elected indirectly by officials, with a disproportionately strong rural vote. However, as the National Assembly is the more powerful of the houses in practice, a majority in the assembly solidifies President Macron’s power after a divisive Presidential election. Moreover, it concretes En Marche’s own viability. As the figurehead, father, and namesake for the party, Macron’s performance as president and party leader will be key in the future of the party during and after his tenure as leader.

Emily Beiser is a summer intern in DMGS’s Philadelphia office. She currently in a dual BA program at Sciences Po in France and Columbia University in NYC. 

Election Recap: GA-06 and SC-05 Special Elections, and the British Parliamentary Election

Over the past month there have been several high profile and very hotly contested special elections in the United States, including in Georgia’s 6th Congressional District and in South Carolina’s 5th Congressional District. Each one of these races filled a void left by a Trump cabinet appointee and saw record amounts of money being spent. In addition, earlier in June, the British Parliament held a snap Parliamentary election, that could be the sign of more political instability in the UK following last summer’s Brexit vote. We have compiled a breakdown and analysis of each of these races below.

Georgia’s 6th Congressional District 

Republican Karen Handel defeated Democrat Jon Ossoff to win Georgia’s Sixth Congressional District during the culmination of a hotly contested special election on Tuesday June 20th. Billed as a referendum on President Donald J. Trump, the highly visible race became the most expensive congressional election in United States history, attracting approximately $60 million, according to Issue One, a nonpartisan advocacy group. That money includes funding for the April 18 special election, as well as the June 20 runoff. Outside groups spent more than $27 million on the election, with pro-Handel organizations spending roughly 2.5 times more than pro-Ossoff groups.

With 52 percent of the vote, Handel fills a seat vacated by former Rep. Tom Price, who now serves as the Health and Human Services Secretary in the Trump administration. Handel’s win makes her the first Republican congresswoman in Georgia history. Similarly, she was the first Republican Secretary of State elected in Georgia after a victory in 2006. In 2010, she narrowly lost the GOP gubernatorial nomination before becoming the Senior Vice President of Public Policy at the Susan G. Komen Breast Cancer Foundation. However, she resigned in 2012 after the organization reversed a plan to cut ties with Planned Parenthood. After a failed senate bid in 2014, Handel announced her candidacy for the sixth district’s seat in February 2017. Before Tuesday’s runoff, Handel and Ossoff competed in a special election on April 18. Both failed to grab a majority of the vote. Ossoff, who was one of five Democrats received 48 percent, while Handel was one of eleven Republicans and only garnered 18 percent.

Their respective performances set the stage for a heavily funded race that attracted an intense level of national media.

With $23.9 million spent on both the special election and the runoff, Ossoff came within 10,000 votes of claiming a reliably Republican district located in the Northern Atlanta suburbs. Former Speaker of the House Newt Gingrich held the seat from 1979 to 1999, while Price consistently won the district with more than 60 percent of the vote since his initial victory in 2004. However, Trump only won the district by two points in November–the same margin of victory for Handel. GOP ads attacking Ossoff hammered the former congressional aide and documentary filmmaker for a lack of experience and living outside the district. The ads also focused on funding he received from west coast donors.

Handel will likely face another intense challenge during the 2018 midterm elections.

South Carolina’s 5th Congressional District

Republican Ralph Norman defeated Democrat Archie Parnell in another special election Tuesday night. Norman fills a seat vacated by current White House Budget Director Mick Mulvaney. While Northam won the reliable conservative district 52 to 48 percent, it pales compared to Mulvaney’s 21-point victory in November. Moreover, Trump won the district by 18 points.

Norman has served as a hardline conservative in the state legislature since 2009, and has already promised to join the House Freedom Caucus. Parnell, a former Goldman Sachs and Exxon Mobil employee, saw the Democratic Congressional Campaign Committee pour $300,000 into his race, while the Georgia contest received $5 million. The National Republican Congressional Committee spent less than DCCC in South Carolina, while pouring more than $6.7 million into Handel’s race.

The British Election of June 2017

On June 8th, 2017, each of the United Kingdom’s 650 Parliamentary constituencies elected new Members of Parliament (MPs) to the British House of Commons.  Under the terms of the Fixed-term Parliaments Act of 2011, an election was not scheduled to be called until at May 7th, 2020, however on April 19th, 2017, Prime Miniser Theresa May called for snap elections in the wake of growing discontent.

Although Prime Minister May’s Conservative party had been approximately 20 points ahead in the polls of the Labour party, what had occurred was anything but, and resulted in what has been described as one of the most dramatic collapses in British political history. In a surprising result, the Conservatives received a net loss of 13 seats, with 42.4% of the vote, while Labour received a net gain of 30 seats, with a 40.0% of the vote.

UK election 2017.PNGThis was the closest result between the two main parties since February 1974, and the highest percentage of the vote for an opposition party since 1970. Although the Prime Minister May was invited by the Queen to form a Government, it is currently unclear how long she will retain power, given the overwhelming numbers the Labour opposition government has seen. With rising unrest over social issues, international issues, and of course, the backlash over last year’s Brexit vote, Theresa May’s time as prime minister may in fact be short lived.

Danny Restivo and Brett Goldman Contributed to This Report. Posted 6/21/17

Virginia Primary Recap

By Danny Restivo (Posted 6/14/17)

Former Republican Party Chairman Ed Gillespie and Lieutenant Governor Ralph Northam clinched their respective party’s nominations for Virginia’s 2017 gubernatorial race:

  • Northam defeated his challenger from the left, former Congressman Tom Perriello with 57 percent of the vote, while Perriello grabbed 44 percent (303,846 to 239,505).
  • Gillespie narrowly defeated Prince William County Supervisor Corey Stewart. He had 43.7 percent compared to Stewart’s 42.5 percent, while state Senator Jack Wagner came in a distant third with just under 14 percent.

With 99 percent of precincts reporting, Stewart did not concede defeat on election night. His performance shocked many pollsters who predicted a 20-point Gillespie victory. However, a low turnout among Republican voters—540,000 Democrats compared to 360,000 Republican—and a solid turnout among a galvanized base gave Stewart a much-needed boost.

In the Lieutenant governor’s race:

  • Former assistant U.S. Attorney Justin Fairfax defeated Gene Rossi, a retired federal prosecutor and Susan Platt, a former Democratic operative and lobbyist to win the Democratic nomination. Fairfax grabbed nearly 58 percent of the vote while Platt and Rossi each had 30 and 12 percent, respectively.
  • On the Republican side, State Senator Jill Vogel earned 43 percent of Virginia GOP voters, while her closest competition, State Senator Bryan Reeves, garnered 40 percent.

In Virginia, the Lieutenant governor is a part-time position that includes presides over the state senate and breaking tied votes.

General Election- Preview

The 2017 Virginia general election will be held on November 7 and following this very contested primary, Democrats appear to be starting out with the advantage. A Northam-vs.-Gillespie general election may look surprisingly similar to other states. Early analysis of turnout suggests that the Virginia primary looked similar to the NJ primary held last week; Democrats had turnout and enthusiasm on their side with approximately 540,000 votes to the GOP’s 366,000 votes.

Analysts are not on yet betting on Gillespie and are convinced that Virginia may no longer be a “purple” state. Republicans have gone 1-9 in major VA statewide races since 2004, and if turnout in this primary shows anything, the Democrats may out perform once again. It is also worth noting that while Gillespie eked out a a win, his win was not without a major fight between the establishment and outsider wings of the republican party.  With five months to go until the general election, both Gillespie and Northam have their work cut out for them in what will no doubt be an indicator of things to come in 2018.

For a complete breakdown of the Virginia gubernatorial candidates, please read our Primary Preview published on June 2.

Democratic Primary- Recap

Ralph Northam– As Lieutenant Governor to Governor Terry McAuliffe, Northam usurped the role of heir apparent until Perriello announced his candidacy in January. Many of dubbed the race as an extension of the Clinton-Sanders fight in Virginian. Northam has received endorsements from state party leaders like McAuliffe, and Democratic Senators Tim Kaine and Mark Warner.  Additionally, every Democrat in the state legislature has backed Northam and every Democratic congressman except one has supported him. While his opponent rides a wave of anti-Trump sentiment, Northam remains a centrist Democrat who admitted supporting George W. Bush in 2000 and 2004. However, the former U.S. Army doctor has shuffled further to the left since becoming state senator in a rural district in 2007. As a Virginia legislator and a lieutenant governor, he helped ban smoking in restaurants, worked with victim’s families of the Virginia Tech shooting to curb gun control and helped legalize cannabis oils. As Governor, Northam said he wants to offer tax credits to businesses with paid family leave. He also wants to revise the state’s grocery tax, which he says would cost $67 million. He’s also suggested decriminalizing possession of marijuana. During a debate with Perriello, Northam touted his relationship with Republican legislator saying “I look forward to the relationships I already have in Richmond and continuing that process in the upcoming four years.” As of March 31, Northam had $3.3 million in campaign funds.

Tom Perriello- The former congressman was elected to represent Virginia’s fifth congressional district in 2008. However, his support for the Affordable Care Act cost him his seat two years later. Following his term, he worked for a progressive nonprofit before heading to the State Department in 2014. After announcing his candidacy in January, he quickly aligned himself with the party’s liberal messaging. Perriello has positioned himself as a policy-oriented progressive who supports free community college, paid family leave and universal pre-kindergarten. He’s also railed against a gas pipeline through Virginia. Meanwhile, Perriello has received outside support from Senator Elizabeth Warren (Mass-D), Senator Bernie Sanders (Vt-I) and several Obama aides. Their support comes in a state where Hillary Clinton won nearly two-thirds of the Democratic electorate against Sanders in 2016. Furthermore, more than half of Perriello’s $2.2 million in campaign funding has come from massive donors outside the state, including contributions from George Soros. While Perriello has championed progressive causes, his voting record on abortion issues and gun rights while in congress has come under fire.

Republican Primary- Recap

Ed Gillespie– The former counselor to George W. Bush and Chairman of the Republican National Committee ran against Senator Mark Warner in 2014. Gillespie’s performance surprised many (he lost by less than one percentage point). Prior to his run, he was a lobbyist in Washington, D.C., and provide government affairs service for Tyson Foods. His critics from the right have said he helped push legislation friendly to illegal immigrants. As part of his platform, Gillespie aims to cut income taxes by 10 percent over three years, improve government efficiency and ethics oversight, ban personal use of campaign funds, while strengthening second amendment rights and abortion restrictions. According to a May poll by Washington Post-Schar School, Gillespie has strong support among all registered Republicans. With $3.3 million in campaign funding, the former RNC chair has 38 percent support while a quarter remain undecided.

Corey Stewart- Known more for his pro-Confederate antics rather than his policy chops, the chairman of the Prince William Board of County Supervisors promises to crack down on illegal immigration while protecting Virginia’s Confederate symbols. As Chair of President Trump’s Campaign in Virginia, Stewart was fired for staging a protest at the State’s GOP headquarters. The anti-establishment Stewart wants to phase out the income tax, outlaw abortion without exception and slash state spending. The firebrand Stewart has attacked Gillespie repeatedly for receiving more than $1 million to lobby for Tyson Foods when allegations of smuggling illegal immigrants to arose. With slightly more than $400,000 in campaign funding, Stewart has 18 percent support among Virginia Republicans.

Jack Wagner- Originally elected to the Virginia House in 1992, then to the State Senate in 2000, Wagner has a significant level of experience in Virginia politics. As a Virginia Beach resident representing the 7th district, he sits on the Commerce and Labor, General Laws and Technology, Rehabilitation and Social Services, and Transportation committees. While Stewart and Gillespie want to cut state spending, Wagner maintains the budget is lean enough—citing a $1.2 billion shortfall in 2016. Wagner wants to increase the gasoline tax to subsidize infrastructure projects. He also wants to create accredited vocational programs in high schools that will support technical training for new jobs. Similar to his opponents, he opposes abortion in all instances except in the case of rape or if the mother’s life is endangered. With $178,000 in campaign funds, Wagner has 15 percent support among registered Republican voters.

 

 

2017 New Jersey Primary Election Recap

On June 6, 2017 New Jersey held its statewide primary.

While there were several legislative districts with contested seats, the most watched race both in NJ and the larger region was the Gubernatorial primary. The outcome of this race would decide which candidate would receive their respective party’s nomination to square off in November to succeed outgoing Governor Chris Christie. In addition to the Gubernatorial primary, several legislative seats were challenged. It has been referred to as one of the largest fields the state has seen in a dozen years, with far more contested seats than two years ago.

Gubernatorial Primary

Four Democrats and two Republicans sought their respective party’s nomination for 2016_lg_officialgovernor. A Quinnipiac University poll released in May 2017 showed Democrat Phil Murphy, former ambassador to Germany, and Republican Kim Guadagno, lieutenant governor, as clear favorites to succeed Chris Christie.philip_d-_murphy

Indeed, the election played out just as anticipated, with Ambassador Murphy (48.3%) and Lt. Governor Guadagno (46.8%) receiving their party’s nominations:

Republican Primary       Democratic Primary    
CANDIDATE VOTE PERCENT   CANDIDATE VOTE PERCENT
Kim Guadagno 112,899 46.80% Philip Murphy 240,279 48.30%
Jack Ciattarelli 75,018 31.1 Jim Johnson 109,086 21.9
Hirsh Singh 23,634 9.8 John Wisniewski 107,661 21.6
Joseph Rullo 15,714 6.5 Raymond Lesniak 24,092 4.8
Steven Rogers 14,085 5.8 William Brennan 11,122 2.2
Mark Zinna 5,127 1

Contested Legislative (Assembly and Senate) Races

In addition to the gubernatorial primary, nine Legislative Districts had contested Senate elections: the 7th, 12th, 13th, 14th, 17th, 24th, 35th, 37th and 40th; and fifteen Legislative Districts had contested Assembly races: the 1st, 2nd, 3rd, 6th, 7th, 11th, 12th, 15th, 17th, 22nd, 24th, 26th, 31st, 37th and 40th.

All told, a total of 278 candidates were on the ballot for state Senate and Assembly seats, resulting in over 20 contested primaries in New Jersey’s 40 legislative districts. It has been referred to as one of the largest fields the state has seen in a dozen years, with far more contested seats than two years ago.

We have compiled a breakdown of select races as follows:

Senate:

LD-7: Assemblyman Troy Singleton ran uncontested in the Democratic primary for the district’s Senate seat, which is being vacated by retiring Republican Diane Allen. Singleton will face Riverside Committeeman Rob Prisco, who ran uncontested in the GOP primary.

LD-12: In the Republican primary for Senate in LD-12 incumbent Samuel Thompson with 60% of the vote defeated his long time rival and challenger, Art Haney, chairman of the Old Bridge Republican organization.

LD-13: In the Democratic primary for Senate in LD-12, Sean Byrnes defeated Joshua Leinsdorf with 93% of the vote. Byrnes will face Republican Assemblyman Declan O’Scanlon in the race to replace retiring Senator Joe Kryillos.

LD-14: In the Republican primary for Senate in LD-14, Ilena Schirmer defeated Bruce MacDonald with 81% of the vote.

LD-17: In the Democratic primary in LD-14, incumbent Senator Bob Smith defeated challenger William Irwin with 72% of the vote. Irwin, the President of the Piscataway school board and a progressive activist, unsuccessfully attempted to capitalize on momentum seen by other “outsider” candidates.

LD-24: In the Republican primary in LD-24, incumbent Senator Steven Oroho
successfully defended his seat against challenger William Haveden, receiving 75% of the vote. The district–among North Jersey’s most Conservative–saw the Gas Tax as a major issue in the race by the challenger. Fortunately for incumbent Oroho, this did not resonate with voters.

LD-35: In the Democratic primary for LD-35, Senator Nellie Pou handily defeated her challenger, Haytham Younes, with 95% of the vote. Senator Pou is currently the chair of the Senate Commerce Committee and serves on the Senate Higher Education and Judiciary committees.

LD-37: In the Republican primary for LD-37, Modesto Romero defeated Eric Fisher with 53% of the vote. Romero will go on to face Senator Loretta Weinberg in the General Election. Weinberg is incredibly popular in this heavily Democratic district.

LD-40: Both the Assembly and Senate primaries in LD 40 are considered some of the most interesting in the state. For the GOP senate primary, Kristin Corrado (62%) defeated Paul DiGaetano (30%) and Edward Buttimore (38%) to succeed retiring Senator Kevin O’Toole.

Assembly:

LD-1: The race for LD-1’s Assembly seats saw James Sauro and Robert Campbell defeat Brian McDowell in the GOP Primary. The race, which includes parts of Atlantic, Cape May, and Cumberland counties, including the city of Cape May, received statewide attention because of a cellphone video of a drunken McDowell making inappropriate comments towards a woman at a bar.

LD-2: In the Democratic Primary for LD-2, incumbent Assemblyman Vincent Mazzeo, and John Armato defeated a large field of four other candidates to receive their party’s nomination. Republican Assemblyman Chris A. Brown is running for retiring Senator Jim Whelan’s seat.

LD-3: The Democratic incumbents in LD-3, Assemblymen John Burzichelli and Adam Taliaferro both retained their seats with 46% of the vote against challenger John Kalnas.

LD-6: In South Jersey’s 6th Legislative District, incumbents Assemblywoman Pamela Lampitt and Assemblyman Lou Greenwald retained their seats with 44% and 43% of the vote, respectively. Both Lampitt and Greenwald defeated challenger Frederick Dande and will not face opposition in the fall.

LD-7: In the 7th Legislative District, incumbent Assemblyman Herb Conaway retained his seat, while Carol Murphy defeated Jennifer Chuang for the seat being vacated by Assemblyman Troy Singleton, who ran for Senate.

LD-11: In the 11th Legislative District, both Assemblywoman Joann Downey and Assemblyman Eric Houghtaling retained their seats.

LD-12: In the 12th Legislative District GOP primary, incumbent Assemblymen Ronald Dancer and Robert Clifton retained their seats against 3 challengers including Debbie Walker, Alex Robotin, and John Sheard.

LD-15: In the Democratic Primary in LD-15, Assemblywoman Elizabeth Muoio and Assemblyman Reed Gusciora retained their seats.

LD-17: In the Democratic Primary in LD-17 incumbent Assemblymen Joseph Egan and Joseph Danielsen both fended off progressive challengers Heather Fenyk and Ralph Johnson.

LD-22: In the Democratic Primary in LD-22, incumbent Assemblymen James Kennedy and Jerry Green both retained their seats.

LD-24: In the Democratic Primary in LD-24, Kate Matteson and Gina Trish received the party’s nomination. Matteson and Trish will face off against Republicans Assemblyman Parker Space, and newcomer Harold Wirths in the fall.

LD-26: In the Republican primary in LD-26, incumbents Assemblyman Jay Webber and Assemblywoman BettyLou DeCroce retained their nominations and will face off against Democratic challengers William Edge and Joseph Raich. In the GOP primary, Assemblywoman fought off challengers Hank Lyon and John Cesaro, both Morris County Freeholders, who criticized her for her support of the Gas Tax.

LD-31: In the Democratic primary for LD-31, incumbents Assemblywoman Angela McKnight and Assemblyman Nicholas Chiaravalloti retained their seats.

LD-37: For the Republican primary in LD-37, Gina Tessaro and Angela Hendricks received their party’s nomination for Assembly. They will face off against Assemblyman Gordon Johnson and Assemblywoman Valerie Huttle. 

LD-40: The Assembly primary for LD-40 was just as heated as the Senate primary. For the GOP, incumbent Assemblyman Kevin Rooney held on to his seat, along with former Wykoff mayor Christopher DePhillips. Rooney and DePhillips ran as a slate with Kristin Corrado, defeating former State Senator Norman Robertson and Joseph Bubba.

Brett Goldman, DMGS Manager of Special Projects, contributed to this report.

Capitol Commentary: The Week Ahead in Washington 6/5/17

Days after President Donald Trump postponed fulfilling a campaign promise to relocate the U.S. Embassy to Jerusalem, the Senate plans to commemorate the 50th anniversary of Israel’s control of a city that is holy to three religions. Today’s scheduled vote to celebrate Jerusalem’s reunification during the 1967 Six-Day War kicks off a busy Senate week that is also slated to include the first public testimony by ex-FBI Director James Comey since Trump fired him on May 9. As lawmakers return from a week-long recess, the House has set votes on legislation to repeal the 2010 Dodd-Frank bank-regulation law that Congress enacted in response to the 2008 financial crisis.

Russia Probe

The congressional investigations of Russian meddling in last year’s presidential election and the Kremlin’s possible collusion with Trump’s campaign are accelerating with a new round of subpoenas and Comey’s scheduled testimony Thursday before the Senate Intelligence Committee. Lawmakers want to learn more about whether Trump pushed Comey to drop the FBI’s probe of former National Security Adviser Michael Flynn’s financial ties to Russia and Turkey. Look to see if a White House legal review results in the president invoking executive privilege to prevent Comey from testifying about his conversations with Trump. Comey’s dismissal led to former FBI Director Robert Mueller III’s appointment as special counsel overseeing the Russia investigation.

Swipe Fees

Intense lobbying by retailers such as Wal-Mart Stores Inc. against a provision in the Dodd-Frank rollback that would lift the cap on fees that banks charge merchants for debit-card purchases prompted updated language that preserves the status quo. The change, made in updated bill text released last week, will enable Republicans to avoid a politically charged vote on legislation that has a dim future in the Senate, where Democrats have the votes to block it.

Surveillance Law

The terrorist attacks in London lend new urgency to a Senate Intelligence Committee hearing set for Wednesday on the Foreign Intelligence Surveillance Act, which authorizes the National Security Agency to eavesdrop on suspected spies and terrorists. A key provision authorizing the bulk electronic surveillance of foreign persons overseas without a warrant expires at year’s end and supporters are bracing for a legislative fight.

NSA Director Mike Rogers and Dan Coats, the former Indiana senator who Trump appointed director of national intelligence, are expected to press lawmakers to renew the provision, known as Section 702, without changes.

Unified Jerusalem

Today’s scheduled vote on the Jerusalem resolution, S. Res. 176, perpetuates debates over moving the U.S. Embassy and the status of the holy city. Israel’s complete control of Jerusalem is not recognized by other nations because Jerusalem was envisioned as an international city under the 1947 United Nations resolution that partitioned Palestine and set the borders of the new Jewish nation that was founded in 1948. Before 1967, Israel held West Jerusalem, and Jordan controlled the Old City. Jews were barred from visiting the Western Wall of the Temple Mount, sacred ground known to Muslims as the Noble Sanctuary. Christians venerate the nearby Church of the Holy Sepulchre as the location of Christ’s tomb.

The Senate vote comes days after Trump, like his predecessors, signed a six-month waiver to continue delaying the requirement of a 1995 law mandating the embassy move. The White House said in a statement that Trump still planned to move the embassy but wanted to preserve the status quo to facilitate a possible settlement between Israelis and Palestinians.

ACA Repeal

Senate Republicans renew their efforts to find consensus on repealing Obamacare. House-passed legislation, H.R. 1628, has little support in the Senate, where Republicans are divided over how to proceed. Republican Senator Richard Burr of North Carolina told a home-state television station that a deal this year is “unlikely.” Watch for Democrats to question Health and Human Services Secretary Tom Price about his administration of the Affordable Care Act when he appears Thursday before the Senate Finance and the House Ways and Means committees to explain his agency’s spending priorities for the 2018 fiscal year. Price leads a parade of Cabinet secretaries making trips to Capitol Hill to discuss Trump’s proposed budget.

Special Election

Voters in California’s 34th District go to the polls tomorrow to pick a successor to former Representative Xavier Becerra, who was appointed state attorney general in January. State assemblyman Jimmy Gomez, preferred by House Democratic leaders to win the Los Angeles seat, faces lawyer Robert Lee Ahn, a former city planning commissioner. It is the only vacant seat being defended by Democrats after Trump appointed Price, a former Georgia representative, and three other House members to top positions in his administration.

John Zang Contributed to This Report