“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.

 

 

DMGS Harrisburg Executive Director Named in Pennsylvania Power 100 List

Patty Mackavage, Harrisburg executive director with Duane Morris Government Strategies, was recently recognized by City & State PA as one of the 100 mostIMG_1230 politically influential Pennsylvanians in 2017. City & State PA, a media outlet covering Keystone Politics at the state and local level, credited Patty’s legislative work with three different governors, her diverse clientele and her knowledge of various issues impacting Pennsylvanians. Ranked at No. 60, Patty’s experience includes secretary and deputy secretary for legislative affairs in the administrations of both Governor Mark Schweiker and Governor Ed Rendell, as well as serving as legislative director for the Pennsylvania Department of Revenue during Governor Tom Ridge’s administration. With an expertise in the state budget process, and public finance/economic development, Patty now represents clients’ issues before the state legislature and local governments throughout Pennsylvania.

The 2017 City & State PA Power 100 list includes state and local officials, as well lobbyists, CEO’s, philanthropists, labor leaders and a number of other influential leaders in Pennsylvania. For a complete list of City & State PA’s Power 100, please visit City & State PA.

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Patty Mackavage with Ron Boston (L) and Stacy Gromlich (R) from the DMGS Harrisburg Team

 

Legislative Insight: Federal and State Gas Taxes

By Danny Restivo (posted 5/24/17)

Shortly after President Donald Trump entered the White House, he pledged a large investment in America’s infrastructure during a nationally televised address to Congress.

“To launch our national rebuilding, I will be asking the Congress to approve legislation that produces a $1 trillion investment in the infrastructure of the United States—financed through both public and private capital—creating millions of new jobs,” the President said during his February speech.

The American Society for Civil Engineers gave American infrastructure a D+ in its 2017 report card.Deteriorating infrastructure is impeding our ability to compete in the thriving global economy, and improvements are necessary to ensure our country is built for the future,” the report said. “While we have made some progress, reversing the trajectory after decades of underinvestment in our infrastructure requires transformative action from Congress, states, infrastructure owners, and the American people.”

The report also said current road conditions cost the country $160 billion in time and money every year, while a report from the Federal Highway Administration says the country’s transit system has a $90 billion backlog on repairs. Democratic lawmakers have long-supported federal dollars to help improve America’s roads, bridges, dams, airports and tunnels. Trump’s plan offers a rare opportunity for bi-partisan support in an increasingly fractured political environment.

While a final proposal has yet to be agreed upon, Trump has called for a public-private partnership, but that seems more viable in urban areas where companies can recoup money by levying tolls. In rural areas, where less people live, projects may not entice enough investment because of revenue concerns.

In early May, President Donald Trump signaled that he’s open to raising the federal gas tax to help subsidize infrastructure improvements.

“It’s something I would certainly consider,” the President said to Bloomberg News in an interview. His statement underscores an issue that’s plagued politicians for years. The last time Congress increased a nationwide gas tax was in 1993, when lawmakers approved a 19.3 cent per gallon tax on gasoline, and a 24.3 cent per gallon tax on diesel fuel. However, that tax has not adjusted for inflation, and the Highway Trust Fund has not kept pace. Since 2008, the federal government has injected $143 billion in the fund, while the tax has generated roughly $34 billion a year. However, the federal government usually spends $50 billion per year on transportation projects, leaving a $16 billion annual shortfall.

The Congressional Budget Office said the fund will become insolvent by 2021 without additional funding. According to the Joint Committee on Taxation, increasing the federal tax to 35 cents per gallon will create an additional $473.6 billion over a period of 10 years.

The Chamber of Commerce, AAA auto club and the American Trucking Association support a new gasoline tax. After the 2014 mid-term elections, the group sent a joint letter to the 114th Congress that lends support for a bill that increases the gas tax. 

“While no one wants to pay more, we urge you to support an increase to the federal fuels user fee, provided the funds are used to ease congestion and improve safety, because it is the most cost efficient and straightforward way to provide a steady revenue stream to the Highway Trust Fund.”

However, critics believe a gas tax will hurt working families by leveling fees on middle class commuters, many of whom supported Trump. Low gas prices may provide cover for a tax increase, but a sharp spike in gas prices could change consumer sentiments. In an interview with CNBC, Chevron CEO John Watson, pushed back against a tax on gas.

“I think a good first step would be to evaluate where existing taxes are going,” he said. “In other words, we have road taxes today. How are they being used? Are they being put to good use in rebuilding our infrastructure?”

In light of the debate, several states have increased their respective gas tax to shore up roads, bridges, tunnels and other state-operated transportation systems.Since 2015, sixteen states and the District of Columbia have enacted legislation to increase taxes on gas that help support infrastructure programs. According to American Road and Transportation Builders Association, voters approved 269 of the 361 transportation funding measures that appeared on township, city, county or state ballots in 2016. Many of these initiatives were approved in Democratic and Republican-dominated regions of the country. Furthermore, Louisiana, Minnesota, Oklahoma and Oregon have transportation funding measures pending in their respective legislatures.

Gas Tax Map

States Enacting Gas Taxes in 2017

California

The State Senate approved a 10 cent per gallon tax hike in April as part transportation bill estimated to raise $5.2 billion a year to repair state roads and highways. The legislation, which was backed by Governor Jerry Brown, increases the per gallon tax rate from 18 cents to 30 cents. The law also mandates $100 annual fee for electric cars, as well as annual fees ranging from $25 for cars valued at or under $5,000, to $175 for a car worth $60,000 or more. About $34 billion of the first $52 billion would go to repairing roads, bridges, highways and culverts, with most of the money split 50-50 between state and local projects.

Michigan

Michigan drivers saw a 7 cent tax increase in fuel prices at the beginning of the year, increasing a 19 cent per gallon tax to 26.3 cents per gallon, while diesel fuel will increase 11.3 cents from 15 to 26.3 cents per gallon as well. Lawmakers also approved a 20 percent increase in vehicle registration fees, while gas-electric hybrid and electric vehicles will experience an added $47 and $135, respectively. The hike is the first gas tax increase in 20 years, and aims to fund crumbling bridges and roads with an additional $2.3 billion over the next four years. The plan allocates 61 percent of the funding to counties, cities and villages, while the rest goes to state projects.

 

 

Indiana

Governor Eric Holcomb signed a $1.2 billion highway improvement plan in April which increases the Hoosier gas tax from 18 cents to 28 cents per gallon in July. Furthermore, registration and licensing fees will increase by $15. There’s also a $50 fee on hybrids and a $150 fee on electric cars. In addition, Holcomb intends to draft a plan that adds tolls for certain interstate projects by the end of 2018.

Montana

The Montana house assembly approved a bill this year that will levy a 6 cent per gallon gas tax increase phased-in over 6 years. More than four percent will take effect on July 1, while the remainder is implemented in 0.5 cent increments between 2019 and 2022. The Montana tax is expected to generate $28 million in 2018, and more in future years to help repair state roads and bridges, as well as the construction of new ones.

South Carolina

On May 10 the South Carolina House and Senate overrode a veto from Governor Henry McMaster to approve an infrastructure bill that increases the state’s gas tax. The legislation will enact a 12 cent per gallon increase phased in over six years, with a two cent increase occurring in July. The tax will eventually reach 28.75 cents per gallon while generating $600 million for infrastructure projects throughout the state.

Tennessee

The House and Senate approved a bill sponsored by Governor Bill Haslam, which would generate $350 million for the state’s highway fund, and boost road revenues for cities and counties. The gas tax will rise by 6 cents per gallon and the diesel tax by 10 cents on July 1. The bill also has several fee increases, including a $5 car registration increase and a $100 fee on electric car users

States Enacting Gas Taxes in 2016

New Jersey

In October 2016, Governor Chris Christie signed a bill that increased the gasoline tax to 23 cents per gallon. The bill marked the first tax hike of Christie’s tenure, and the first tax increase on gas since 1988. The law takes the second lowest gas tax rate from 14.5 cents per gallon, to 37.5 cents, the seventh highest. The law levies diesel users with a 15.9 cent per gallon tax increase, totaling more than 27 cents per gallon.

The bill will generate $1.23 billion annually to help finance an eight year, $16 billion transportation program. The legislation comes after the state’s Transportation Trust Fund, which helps pay for Garden State roads, bridges and railways, had no money to pay for new projects over the summer.

After Christie signed the bill in October, voters approved a November referendum to amend the state’s constitution to allocate the tax revenue to transportation projects. The law prevents lawmakers from reallocating the money to different projects.

States Enacting Gas Taxes in 2015

Georgia

The Georgia Legislature enacted the Transportation Act of 2015, increasing the excise gas tax by 7.5 cents per gallon, along with a four percent state sales tax, to 26 cents per gallon. These rates will then adjust to Consumer Price Index Every year. The money accrued from the tax will allocate to future state transportation projects. Additionally, the state will also collect a $5 per night hotel fee, as well as fees for heavy trucks and a $200 registration fee for electric cars. The law also eliminates a $5,000 tax credit for anyone who purchases an electric car. House Bill 170 also allows counties and municipalities to levy a 1 percent use tax on all motor fuels. The bill aims to collect $900 million a year to help fund transportation projects throughout the Peach State.

Idaho

Idaho’s gas tax increased 7 cents after state lawmakers approved a funding bill in April 2015 to help raise money for road repairs. The house bill increased the gas tax from 25 to 32 cents, to help raise more than $95 million a year. The accrued revenue is then split between local governments and state highway departments (60/40). Idaho also stipulates a $145 registration fee for an electric car, and a $75 fee for hybrid vehicles. However, a house bill introduced in 2017 will eliminate those fees if approved by the Governor.

Iowa

Governor Terry Branstad signed a bill in February 2015, which increased Iowa’s gas tax from 20 cents to 30 cents per gallon. The bipartisan initiative provides $215 million in annual funds for city, county and state roads. The gas tax increase received support from the Iowa Farm Bureau, the Chamber of Commerce, the trucking Industry, the Iowa State Association of Counties and the Iowa County Engineers Association. The gas tax legislation was the first fuel tax increase since 1989.

Kentucky

Kentucky lawmakers approved legislation pegging the gas tax to the average wholesale price of gas over a three-month span. However, a $1.46 drop in gas prices in 2015 created a significant shortfall in the Commonwealth’s transportation budget. As a result, the lower gas taxes helped create a $125 million gap for transportation projects in local municipalities and townships, as well as state highways. To ensure a steady stream of revenue, lawmakers approved a 26-cent minimum for the gas tax rate.

 

 

Nebraska

State legislators overrode a veto from the Governor to increase the state’s gas tax by cents per gallon, creating roughly $75 million a year in additional funding for transportation projects. The law says the gas rate will increase 1.5 cents every year for the next four years, through 2019. The State’s Transportation Innovation Act is estimated to raise $400 million. Nebraska’s gas tax has three components. This legislation will impact the fixed tax, which is set by state law at 12.3 cents per gallon in 2017. Meanwhile, the wholesale tax is pegged at the wholesale price and the variable tax adjusts every six months to meet the funding demands of previously approved state roads projects. The gas tax currently sits at 27.3 cents per gallon.

North Carolina

Governor Pat McCrory signed a bill reducing the fuel tax from 37.5 cents per gallon to 34 cents per gallon by 2016. In January 2017, the gas tax began using a formula that accounts for population, energy prices and the consumer price index to help adjust the rate. The reformed gas tax formula takes population and energy prices into account when calculating future gas tax increases in the years ahead. The first of those increased the rate to 34.3 cents per gallon.

South Dakota

Governor Dennis Daugaard signed legislation that increased the gas tax from 22 cents per gallon to 28 cents. The legislation also increases the excise tax on vehicle registration from three to four percent and increases license plate fees for noncommercial vehicles by 20 percent. The fuel tax hike will generate an estimated $40.5 million annually, while the excise tax increase will produce an additional $27 million to $30 million. Most of the revenue generated is allocated to state roads and local bridges. The new bill allows municipalities to levy their own taxes to repair roads in their jurisdiction.

Utah

State lawmakers approved legislation to increase the state’s gas tax by 5 cents per gallon from 24.5 cents. The legislation levies a 12 percent wholesale tax on fuel and pegs future increases to a formula that considers fuel prices and inflation. In March 2017, the state house voted to pass fuel tax increases of .6 cents per gallon beginning in 2019 and 1.2 cents a gallon in 2020, essentially reworking the formula established two years prior.

Washington

The Governor signed a 16-year transportation revenue package in August 2015, which increases the state’s gas tax to 44.5 cents per gallon. The legislation is part of the state’s $16 billion transportation project aimed at improving highways and roads, as well as non-highway projects like walkways, bike paths and transit systems. The two-part tax hike increased rates by an additional 4.9 cents a gallon, putting the total tax at 49.4 cents.

Technology Briefing: Hacking Vehicles

By Danny Restivo (Posted 5/3/17)

A few months ago, we looked at the legislative developments surrounding driverless vehicles–something that nearly all 50 states are thinking about. As driverless vehicles become reality and states continue to grapple with regulatory challenges, more threats have emerged, including the ability for hackers to take control of someone’s car whether they’re driving it or the car drives itself.

Recent technological developments have allowed drivers greater accessibility and convenience than ever before. Whether it’s a WiFi hotspot, a mobile car starter application, a locator connected to your phone or a computer located under the hood that monitors maintenance, new technology has given consumers and technicians a level of sophistication that was once the work of science fiction.

Unfortunately, a greater degree of convenience means an increased level of vulnerability. In August 2015, two hackers compromised a tech reporters’ vehicle on the highway (The Wired reporter was working on a story about the dangers of car hacking and was aware of their attempts). From a remote location, the two hacked into the reporter’s 2014 Jeep Cherokee and controlled the vehicles steering and brakes from a computer more than 10 miles away. Ultimately, the reporter’s car ended up in a ditch (no one was injured). The story grabbed public attention and Fiat Chrysler recalled more than 1.4 million vehicles, including Ram, Dodge, Jeep and Chrysler vehicles. A similar organized hack occurred in June 2016 when a British security firm purchased a 2017 Mitsubishi Outlander and successfully disabled the vehicles alarm system. Nissan, Tesla and Chevy have all experienced similar breaches in their vehicles computer systems.

The hacks underscore a growing concern among regulators and legislators that automakers haven’t safely created communication systems. In light of these security vulnerabilities, the FBI, The Department of Transportation and the National Highway Traffic Safety Administration issued a public service announcement in March 2016.

“While not all hacking incidents may result in a risk to safety – such as an attacker taking control of a vehicle – it is important that consumers take appropriate steps to minimize risk,” the statement said. “Therefore, the FBI and NHTSA are warning the general public and manufacturers – of vehicles, vehicle components, and aftermarket devices – to maintain awareness of potential issues and cybersecurity threats related to connected vehicle technologies in modern vehicles.”

They added: “Vulnerabilities stemming from wireless communication, such as a cellular phone or tablet connected to the vehicle via USB, Bluetooth, or Wi-Fi, can put drivers at significant risk,” the statement also included several best practices for minimizing cybersecurity risks:

  • Ensure vehicle software is up to date
  • Be aware of making any modifications to vehicle software
  • Exercise discretion when connecting third party devices to a vehicle
  • Be aware of who has physical access to your vehicle

If you end up a victim of a car hack:

  • Check for outstanding vehicle recalls or vehicle software updates
  • Contact the manufacturer or authorized dealer
  • Contact the National Highway Transportation Safety Administration
  • Contact the FBI

The NHTSA and the FBI also suggested that automakers and auto companies should consider the full life cycle of their vehicles, while creating a rapid response and recovery system to help stem cybersecurity incidents. With the introduction of autonomous driving technology by companies like Tesla Motors, Uber, and others, yet another layer of vulnerability has complicated the issue. In September 2016, the NHTSA issued a framework for states to regulate self-driving cars, but critics fault it for its lack of focus on car hacking. A 2016 report from the Government Accountability Office, an independent watchdog organization, said the Department of Transportation had not taken enough steps to help prevent car hacking.

“Until [DOT] develops such a plan … the agency’s response efforts could be slowed as agency staff may not be able to quickly identify the appropriate actions to take,” the report stated.

Shortly after hackers showcased their ability on a 2014 Jeep Cherokee, Senators Ed Markey (D-Mass) and Richard Blumenthal (D-Conn) introduced the SPY Act of 2015 (Security and Privacy in Your Car).  The proposed legislation would have created a uniform regulatory standard for vehicle communication, while protecting a driver’s privacy data. The bill would also have created a “cyber dashboard” to inform the public of how well the vehicle protects drivers’ security and privacy.  While Markey and Blumenthal’s legislation did not make it out of committee during the 114th Congress, they recently reintroduced the SPY Act legislation in March as S. 680, along with a reintroduction of the Cybersecurity Standards for Aircraft to Improve Resilience (Cyber Air) Act (as S. 679 in the 115th Congress).

“This critical legislation will help protect the public against cybercriminals who exploit advances in technology like wireless-connected aircraft and self-driving cars,” said Blumenthal in a release following the reintroduction. “As technology rapidly advances, we must ensure that auto and airline industries protect their systems from cybersecurity attacks. Security and safety cannot be sacrificed as we achieve convenience and promise of wireless progress.”

Markey and Blumenthal cited a need to reintroduce the legislation because of an increased vulnerability in our transportation systems. After Uber unveiled plans to use driverless cars in Pittsburgh in September, the National Highway Transportation Safety Administration unveiled a federal framework for the technology to prosper, giving states a significant degree of sovereignty. However, some believe the NHTSA’s mandate didn’t go far enough in solving technological vulnerabilities in vehicles. Conversely, tech researchers and developers fear any federal regulatory framework will not ensure safety because cyber technology often outpaces the law, making hacks more accessible.

In a bipartisan effort, the House introduced a new piece of legislation to help safeguard drivers. Representatives Ted Lieu (D-CA) and Joe Wilson (R-SC) have cosponsored the Security and Privacy in Your Car Study Act of 2017. Compared to the senate bill, the House bill would only perform a study of best practices.

While federal lawmakers debate the best path forward, some states have taken their own steps to improve cybersecurity in vehicles. In Michigan, home of the American auto industry, state lawmakers have decided to use deterrence as a weapon against car hacking. In August, the state senate unanimously passed a law that would increase the penalty to life in prison if the interference of a vehicle’s computer system resulted in death. According to state law, there’s a 10-year sentence and $50,000 fine for anyone who tampers with the computer system of a driverless vehicle that results in injury.

Virginia Governor Terry McAuliffe announced a public-private commission in May 2015 to help protect state troopers against cyberattacks. Just prior to the announcement, The Old Dominion became the first state to create its own information and analysis sharing organization to help prevent against cyber-attacks. As part of its public safety initiative, researchers hacked into two Virginia State Trooper vehicles; a 2012 Chevrolet Impala and a 2013 Ford Taurus. Researchers from the University of Virginia and a few private tech companies, hacked into the vehicles control system before meddling with the gear shift, instrument panel, car locks, trunk and accessing the vehicles Bluetooth and key fob. While the organized hack was an attempt to raise awareness about the seriousness of car hacking, Governor McAuliffe continued a call for voluntary partnership between private and public entities in an effort to prevent car hacks.

While Michigan and Virginia pursue preventative action against car hacking, many state legislative bodies have tabled the issue. Every state has some sort of law on computer hacking, but none (besides Michigan) have laws that specifically deal with hacking vehicles. Meanwhile, New York University, University of Nevada, North Dakota State University, and others, have taken steps in research and development to create cybersecurity systems for self-driving cars. Furthermore, The Oak Ridge National Laboratory in Tennessee has begun experimenting with electronic control systems to help protect the federal government’s automotive fleet.

“Car hacking remains a significant issue for automakers and regulators, but it hasn’t spurned the federal government into action, just yet” says Brett Goldman, DMGS Manager of Special Projects. He adds that “it’s safe to say that at some point in the future, car hacking will receive greater public scrutiny, but whether that comes as an issue of legislative and regulatory foresight or as a reactionary measure to the unthinkable remains to be seen.”

 

Looking Ahead: The Intersection Between Cyber Security Regulation and the Financial Sector

By Danny Restivo

On September 13, The New York State Department of Financial Services (NYDFS) proposed a law calling for all regulated financial institutions in the Empire State to enact a list of cybersecurity measures.[1] The proposal requires banking, insurance, and financial services companies under the jurisdiction of the NYDFS to adopt and maintain a strong cybersecurity program.

Among the guidelines, the proposed regulation requires organizations (termed as “covered entities”) to designate a Chief Information Security Officer (CISO) to oversee cyber security programs and procedures. The mandates also include oversight measures for information shared by or with third parties, including law firms, accounting services, and marketing groups.[2]

“New York, the financial capital of the world, is leading the nation in taking decisive action to protect consumers and our financial system from serious economic harm that is often perpetrated by state-sponsored organizations, global terrorist networks, and other criminal enterprises,” said Governor Andrew M. Cuomo in a statement from the New York State Department of Financial Services. “This regulation helps guarantee the financial services industry upholds its obligation to protect consumers and ensure that its systems are sufficiently constructed to prevent cyber-attacks to the fullest extent possible.”[3]

Currently, the proposed regulation is open to a 45-day public commenting period after it was published on September 28 in the New York State Register. If the proposal is adopted, covered entities will have 180 days from January 1, 2017 to comply with its requirements.
The proposal aims to protect consumers, as well as financial institutions from an increase in cyber-attacks. In 2015, large banks in the Philippines, Vietnam, Bangladesh and Ecuador experienced major hacks that netted millions for cybercriminals.[4]  In light of these high-profile incidents, a number of large financial institutions have invested in secure digital infrastructures. As a result, many organizations already fall in-line with New York’s proposal. However, many smaller covered entities have not made the same investments, and if the law is approved, they will be forced to make costly upgrades.[5]
Critics opposed to the regulation say the new guidelines overlap with mandates set forth by the Federal Financial Institutions Examination Council (FFIEC), an interagency that includes the Federal Deposit Insurance Corporation, the Federal Reserve Board of Governors and the Consumer Financial Protection Bureau.[6] Although the FFIEC proposal has many of the same requirements, the NYDFS goes further in calling for cyber security assessments, notification of authorities within 72 hours of a breach and the appointment of a CISO.

While Cuomo dubbed the legislation a “first-in-the-nation,” other states have enacted similar regulation and guidance regarding cybersecurity. The Massachusetts’ Standards for the Protection of Personal Information of Residents of the Commonwealth requires every business holding personal information on residents to comply with certain security safeguards.[7] Moreover, state authorities around the country have provided organizations with similar instructions for the adoption of cybersecurity standards. In California, the Attorney General’s office publishes an annual report that includes specific practices for “reasonable security measures” that align with the states information security statutes. These recommendations are not requirements, allowing organizations the flexibility to craft a cybersecurity program that best responds to their industry-specific vulnerabilities.[8]

Eric Martins and Brett Goldman of DMGS agree: “Ultimately, the NYDFS is far more prescriptive than any current state-authored regulation,”  said Martins. While organizations outside the Empire State may want to ignore the NYDFS proposal, other governmental agencies have recognized the need to establish “minimum standards” for the protection of consumer-sensitive information.[9] If approved, New York’s cyber security regulation will be the first and it will serve as an important model for other the efforts of other states’ that pursue comparable legislation. “I think the bigger question here” adds Goldman, “is how quickly other states will take notice and make sure that their financial institutions and other businesses are proactive in protecting themselves from Cyber vulnerabilities”

[1] “Governor Cuomo Announces Proposal of First-In-the-Nation Cybersecurity Regulation to Protect Consumers and Financial Institutions.” New York Department of Financial Services, Sept 13, 2016. https://www.governor.ny.gov/news/governor-cuomo-announces-proposal-first-nation-cybersecurity-regulation-protect-consumers-and

[2] Bucsescu, Marle and Waxman, Matthew. “NY State Cyber Regulations for Banks.” Lawfareblog.com, Sept. 19, 2016. https://www.lawfareblog.com/ny-state-cyber-regulation-banks-model.

[3]Cuomo

[4] Pagliery, Jose. “Global Banking System: What you need to Know” CNN Money. May 28, 2016. http://money.cnn.com/2016/05/27/technology/swift-bank-hack/

[5] Taylor, Harriet. “Critics are Skeptical of New York’s Proposed Financial Security Laws.” CNBC. September 26, 2016. http://www.cnbc.com/2016/09/26/critics-are-skeptical-of-new-yorks-proposed-financial-cybersecurity-rules.html

[6] Jacob, C. Reade; Mao, Mark C.; Raether, I. Ronald Jr., and Taylor, Ashley L. “NY Proposes Regulations Requiring Financial Services Companies to Implement Cyber Security Measures.” Consumer Financial Services Law Monitor. September 26, 2016. http://www.consumerfinancialserviceslawmonitor.com/2016/09/ny-proposes-regulations-requiring-financial-services-companies-to-implement-cyber-security-measures/?utm_source=Mondaq&utm_medium=syndication&utm_campaign=View-Original

[7] Jacob, C. Reade; Mao, Mark C.; Raether, I. Ronald Jr., and Taylor, Ashley L

[8] Harris, Kamala.  “California Data Breach Report: February 2016.” California Department of Justice.
https://oag.ca.gov/breachreport2016

[9] Roberts, Jeff John. “Look Out Companies, Here Comes the Cyber Regulations.” Fortune, September 25, 2016.
http://fortune.com/2016/09/25/cyber-regulations/

Brett Goldman edited this report