Business

Policy Prescriptions: Fiscal Discipline to Address Economic and Health Care Challenges in the Face of COVID-19

With all of the uncertainty surrounding the COVID-19 pandemicwe are continually analyzing the many policy proposals at all levels of government to address the current situation. Obviously, many of these could lead to an erosion of free markets, limited government and federalism. I think we can all agree that times of crisis can be dangerous for our shared principles.

In order to provide the most effective policy solutions that empower states and localities – and more importantly, job creators, civic institutions and individuals – ALEC turns to you; state elected officials, members of the private sector, researchers at think tanks, and concerned taxpayers for your ideas that will bring timely guidance to leaders in Washington and the 50 state capitals. Throughout our nearly 50-year history, ALEC has always been at the forefront of producing and exchanging ideas and will continue to provide principled solutions that benefit all Americans.


Policy Ideas from the ALEC Task Forces and Centers of Excellence:

American City County Exchange

An Ordinance for Local Coordination on Federal Regulations

State and local governments are the frontline of defense against the COVID-19 coronavirus pandemic. For the last 15 years, local governments have been making plans for manmade and natural disasters under the National Incident Management System (NIMS).

One of the great successes that came out of the creation of the Department of Homeland Security, NIMS have assured that every county and major city has an emergency management team in place who constantly reviews processes and procedures to deploy in emergency situations. NIMS is non-partisan, it does not make political considerations but sets the processes in-which federal, state and local governments react to disasters.

The federal government has not imposed burdensome restrictions because the states, in coordination with localities, have taken the lead to do what they think is in the best interest of their residents. This relationship between the federal and state governments can best seen in the cooperation and admiration shared between the governors and President Trump. The best way forward through the pandemic is to work the NIMS plan in a spirit of cooperation and coordination between federal, state and local governments.

 

Civil Justice Task Force

Liability Protection for Employers in a Declared Disaster or Public Emergency

The ALEC model The Liability Protection for Employers in a Declared Disaster or Public Emergency Act allows a person (broadly defined to include a natural person, business, association, or governmental entity, or any of their employees or agents) to operate during a declared disaster or public emergency and beyond without the threat of civil liability or professional disciplinary action if the person complied with or made a good faith effort to comply with applicable federal, state, or local regulations, executive orders, or guidance or complied with applicable federal or state statutes passed or issued in response to the disaster or public emergency.  Where competing but inconsistent statutes, regulations, executive orders or guides apply to a person’s activity, liability can be avoided through compliance with or a good faith effort to comply with any applicable federal, state, or local regulations, executive orders, or guidance or through compliance with any applicable federal or state statutes passed or issued in response to the disaster or public emergency. Civil liability and professional disciplinary action for any action or inaction as a result of, in response to, or arising out of a disaster or emergency declared at the federal, state, or local level shall be limited to recklessness or willful misconduct in the absence of statutes, regulations, executive orders, or guidance passed or issued in response to the disaster or public emergency and applicable to the activity at issue.

Resolving Potential Court Backlogs

Several courts throughout the country have postponed proceedings and trials for weeks or months, which will likely lead to a backlog in the court system going forward. States have an essential role to play easing that burden on the system.

States should encourage parties to a lawsuit to consider Alternative Dispute Resolution (ADR). The ALEC model Alternative Dispute Resolution Act would encourage the use of arbitration or other alternatives to formal court proceedings to resolve disputes where a judge and the parties find the approach appropriate and are comfortable with pursuing a speedier solution outside of court. The approach may include early neutral evaluation, mediation, arbitration, mini-trial, or summary jury trial. Although the parties may elect from an assortment of ADR procedures, they are not required to do so. This voluntary approach would provide some relief to court backlog while safeguarding traditional litigation where the parties prefer it and it is more appropriate.

Limiting Liability for Volunteers and Charitable Organizations

States should encourage the formation of charitable organizations, preserving the resources of charitable organizations, and encouraging volunteerism. A key component of this is to limit liability of charitable organizations and their volunteers. The ALEC model Volunteer Immunity and Charitable Organization Liability Limit Act would limit the exposure of organizations and volunteers to lawsuits arising from their charitable activities, thereby encouraging nonprofits to provide important services, particularly during times of crisis, without fear of excessive litigation.

This includes those organizations providing health care, which is critically needed right now. These charities are absolutely essential and need to be able to provide for patients without the constant fear of litigation, especially in a time of a nationwide pandemic.

Ensuring Individuals Have Access to Information Online

During the pandemic, the ability to share the most current information is essential, and states should take steps to protect online platforms and services. The ALEC model Resolution Protecting Online Platforms and Services provides that the government should not be heavily regulating online platforms. Should the government attempt to censor or regulate online platforms during this time, Americans will be deprived of information that could impact millions of lives.

 

Commerce, Insurance and Economic Development Task Force

Model Interstate-Mobility and Universal-Recognition Occupational Licensing Act

In order to expedite the response to COVID-19, states and the federal government should reduce regulatory red tape. This includes reforming state occupational licensing requirements, and the ALEC model Interstate-Mobility and Universal-Recognition Occupational Licensing Act contains important provisions and principles for state officials to consider.

Occupational licensing recognition promotes geographic mobility by allowing people with licenses, private certifications and work experience to apply that experience to a license in a new state. Licensing recognition is particularly important during times of crisis, like the COVID-19 pandemic, because licensed professions may be disproportionately needed in a particular state and not others. By recognizing people’s experience, it allows workers that are trained and educated in a profession to work where they are most needed and not be limited by a new state’s license that has a similar scope of practice as the license they already have. States that are particularly hard hit by COVID-19 will want the flexibility of attracting healthcare workers from other states by easing the process of obtaining licensure in their state.

In response to COVID-19, North Dakota Governor Doug Burgum issued an executive order temporarily dropping unique state licensure requirements, allowing professionals—particularly those in healthcare professions – to temporarily practice without North Dakota licensure if they are duly licensed in another state. Prior to the executive order, North Dakota had been working on professional licensure reciprocity, noting the success of the Arizona law. Other states that have eased occupational licensing restrictions on healthcare workers in response to COVID-19 via executive order include Maryland, Oklahoma, Tennessee, and several others.

Reducing Regulations on the Private Sector that Hinder Creation or Delivery of Essential Products

There are certain regulations that ought to be relaxed or removed in order to combat the impact of the virus. For example, federal regulations provide that commercial truck drivers be limited to 11 hours of driving time during a 14-hour work day. The goal is admirable: to reduce accidents caused by driver fatigue. However, due to shortages of groceries and other necessary supplies, such as medical equipment, after President Trump declared a national emergency, the Department of Transportation’s Federal Motor Carrier Safety Administration suspended the limitation on truck driver’s hours.

This comes on the heels of grocers and hospitals reporting a shortage of supplies. A reduction of red tape generally can make medical supplies such as tests for the virus, hospital beds, and respirators more readily available as the situation warrants. It can also provide for easier access to groceries and other essential items.

An Act to Establish a Cap on Government Red Tape and related Establishing the Production of Economic Analysis in the State Legislature Act

Utilizing economic analysis, the legislature can perform cost benefit analysis on the effect of government regulations and expand the capacity for informed decision making. Burdensome government red tape not only decreases economic growth during times of economic expansion but interferes with the ability of the private sector to respond to crises, like the COVID-19 pandemic. Red tape reduction and economic analysis focuses the government to deal with these regulations sooner rather than later, so they are either not around during crises or are removed once identified. During the current COVID-19 pandemic, states are particularly attuned to these regulatory challenges like licensing burdens, certificate of need laws, and telehealth restrictions and can utilize red tape reduction initiatives and economic analysis to reform or get rid of the most harmful regulations.

 

Communications and Technology Task Force

Independent Contractor Definition Act

A policy CAT and CIED share. During this emergency, people may be looking for opportunities to participate in the gig economy, through apps like Doordash, TaskRabbit, and so on. The Independent Contractor Definition Act is, for now, the perfect pushback to proposals like California’s AB5 and preserves the right of people to work as they see fit.

Telecommunications Deregulation Policy Statement

Advances in internet technology guarantee that people can work from home during the crisis, ensuring that they are both productive and do not lose wages. Additionally, the government and private sectors are working together to ensure uninterrupted broadband services. For example, the FCC already announced an agreement with providers not to disconnect people who cannot pay due to income loss during the emergency.

Six Principles for Communications and Technology

These principles state that the best way to promote growth and innovation is through removing outdated regulations and other barriers to entry and reminding governments that constitutional limits and protections apply at all levels.

 

Criminal Justice Task Force

Resolution on Criminal Justice Fines and Fees

Especially in light of the economic downturn, individuals should not be burdened with high court fines or fees.

Resolution in Support of Limiting Driver’s License Suspensions to Violations Involving Dangerous Driving

Suspending licenses for conduct unrelated to dangerous driving does not increase the safety of those on the road. In fact, preventing individuals from driving may impact their ability to buy groceries, medicine, or other products during a time of an emergency. It may also impact those employees who may need to drive to get to work. Especially in times of an emergency, individuals need to have the ability to purchase essential products.

Resolution in Support of Justice Reinvestment

This policy will be crucial for states trying to save money on their corrections budget — without sacrificing public safety. As states look for ways to save money, reducing the rate of incarceration is one possible way, but we all need to remember that some of the savings need to be reinvested into programs to help individuals not commit new crimes.

Prison Visitations

States have been curtailing prison visitations to slow the spread of the virus. This will lead to family members being unable to see each other. These visits are often a glimmer of hope during a prisoner’s term of incarceration. In order to facilitate continued contact, prisons should set up designated times where prisoners can contact their family members via phone or video.

 

Education and Workforce Development Task Force

Education Savings Account Act

The Education Savings Account Act allows parents to use the funds that would have been allocated to their child at their resident school district for an education program of the parents’ choosing. To help parents mitigate the costs of providing their children with a quality education while taxpayer-funded schools are closed due to the coronavirus pandemic, states can extend existing ESAs to homeschoolers or include homeschoolers in new programs.

Due to the differences in each state’s homeschooling laws, homeschoolers in some states may oppose attempts to make homeschoolers eligible to receive state education dollars. The authors encourage you to reach out to homeschool organizations in your state in advance to discuss this with them.

Digital Teaching and Learning Plan

This bill requires the State Board of Education to develop a digital teaching and learning plan to prepare the state to implement a state-wide initiative that will result in dramatic improvements in student achievement.

Had more states prepared digital teaching and learning plans, the impact of the coronavirus pandemic on our educational system might have been at least somewhat mitigated.

Resolution Supporting Homeschooling Freedom

The Resolution Supporting Homeschooling Freedom supports the right of parents to homeschool without undue regulatory burdens or intrusions from the state. Now that the coronavirus pandemic has made us all homeschoolers, it is especially important to make sure we show our support for our homeschool families.

Homeschool Credential Recognition Act

Qualified homeschool graduates are missing out on postsecondary educational and career opportunities because state and local government policies fail to recognize a homeschool diploma and transcript as sufficiently documenting a high school level education.

As many students don’t know when they will be returning to their brick-and-mortar schools during the coronavirus pandemic, it is important to make sure that any educational gains they make are recognized.

Statewide Online Education Act

The Statewide Online Education Program is created to enable eligible students to earn high school graduation credit through the completion of publicly funded online courses. The Statewide Online Education Program is designated as a program of the public education system.

The coronavirus pandemic has made providing opportunities for online education more important than ever. The Online Education Program Act make that reality.

The Virtual Public Schools Act

The Virtual Public Schools Act provides families with an alternative to access additional educational resources to improve academic achievement and must be recognized as public schools and provided equitable treatment and resources as any other public school in the state. Virtual school are an independent public school in which the school uses technology in order to deliver a significant portion of instruction to its students via the Internet in a virtual or remote setting.

Much like the Online Education Program Act, expanding opportunities in the virtual space during these trying times of pandemic are paramount.

 

Energy, Environment and Agriculture Task Force

Auxiliary Container Act

Reusable plastic bags have the potential to spread the COVID-19 virus. While there is not specific evidence of transmission from reusable bags leading to any cases yet, the National Institutes of Health reports that it can live on plastic surfaces for 2 or 3 days. In addition to viruses, bacteria can linger on reusable plastic bags and consumers often neglect to clean them. A 2011 study of reusable bags found that only 3% of consumers regularly wash them, 99% percent of bags tested positive for bacteria, and 8% of bags carried E. coli. Amid shutdowns of non-essential businesses, it makes since to also stop the potential spread of the virus by having people use disposable plastic or paper bags.

Maine enacted a single-use plastic ban last year that was set to go into effect in April but early this month voted to delay the ban until next year. New York’s Department of Environmental Quality delayed enforcement of its single-use bag ban until at least May 15. New Hampshire Governor Chris Sununu ordered grocery only use single-use plastic or paper bags instead of reusable bags.

 

Federalism and International Relations Task Force

Once recommendations to mitigate the pandemic are lifted, it’s time to begin repairing the global economy. One way of the surest ways to speed our nation’s recovery and to strengthen our strategic and economic connections with nations around the world is to expand our international trade outreach.

Upon withdrawal from the Trans-Pacific Partnership in January 2017, the White House pledged to pursue bilateral trade frameworks in the multilateral agreement’s place. Now would be a good time to negotiate such free trade agreements, and the UK and Taiwan should be among the obvious early candidates. Model policies calling on the launch of negotiations include the following:

It would be positive for economic growth if the USTR joined the CPTPP – the framework forged by the countries that remained in TPP following America’s departure.

Resolution Calling for the Creation of a National Federalism Task Force

States have stepped up to the plate and exhibited leadership during the crisis. Imagine how much more powerful their response could be with a National Task Force that would enable them to push back against federal overreach and coordinate with each other more effectively. Establishing a National Federalism Task Force could help to accomplish that.

 

Health and Human Services Task Force

Addressing Restrictions on Medicaid Reimbursements for Telehealth

Each state has different laws about which telehealth services it will reimburse for and what restrictions surround those services. For instance, some states require an in-person relationship be established first, before telehealth services will be covered. Other states require different time or distance restrictions on telehealth services. In the ALEC telehealth guide, we recommend all these restrictions be removed and telehealth services are available for reimbursement at the broadest possible use.

We also recommend provisions for cross state licensing. Often those who are traveling will use telehealth services from their home provider or maybe have a primary provider in a different state. Reciprocity agreements (similar to what VA, MD and Washington, DC have), compacts, or origin of service provisions all allow providers to treat patients no matter which state the patient might be located in at that time. It’s best to have the broadest form of cross-state licensing your state licensing board will approve.

Another common restriction on telehealth services are those surrounding online prescribing. Obviously, patient safety comes first and foremost, and states should ensure they are not making the opioid crisis worse, but physicians across the country are using systems through companies to send prescriptions electronically and still avail themselves of Prescription Drug Monitoring Programs (PDMP) services. The physician is able to check the PDMP which monitors prescribing of controlled substances and then provides the pharmacy with the prescription. Many pharmacies will now deliver the prescription right to your door. The ALEC research recommends the removal of restrictions and regulations on online prescribing as long as the appropriate precautions are taken.

Finally, the ALEC guiding principles of free markets and limited government stand in opposition to government price setting of prescription drugs and health care services. By extension, state telehealth parity laws are also anti-free market. One of the key benefits of telehealth is that it is less expensive because it uses fewer resources than an in-person visit. As such, law that attempts to set the price of telehealth services on par with in-person services is not sound policy. The coverage of telehealth services is a positive development, but our research shows those prices should be negotiated by the payer and the provider and not dictated by the state.

As technology continues to advance, telehealth will continue to pay a much larger role in how Americans get their health care services. That is a positive advancement as we address health challenges in the future.

Resolution on Certificate of Need (CON) Laws Required for the Establishment of Certain Health Care Services

Certificate of Need (CON) laws require health care providers to obtain permission from a state board before opening a new health care facility and in some cases, before utilizing new technologies, purchasing new equipment or offering new services. The provider must prove to the board that the community “needs” the new service, facility, etc.

Many states have already eliminated their CON laws as a relic from the past that did not achieve the desired goal of improving access and lowering health care costs. However, some states are still requiring CON approval, including COVID-19 hot spot states like New York, Illinois and Washington.

Under CON, increasing the number of hospital beds is not a quick fix. Applicants have to jump through bureaucratic hoops that can take years and millions of dollars to manage. This simply is not feasible in many cases, especially when there is a good chance an existing provider will be successful in blocking applications.

Addressing bureaucratic CON laws would help prevent provider shortages in the future.

 

Homeland Security Task Force

The response to the Coronavirus outbreak has been locally executed, state managed, and federally supported. Because it is state led, state governments have employed a diverse range of solutions. Some states have opted to issue “stay-at-home” orders, while other states are permitting much freer movement while taking necessary precautions. Regardless of whether a state is taking a strict approach or a “more free” approach, the federal government is providing financial support, resources, coordination efforts, and more. Policymakers can access some of these tools through a number of websites, including:

The Cybersecurity and Infrastructure Security Agency (CISA). CISA has a number of resources, including a Coronavirus landing page, helping state policymakers identify critical infrastructure workers, critical infrastructure sectors, and more. Recently, CISA Director Christopher Krebs issued a memo designed to help states identify sectors they should deem “essential.”

This memo is based on Presidential Policy Directive (PPD) 21 and the work the Department of Homeland Security and CISA did in response to the PPD. Most of the work, while bearing fruit now, can be found on the Infrastructure Security Division’s main webpage.

The Federal Emergency Management Agency (FEMA) is assisting state, local, and tribal governments “with the health and safety actions they take on behalf of the American public.” This means FEMA helps ensure that governments of all levels receive medical supplies and any other needed aid. FEMA is also providing support by managing a rumor control page.

Finally, the Department of Health and Human Services and the Center for Disease Control are the primary agencies leading the response to the virus. Together they have created a one-stop website, www.coronavirus.com, for people and policymakers alike. The site contains a large volume of useful information.

The Coronavirus effects every level of government. States must lead, taking an example from the federal government and empowering local governments to respond in proportion to the risk. But no response should violate basic constitutional or civil rights. The resources from the federal government provide a framework for balancing health and safety with those rights.

 

Tax and Fiscal Policy Task Force and Center for State Fiscal Reform

Facilitating Business Rapid Response to State Declared Disaster Act

In response to natural disasters in previous years, policymakers many times focused their efforts on appropriating money to pay for reconstruction. Of course, this can be a needed response. However, temporarily repealing burdensome state regulations and tax policies is another essential tool that policymakers have at their disposal to significantly speed up response times for indispensable disaster relief workers. This ALEC model policy would amend the public services law, state law and tax law, in relation to thresholds for establishing presence, residency or doing business in the state for out-of-state employees and businesses including affiliates of in-state businesses that temporarily provide resources and personnel in the state during a state of emergency declared by either the Governor or the President of the United States. For more information, see: When Disaster Struck, States Repealed Onerous Regulations

State Budget Reform

As many states look to re-evaluate their budgets to factor-in recent market trends, the ALEC State Budget Reform Toolkit is a great resource. The toolkit outlines 23 proven policy solutions for states to improve their budget process, while avoiding economically damaging tax increases. Retaining our national and state economic competitiveness during this period will be critical. This will ensure we exit this painful time with the best outlook for recovery and growth.  You might be interested in our latest video, where we discuss how state policymakers can best position their states to weather these challenging times of economic uncertainly.

Principles of Taxation

States can also reference the ALEC Principles of Taxation as a guide for tax policy changes. These principles provide guidance for a neutral and effective tax system; one that raises needed revenue for core functions of government, while minimizing the burden on citizens.

When it comes to tax policy, we are seeing some encouraging solutions. The Trump Administration has wisely delayed the federal tax filing and payment deadline by 90 days, and an increasing number of states are following suit. This shift will help businesses remain competitive (a key component of the ALEC Principles of Taxation) and families manage cash flow during these trying times. Also, the recent federal CARES Act provided businesses flexibility in claiming net operating losses (NOLs) and this will give businesses some much-needed breathing room. States could allow more flexibility around claiming NOLs on their state income tax as well.

Resolution for a Federal Balanced Budget Amendment

Once the COVID-19 crisis subsides, the federal government should wholeheartedly work toward a reduction in both federal spending and the national debt. There are many pro-taxpayer fiscal rules to choose from, including the Taxpayer Bill of Rights (TABOR) in Colorado, or a meaningful balanced budget amendment, like the one Indiana voters overwhelmingly inserted into their state constitution in 2018. President Trump’s proposed budget for FY 2021 already outlined the importance of fiscal rules this year. Individuals and businesses should not be squeezed for higher taxes to support federal spending habits as the national debt hurtles past $23 trillion.

 

Conclusion

As you can see, our entire policy department at ALEC is busy preparing the best ideas from our task forces and centers to bring to the debate. However, these are just some of the promising policy ideas that could help us recover from our current crisis.

We look forward to hearing from you as we build our free market collection of policy ideas from the 50 “laboratories of democracy” and update it frequently below. Stay safe, and please let us know whenever ALEC can be helpful to you.

Ideas from Members: Free-Market Policy Solutions for the COVID-19 Crisis

Policy prescriptions developed by our members can be found in ALEC Connect.


In Depth: Business

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