BEST PRACTICES GUIDE 2011

www.democraticgovernors.org

CHAPTER I ECONOMIC DEVELOPMENT

POLICY SOLUTIONS
Encouraging Innovation: In order for states to have economic growth, its people and businesses must have the ability to innovate. Governors have implemented policies to support and promote innovation and have worked to create 21st century jobs. Maryland Governor OMalley proposed the creation of InvestMaryland - a $100 million public-private partnership that infuses valuable capital into Maryland businesses through the Maryland Venture Fund and through private venture capital firms. Through this program, the state will offer premium tax credits to insurance companies at a discounted rate in exchange for an up-front investment in the program. Investments received from participating insurance companies will be allocated to the Maryland Venture Fund, the Maryland Small Business Development Financing Authority and selected private venture capital firms. Those investments will then be distributed using a traditional venture capital model, whereby 100% of the principal must be returned to the state before profit-sharing distributions are made and additional profits are also further distributed between the State and the VC firms. He also launched Bio2020, a 10-year, $1.3 billion investment in life science and biotech research and development. The initiative includes funding for research, tax credits to emerging biotechnology companies and investments in STEM disciplines and technologies at Marylands colleges and universities. Illinois Governor Quinn announced the creation of an Innovation Council made up of key business executives across a variety of critical sectors, along with science, technology and university leaders with the goal of growing existing industries and developing policies to cultivate and retain entrepreneurs, innovative researchers and other enterprises. In 2010, Illinois added more jobs than any other state in the Midwest and was fourth in the nation for job growth. Missouri Governor Nixon proposed the Missouri Science and Innovation Reinvestment Act (MOSIRA) to create stable, on-going funding to attract and retain high-tech scientific and research jobs. A funding source would be created by capturing a small percentage of the growth in state revenue over a base year from a designated group of science and innovation companies. The monies would then be transferred into the Missouri Technology Investment Fund and reinvested to generate further economic growth in the science and innovation industry sectors, with an emphasis on biotechnology and life sciences. North Carolina Governor Perdue proposed establishing a tax exclusion for capital gains on stock acquired by founders and investors in North Carolina start-up companies that have a disproportionate potential for rapid growth and high job creation. Connecticut Governor Malloy proposed lifting the cap on the states research and development tax credit - which limits any company to erasing no more than 70 percent of 3

its tax liability - by $6,000 for each net new job created. Illinois Governor Quinn proposed extending the R&D tax credit by five years and making it refundable for companies with $50 million or less in taxable income for that year if it exceeds their income tax liability. Creating a refundable credit targeting small and start up businesses will allow them to reinvest this money to create jobs and expand their operations in Illinois. The Illinois R&D Credit provides a 6.5 percent credit on qualified research and development costs. Massachusetts Governor Patrick announced a new loan program - the Manufacturing Innovation Initiative (MI2) - a multi-tiered loan program to help Massachusetts manufacturers invest in innovation, adopt advanced production practices, upgrade facilities and buy equipment. MI2 will reduce interest rates on real estate and equipment lending to manufacturers, while the new planning and growth initiative loans will encourage companies to improve operations and pursue expansion opportunities. Planning loans will be up to $50,000 and growth initiative loans up to $500,000. He also formed the Advanced Manufacturing Initiative, a public-private collaboration throughout the manufacturing sector that will support job creation, export growth, innovation and economic recovery throughout the state. The partnership between manufacturers, academics and policymakers will identify strategic opportunities for manufacturing growth and state strategies to enhance the sector's competitiveness. Montana Governor Schweitzer launched Innovate Montana, a new business attraction campaign that includes a website (www.innovatemontana.com) and direct marketing to out-of-state entrepreneurs and businesses. It offers a unique web portal uniting Montana's innovative economies and providing information and resources for working, living and playing in Montana. It is a private-public partnership between industry and the Governors Office of Economic Development. The attraction campaign will also include strategically placed in-state television advertisements targeting business travelers who have a pre-existing relationship with the state. The website is being promoted with Internet advertisements on major newspaper websites in Portland, Seattle, Denver and Minneapolis. Vermont Governor Shumlin proposed providing farmers with various tools to help them expand their market share and modernize, including establishing a matching fund program to help producers obtain needed equipment and make building modifications to enable them to reach food safety certifications to access larger retail markets, and offering flexible lending terms and funds to farmers seeking to transition and/or diversify out of conventional agriculture into other forms of agricultural production or value added agriculture.

Providing Tax Incentives for Job Creation: Governors are using tax credits and economic incentives to attract new jobs to their states and retain current jobs. Tax incentives are also being used to reduce unemployment in the states by encouraging businesses to hire individuals who have been out of work. North Carolina Governor Perdue enacted JobsNOW legislation which provides a number of critical tools for economic development in North Carolina, including a new tax credit for investments in the digital media industry; extension of tax credits for businesses that create new jobs and new investment; enhancements to North Carolinas film tax credit to increase the states competitiveness in film production; and an increase in the bonding limit for small businesses that compete for small state construction projects, which makes it easier and cheaper for small businesses and historically underutilized businesses to do work for the state. Connecticut Governor Malloy proposed First Five an initiative aimed at landing major business relocations or openings. The states Department of Economic and Community Development will be empowered to combine existing tax credits to reward the first five companies that choose to add at least 200 full-time jobs in the state in the next two years. Missouri Governor Nixon launched Compete Missouri to provide business incentives that drive job growth. Companies who offer competitive salaries and give employees access to health care will be eligible for consolidated business incentives, including tax credits and the ability for employers to retain a portion of the withholding taxes they typically would pay to the state. Extra incentives will be provided to Missouri companies and small business owners. Illinois Governor Quinn proposed and signed legislation that expanded the Economic Development for a Growing Economy (EDGE) tax credit that has been used to save and attract thousands of new jobs from automakers like Ford, Mitsubishi, Chrysler and Navistar. West Virginia Governor Tomblin proposed a sales tax exemption to assist distribution and fulfillment businesses with some up-front costs for expanding or locating in the state. It would enable existing distribution and fulfillment businesses operating in the state to claim the exemption upon expansion and would enable new businesses in the industry to claim the exemption to assist with relocation costs.

Washington Governor Gregoire enacted legislation to give a temporary sales-tax break to companies that build and operate server farms - large computer-filled buildings that tech companies use to handle data storage and Internet traffic - in rural areas. Missouri Governor Nixon enacted the Missouri Manufacturing Jobs Act to provide tax relief and incentives for qualified suppliers and manufacturers that invest a certain amount of money in making new products and retaining or creating jobs in the state. Qualified suppliers and manufacturers are allowed to keep a portion of withheld income taxes. Tax incentives for any single employer are capped at $10 million a year for 10 years. Delaware Governor Markell created the Business Finders Fee Tax Credit to enlist Delaware businesses in recruiting other businesses to the state. Under the program, both the company recruited and the recruiting company are eligible for a $500 tax credit per year for three years for each new job created by the new company. North Carolina Governor Perdue proposed lowering the states corporate tax by 29% from 6.9% to 4.9% - the lowest corporate tax rate in the Southeast. Vermont Governor Shumlin proposed tax incentives of $2,000 for employers who hire veterans and $500 for those who hire long-term unemployed individuals. Maryland Governor OMalley enacted the Job Creation and Recovery Tax Credit, a program that will give any business that hires an unemployed Marylander a tax credit of $5,000. Since its inception, the program has helped put more than 1,500 Marylanders back to work and has been used by more than 750 companies. Creating Quality Jobs: Governors are reaching out to the private sector and local communities to develop economic plans and make sure that job opportunities are created across their states. Oregon Governor Kitzhaber asked representatives from the states business and natural resource communities to serve on five transition teams that would look at such things as attracting new factories, launching energy programs that would put people to work weatherizing schools and thinning forests, and provide training for jobs in health care and wind power. New York Governor Cuomo proposed creating ten Regional Economic Development Councils - public-private councils that would work across the state to create jobs and compete for funding. Colorado Governor Hickenlooper signed an executive order to require the state to partner with local communities in creating jobs and designing economic plans for those communities. Each of the states 64 counties is creating or revisiting its own economic development plan which will then be used first in the creation of 14 regional plans and, ultimately, in the development of a statewide plan. 6

Expanding Trade Opportunities for Local Businesses: Recognizing that exports are an integral part of their states economies, governors are supporting and promoting their states businesses so they can expand their markets and do business overseas. Kentucky Governor Beshear launched the Governors Kentucky Export Initiative, an initiative designed to increase exporting activity among small and medium-sized businesses. The statewide program, which is loosely modeled on the National Export Initiative, leverages the existing efforts of Kentuckys leading international trade organizations in an effort to increase education and market exploration among Kentuckys smaller companies. Maryland Governor OMalley launched the Maryland Export Initiative, focusing on increasing export assistance to small businesses, creating jobs and leveraging the resources of existing federal and nonprofit partners. As part of the Maryland Export Initiative, Maryland will fully fund Export MD grants, a program within the Maryland Department of Business and Economic Development that awards $5,000 grants to small and mid-sized companies to assist them with doing business overseas. In addition, through the Export Initiative, the state will work with its federal partners, including the U.S. Export Assistance Center and the U.S. Department of Commerce, on a new campaign to educate Maryland companies on how to access foreign markets and develop export markets for their products Illinois Governor Quinn announced an agreement with China that will establish American Goods Distribution Centers in Beijing and Shanghai that will make it easier for the state to boost its vital agricultural export economy. He has pledged to double Illinois exports over the next five years. Colorado Governor Hickenlooper signed an executive order creating the Governors Trade and Tourism Ambassador Program which enlists Colorado-related businesses and individuals living in other states and countries who have a stake in Colorado to spread the word about Colorado, brand it as a state that welcomes innovation and new investment, and help it spur international tourism and export opportunities. North Carolina Governor Perdue is creating a Global Ambassadors program - an optin network, with clear rules and guidelines, made up of a small percentage of the states business executives, academics and political leaders who have scheduled business interactions with countries/areas important to the state. They will be given information they could use to market the state to others as an attractive place for investment, providing them the opportunity to generate new leads and potential business opportunities for the state.

Expanding Access to the Workforce: In order to reduce their states unemployment rates, governors are offering businesses assistance so that they can keep their employees and make sure their workers have the needed skills for the new economy. Governors are also providing innovative tools to workers to help them prepare themselves for, and find, quality jobs. New Hampshire Governor Lynch enacted New Hampshire Working - a three-part initiative to help companies and workers avoid layoffs, help unemployed workers return to work and provide training to help workers get new jobs. Under the first part of New Hampshire Working, the state is able to partner with businesses and workers to provide an alternative to layoffs. If companies and workers agree to reduced hours instead of layoffs, the state will make up part of the lost wages for workers through unemployment benefits. Under the second part of New Hampshire Working, New Hampshire job agencies have developed a plan for assessing the job skills of all newly unemployed workers. Workers can take the results of those assessments to potential employers, giving business owners confidence that new hires will have the necessary skills. The third part of the initiative reduces upfront training costs for companies - often an impediment to hiring - and is providing on-the-job training to help workers get new jobs. Unemployed workers are able to continue to receive unemployment benefits while participating in up to six weeks of training at a potential new employer. A company has until the end of that period to decide if a worker has the skills the business needs. Illinois Governor Pat Quinn is proposing increasing support for the Employer Training and Investment Program that reimburses Illinois companies for up to 50 percent of the cost of training their employees with the goal of upgrading their skills in order to remain current in new technologies and business practices. He also launched Put Illinois to Work, a nationally-recognized innovative job placement program that allowed 27,000 people to gain valuable employment skills and experience in private-sector jobs while supporting their families and boosting Illinois economy. Missouri Governor Nixon launched the Work Ready Missouri program, to help businesses train potential employees at no cost. The program aims to give out-of-work individuals a connection to the workforce while unemployed and the opportunity to gain experience and learn skills to add to their resumes. Businesses who choose to participate in the program are not required to pay anything, including workers compensation. Vermont Governor Shumlin proposed creation of a program to enable unemployed individuals to get unpaid work experience and training at a business while collecting unemployment.

Arkansas Governor Beebe unveiled the College and Career Planning System, an on-line information resource that will help Arkansans locate jobs that fit their interests and help businesses find qualified candidates to meet their workforce needs. A database will be built that will enable Arkansas businesses locate workers and showcase themselves and the career opportunities they offer. Maryland Governor OMalley launched an innovative new web tool on the Maryland Workforce Exchange program for the states job seekers. The new feature harnesses the use of web spidering technology which aggregates every job search website, every employer website, and every job posting in Maryland, creating a real-time, web-based, one-stop shop for Maryland jobs seekers. Supporting Small Businesses: Small businesses are the backbone of states economic growth. Governors are helping small businesses by improving their access to capital, providing advice and offering technical support. They are also working to make sure that small businesses are not unnecessarily burdened financially. Illinois Governor Pat Quinn proposed and signed into law the Illinois Small Business Job Creation Tax Credit. The $2,500 credit will be available to businesses with 50 or fewer employees that hire new, full-time Illinois employees during a 12-month period beginning July 1 with a minimum salary of $10 an hour, which is $18,200 annually. The position must be created and maintained for at least one year. Massachusetts Governor Patrick created the Massachusetts Growth Capital Corporation to create and preserve jobs, as well as promote economic development in communities by serving as a one stop resource for small businesses seeking capital and advice. The MGCC will offer working capital, loan guarantees, grants, and financial guidance - including one-on-one mentoring services. Maryland Governor OMalley created the Maryland Small Business Credit Recovery Program to streamline the loan approval process and allow the state to guarantee a small percentage of loans in order to help banks provide much-needed capital to small businesses. New Hampshire Governor Lynch launched a series of regional business outreach sessions designed to directly connect New Hampshire businesses with state leaders and state services to help grow their companies and make them more competitive. He organized a business finance fair to better connect businesses with financial institutions and to provide information on credit enhancements, preparing business plans and how to work with creative financing. He has also proposed and included funding in his budget for the creation of an on-line Business One-Stop Center for business owners to more easily work with state government. Colorado Governor Hickenlooper proposed requiring a regulatory impact statement to be attached to every new piece of legislation that includes an estimation of the costs to businesses. 9

Building Infrastructure to Create New Jobs: Governors are investing in infrastructure to create jobs that yield both immediate and long-term economic benefits for their states. North Carolina Governor Perdue launched Main Street Solutions to help small businesses revitalize the downtown area by creating jobs and infrastructure improvements. For every dollar invested by the state, an additional $4.72 will be invested by the local community. The first round of funds went to eight communities in the state and will help small businesses create or retain 223 permanent full and part time jobs. Minnesota Governor Dayton proposed a $1 billion Bonding Bill for projects that would create jobs right away - projects that are shovel ready (for construction) and paint and repair (building rehab) projects in the key areas of essential infrastructure, community assets, and education. His proposal includes $531 million in investments in 300 specified critical infrastructure projects and $470 million for projects which the legislature would propose. The projects funded are estimated to create up to 28,000 jobs. Hawaii Governor Abercrombie is launching New Day Work Projects, a significant capital improvement program of projects that are ready to move and can be completed within two years. Illinois Governor Quinn passed the states largest-ever $31 billion capital program in 2009 that has created an estimated 155,000 jobs to date, and is expected to create or retain more than 439,000 jobs over six years. In addition to leading to the largest construction seasons in the states history, it also focused hundreds of millions of dollars on boosting sustainability and expanding broadband access. New Hampshire Governor Lynch proposed creating a State Infrastructure Bank - a revolving loan fund that communities could access to pay for road and bridge projects and then pay back the cost of those projects over time through tax revenues generated by the economic growth. Delaware Governor Markell proposed a Job Creation Infrastructure Investment Fund to help fund transportation projects in the state related to business creation or expansion. It will be used to fast track the kind of public infrastructure work a business may need when building or expanding facilities. West Virginia Governor Tomblin proposed a bill to expand tax increment financing from the current large municipalities and counties to the smaller cities and counties in the state. Local communities would be able to use tax increment financing to expand economic development and find the industries and the companies that are best suited to locate in their hometowns and bring jobs. In addition, reclaimed mine sites located within municipalities borders would be eligible for tax increment financing funding when the land is to be used for economic development.

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Vermont Governor Shumlin launched Connect VT - an initiative to deliver high speed internet and cell service access to every corner of the state by 2013.

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DEMOCRATIC GOVERNORS POLICIES MAKING A DIFFERENCE: The top three states rated in the State Technology and Science Index for 2010 were led by Democratic governors - Massachusetts, Maryland and Colorado. [Milken Institute, 1/11] Democratic governor-led states were rated the top three entrepreneurship and innovation performers - Montana, Maryland and Washington. [Enterprising States, US Chamber of Commerce and the National Chamber Foundation, 5/10] North Carolina, under Governor Perdue, is rated the state with the Top Business Climate. [Site Selection Magazine] Since January 2009, Governor Quinns Administration has put together more than 90 business investment packages that are creating and retaining nearly 20,000 jobs and leveraging $2.38 billion in private investment in Illinois. Since Governor Beebe took office in January 2007, new business development and expansions in Arkansas have led to the announcement of more than 25,000 new jobs and investments of more than $4 billion. In Forbes annual ranking of best states in which to do business, Kentucky improved by 12 places in 2010 under Governor Beshears leadership. And, Kentuckys business tax climate ranking rose faster than any other state in the past two years - up 15 spots to 19th, in the Tax Foundations 2011 State Business Climate Tax Index. Under Governor Lynchs leadership, the Federal Reserve Bank said New Hampshire had the fastest economic growth of any state in the nation in the past year and the National Journal called New Hampshire the highest-performing economy in the nation. Governor Gregoires initiatives to help Washington businesses keep their competitive edge will create an estimated 70,000 jobs over the next five years. Missouri Governor Nixon signed an MOU with Ford which will invest at least $400 million in its Claycomo facility to upgrade the plant and accommodate production of a new vehicle, and retain full-time employment of at least 3,750 workers.

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CHAPTER II EDUCATION

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POLICY SOLUTIONS Early Education

Coordinating Education Policies from Pre-School Through College: Governors are working to create a seamless and integrated education experience for all students throughout the educational pipeline. Washington Governor Gregoire proposed creating a new Department of Education led by a Cabinet-level secretary who answers to her and oversees state education divisions and departments from early childhood through college to forge student-focused education policy, streamlined program implementation, and linked accountability. Colorado Governor Hickenlooper signed an executive order creating the Governors Education Leadership Council with the goal of making the state a leader in providing 21st century learning opportunities from birth through graduate school. Members will be appointed by the governor and will include representatives from state government, the legislature, local school boards, school administrators, teachers, business, and experts in infant health and development. Oregon Governor Kitzhaber created the Oregon Education Investment Team by executive order which is charged with developing strategies to create a seamless zero to 20 education system, with the goal of ensuring that children enter school ready and able to learn, teachers have support and resources to teach, and high school graduates are prepared to pursue colleges and careers.

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Expanding Early Education Opportunities: Early education programs are critical to ensuring that children, regardless of income level, have the necessary skills and tools to succeed later in life. Governors are working to ensure that quality early education programs are accessible and available so that everyone who wants to attend can do so, and that services and support for young children are coordinated and comprehensive. Minnesota Governor Dayton proposed funding an early childhood rating system to improve quality and help parents make informed decisions about early childhood providers. Hawaii Governor Abercrombie is utilizing federal, state and private resources to develop a leadership position in the governors office to coordinate early education efforts across departments and in the private sector. Connecticut Governor Malloy made a significant downpayment on his longstanding commitment to universal, high quality preschool across Connecticut in his budget proposal. First, the budget includes $2 million in each year of the biennium to bring together the two programs that offer early childhood slots, equalize rates between them, and administer them jointly within the State Department of Education. This change will simplify reimbursement for local providers, and help to improve their tenuous finances. Second, this budget includes funding for the state share of a significant public/private venture with three foundations (Graustein, Casey, and CHDI) that will begin to lay the groundwork for statewide expansion of universal early childhood services.

K-12
Ensuring Quality Schools: Access to a high-quality education for all children is critical to states economic growth. Governors have implemented initiatives to increase accountability and measure progress in the public schools. They are also working to ensure that students have the best teachers and that teachers have the resources they need to succeed. Massachusetts Governor Patrick established six regional Readiness Centers, multipurpose and collaborative centers focused on improving the quality of teaching both across the education continuum and across Massachusetts. The Readiness Centers are managed and operated by regional consortia of partners that include public and private institutions of higher education, school districts, early education and out-of-school-time

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providers, educational collaboratives, non-profit organizations, and business and community partners. New York Governor Cuomo proposed restructuring a portion of the states education aid to create incentives that reward school districts for improving student performance and implementing management efficiency policies. Washington Governor Gregoire proposed legislation to increase accountability by committing the state to adopting and reporting metrics through the National Governors Association's "Complete to Compete" initiative. Those schools and universities that can show improvements in student outcomes and student progress would be able to apply and compete for funds included in the governors new $5 million Baccalaureate Performance Incentive Program. Minnesota Governor Dayton proposed creating the Governors Excellence in Education Award to highlight schools where students are demonstrating extraordinary growth and to help share best practices. He also proposed creating the Governors Achievement Gap Innovation Fund with the goal of closing achievement gaps through the use of technology. West Virginia Governor Tomblin introduced legislation to reinvest in our principals and teachers by providing alternative certification to regular college programs. The bill would allow for new ways to recruit educators to the classrooms. County education districts would be allowed to consider alternative certification so that school systems could recruit professionals to become teachers. A hiring committee comprised of faculty members, county superintendents, principals and teachers would interview candidates and the hiring criteria for all professional personnel would be equally weighted. A loan forgiveness program would be created for newly graduated teachers in order to recruit more math and science teachers in areas of need. Massachusetts Governor Patrick implemented a statewide recruitment campaign aimed at encouraging outstanding educators to apply for vacancies in the lowest performing schools. The campaign included a new website, www.amazingteachers.org, to inform teachers about career opportunities in the states Turnaround Schools. The website also allows visitors to recommend outstanding teachers to be considered for teaching positions in such schools. In addition to the site, the overall campaign includes on-line advertising, public service announcements and outreach through social media. U.S. Virgin Islands Governor deJongh is revamping early childhood education through the implementation of early learning guidelines and a new quality rating improvement system for childcare and development centers so that parents are better informed on the choices they have for their children, and centers are supported in their efforts to achieve higher quality.

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Massachusetts Governor Patrick created Innovation Schools, in-district public schools that can be established by a wide range of applicants and utilize increased autonomy and flexibility in six areas (curriculum, budget, schedule and calendar, staffing, professional development, and district policies) authorized by the local school committee. In exchange for increased ownership, discretion, and authority to establish and operate an Innovation School, eligible entities are held responsible for improving student learning and school performance in accordance with measurable annual goals. Two goals of establishing these schools are to foster innovation across the state and increase students access to excellent educational opportunities while retaining funding within public school districts. Two innovation schools were launched this Fall and 27 proposals have been filed for the two upcoming school years. Illinois Governor Quinn initiated the Learning and Performance management system (LPMS) by securing $11.9 million from capital funds. LPMS provides hardware and software as a service to school districts across the state resulting in reduced infrastructure costs at the local level as well enable new use of data to better monitor and improve teacher and student performance. It also increases broadband access to schools statewide so that all districts can utilize LPMS. Preparing Students for Jobs in Science, Technology, Engineering and Math: Students across the country are lagging in math and science when compared to students in other countries. Governors are improving STEM education with the goal of creating a workforce for the 21st century. Maryland Governor OMalley expanded Science, Technology, Engineering and Math (STEM) and Career and Technology Education (CTE) programs statewide and is launching the comprehensive Maryland STEM Innovation Network to promote the delivery of high quality STEM education at all levels throughout the state. Delaware Governor Markell created, by executive order, a statewide council to improve student preparedness in the areas of science, technology, engineering, and math (STEM). The council will institutionalize collaboration between stakeholders and help the Department of Education (DOE) reach its goal of increasing student enrollment in STEM careers by 50% from 2010 to 2013. The Council will include the heads of the departments of Education, Labor, and Technology and Information; educators; curriculum specialists; a district superintendent; and representatives from the Delaware Foundation for Science and Mathematics Education, the Delaware Business Industry Education Alliance, a local charter school, and institutions of higher education. It is tasked with advising DOE on STEM-related issues, goals and planning; reviewing and evaluating STEM education programs from Delaware and elsewhere, and working with districts and schools to incorporate proven programs; reviewing and evaluating federal sources of funding and supporting STEM grant applications; advising DOE on strategies 17

to improve student test scores and on alignment of STEM programs with common standards; collaborating with institutions of higher education on college-readiness standards and working with DOE, districts and schools to increase the number of students who are college-ready in STEM field; meeting with educators and school leaders on how to improve professional development in STEM-related areas; promoting collaboration and partnerships between schools and local employers; studying the demographic distribution of students pursuing STEM education programs and career pathways and develop strategies to address disparities; and pursuing strategies for increasing recognition among students, teachers, parents and educators of the importance of STEM education. A STEM Teacher Residency Program was created to attract individuals with experience in the STEM areas to the teaching profession. Missouri Governor Nixon proposed $500 incentive grants to all recipients of the states financial assistance and scholarship programs who earn passing scores on at least two Advanced Placement exams in science or math while attending a state public high school. The goal is to encourage more high school students to enroll in rigorous science and math courses. Massachusetts Governor Patrick created a new initiative to develop innovative education and training partnerships with healthcare employers to reduce health care skill shortages. The Healthcare Skills Gap Partnership grants support healthcare training and employment programs to prepare residents for jobs that are in demand in each of the states 16 workforce investment regions. The programs funded through these grants provide academic credit leading to industry recognized certificates and degrees and required the grant participants to redesign pathways to healthcare careers within academic institutions. The grants also are supporting regional partnerships made up of Workforce Investment Boards, community colleges, industry leaders and other regional stakeholders to identify critical health care workforce issues and develop strategies to address them. Awarded to each of the states 16 Workforce Investment Boards, these grants are funded with $3.2 million in American Recovery and Reinvestment Act resources allocated to Commonwealth Corporation by the Executive Office of Labor and Workforce Development. Reducing the Dropout Rate: Governors are providing additional targeted resources to increase the graduation rates in their schools. West Virginia Governor Tomblin proposed a bill to give local educators, schools and the communities in which they operate the ability to formulate specific drop-out prevention programs tailored to their students and to allow them to apply for state 18

funding for implementation of the programs that will improve their graduation rates. These drop-out prevention programs would begin as early as middle school. New Hampshire Governor Lynch raised the state's compulsory school attendance age to 18 and worked with schools to expand alternative education opportunities - offering students options for night school, real-world learning or to earn GEDs. These changes have led to a dramatic reduction in the drop out rate, which now stands below 1 percent. Kentucky Governor Beshear proposed gradually increasing the mandatory attendance age for high school students from 16 to 18.

Higher Education
Expanding Access to Higher Education: Governors are working to make sure that anyone who wants to continue their education after high school has the tools and the ability to go to college. They are also working to ensure that those who choose not to go to college have a way to gain the skills they will need to be successful in the future. Delaware Governor Markell awarded College Board a four-year contract to administer the SAT annually to all 11th graders attending Delaware public high schools. Enabling students to take the SAT during a regular school day at their own high school means that nearly three times as many 11th graders will participate and the number of students who are likely to apply to college will increase because it eliminates a number of barriers to traditional testing, including the cost of registration, lack of transportation to the test center, unfamiliarity with the test and how to prepare, and conflicts with job or family responsibilities. Arkansas Governor Beebe launched a program to place 43 career coaches in high schools to offer enhanced career guidance to students who want to build careers in the state. The coaches will be employed by the two-year colleges located in the communities in which they are placed. Kentucky Governor Beshear enacted legislation that allows students to transfer credits more easily from one college to another, particularly from community and technical schools to four-year institutions. The law requires faculty from two-year and fouryear institutions to work together to align arts and science coursework at community colleges with bachelors degree programs at four-year schools. Montana Governor Schweitzer urged the Montana University System to undertake a common course numbering 19

system which, when fully implemented in the summer of 2011, will provide the full transfer of courses between all Montana universities, community colleges, and K-12 dual enrollment programs. He also created the Montana Digital Academy, to provide opportunities for rural Montanans to gain additional 21st century knowledge and skills through distance learning. Illinois Governor Quinn pushed 48 Illinois community colleges to develop innovative programs that will stimulate the adoption of energy efficiency and renewable energy practices in Illinois homes and businesses, and train people for energy efficiency and renewable energy jobs. Maryland Governor OMalley launched Skills2Compete-Maryland to ensure that every working Marylander has access to the equivalent of at least two years of education or training past high school - leading to a career or technical credential, industry certification, or two years of college - to be pursued at whatever point and pace makes sense for individual workers and industries. Skills2Compete-Marylands goal is to focus state agencies, community colleges, local Workforce Investment Boards, apprenticeship programs and other stakeholders on preparing more Marylanders for middle-skill jobs those that require some training past high school but not necessarily a four-year degree. A goal has been imposed on the workforce development community to increase the skills of Marylands workforce by 20 percent by 2012. Among other things, state agencies and other partners involved in the campaign will assist customers in navigating the appropriate resources and services that provide pathways to skills attainment, such as One-Stop Career Centers, community colleges, apprenticeships, and private career schools. Massachusetts Governor Patrick launched a new approach to adult education at the workplace through the Learn at Work Initiative to identify more effective program models to build basic education skills in the workforce. On behalf of the Governor, the Executive Office of Labor and Workforce Development, the Executive Office of Education and the Department of Elementary and Secondary Educations Adult and Community Learning Services Department created this new grant program using funding from both education and workforce development agencies to encourage employers and adult education providers to craft more effective learning models to acquire workplace basic skills on the job, including English for Speakers of Other Languages. The initiative awarded nearly $2 million in funding to 11 organizations that are testing new models of workplace-based education. Making College Affordable: States have taken a variety of steps - ranging from loans to grants to tax incentives - to ensure that nobody is denied a college education because of a lack of financial resources. Massachusetts Governor Patrick announced the availability of low-cost, fixed interest rate college loans offered by the Massachusetts Educational Financing Authority (MEFA). MEFA loans have a fixed interest rate starting at 6.89%; offer multiple 20

repayment options - immediate, interest-only or deferred repayment, and offer a predictable and stable monthly payment of as little as $94.34 per $10,000 borrowed. Montana Governor Schweitzer created the Best and Brightest Scholarship Program to help students in need gain access to college and K-12 dual enrollment learning opportunities. North Carolina Governor Perdue proposed the Career & College Promise program which pays for high school juniors and seniors who have and maintain a cumulative B GPA and demonstrate Career and College readiness on placement assessments to complete 30 hours of college transfer credit through the states community colleges or 15 to 18 hours of career credentialing verifying entry level competency in a specific industry while in high school, and a second year of free higher education tuition and fees through the community college system upon graduation. Arkansas Governor Beebe simplified and improved the process by which students apply for financial aid, by replacing its 20-plus separate scholarship forms with a single universal application that is available on-line. Vermont Governor Shumlin proposed a higher education income tax credit that will enable Vermont students who stay and work in the state to reduce their college debt. Delaware Governor Markell proposed making it easier for Delawareans to save for their childrens college education by allowing taxpayers to direct their tax refunds to their college investment savings plan. Reforming School Funding: Given the current economic situation states are facing, governors have taken steps to make sure that higher education institutions continue to have the resources they need without increasing the financial burden on students. Arkansas Governor Beebe proposed implementing a performance-based funding model for institutions of higher education that would reward institutions for their performance in a variety of measures, which may include end of course enrollment, student retention and progression, number of credentials awarded, number of graduates from underserved populations, student transfer activity, and institution research activity.

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DEMOCRATIC GOVERNORS POLICIES MAKING A DIFFERENCE: Massachusetts, under Governor Patricks tenure, was ranked #1 in student performance trends - earning the only A in the Chance-for-Success Index which factors in 13 indicators in education. And, Massachusetts received the top scores in the nation in 4th grade and 8th grade math and reading. [Education Week Quality Counts Report 2011, 2009 NAEP data] Under Governor OMalleys leadership, Marylands public education system was ranked the nations best overall for three years in a row. Maryland was rated the top state in high AP test scores. [Education Week Quality Counts Report 2011; 2009 NAEP data] Kentuckys 4th and 8th graders, under Governor Beshears leadership, outperformed the national average in science. [2009 NAEP data] Under Governor Beebes leadership, Arkansas earned the highest ranking in Transition and Alignment, which tracks state efforts to better coordinate connections between K-12 education and other segments of the education pipeline, including early childhood education, college readiness and the workforce. [Education Week, January 2011] North Carolina is providing a 21st century education embedded with technology and more career and academic choices for students of all ages. 46,000 high school students are taking courses from the NC Virtual Public School, which is the nations second largest virtual public school. In 2006, less than 10% of Washingtons teachers in challenging schools were National Board Certified Teachers (NBCT). By 2010, almost 30% were. Under Governor Gregoires leadership, Washington ranks 4th nationally in the number of NBCT teachers, and 2nd this year in the number of new teachers receiving NBCT certification. Reforms implemented by Governor Lynch in New Hampshire have reduced the states dropout rate below 1 percent. Governor Nixon kept tuition and fees at Missouri colleges flat for two years in a row. Montana, under Governor Schweitzers leadership, has the fourth most educated workforce in the country. [Business Facilities Magazine]

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CHAPTER III HEALTH CARE

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POLICY SOLUTIONS
Implementing Health Care Reform: With passage of the Patient Protection and Affordable Care Act, states have been given a significant role in health reform implementation. Governors are making sure they have a clear understanding of the law and its impact on their states, and the capacity to take advantage of the opportunities the new law presents. Illinois Governor Quinn signed an executive order establishing the Illinois Health Care Reform Implementation Council to create a rigorous framework to implement the federal Affordable Care Act in a way that protects consumers from unwarranted insurance premium hikes and provides affordable health insurance to more than one million additional Illinois residents. The Council has made recommendations to assist the state in establishing a health insurance exchange and other consumer protection reforms; reforming Medicaid eligibility and delivery systems; assuring high-quality care; identifying federal grants and other non-governmental funding sources and fostering the widespread adoption of electronic medical records. Members include directors of the Illinois Departments of: Healthcare and Family Services, Insurance, Public Health, Aging, Human Services, Department of Central Management Services, Labor, Financial and Professional Regulation, the Governor's Office of Health Information Technology and the Governor's Office of Management and Budget. Washington Governor Gregoire issued an executive order creating a health-care cabinet to oversee state implementation of the new federal health reform law. The cabinet is made up of the state Health Care Authority administrator, the state Health Department secretary, the Department of Social and Health Services secretary, the governors executive policy director, and her state budget director. The Insurance Commissioner, a separately elected official, also will participate. The cabinet is responsible for identifying opportunities and responsibilities under the new law and delegating them to the appropriate state agency, and assuring that implementation among the individual agencies is well coordinated. Maryland Governor OMalley established the Health Care Reform Coordinating Council through executive order to create a blueprint for implementation of health care reform. The Council conducted an assessment of the federal law and its potential impact on the state; ran a workgroup process in which six groups open to all stakeholders and the public focused on key implementation issues; solicited direct public input on proposed recommendations during five hearings held across the state; and then issued a final report

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that identified 16 recommendations for short and long term action items on how federal reform can be implemented in the state most effectively. Expanding Access to Quality Health Care Governors are working to make sure that the health care coverage available in their states is high quality and provided in the most effective and cost-efficient manner. New Hampshire Governor Lynch launched an Accountable Care Organization pilot program at five health care providers across the state. This pilot will move the state away from the fee-for-service model and instead give health care providers incentives to spend more time with their patients, to work with their patients to prevent new illnesses and better manage existing illnesses, and to collaborate better with other health care providers. Under this new model, providers and health care systems profit from providing good, cost-effective care to patients rather than from seeing as many patients as possible. Maryland Governor OMalley established a Patient Centered Medical Home (PCMH) program to change how health care is delivered by focusing on the whole patient, increasing coordination across the care continuum, and improving access for both the healthy and the chronically ill. The PCMH program provides incentives to providers to spend more time with each patient and help manage and coordinate their health needs. The program places a special emphasis on chronic and preventive care processes that improve the health of the practices entire population of patients. Marylands program will launch in the Spring of 2011 with sixty practices, including over 300 providers and covering more than 250,000 Marylanders. Illinois Governor Quinn has significantly reformed the delivery of care to the most vulnerable populations covered by the Medicaid program by selecting two managed care organizations to provide 40,000 adults with disabilities and older adults the full spectrum of Medicaid-covered services through integrated care delivery systems. He also implemented policies to improve the quality of care received in nursing homes by restructuring the system of admission to nursing homes to ensure that only those in need of 24-hour skilled care are admitted; strengthening the screening process to prevent residents with violent criminal histories from being placed with vulnerable, older adults; setting higher nursing home quality and staffing requirements; raising penalties for violations; increasing inspections and monitoring; and requiring nursing homes to help all residents achieve their highest level of functioning and prepare to transition to more independent, community-based living. Massachusetts Governor Patrick expanded health plan options on 25 public college campuses through a partnership between the state and Blue Cross Blue Shield in order to significantly enhance state and community college students access to quality health care coverage.

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Making Health Care More Affordable: As families struggle to make ends meet, states are working to lower the amount needed to pay for health care expenses including insurance, prescription drugs and patient care. Minnesota Governor Dayton issued an executive order implementing early Medicaid enrollment which will bring an estimated 95,000 Minnesotans onto health coverage and protect 20,000 health care jobs across the state. Kentucky Governor Beshear ended a $20 monthly premium that families were required to pay in order to ensure health care coverage for their children through the Kentucky Childrens Health Insurance Program. Suspension of the premium affects approximately 12,200 families and more than 16,000 children. Montana Governor Schweitzer submitted a research and demonstration waiver proposal to the Centers for Medicare and Medicaid Services that would allow Montana to negotiate the same price breaks for everyone that the state receives for people on Medicaid and pass along the savings - about 55 percent on the retail price - to all Montanans. Enrollment would be optional and open to Montana residents who apply and are U.S. citizens. Those with prescription drug coverage through private insurance could also participate and decide whether to pay their insurance co-pay or the Medicaid price whichever was cheaper. The program also would cover elderly residents on Medicare whose coverage runs out. Washington Governor Gregoire introduced legislation to consolidate a majority of the states health care purchasing into a single agency so that the state can use its full purchasing power to get the greatest value for taxpayer dollars. New York Governor Cuomo issued an executive order to create a Medicaid Redesign Team to find ways to save money and improve care within the Medicaid program. It brings stakeholders - leaders from the healthcare industry, the Governors office, the legislative bodies, and business, labor and consumer advocates - together to find efficiencies and cost savings within the Medicaid program. Fighting Fraud: Waste and abuse drives up the price of health care. Governors have put tough enforcement measures into place and have devoted resources to fighting health care fraud. North Carolina Governor Perdue enacted a series of measures to crack down on Medicaid fraud, waste and abuse that cost taxpayers millions of dollars each year 26

including stronger investigation and prosecution of potential abusers, new Medicaid SWAT teams, better use of technology to detect and prevent abuse, and a campaign to encourage the public and providers to report suspected abuse. Maryland Governor OMalley signed into law the Maryland False Health Claims Act which authorizes private citizens to bring lawsuits on behalf of the state to recover funds for false or fraudulent claims through a state health plan or program. Creating Health Information Technology Systems: States are implementing electronic health record systems in order to save money by cutting unnecessary administrative costs, while at the same time, reducing medical errors and saving lives. Illinois Governor Quinn created the Illinois Health Information Exchange (HIE) and established a state authority for its operation. The HIE is a secure framework for providers and insurers to share health records electronically. The HIE will provide health care providers with a secure system to access a patient's comprehensive medical history, avoid duplicate tests and procedures, and assure the accuracy of prescription drugs and other medical orders, and will provide patients with more information about the care and treatments they receive and empower them to be more involved in health care decisions. An eight-member board will govern the Authority. Maryland Governor OMalley created a private, non-profit organization responsible for building the states health information technology exchange. The non-profit was tasked with creating a system to allow patients medical records to be shared between hospitals and physicians. The goal is to recruit 1,000 primary care providers to transition to electronic health records by 2014. Supporting a Healthy Lifestyle: Over the past three decades, childhood obesity rates in America have tripled. Governors are promoting wellness by making sure that children have access to healthy foods and that everyone is knowledgeable about healthy lifestyles. Delaware Governor Markell issued an executive order promoting healthy lifestyles and creating a Council on Health Promotion and Disease Prevention. Members include representatives from several state agencies, legislators, the health care community, the insurance industry, higher education, the business community and the public. The Council will conduct an assessment of the burden of lifestyle-related diseases in the state, develop an overarching statewide strategy on promoting healthy lifestyles/preventing lifestyle-related diseases, and establish and track measurable outcomes for reduction of obesity and other lifestyle-related diseases. 27

Massachusetts Governor Patrick enacted a law ensuring that only foods that meet established nutritional standards are sold in public schools during school hours and mandating that the states Department of Public Health create specific food guidelines through the regulatory process. Delaware Governor Markell implemented a partnership among three state agencies the Delaware Department of Agriculture, Department of Education and Department of Health and Social Services - to connect Delaware farmers and its agricultural industry to Delaware schools and long-term care facilities in order to promote healthy eating and help Delaware agriculture. The partnerships goal is to encourage healthy eating, healthy lifestyles, health education, consumption of local food products, and nutrition education. The agreement will also lead to the establishment of school gardens and improve the nutritional value of food products consumed in public schools and facilities.

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DEMOCRATIC GOVERNORS POLICIES MAKING A DIFFERENCE: Since he took office, Kentuckys Governor Beshear has brought health coverage to more than 50,000 Kentucky children. Since Washingtons Governor Gregoire took office, she has increased enrollment in her Apple Health for Kids program - which provides health insurance to lowincome children - by more than 140,000. Maryland, during Governor OMalleys tenure, has expanded health care to 248,000 Marylanders, including 118,000 children. Massachusetts, under Governor Patricks leadership, was tied for number one in the country for childrens health care and is the only state that has fewer than four percent of children uninsured. [Commonwealth Fund] Missouri has trained more than 1,000 doctors, dentists, nurses and other professionals through Governor Nixons Caring for Missourians initiative.

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CHAPTER IV ENERGY

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POLICY SOLUTIONS
Providing Incentives for Producing Alternative Energy: Innovation in energy is critical for both job creation and a cleaner environment. Governors are encouraging such innovation by providing financial incentives and other assistance for the development of new technologies. Kentucky Governor Beshear launched Kentucky New Energy Ventures Fund (KNEV) which provides public funds to promising, earlystage Kentucky companies developing and commercializing alternative fuels and renewable energy technologies. KNEV provides one-time grants of $30,000 that must be matched on a dollar-for-dollar basis. Equity investments by the fund typically range from $250,000 to $750,000 and must be matched dollar-for-dollar through qualified financing or stand-alone investment by the company. To date, the KNEV has made 25 awards for a total of $2.85 million, including 20 grants of $30,000 each and five investments ranging from $250,000 to $750,000. The majority of the companies receiving KNEV awards are located in rural Kentucky communities and are developing alternative and renewable energy technologies based on clean coal, solar, wind or biofuel. New Hampshire Governor Lynch created the Green Launching Pad, a partnership between the state and the University of New Hampshire to help companies bring clean energy products to market and create new jobs for the states workers. The Green Launching Pad solicits submissions from the states entrepreneurs, businesses, students and researchers. An advisory board then selects business teams that are supported during an intensive summer business accelerator program. Selected companies are connected to business, science and engineering faculty to develop finance and marketing plans and to angel investors and private sector business mentors. In 2010, five New Hampshire companies received support through this program to help bring their products to market. Illinois Governor Quinn signed legislation that encourages investment in renewable energy by extending property tax relief for wind farms. It keeps the property tax assessment of wind energy devices uniform across the state - instead of basing it on where the farms were located - so that the industry can anticipate operating costs. Encouraging Alternative Energy Use: Governors are providing economic incentives to encourage the use of clean energy sources in homes and businesses.

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Maryland Governor OMalley passed the Maryland Clean Energy Incentive Act to give Marylanders a state income tax credit for electricity generated by clean energy, including solar, wind, geothermal and clean coal. This credit, when coupled with the federal tax credit, will reduce the cost of the installation of renewable energy systems by as much as 45% for residents and businesses. Kentucky Governor Beshear launched KY Home Performance, a comprehensive energy efficiency program that will help homeowners save money and energy while creating jobs. KY Home Performance provides homeowners access to tools to reduce their homes energy use. Homeowners will be able to get below-market loans or rebates to implement energy-efficiency improvements to their homes. All homes participating in the program will receive a comprehensive, home-energy evaluation by a certified professional. The homeowner and the evaluator will then review a report that identifies opportunities in the home to save energy and money. A certified contractor, evaluator or approved installer will make the improvements. KY Home Performance offers a rebate of up to $2,000 or financing for qualified homeowners up to $20,000 for qualified improvements at 6.99% interest rate for a maximum 10-year term. Additional incentives were given to the first 1,000 participants in the program. Delaware Governor Markell launched a Green for Green rebate program that provides homeowners with rebates at settlement for newly constructed homes certified by the NAHB Research Center to the National Green Building Standard. The rebates range from $3,000 for homes built to the Silver level of the standard, to $5,000 for Gold and $6,000 for the Emerald level. Maryland Governor OMalley implemented the Home Performance Rebate program which offers homeowners a 35% rebate - up to $3,100 total - toward qualifying home efficiency upgrades and provides assistance in financing a home energy efficiency investment through unsecured home energy improvement loans for up to $20,000 at 6.99%. North Carolina Governor Perdue initiated a debit card rebate program as an incentive for homeowners to replace home appliances and heating and cooling systems with new, high efficiency ones. Homeowners received up to a $300 rebate for such purchases by registering on-line and sending the state proof of purchase. New York Governor Cuomo announced available grants through the New York State Energy Research and Development Authority to help farmers across the state reduce their energy use, save on operating costs, and cut greenhouse gas emissions through more efficient use of energy. The program will provide financial incentives to support 75 percent of the cost of electricity and gas efficiency investments. Farms that are eligible for the grants include: orchards, dairies, vineyards, maple producers, egg and poultry farms, grain, specialty crops, and others. Upgrades covered in the grants include: process improvements, lighting upgrades, and high-efficiency fan, pump, and motor systems, and 32

other measures. Small farms could be eligible for free energy audits to assist in identifying energy efficiency projects. American Samoa Governor Tulafono signed an executive order creating a 12-member American Samoa Renewable Energy Committee which is tasked with developing and implementing a strategic renewable energy plan for the territory and working with federal partners that may be able to provide technical and financial assistance. Illinois Governor Quinn announced that long-term agreements have been executed to advance the states ongoing efforts to expand renewable energy use, create green jobs and increase sustainability. The winning wind and solar energy vendors will supply Ameren and ComEd with renewable electricity to provide to consumers throughout the state. The 20-year agreements will help ensure long-term cost and rate stability for consumers across Illinois. The Illinois Power Agency administered the vendor bidding process. By guaranteeing a lower rate over a longer period of time, the long-term contracts allow providers to mitigate financial risk and pass the benefit of lower rates on to consumers. Reducing State Energy Use: Governors are taking the lead by requiring or encouraging energy improvements in state buildings. Arkansas Governor Beebe created the Sustainable Building Design Program - a revolving loan fund that provides much needed capital to advance and encourage state agencies to make energy efficient improvements to their facilities. Funding is provided for heating and cooling unit replacement for the latest Energy Star approved models, lighting replacement, replacement of windows with solar film models, and water usage reduction. State agencies are required to determine the baseline of energy consumption in its facilities, establish an accounting system for future tracking, and determine their carbon footprint before retrofitting. Two state agencies and two higher education institutions have signed memoranda of understanding for funding. Oregon Governor Kitzhaber directed unspent federal stimulus funds to conduct energy audits at 500 Oregon schools. The audits, to begin immediately, would help state officials identify which schools should receive weatherization and energy efficiency retrofits. Washington Governor Gregoire enacted the Jobs Act for Public K-12 and Higher Education to give grants to public education institutions to create jobs and save energy costs. Grants are awarded through a competitive process, and may be used solely for energy and cost savings improvements. The immediate goal of the program is to stimulate Washington's economy by creating jobs. The long-term goal is to reduce the energy costs at the states public education facilities. It will create 36,000 jobs across the state over the next five 33

years. Montana Governor Schweitzer started the 20X10 program in January of 2008. The program called for a twenty percent reduction in facility energy requirements by executive branch agencies, by the end of 2010. Montana state agencies reached that goal. In addition to the energy savings in state buildings the state car fleet now has an average gas mileage of 35 miles per gallon. Illinois Governor Quinn signed laws to require all new state-funded building construction and major renovations of existing state-owned facilities to meet green building practices. He is also working towards the goal of producing 25 percent of Illinois energy from renewable resources by 2025. Connecticut Governor Malloy includes a significant merger of energy-related functions from across state government into a new Department of Energy and Environmental Protection in his budget proposal. This consolidation will increase overall the resources dedicated to energy policy, program implementation, and regulation. In addition, it will clarify the responsibilities of regulatory and programmatic functions surrounding energy, and will enable closer coordination with our overall environmental goals. Massachusetts Governor Patrick launched GreenDOT, a comprehensive environmental responsibility and sustainability initiative to green the state transportation system by reducing greenhouse gas emissions; promoting the healthy transportation options of walking, bicycling, and public transit; and supporting smart growth development. GreenDOT calls for the states transportation agency to incorporate sustainability into all of its activities, from strategic planning to project design and construction to system operation. Making Transportation More Energy Efficient: States are helping work towards reducing the countrys dependence on oil by putting policies in place to incentivize the use of electric vehicles. Washington Governor Gregoire is implementing the nations first electric highway, an initial network of public access electric vehicle recharging locations along I-5. As many as 300,000 electric vehicles are anticipated on Washington roads in the next 10 years. Illinois Governor Quinn launched an initiative to increase the use of electric vehicles by investing $1 million to install state-of-the-art, electric vehicle charging infrastructure throughout the Chicagoland area. This project is expected to be the largest concentration of DC quick-charge stations in the world. The DC quick-chargers represent a new technology that will drastically reduce the amount of time it takes to charge a vehicle. A vehicle would now be able to charge in the time it takes to shop at the grocery store, as opposed to charging overnight, which is the current standard. This will encourage greater

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use of green transportation alternatives by making electric vehicle use more convenient and accessible in one of the most heavily traveled cities in the country. Maryland Governor OMalley proposed a package of bills to incentivize electric vehicles. First, he proposed creating an Electric Vehicle Infrastructure Council to help prepare the state for the rapid integration of electric vehicles into its communities. The Council will include representatives of state and local governments, utilities, automobile manufacturers, and environmental and energy experts. It will develop strategies relating to the development of metering and charging infrastructure, home charging requirements, streamlining permits, updating building codes and parking rules, electricity demands and grid stability, incentives to increase consumer adoption of electric vehicles, and public education. Second, he is proposing legislation to require the Public Service Commission to implement a pilot program that permits utilities to offer homeowners and businesses incentives to recharge vehicles during off-peak hours as prescribed by their electric companies. Incentives may include time-of-day pricing of electricity, credits on electric distribution charges, or rebates on the purchase of EV charging systems. Third, he is proposing a State income tax credit of 20% of the cost of an electric vehicle recharging equipment that, along with the federal tax credit, will incentivize individuals and companies to invest in electric vehicle technology. The tax credit will be limited to three years, with a total cap of $400,000 in tax year 2011, $500,000 in tax year 2012, and $600,000 in tax year 2013. The program will be paid for out of proceeds from our greenhouse gas emissions auction proceeds.

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DEMOCRATIC GOVERNORS POLICIES MAKING A DIFFERENCE: Under Governor Gregoires leadership, Washington exceeded its goal of 25,000 green jobs by 2020 in 2009. Among private industries surveyed in both 2008 and 2009, green jobs grew by 15,100 to about 62,000 jobs. Through North Carolina Governor Perdues Green Business Fund, the states business have created 40 new jobs, and have attracted a $14-to-1 return on the state dollar in follow-on funding and external investments. Under Governor Schweitzers leadership, Montana is the number one state in wind power growth. The Montana Legislature also passed a bill requiring a 15% renewable energy portfolio standard by 2015. Governor Schweitzer was the first governor to endorse the national 25 x 25 Initiative, a grassroots effort gaining bipartisan support to pass federal legislation requiring 25% of US energy demand be supplied by renewables by 2025. Employment in solar manufacturing, installation and services in Massachusetts nearly tripled since Governor Patrick first took office, from 1,200 jobs in 2007 to roughly 3,000 by the end of 2010. Solar manufacturing jobs alone jumped from 750 in 2007 to 2,000 in 2010. Since Governor Beebe took office, six major wind-manufacturing companies and suppliers have opened or announced plans to open facilities in Arkansas.

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CHAPTER V GOVERNMENT EFFICIENCY

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POLICY SOLUTIONS
Ensuring the Best Return on Taxpayer Dollars: Just as families and businesses have tightened their belts, governors are taking a close look at their state budget and operations and seeing where they can make cuts without hurting critical services. They are also taking steps to make government spending more accountable to taxpayers through changes in their budgeting procedures and reviews of their spending processes. New York Governor Cuomo issued an executive order creating the Spending and Government Efficiency Commission to make state government more accountable and efficient with a goal of reducing the number of agencies, authorities and commissions by 20 percent. The Commission is required to submit a rightsizing plan to the Governor. Legislation has been introduced that requires the plan to go into effect after it is submitted to the Legislature unless the legislature rejects it within 30 days. Kentucky Governor Beshear launched the Smart Government Initiative (SGI) - a collaborative, statewide, multi-cabinet drive to share ideas and employ cost-saving measures. SGI brought together more than 200 state workers representing every cabinet and major agency throughout state government, as well as constitutional offices that elected to participate, to create a smarter, leaner and more efficient executive branch. Participants were divided into five investigative workgroups: asset management, postal services, procurement, transportation, and information technology. The initiative also asked for input and suggestions from all state employees, utilizing the existing Employee Suggestion System. After a year of gathering information, the program is now entering the implementation phase, which is expected to save millions of dollars. California Governor Brown directed all state agencies and departments to immediately halt new car purchases and turn in taxpayer-funded cars that are not essential to state business, with the goal of halving the number of the states passenger cars, trucks and home storage permits. He also issued an Executive Order directing state agency and department heads to collect and turn in 48,000 government-paid cell phones. Delaware Governor Markell led efforts to review real estate management practices for potential savings. The state has negotiated rent reductions, consolidated some office space, and moved some employees from offices that were leased to buildings already owned by the state. Illinois Governor Quinn has saved taxpayers over $23 million dollars annually by consolidating general office space and eliminating holdover leases and almost $11 million by combining the states data centers. Illinois has also kept its payroll lean, with the lowest number of state employees per capita in the nation.

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Connecticut Governor Malloy issued an executive order incorporating generally accepted accounting principles (GAAP) - a standard used by Fortune 500 companies into the state budget process in order to ensure greater budgetary transparency and a healthier economic condition. GAAP are used by all towns and businesses and require, among other things, recording expenditures and revenues as they are incurred or received, rather than pushing them off until another fiscal year. Washington Governor Gregoire signed an executive order directing state agencies to base all their new contracts on performance and to provide incentives and consequences to ensure that agreed upon value to the state, and taxpayer, is received. In addition, all existing contracts are to be reviewed prior to renewal and updated as necessary to reflect performance-based contracting standards. The executive order directs the Office of Financial Management and the Government Management Accountability and Performance office to give a progress report to the governor, detailing implementation of the executive order as well as results, and requests the State Auditor to assist with evaluation and training. Minnesota Governor Dayton signed an executive order to speed the way two state agencies do business by instructing the Commissioners of the Department of Natural Resources (DNR) and the Pollution Control Agency (PCA) to accelerate and simplify their environmental review and permitting processes. Hawaii Governor Abercrombie is establishing through a public-private partnership the office of the Chief Information Officer who will be tasked with upgrading and streamlining the states IT systems into a single, cohesive strategy in order to deliver better service to citizens, state employees, businesses and government agencies and save taxpayers money. Missouri Governor Nixon appointed a bipartisan Tax Credit Review Commission to review the states tax credit programs and make recommendations for greater efficiency and enhanced return on investment. Commission members included 25 leaders from business, communities and the legislature. New York Governor Cuomo issued an executive order creating the Mandate Relief Redesign Team to review unfunded and underfunded mandates imposed by the New York State Government on school districts, local governments and other local taxing districts. The Team includes representatives from private industry, education, labor and government and is tasked with identifying ways to reduce the costs of mandated programs, identify mandates that are ineffective and outdated, and determine if school districts and local governments can have greater ability to control expenses.

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Massachusetts Governor Patrick pushed his vision for a simpler, customer focused approach to transportation soon after he was elected to his first term. Before the term was completed in 2010, his vision resulted in the consolidation of all of the Commonwealth's surface transportation agencies into one central organization, known as MassDOT, the most extensive reform effort in Massachusetts transportation in over 4 decades. In its first year beginning with its inception in November 2009 and continuing through 2010, MassDOT has focused on bringing a business-like approach to transportation with a focus on customer service and safety, while developing the state's first strategic plan for transportation, getting its employees focused on a its mission, stressing empowerment, and negotiating with its unions to lower its overall cost structure. MassDOT has aligned employee benefits across formerly disparate agencies and authorities, and has documented yearly savings of over $124 million. Making Government More Transparent: Governors believe that taxpayers have a right to know where their tax dollars are going so states are making it easier for them to find out by disclosing more information and making it easily available in an accessible way. Kentucky Governor Beshear launched the OpenDoor website to provide a more transparent, accountable state government, and to allow citizens the opportunity to find out how their tax dollars spent. The website includes Department and Agency Budgets, up-to-date salary information for state employees, information on Kentucky taxes, Open Records and ethics, and searchable databases of grants, contract information, and line item expenditures. Illinois Governor Quinn signed legislation to increase transparency and accountability in state government by strengthening the Illinois Freedom of Information Act (FOIA) and the Open Meetings Act (OMA), and ensuring the states boards and commissions are open and accessible to the public. The Attorney Generals Office is given authority to decide disputes between citizens and governmental bodies. Governor Quinn also posted the State Budget online for the first time in Illinois history so the public could actively participate in the states budgeting process. Visitors to the site were able to provide suggestions and feedback. North Carolina Governor Perdue created an on-line budget challenge http://www.governor.state.nc.us/budgetapp/default.aspx - that allows citizens to use an on-line tool to examine the state budget and propose how they would cut spending or increase revenues to balance the budget.

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DEMOCRATIC GOVERNORS POLICIES MAKING A DIFFERENCE: Montanas Governor Schweitzer asked his states citizens for their best ideas and they responded with more than 1,000 ways to make government more efficient. Some cost-saving measures were implemented including: cuts to the Governor and Lt. Governors salaries by $11,764; 15% of the state car fleet was sold and the average gas mileage of the remaining fleet was reduced to 35 mpg; an end to out-of-state travel; reduced in-state travel through technology use; a one-third decrease in the number of state cell phones and curtailed service plans; combined state department server centers; a reduction in energy use in state buildings by 20%; a decrease in the size of the states workforce; and an end to printing state phone books. Missouris Governor Nixon has reduced government spending by more than $1.8 billion since he took office. Delaware, under Governor Markells leadership, has achieved $400,000 through improved real estate management practices and is aiming to achieve a total of $1.1 million in savings for FY2011. The Center for Study of Responsive Law recognized Kentucky as a national leader for transparency in state contracts. In April 2010, Kentucky was the only state in the nation to receive an A rating for openness in government spending in a report by US PIRG. In a report issued by Good Jobs First, Kentucky was recognized for having the second highest rating nationally for accountability to taxpayers. New Hampshire, under Governor Lynchs leadership, now makes monthly state spending reports available online for the first time ever. Under Governor Gregoires leadership, Washington exceeded its goal of 25,000 green jobs by 2020 in 2009. Among private industries surveyed in both 2008 and 2009, green jobs grew by 15,100 (32 percent), to about 62,000 jobs.

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