Politically Direct: DMA's Spring 2009 State Report: News from State Capitals

April 1, 2009 — The 2008 election brought mixed results for control of state houses. In an average election cycle, approximately 12 chambers change party control. This year closely followed that average, with Democrats and Republicans trading control of 11 seats.

Democrats took control of five state chambers: the New York Senate (for the first time since 1966), the Delaware House, the Ohio House, the Wisconsin Assembly, and the Nevada Senate.

Four chambers switched from a Democratic to Republican majority: the Tennessee House and Senate, the Montana Senate, and the Oklahoma Senate.

The Alaska Senate went from a Republican majority to a 10-10 tie, and the Montana House’s previous Republican majority moved to an even split at 50-50.

Eleven states held gubernatorial elections, but the only governorship to change party control was in Missouri, where Attorney General Jay Nixon (D), defeated US Representative Kenny Hulshof (R). Incumbent Governor Matt Blunt (R) announced at the beginning of the year that he would not seek reelection.

The country remains generally split in terms of partisan control of the states, with Democrats in full control in roughly half of the states, and Republican or divided control in the remainder.

State Finances

Like the nation at large, states are under tremendous financial pressure as taxes and other revenue sources shrink. During last year’s session, states faced a $48 billion budget gap that had to be closed, since virtually all states are required to achieve balanced budgets.

After passing their budgets, and with the economy still sliding, 41 states have slipped further into the red, and now face budget gaps of more than $30 billion that must be addressed.

The future doesn’t promise much relief, with half of the states already predicting fiscal year 2010 budget shortfalls of more than $63 billion. Once the economy does turn around and begins growing again, it typically takes additional time for state budgets to reflect the recovery. Therefore, a sound financial footing in the states may still be some time away.

Issue Outlook

While financial matters and budget gaps are likely to be top priorities in most states, work will continue on other issues pertinent to direct marketers.

Last year, a number of states considered(but did not pass) data security/breach, privacy, and Internet advertising legislation. These bills, had they been enacted, would have had significant implications for direct marketers. Similar versions of these bills are being seen in the 2009 session.

Do Not Mail (DNM) legislation remains a policy priority for DMA and the Mail Moves America coalition, as DNM proponents continue to push for state or federal legislation to establish Do Not Mail registries. Five Do Not Mail bills have been introduced so far this year in three states: Connecticut, Florida, and New York. The San Francisco Board of Supervisors also has before it a non-binding resolution calling on the California State Legislature to create a Do Not Mail registry. Mail Moves America members have been actively working to counteract these efforts.

Combined with other proposed legislation such as do not track, do not sell, and even do not deliver, a worrisome trend is developing that threatens to eliminate most forms of contact between marketers and consumers. DMA remains committed to keeping all marketing channels open and viable.

Telemarketing issues remain popular with legislators. Several states have introduced bills this year that would allow businesses to be included on the state’s Do Not Call list. One such bill has been amended to address the underlying problem, while others did not advance. Additionally, auto-dialer and calling-day restrictions continue to be examined.

A number of data security and data breach notification bills have also been introduced so far this session with a significant focus on protecting the privacy of Social Security numbers. Additional bills have been introduced that target “personal information” (variously defined) and limiting its distribution.

Finally, a number of bills have been introduced that make changes or additions to state sweepstakes, negative option, trial offer, and automatic renewal of contract law. While some of these bills only clarify existing law, DMA actively opposes the few that impose either unnecessary requirements or complicate the consumer/business relationship.

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