At the 2008 Annual Meeting, state budget employees will tour the Hawai’i Civil Defense Center and will have a special briefing at the U.S. Pacific Command Center. At the Civil Defense Center, participants will view real-time maps of the region, learn about projecting and financing needs, and discuss budget constraints on disaster and emergency planning. A United States Navy representative will then brief the group on the federal government’s interaction with states and the relationship to services regarding disaster response.

Following these briefings, a special Navy boat will take all participants and guests on a tour of Pearl Harbor. The group will view markers from other Navy vessels in port on December 7, 1941. The boat tour will conclude at the U.S.S. Arizona Memorial where participants and guests will take a self-guided tour prior to a private wreath-laying ceremony for our group.

NASBO has secured a special room rate of $187 single or double occupancy at the Hyatt Regency hotel, considerably lower than high tourist season rates. The hotel cut-off date for NASBO's special room rate is Thursday, June 19. The registration fee for members (all state budget office employees) and alumni is $295 and $495 for non-members. The meeting registration deadline is Thursday, June 26.

If you cannot attend, please consider sending a staff member to represent your state. If you have questions about the meeting, transportation, or location information, please contact Lauren Cummings at (202) 624-8434 or lcummings@nasbo.org.

Link - 2008 Annual Meeting Information

Historical Fact - There were 1.4 million gallons of fuel on the USS Arizona when she sank. Over 60 years later, approximately two quarts a day still surfaces from the ship. Pearl Harbor survivors refer to the oil droplets as "Black Tears."

Governors Tim Pawlenty (R-MN) and Ed Rendell (D-PA), the chair and vice-chair of the National Governors Association (NGA) respectively, submitted a letter to President Bush on Thursday, March 20, requesting $1 billion this year from the federal government to help states handle the upfront costs associated with REAL ID. The Office of Management and Budget (OMB) recently estimated that it will cost states $4 billion to comply with REAL ID regulations over the next ten years. To date, Congress has only appropriated $90 million for REAL ID. Govs. Pawlenty and Rendell argue that $1 billion in federal funds is needed now because much of the cost to states will occur in the first year as they are forced to invest in new systems and alter existing practices.

Link: REAL ID letter from Govs. Pawlenty and Rendell
NASBO|Connects: Transportation Forum

On Tuesday, March 18, Senators Max Baucus (D-MT) and Chuck Grassley (R-IA), the chairman and ranking member of the Senate Finance Committee, asked Department of Health and Human Services (HHS) Secretary Mike Leavitt to revise a proposed rule that would increase Medicaid co-payments beyond intended levels. According to Sens. Baucus and Grassley, the formula in the proposed rule would permit patients’ co-payments to increase annually at a faster rate than other co-payments set by the federal government. Additionally, the senators say that the proposed rule may violate language from the Deficit Reduction Act of 2005 that gave states flexibility to set co-payments for Medicaid beneficiaries. The proposed rule was published on February 22, and comments are due by today, Monday, March 24.

Link: Letter from Sens. Baucus and Grassley on Proposed Medicaid Co-Payment Rule
NASBO|Connects: Medicaid/SCHIP Forum

In a letter released Friday, March 14, the Congressional Budget Office (CBO) examined how different scenarios would impact the long-term federal budget imbalance. Earlier, in December 2007, CBO developed a 75-year extended baseline scenario that assumed that current tax cuts would expire as scheduled. The letter released on March 14 looked at what would happen to the long-term budget imbalance under three different scenarios: eliminating Medicare Part D, extending the tax cuts instead of allowing them to expire, and both eliminating Medicare Part D and extending the tax cuts. CBO found that the budget imbalance would be reduced if Medicare Part D was eliminated, the budget imbalance would grow if the tax cuts were extended, and that the budget imbalance would be reduced if both Medicare Part D was eliminated and the tax cuts were extended.

Link: CBO Long-Term Budget Outlook Letter

An Analysis of the President’s Budgetary Proposals for Fiscal Year 2009, Congressional Budget Office

The Nation’s Long-Term Fiscal Outlook, Government Accountability Office

U.S. States Lead the World in High Corporate Taxes, Tax Foundation

Recessions and State-Local Finances, Rockefeller Institute of Government

On Tuesday, March 18, the Federal Reserve Board voted to reduce the federal funds rate by three-quarters of a point, from 3 percent to 2.25 percent. Since the beginning of the year, the Federal Reserve has reduced the federal funds rate by 2 percentage points. Federal Reserve Board Members cited weakening economic conditions as the reason for the rate cut. Many economists believe that the Federal Reserve will continue to reduce the federal funds rate, while some critics contend that further reductions will increase the risk of inflation.

Link: Federal Reserve Press Release
NASBO|Connects: Economic Outlook Forum

On Thursday, March 20, the Conference Board announced that the leading index of economic indicators declined by 0.3 percent in February, marking the fifth consecutive month that the index has declined. The last time the index declined for five consecutive months was during the recession of 2001. Components of the index that showed declines in February were stock prices, building permits, unemployment insurance claims, vendor performance, and consumer expectations.

Link: Conference Board Press Release