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Buoyed by Election Results, ALEC Lays Blueprint for 2015

The American Legislative Exchange Council (ALEC), emboldened by the mid-term success of conservative Republicans at the state and federal levels, will be meeting December 3-5 in Washington, D.C. to develop its policy agenda for 2015 and beyond. ALEC will be seeking, among other things, to "preempt" state and local level minimum wage increases, promote local "right to work" legislation, forestall shareholder activism, and increase school privatization.

Oklahoman’s protest ALEC meeting in the 2013 March for Middle Class and Working Families,Transport Workers Union/|AFL-CIO

The midterm elections may have given the embattled American Legislative Exchange Council a new lease on life. ALEC has been bleeding corporate members, but with Republicans now in control of 68 out of 98 state legislative bodies, there are fewer impediments to the enactment of the corporate-friendly legislation that ALEC peddles -- and in early December, ALEC and the corporations that still fund it will likely lay out the legislative blueprint for 2015 at the ALEC States & Nation Policy Summit in Washington, DC.

“Prior to the sweeping change witnessed in 2010, one must look back to 1896 to see such a momentous shift in leadership at the federal, state and local levels,” wrote ALEC Executive Director Lisa B. Nelson in a November 5 email to ALEC members. Republicans expanded their majorities in many states, took control of 11 legislative chambers that had been held by Democrats, and gained three governorships. She claimed the election results were “a historic victory for limited government, free markets and federalism.”

Yet, the actual policy ideas that ALEC promotes are less popular than ever. Republican and Democratic voters across the country voted overwhelmingly in favor of increasing the minimum wage on election day -- which ALEC and ALEC funders like the National Restaurant Association have long opposed -- and not surprisingly, a top agenda item at ALEC's December meeting is aimed at thwarting efforts to raise the wage.

Blocking Local Minimum Wage Increases

Citizens in red states like Alaska, Arkansas, Nebraska and South Dakota voted overwhelmingly in favor of raising their state’s minimum wage on November 4, as did Republican and Democratic voters in states like Wisconsin, where twenty communities supported advisory referendums in favor of raising the wage.

With such a clear divide between the policies that voters support and those that ALEC corporate interests like the National Restaurant Association (which has been fighting for a $2.13 sub-minimum wage) want legislators to implement, the Commerce, Insurance, and Economic Development Task Force will feature a presentation on “Minimum Wage Preemption Policies.”

ALEC has long pushed bills like the “Living Wage Preemption Act" to block city, county, or local governments from enacting progressive economic initiatives like a higher minimum wage. In light of the renewed grassroots push for fair wage laws, this bill to crush a local government's ability to increase wages in their community will likely be a top ALEC priority in 2015. (ALEC legislators have also been active in banning local paid sick day efforts, passing 10 laws after Wisconsin's paid sick days preemption bill was shared at ALEC's August 2011 meeting).

Running parallel to the ALEC summit is the second meeting of the American City County Exchange (ACCE), the new ALEC offshoot aimed at pushing corporate-friendly legislation directly at the local level.

It presents an interesting contrast: as ALEC members discuss how to thwart local governance through minimum wage preemption policies, ALEC is trying to make inroads into local government. An early agenda for the ACCE meeting shows that one workshop is titled "Local Minimum Wage: a defense for small business and their employees."

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Local Right to Work

The ACCE meeting will also feature a presentation titled "Local Right to Work: Protect my Paycheck." ALEC has long pushed anti-union "Right to Work" laws, which allow non-union members to free-ride on union representation, reaping the benefits of union negotiations for wages and benefits but without paying the costs. Michigan's right to work law, for example, was a word-for-word copy of ALEC's model legislation and sponsored by ALEC members.

With ACCE, ALEC is now trying to promote this anti-union legislation at the local level.

In September, the Washington Examiner reported that "Conservatives are starting to push the idea that city and county governments can pass union-restricting right-to-work laws, even though it may not be legal and has been tried only a handful of times in the last 70 years." It is unclear whether local governments have the authority to pass right to work under the Taft-Hartley National Labor Relations Act, but in August the Heritage Foundation issued a report arguing that they do. Heritage hosted a panel discussion on local right to work in August featuring representatives of ACCE, Grover Norquist's Americans for Tax Reform, and the National Right to Work Legal Foundation, and highlighted what they viewed as opportunities for local ordinances in Kentucky, Ohio, and Pennsylvania.

Earlier this year, the Freedom Foundation (a State Policy Network affiliate and ALEC member) promoted local right to work ballot initiatives in three cities in Washington State, all of which failed. Newly-elected local officials in Kentucky have announced plans to push local right to work laws in 2015. 

Given the legal uncertainty around local right to work, any local government that enacts this anti-union legislation would certainly face costly legal challenges. Yet this may be ACCE's goal: to set up a lawsuit that can be appealed to a friendly U.S. Supreme Court.

Right-to-work may also gain new momentum on the state level. In New Mexico, for instance, where Republicans gained control of the Assembly for the first time in 60 years, ALEC members like Sen. Stuart Ingle are calling for the state to pass right to work legislation.

Depriving Low-Wage Workers of Health Insurance

The ALEC Health and Human Service Task Force will discuss the "Medicaid Anti-Crowd-Out Act," which would prohibit people from enrolling in Medicaid if their employer offers some form of insurance, regardless of how poor the person might be or how much the plan costs.

When combined with the latest Affordable Care Act challenge to reach the U.S. Supreme Court -- which ALEC has helped advance -- this proposal can only be called cruel.

On November 7, the Court granted review of the case King v. Burwell, which argues that the ACA should be read as prohibiting insurance premium subsidies for low-income citizens in states that refused to set up their own online healthcare exchanges, a reading contrary to the clear intent of the law's drafters and to a reading of the law as a whole. If the King lawsuit is successful, then low-income citizens of the 26 states that refused -- many at ALEC's urging -- to set up state-run exchanges would be ineligible for the subsidies that make insurance affordable.

And in states that pass the ALEC "Medicaid Anti-Crowd-Out Act," those same low-income Americans -- who cannot afford insurance because the subsidies are unavailable --would be prohibited from enrolling in Medicaid.

On the one hand, ALEC is working to eliminate the subsidies that would make that private health insurance affordable for the working poor. And on the other, ALEC is declaring that those same people are ineligible for Medicaid.

"The Onslaught of Shareholder Activism"

Although ALEC will come into its December meeting buoyed by the opportunities presented by November’s election results, dark clouds will be hanging over the festivities: throughout the fall, ALEC suffered an exodus of high-profile tech industry members, including Google, Microsoft, Yelp!, Yahoo, and AOL, which separated themselves from the organization over its climate change denialism and efforts to crush renewable energy. And, at the beginning of November, SAP America parted ways with ALEC, a particularly crushing loss since the software giant chaired ALEC's private enterprise board.

Since the Center for Media and Democracy launched in 2011, over ninety companies have dropped their ALEC membership. As a result of its dwindling list of corporate funders, ALEC closed 2013 with a nearly $1.2 million deficit.

Socially-conscious investors like Walden Asset Management and faith-oriented investors like the Unitarian Universalists have played an important role in getting companies to disclose their ALEC membership or leave ALEC altogether, and this apparently has ALEC spooked. In one recent fundraising email ALEC attacked the Unitarian Universalist Church as “professional activists.”

Accordingly, the ALEC Civil Justice Task Force will consider a presentation on “The Onslaught of Shareholder Activism and Its Implications” at the December meeting. And, multiple task forces will receive updates from the ALEC Public Affairs Department, presumably to discuss the loss of corporate members.

Tobacco, Trade, and Teeth

Here are some of the other bills on the ALEC and ACCE December agenda:

  • Electronic cigarettes: The Commerce, Insurance and Economic Development Task Force will feature a presentation on “Vapor Usage Restrictions,” and the Tax & Fiscal Policy Task Force will consider "E-Cigarette taxation," which come on the heels of a workshop at ALEC's Spring meeting titled “Regulating Electronic Cigarettes: Jeffersonian Style.” Electronic cigarette maker NJOY joined ALEC last year -- and all of a sudden, "vaping" has become a top ALEC priority. Health advocates protest e-cigarette flavors like “gummy bears” and the American Heart Association warns that "Electronic cigarettes need to be strongly regulated -- and quickly -- to prevent another generation of young people from becoming addicted to nicotine."
  • Protesting "Global Taxes" on Tobacco: The discussion of e-cigarettes is just one of many tobacco-related agenda items. ALEC's "Resolution Opposing International Taxation Initiatives" will protest "global taxes," including the World Health Organization’s convention on tobacco control, which is intended to reduce tobacco consumption and raise funds for health care. ALEC also reviews its "Resolution Urging the European Union to Remove Its Ban on the Sale of Smokeless Tobacco." Tobacco companies are some of ALEC's top funders, and an Altria/Phillip Morris representative sits on ALEC's corporate board.
  • Regulating Ride-Share Companies? As safety concerns continue to grow around "ride-sharing" services like Uber and Lyft, ALEC's Communications and Technology Task Force will consider a model bill declaring that Uber and Lyft are not “common carriers” that would bring their operations under control of state Public Service Commissions (PSC). Earlier this year, Maryland’s PSC deemed Uber a common carrier offering passenger-for-hire services -- rather than a mere technology company, as Uber had argued – and subject to the same laws as taxis. The proposed ALEC bill largely tracks legislation in that state creating a new regulatory regime for “Transportation Network Services,” defined as “a digital network to connect riders to drivers for the purpose of providing transportation.” The ACCE meeting will also feature a workshop called "Rideshare: Emerging Community Transportation." Uber and Lyft have attended past ALEC meetings, but both denied being ALEC members earlier this year.
  • Industry-Friendly Dental Bills: The ALEC Health & Human Services Task Force will consider a set of resolutions, including a call to declare August "Oral Health Awareness Month" and a resolution to allow dental practitioners (who have a lower level of training than full dentists) to be hired more easily by dental practices and health clinics. Similar bills have passed in Maine, Alaska, and Minnesota. On one hand, measures like these could be a move toward making basic dental care more accessible and affordable. On the other hand, as has happened in other professions such as medicine and higher education, it could end up meaning lower-status practitioners do the same work for less pay without much savings to the patient. Not surprisingly, the Academy of General Dentistry is an ALEC member.
  • Rigging the Game for Insurers: The Commerce, Insurance and Economic Development Task Force will consider has a draft “Property Insurance Claims Act” that tilts the playing field in favor of big insurance companies by limiting the ability of businesses or consumers to dispute a denied property insurance claim. The proposal allows insurance companies to get around state law by writing exceptions into the policy, shortens claim filing and statute of limitation deadlines, and restricts awards of attorney fees and/or penalty interest to levels that make it difficult for a business or consumer to hire a lawyer to dispute the denial. State Farm Insurance has long been an ALEC member and has a representative on the ALEC corporate board.
  • Free Trade!: On the trade front, ALEC will be pushing for more job-killing trade deals, with a presentation in the ALEC International Relations Task Force called “The Election is Over – It’s Time to Focus on Trade.” ALEC has supported every free trade agreement the U.S. has signed, including NAFTA, the WTO, and free trade with China. In the new Republican-controlled Congress, top agenda items include “Fast Track” free trade authority, the TransPacific Partnership and the Transatlantic Trade and Investment Partnership. ALEC's International Relations Task Force will also feature presentations titled "Azerbaijan - an Important Partner in a Strategic Region" and "Zambia - Opportunities for Engagement."
  • School Privatization: ALEC's "Public Charter School Act" is a revamp of a 2007 ALEC bill, and it goes far beyond the predecessor in its attempts to greatly expand school privatization in a state, preempt democratic oversight, and sneak in a parent trigger mechanism. Although ALEC's agenda does not list the bill's sponsor, the proposed model closely tracks one promoted by the National Alliance for Public Charter Schools. The bill would eliminate caps on the growth of charter schools in the state, exempt those charters from many state laws, and exempt the charters from existing collective bargaining agreements between a district and its employees. The bill explicitly provides for these schools to be managed by “for-profit” education management organizations -- and since there are no other sources of revenue than what the school district pays, the profit must be “carved out” from the money intended for students. Notably, the bill also sneaks in a "parent trigger" mechanism, which allows for paid petition drives and a snapshot of parent opinion to shut down public schools and reinstate them as charters. Additionally, the bill puts charter authorizing authority in the hands of unaccountable state-wide authorizers, and expands the list of authorizers, taking authorizing authority away from elected local school boards. As one ALEC member told an ALEC education subcommittee earlier this year, "we need to stamp out local control."

ALEC's meeting will run December 3-5 in Washington, DC.

[Brendan Fischer is the Center for Media and Democracy's General Counsel. More information on ALEC can be found at ALECexposed.]