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Analysis & News on the Future of Public Finance

CSG: What the Governors Care About

By Joseph Krist, Partner, Court Street Group

We had the opportunity to hear from Scott Pattinson of the National Governors Association (NGA) on issues about which governors’ are most concerned. It comes as no surprise that, much as is the case with many private businesses, healthcare (and how to pay for it) is one of those concerns. Next would come Medicaid, more specifically as its funding is a significant cost center for states and municipalities.

Medicaid leads us to another subset of the healthcare issue -- the opioid epidemic. Through its role in Medicaid, states are effectively on the financial frontline of all of the elements of the problem. Costs of dealing with the direct health impact are great enough -- add in the related criminal justice, social welfare financial issues, and the reason for concern is real.

They care about innovation. The potential impact on the physical operation of transportation, utilities, and direct service provisions could potentially be significant. Along those lines, cyber security is a concern. The potential for exposure which exists in many governmental systems reflects age of equipment, competition for fewer financial resources. The cost of replacement or of the best quality equipment can be a very heavy lift at the local level. This competes with the demand for funding of broadband internet capacity. Smaller communities will rely on such technology to offer sufficient levels of service and information to retain population and expand local economies. It will also be a key link in the digital infrastructure chain in the healthcare industry.

Here is an example: Sens. Charles Grassley (R-IA) and Richard Blumenthal (D-CT) are cosponsoring legislation which would, among other things, expand the use of telehealth services for the treatment of opioid use disorder and other substance use disorders. It would eliminate the requirement for treatment for substance abuse to be initiated at a physical site and allows for payments of telehealth substance abuse payments. The proposal also allows for controlled substances under restricted circumstances to be prescribed via telehealth.

Of course, infrastructure made the list. With states a primary source of funding for road and other transportation projects, this should be an area of interest. The inability of Congress to agree on an infrastructure package satisfactory to the Administration is not a surprise. Nonetheless, it is becoming more apparent that states and localities cannot wait for the federal government step up.