State lobbyists near the $1 billion mark

Introduction

Vested interests are working harder than ever to achieve their goals in state capitols and state agencies across the country. Nearly 47,000 such interests—companies, advocacy groups, labor unions, professional organizations and even government agencies—hired more than 38,000 individual lobbyists. This averages out to five lobbyists and almost $130,000 in expenditures per state legislator.

Such generosity can create a sense of entitlement. In January, Louisiana state Rep. Charles Lancaster suggested raising the $100 limit on free tickets to sporting and cultural events because good seats at college and professional games often cost much more. The Republican’s comments prompted editorials in the local media and rekindled an attempt in the legislature to enact an outright ban on free tickets. The measure breezed through the Senate but was ultimately killed by a House committee—whose chairman happens to be Rep. Lancaster.

All told, lobbyists and their employers in 42 states reported spending nearly $953 million in 2004 attempting to influence state legislators and executive branch officials. That figure is up from the $904 million reported in 2003. It seems likely that state lobby expenditures will exceed the $1 billion mark this year.

The other eight states could not provide overall spending totals for 2004, although lobbyists do report spending in those states. Pennsylvania, one of the eight, remains the only state in the union without a statute mandating lobbying disclosure, but its state senate does require those who lobby the chamber to register.

State Lobby Spending in 2004

Among the states providing an overall lobby spending total in 2004, 25 reported an increase in spending over the previous year. Arizona, Mississippi, Virginia and West Virginia all reported increases of more than 30 percent. Montana’s expenditure total increased by 18 percent even though the legislature did not meet in 2004. Iowa’s total increased 35-fold, primarily because its reporting agency was not able to include lobbyists’ salaries in the 2003 figure.

Alaska significantly relaxed lobbyist registration requirements in 2003. The Center predicted this would lead to a decrease in expenditure reporting in 2004. In fact, the total amount actually increased by 3 percent, even though the new registration rules caused fewer lobbyists and lobbyist employers to register.

Florida expenditures, which declined by 59 percent in 2004, were at their lowest in a decade. Illinois and Ohio also reported dramatic declines, perhaps because of the 2004 election, when lobbyists and their employers presumably channel a significant portion of their resources toward campaign activities. Florida, Illinois and Ohio do not require lobbyists to disclose campaign contributions. In contrast, in the four states that lump lobbyists’ campaign contributions in with their other spending—Colorado, South Carolina, Tennessee and West Virginia—expenditure totals increased.

North Dakota, which has a legislature that only meets in odd-numbered years, reported the lowest total expenditure: $3,141 in total. Even during the years in which the legislature meets, the total is lower than that of almost every other state. For example, when the legislature met in 2003, the state reported lobbying totals of $20,096. North Dakota’s disclosure law only applies to legislative lobbyists, who do not have to report their income or what they spend on a legislator if it’s less than $50 per occasion (increased to $60 this year).

In Ohio, which also has a relatively high disclosure threshold and does not require the disclosure of lobbyists’ income, more than 1,280 lobbyists and their employers reported spending a total of only $394,146.

In all, 15 of the 42 states do not keep track of how much lobbyists get paid. Neither lobbyists nor their employers must report lobbyists’ fees or salaries, which account for the vast majority of the overall spending total. When it comes to compensating a state lobbyist, the sky’s the limit. Last year, for instance, lobbyists in Colorado reported earning nearly 13 times as much as they spent. But what a lobbyist is permitted to spend on a legislator is limited in about half of the states.

Eight states did not provide an overall total for 2004 spending, and lobbyists in two of them—Nevada and Pennsylvania—were not required by law to even register. In Nevada, lobbyists only register during the months the legislature is in session, which occurs in odd-numbered years. In Pennsylvania, the state Supreme Court struck down a lobbyist disclosure law in 2002, holding that it was an unconstitutional regulation of the practice of law.

Pennsylvania Senate Minority Leader Robert J. Mellow, a Democrat, was quoted by the Associated Press as saying that the distinction as the only state in the country lacking lobbyist registration and disclosure laws has made it “the nation’s laughingstock.” In April, the Senate unanimously approved a lobbyist registration and disclosure bill, but efforts to push through a similar bill in the House have failed so far.

“This is one of the basic things a modern democracy does,” Barry Kauffman, the executive director of Common Cause Pennsylvania, told the Center. Common Cause has made passage of a new lobbying registration and disclosure law its “premier issue” in the state since the controversial 2002 court decision.

Pennsylvania is among 19 states where lawmakers have tried in the last year to change the way lobbyists conduct business.

State Lobby Laws in 2005

State oversight of lobbying generally takes four forms. States establish registration requirements by defining what lobbying is and who is a lobbyist; they require lobbyists or the interests that hire them to periodically disclose their expenditures and earnings; they regulate the “revolving door” between government and the private sector by establishing a cooling-off period during which ex-government officials are prohibited from lobbying the government they once served; and they define the range of permissible lobbying activities, such as providing free gifts or meals.

Two years ago, the Center’s comprehensive report on state lobbying, “Hired Guns,” gave more than half the states a failing grade on their registration and disclosure requirements. Since then, some states have strengthened lobbying regulations while others have weakened them. In many states, regulations can fluctuate from year to year as a result of ongoing battles waged by lawmakers, lobbyists, watchdog groups and concerned citizens.

The following are brief summaries of the changes in state regulations that have occurred since the Center’s last comprehensive analysis of lobbying in the states, the May 2004 report “Under Pressure.”

Registration Law Changes

In June 2004, New Jersey enacted sweeping changes to its lobbying regulations. The new rules will expand the state’s reach over the activities of lobbyists (now called “governmental affairs agents”), impose a registration fee and increase the state’s audit powers. The state Election Law Enforcement Commission will ultimately decide how to implement the new regulations.

Colorado, Florida, New York, North Dakota and Pennsylvania also undertook efforts to change their lobbyist registration policies and procedures. As of January, Louisiana began regulating executive branch lobbyists. West Virginia imposed new training and education requirements on all lobbyists.

Disclosure Law Changes

In Washington state, which got the highest grade in the Center’s “Hired Guns” report, the spirit of the state’s exemplary disclosure law is being undermined by lobbyists who report their clients’ purposes on disclosure forms in vague, non-descriptive terms. Some state regulators and lawmakers seem determined to fix the problem, although nothing has been done yet. Meanwhile, in Tennessee, efforts to pass lobbying reform got bogged down over whether lobbyists should be required to disclose their income and client fees.

Florida, Georgia, Louisiana and North Carolina each introduced or passed legislation that broadens disclosure requirements for lobbyists and their employers, while lawmakers in North Dakota took a small step backward by voting to raise by $10 the amount of money a lobbyist may spend on them without having to disclose it. New lobbying regulations in New Jersey include tougher disclosure requirements.

Revolving Door Law Changes

Georgia passed a law in May that makes lawmakers wait at least one year after leaving office before returning as lobbyists, while similar revolving door measures were introduced in Indiana, Michigan, Montana, North Carolina and Oklahoma. In Tennessee, a House bill imposing a one-year cooling-off period was defeated, but the state did enact a law banning elected officials from taking money to lobby or influence the government in which they serve.

Lobbyist Conduct Law Changes

The Florida Senate took steps to curb free gifts and meals. New York, North Carolina and Rhode Island introduced or adopted similar restrictions. In Oklahoma, the ethics commission considered, but ultimately rejected, raising the amount a lobbyist can spend on any state official or employee.

Other states had less success.

In Georgia, a $50 limit on gifts and meals proposed by Gov. Sonny Perdue was stripped from the bill he signed into law in May. In Louisiana, a ban on free tickets to sporting or cultural events passed by the Senate was scuttled the following month in the House. In Missouri, Senators voted to lift a legislative rule limiting lobbyist gifts, reasoning, without any hint of irony, that the ban was outdated and frequently violated.

Elsewhere, the focus was on other aspects of lobbying. In Tennessee, a measure prohibiting lobbyists from serving on many state and local boards was defeated. So, too, was a proposal to ban lobbyists from working for contingency fees (fees paid only if the lobbyist achieves a favorable legislative result for the client).

In Connecticut, legislators considered imposing a ban on having lobbyists solicit money for legislative campaigns. At least one state legislator, Sen. President Pro Tem Donald Williams Jr., got a harsh reminder this year of the perils of an unchecked lobbying industry when he saw two of his bills stymied by a coalition of business lobbyists.

David Jimenez, Davinia Seay, Arya Hariharan and Leah Rush assisted in compiling the figures for this report, made possible by support from the Joyce Foundation and the Ford Foundation.