In this week’s State of the States, we explore pivotal developments across the U.S., from New Jersey’s tax increases to ensure a $6 billion surplus, to Pennsylvania’s ongoing budget delays, and Alabama’s move to ban hemp-derived THC. These critical state-level actions are shaping budgets, public services, and emerging industries as the new fiscal year begins.
Alabama
The first bill to be introduced for next year’s legislative session is Senate Bill 1, seeking to classify hemp-derived THC as a controlled substance. Doing so would mean banning the sale in Alabama of any products that contain THC derived from hemp.
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Arizona
Republicans in the state House passed a stopgap budget that Governor Katie Hobbs (D) has vowed to veto, raising the risk of a government shutdown next week amid ongoing GOP infighting over state spending. With the fiscal year ending June 30, lawmakers face a deadline to pass a budget to keep state agencies operating, but divisions between House Republicans and the GOP-controlled Senate remain unresolved.
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Arkansas
Last Friday, Arkansas lawmakers approved the release of an additional $90 million for the state’s school voucher program. The Education Freedom Account Program provides up to 90% of the annual per-student public school funding rate for allowable expenses, including private school tuition and homeschooling.
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California
Lawmakers have agreed to expand the California Film and TV Tax Credit Program, increasing the funding for incentives from $330 million to $750 million. Legislators are also working on a companion bill, AB 1138, which would make funding available to more productions including sitcoms, animation, and large-scale competition shows.
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Colorado
Lawmakers enacted green tax credits in 2023 to provide discounts for purchasing electric heating and cooling and transportation. However, the availability of the credit depends on state economic forecasts showing at least 4% projected revenue growth in the next fiscal year, otherwise tax credits will be cut by 50%. Thus, the somber state revenue forecast suggests that the tax credits will be slashed in 2026.
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Connecticut
Governor Ned Lamont (D) signed a new law to create the Connecticut-Puerto Rico Trade Commission, aiming to boost trade, investment, and collaboration. The Commission will focus on academic partnerships, infrastructure investment, and shared policy objectives, and will produce an annual report for the governor and state lawmakers.
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Delaware
A $6.58 billion operating budget was approved by the state House and has been sent to the Senate for approval. The budget includes a 2% raise for all education employees, an allocation of $3.2 million for free breakfast in public schools, and $40 million for additional Medicaid funding.
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Florida
In response to rising costs faced by condo owners after the 2021 Surfside collapse, Governor Ron DeSantis (R) signed a law to ease the financial burden. The new law allows condo associations to secure credit lines and investment funds to cover building repairs, reducing the need for expansive special assessments and fee hikes.
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Georgia
The Fentanyl Eradication and Removal Act, set to take effect July 1, introduces stricter mandatory minimum sentences for anyone convicted of trafficking fentanyl. It creates a separate schedule of offenses specifically for fentanyl and its related substances, effectively removing it from Georgia’s general statutes on opiates. The new law brings punishments up to par with the extreme potency and lethality of fentanyl, hoping to keep communities safer amidst rising overdose deaths.
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Hawaii
Mayor Blangiardi in Honolulu has signed three bills into law to curb the rise of illegal backroom gambling in the city. Under the new law, police and city agencies will gain increased powers to shut down illegal gambling activities.
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Idaho
Three important pieces of legislation passed in Idaho’s recent legislative session: one provides a significant income tax cut, reducing revenues by $240 million; another creates a school voucher program to allot grants to students who attend non-public schools, and the third reduces Medicaid expansion spending by implementing new cost-control measures.
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Illinois
Governor JB Pritzker (D) signed Senate Bill 19 into law on Friday, expanding victims’ rights in the Prisoner Review Board process. The new law allows victims to file impact statements before hearings, provides additional notice to victims of their offender’s early release, and allows victims to seek an order of protection against incarcerated offenders.
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Indiana
Lawmakers announced the topics they plan to study this summer during the Interim. This year, lawmakers will take an in-depth look at water safety education for kids, maternal mental health, artificial intelligence, and the economic impact of how Indiana’s recreational land is used, among other things.
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Iowa
Governor Kim Reynolds (R) signed Senate File 22 into law on April 2, 2025, making Iowa the 31st state in the nation to enact a Hands-Free Driving Law prohibiting drivers from using electronic devices while driving unless the device is in a hands-free setting. The law will go into effect on July 1, 2025, with an initial warning period through December 31, 2025.
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Kansas
101 new laws will take effect on July 1, 2025. Key legislation includes a ban on gender-affirming care for minors, increased campaign contribution limits, and modification to the tax laws including a gradual shift to a flat income tax. Other laws address child support at conception, government efficiency, and foreign land ownership near military bases.
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Kentucky
A new law going into effect on Friday, June 27, will establish new standards for student-teacher communication. The bill mandates that all electronic communication between school staff, coaches, volunteers, and students must be conducted through designated, traceable platforms.
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Louisiana
Governor Jeff Landry (R) signed Act 44 into law earlier this month, expanding the power of the state’s economic development agency to make changes to the film tax credit program. The bill will increase the competitiveness of Louisiana’s film industry, incentivizing more productions in the state that is struggling with a stagnant film industry.
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Maine
On Wednesday, the Maine Legislature approved a bipartisan bill to address problems with the state’s clean energy credit program. The bill asks the Governor’s Energy Office to create a new program for front-of-the-meter net energy billing projects, including community solar projects. The measure is designed to promote small-scale renewable energy, helping customers offset their electricity costs.
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Maryland
Governor Wes Moore (D)’s administration plans to cut $121 million from the state’s personnel budget through a combination of buyouts to state employees, a hiring freeze, and the elimination of at least 150 vacant positions.
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Massachusetts
For the first time since 2019, the House and Senate Democrats have come to an agreement on joint rules to guide their legislative session. Reforms will include publishing all committee votes online, live-streaming all hearings, and giving the public a 10-day notice before joint committee hearings.
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Michigan
The House passed a series of bills on Tuesday to limit the use of bots for purchasing large amounts of concert and event tickets. Together, House Bill 4262 and 4263 would allow the Michigan Department of the Attorney General to pursue legal action against anyone using automated technology to circumvent online ticket purchasing limits.
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Minnesota
During a special session held on June 9 and 10, the Minnesota legislature passed tax changes that were later signed by the Governor on June 14. The tax changes largely target data centers and healthcare entities.
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Mississippi
After a special legislative session, Governor Tate Reeves (R) signed a $7.135 billion state budget for the upcoming fiscal year. Disagreements between House and Senate leaders over budget allocations and special projects continued during the special session, with House Democrats filibustering and the House ultimately passing bills with errors and unconstitutional provisions.
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Missouri
The CROWN Act is part of a national movement to eliminate race-based hair discrimination and establish protections for natural hair textures.Unlike the 27 other states who have enacted similar laws, Missouri’s version of the bill only applies to educational settings including preschools, K-12 schools, and higher education institutions that receive state funds. The bill is currently awaiting Governor Mike Kehoe (R)’s signature.
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Montana
Governor Greg Gianforte (R) vetoed a bill that would have made child care workers eligible for the Best Beginnings Child Care Scholarship for their own children. To justify the veto, Gianforte cited previous measures aimed at improving access to affordable child care as his reason for the veto. One such measure, House Bill 648, approved in 2023, provided Best Beginnings with $7 million to increase access and permanently expanded income eligibility from 150% to 185% of the federal poverty level.
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Nebraska
Governor Jim Pillen signed LB 644 into law during a ceremony on June 25th. The new law establishes the Foreign Adversary and Terrorist Agent Registration Act and the Crush Transnational Repression in Nebraska Act, which will both work to reduce the influence of foreign adversaries on Nebraska’s infrastructure, contracts, property, and other key assets.
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Nevada
Assembly Bill 263, passed unanimously by Nevada lawmakers, will allow Clark County social workers to collaborate with the Nevada Department of Transportation to perform outreach and offer social services to the homeless communities camped along freeways and embankments.
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New Hampshire
Senate Bill 245, which aims to address surprisingly high bills for ambulance rides, has been approved by the House and Senate and is headed to Governor Kelly Ayotte (R)’s desk. The bill bans balance billing, which happens when the price of an ambulance ride exceeds what an insurance company will pay, leaving the patient to pay the difference.
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New Jersey
New Jersey’s budget panels approved tax increases on expensive building sales, cigarettes, nicotine, online gambling, and sports betting to maintain a balanced budget and a $6 billion surplus for the next fiscal year, though the full budget vote was delayed as the bill is still being drafted. Sen. Paul Sarlo noted the difficulty of these tax hikes, which support Gov. Phil Murphy’s (D) pledge to leave a strong financial surplus when he exits office in January.
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New York
Senate Bill S4505 is awaiting Governor Kathy Hochul (D)’s signature after being passed in the state Senate last week and in the Assembly on Tuesday. The bill would require social media companies to post warnings on their platforms if they contain addictive features such as autoplay, infinite scroll, like counts, and push notifications.
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North Carolina
Governor Josh Stein (D) rejected a trio of controversial measures sent to him by the General Assembly last week. Among these vetoed bills are Senate Bill 50, which would have allowed North Carolina residents over 18 to carry concealed firearms without a permit. Another vetoed bill, Senate Bill 153, would have required state agencies to cooperate with the U.S. Immigration and Customs Enforcement (ICE) and prohibited undocumented immigrants from receiving state-funded benefits.
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Ohio
The Senate and House both approved a two-year, $60 billion biennial operating budget, and it now heads to Governor Mike DeWine (R) for signature. The budget features a $1.1 billion income tax cut, an increase to school funding by $635 million over the previous two years, and a $600 million allocation from the state’s unclaimed funds program for a new Cleveland Browns football stadium.
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Oklahoma
Lawmakers passed Senate Bill 739 on Monday to strengthen oversight of Oregon’s long-term and memory care facilities. The bill requires facilities to notify residents’ contacts when violations of state health policies on neglect and abuse occur, or if a location is placed on an oversight watchlist by the state. The bill would also require the Oregon Department of Human Services and the Oregon Healthy Authority to begin investigations within 24 hours of neglect or abuse complaints.
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Oregon
House Democrats voted on Friday to prevent the Oregon National Guard from being used as law enforcement or federally deployed without Governor Tina Kotek (D)’s consent. House Bill 3954 bars the state’s adjutant general from cooperating with the U.S. Defense Department or military branches unless the mission is congressionally authorized or is for training purposes. The bill passed 32-16, with all Democrats in favor and all Republicans opposed.
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Pennsylvania
Pennsylvania’s state budget will be late for the fourth consecutive year, as deep philosophical differences between Democratic Gov. Josh Shapiro, House Democrats, and Senate Republicans stall negotiations.
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Rhode Island
On the final day of the 2025 legislative session, lawmakers passed a bill banning the sale and manufacture of assault-style weapons. The ban applies to semi-automatic rifles, shotguns, and handguns with military-style features, and is set to begin July 1, 2026 if signed by Governor Dan McKee (D).
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South Carolina
A law signed in April by Governor Henry McMaster (R) created the Department of Behavioral Health and Developmental Disabilities by combining three agencies into one. Combining the departments of mental health, disabilities, and alcohol and drug abuse services into one agency will help streamline healthcare in the state.
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South Dakota
Governor Larry Rhoden (R) announced on Monday that he will provide $1.5 million for a program that brings on-site instruction to the state penitentiary so inmates can earn a certificate to work on diesel heavy equipment. The money will come from the Future Fund, which is designated as economic development money under the exclusive control of the governor.
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Tennessee
Instead of completely banning lab-grown meats, lawmakers passed legislation to regulate how alternative proteins are sold and marketed. The bill establishes a permit process through the Department of Agriculture, and bans the words “meat” or “meat food products” from being printed on the lab-grown meat products.
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Texas
Governor Greg Abbott (R) signed Senate Bill 10 into law, mandating that every public school in the state display the Ten Commandments in all classrooms. The bills, passed 82-46 in the House, clarifies that the state would be responsible for any legal fees incurred if a school district were to be sued over the policy.
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Utah
Governor Spencer Cox (R) announced on Monday that the vote on whether to repeal a law banning public employee unions from negotiating contracts with their government employers will not be on the ballot until November 3, 2026.
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Vermont
Governor Phil Scott (R) signed a $13.5 million tax credit package on Wednesday, which will provide breaks for low-income workers, families, veterans, and retirees.
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Virginia
The Virginia Department of Elections announced on Monday that it will reduce the cost of purchasing voter lists by 90% starting next month. The change dramatically lowers the price of essential voter data for candidates, political parties, and political action committees legally entitled to access them under state law.
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Washington
Washington lawmakers approved a tax on products that contain tobacco or nicotine, whether derived or synthetic. Starting January 1, 2026, the products will be subject to a 95% tax on the sale price.
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West Virginia
Lawmakers are considering limiting city and county ownership of broadband networks that compete with private providers. The state currently allows municipal networks, but this new proposal would align West Virginia with 16 other states that restrict such competition.
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Wisconsin
State lawmakers passed a bill allowing gig workers, such as DoorDash and Uber drivers, to be eligible for benefits like retirement accounts and health insurance. These portable benefits would be tied to the individual rather than an employer, enabling gig workers to retain benefits across multiple jobs and platforms throughout the gig economy.
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Wyoming
Lawmakers have established a working committee to investigate licensing naturopathic doctors to practice in Wyoming. Ultimately, the group will decide whether naturopathic doctors can lawfully prescribe medications, access specialized lab tests, and perform other actions that have been traditionally reserved for licensed practitioners.
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