2025 Fall Forum
September 3-7, 2025
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The Senate Presidents’ Forum met in Kona, Hawai’i on September 3 – 7, 2025. Hosted by Senate President Ron Kouchi (HI) and Senate Majority Leader Dru Mamo Kanuha (HI), the Forum received a warm welcome from Hawai’i’s Lieutenant Governor, Sylvia Luke. Plenary sessions focused on the implications of House Resolution 1 (H.R. 1) for the states, with an opening session dedicated to Medicaid. We considered recommendations for budget resiliency in a changing fiscal environment and explored the new realities of trans-Pacific trade as tariffs and trade agreements evolve. Admiral Samuel Paparo provided a briefing on Pacific Rim security, illuminating challenges and opportunities in the sector. The Forum reviewed lessons learned from the Lahaina fire for disaster mitigation, and concluded with the perennial challenge of workforce development.
Managing Medicaid:
Policy Strategies for State Senate Leaders & Discussion Roundtable
Kathryn Costanza
Program Principal, Health Program
National Conference of State Legislatures
Kathryn Costanza is a program principal with the Health Program at the National Conference of State Legislatures. She updated the Forum on changes to Medicaid contained in H.R.1 (the One Big Beautiful Bill) and discussed how state legislators could prepare for the impact of these changes.
H.R.1 contains over 20 policies, but five account for most of the projected $911 billion in federal savings. These include work requirements, changes to eligibility, adjustments to provider taxes, limits on state-directed payments, and new rules on how often expansion populations must be re-verified. Together, these measures represent 86% of total savings for the federal government.
Five elements account for 86% of federal Medicaid savings anticipated from H.R. 1:
• Work requirements
• Changes to eligibility
• Adjustments to provider taxes
• Limits on state-directed payments
• New rules on how often expansion populations must be re-verified
Most of the fiscal impact is delayed until later years. Nearly $700 billion of the savings occur between 2030 and 2034, largely because provider tax and state-directed payment restrictions do not take effect until 2028 and then expand over time.
More than half of all savings come from measures such as stricter eligibility checks, work requirements, and cost-sharing changes. The greatest effects will be felt by state budgets and by Medicaid enrollees in Medicaid expansion states.
Medicaid expansion states are hit hardest by the new federal provisions and hospitals face substantial losses.
Hospitals also face substantial losses. Over the next decade, their payments are projected to fall by about 18.2%, or $664 billion. The main drivers are limits on provider taxes and state-directed payments, though some facilities—such as nursing homes and care centers for people with developmental disabilities—are exempt.
The effects will vary significantly across states. Differences in expansion status, reliance on provider taxes, and use of state-directed payments mean the timing and scale of impacts will not be uniform. New federal rules will also allow for the recouping of funds from states that make excess eligibility errors, particularly concerning non-citizens.
Importantly, federal savings do not always equal state savings. Lower provider taxes reduce federal costs but also take away a funding tool for states. Eligibility cuts might reduce Medicaid rolls but could raise uninsured rates and uncompensated care costs. These trade-offs mean each state’s budgetary and coverage outcomes remain uncertain.
State Financing and Payments
The first major set of provisions involves state financing and payments. Provider taxes, which states have long used to leverage federal dollars, face new restrictions. Beginning in October 2026, a moratorium will block new provider taxes unless strict conditions are met.
Starting in 2028, the allowable provider tax threshold will gradually decline from 6% to 3.5%, significantly reducing revenue potential for expansion states. While some providers, like nursing facilities, are exempt from cuts, all remain subject to the moratorium.
Provider Tax Waivers
The bill also narrows the use of provider tax waivers, which states had used to support specific hospitals such as rural or children’s hospitals. This reduces flexibility in directing Medicaid support to safety-net providers.
The states are just trying to wrap their arms around what is in this bill, and what it means for their state.
– Kathryn Costanza
State-Directed Payments
Finally, H.R.1 places new caps on state-directed payments. From 2028 onward, these supplemental payments through Medicaid managed care cannot exceed 110% of Medicare rates in non-expansion states or 100% in expansion states. For services not covered by Medicare, states may use Medicaid fee-for-service equivalents. While some flexibility is offered for behavioral health and home-based care, hospitals face steep reductions under the new limits.
Timing
Medicaid changes will impose significant administrative burdens and costs to update systems. H.R.1 allocates funds to cover some of these costs; for example, a 90% federal match for the administrative costs of implementing new information management systems. However, guidance from the Centers for Medicare and Medicaid Services (CMS) on these requirements will not be released until June 2026, and most provisions must be implemented by October 1, 2026, leaving state Medicaid directors scrambling to prepare.
In the roundtable discussion that followed Ms. Costanza’s presentation, state leaders were asked to comment on the projected fiscal impact of Medicaid changes on their state.
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Discussion
Comments are paraphrased for brevity.
Sen. Dafna Michaelson Jenet (Senate President Pro Tempore, Colorado):
Colorado is a TABOR (Taxpayer Bill of Rights) state and we are required to have a balanced budget. When H.R.1 went into effect, we immediately had a $1.2 billion deficit and went into special session to address this.
Sen. James Coleman (President of the Senate, Colorado):
We are actively addressing the deficit by tapping into our reserves, decoupling tax loopholes, and making cuts to our state budget. Currently, we have identified $250 million in cuts, but will need to find $1 billion more by the end of the year.
Sen. Stuart Adams (President of the Senate, Utah):
Utah’s Medicaid expansion was secured through an initiative but later modified by legislation to allow rescission if the federal government withdrew support. We are analyzing the ripple effects of expansion on beneficiaries, providers, hospitals, doctors, and the insurance market, acknowledging that pressure in one area often causes strain in another. Before the Affordable Care Act, the state had implemented a high-risk pool funded by state dollars to remove costly patients from the system, which successfully lowered insurance rates and improved access. Currently, we are gathering and analyzing data under a short timeline to guide future decisions.
Sen. Rob McColley (President of the Senate, Ohio):
Ohio has maintained a trigger since adopting Medicaid expansion, which was later refined in the most recent budget to address rising costs. Over the past 12 years—especially the last six—both federal and state spending on Medicaid had increased significantly. Concerned about potential federal reimbursement cuts, leaders established a $1 billion Medicaid stabilization fund using surplus dollars to safeguard against future shortfalls. The trigger would activate if the federal match rate for the expansion population dropped below 90%, and officials are still assessing the budgetary impact.
Sen. Jonathan Dismang (Chair, Senate Joint Budget Committee, Arkansas):
Ms. Costanza noted that expansion states would be capped at 100% of Medicare payments, which raises concerns for Arkansas since we have the lowest Medicare rates in the nation. To compensate, Arkansas had been supplementing Medicare reimbursements with Medicaid funds and private payers. If payments are capped at Medicare’s low rates without a recalculation or adjustment, the state could see significant financial strain on its health care system. Are Medicare rates likely to change?
Ms. Costanza:
I think the administration is very cost-sensitive to the federal cost drivers. So, any recalculation or adjustment that would raise Medicare payments is less likely to happen.
Sen. Phil Berger (Senate President Pro Tempore, North Carolina):
North Carolina adopted Medicaid expansion with a trigger provision, but there is debate about whether the trigger applies only if the federal 90/10 match changes—which has not occurred. However, the state relies heavily on provider taxes to cover its share, and those payments are expected to face significant strain in the coming years. Officials are still evaluating the long-term consequences and have acknowledged that doing nothing is unlikely, though it is too early to determine what adjustments will ultimately be made.
Sen. Rod Bray (Senate President Pro Tempore, Indiana):
Indiana put a mechanism in place allowing the state to end Medicaid expansion if the federal match drops below 90%, though the trigger only grants the option rather than requiring withdrawal. Medicaid costs had risen sharply, doubling from $5 billion in 2021 to $10 billion in 2025, which lawmakers deemed unsustainable. In response, the state enacted new measures, including work or education requirements for eligibility and accountability rules for hospitals that frequently misclassified patients for Medicaid, with a “three strikes” penalty system. These steps aimed to ensure fiscal responsibility while maintaining flexibility if federal support declines.
Sen. Bill Ferguson (President of the Senate, Maryland):
The biggest concern is the sharp rise in commercial premiums and the burden it will place on individuals. Maryland’s insurance administration recently reported that ACA marketplace premiums are set to increase by about 20% next year. Given how similar cost surges have played out in energy markets, there is growing worry that health care costs for individuals will be the next major financial hit. My question is whether this trend is unique to Maryland or part of a broader national pattern.
Ms. Costanza:
Premium hikes are being reported across multiple states, not just Maryland, largely due to the expiration of the enhanced premium tax credit under H.R.1. Unless Congress renews it in upcoming appropriations, the change will take effect this fall, driving higher costs in both ACA marketplace plans and Medicaid managed care rate-setting. Gaps in coverage—whether from people leaving Medicaid or losing marketplace subsidies—also increase uncompensated care and risk in the insurance pool, further fueling rate increases.
Sen. Bob Duff (Senate Majority Leader, Connecticut):
The expiration of enhanced tax credits will significantly raise premiums, but many people—both low- and middle-income—may not fully realize the impact. Even states like Connecticut, often seen as wealthy, expect to face serious challenges, and the situation appears difficult across the board. While triggers, programs, and state policies differ, no state seems immune from negative effects.
The only clear “winner” may be the federal budget,
while every state faces financial strain.
Sen. Scott Surovell (Senate Majority Leader, Virginia):
Like most states, we are still trying to understand the full impact as the dust settles. Recent data show that with the expiration of premium tax credits, individuals at 200% of the federal poverty level—earning around $40,000 a year—could face premium hikes of about $792 per month. Projections suggest roughly 100,000 people may drop their coverage as a result, many likely turning to Medicaid. The challenge now is assessing how this shift will affect the state budget, a question set to be explored further.
Sen. John Arch (Speaker of Legislature, Nebraska):
Nebraska was late in adopting provider assessments, and the state also introduced MCO (Managed Care Organization) assessments, which are awaiting approval. Of 93 hospitals statewide, 80 of them are critical access hospitals, which often serve a large Medicaid patient base. Medicaid reimbursement rates can be low, sometimes failing to cover the full cost of care. Therefore, the stakes are high for Nebraska’s rural health care system, depending on how Medicaid and Medicare changes evolve. For now, officials are watching closely, noting that 50% of available funds will be distributed equally across states, though final decisions on how those funds will be used are still pending.
The non-partisan legislative branch agency MACPAC
(Medicaid and CHIP Payment and Access Commission) shared these
guidelines for MCO assessment in December 2024.
State and Federal Tools for Ensuring Accountability
of Medicaid Managed Care Organizations
Welcome by
Lieutenant Governor Sylvia Luke
Before becoming Lieutenant Governor, Sylvia Luke served 24 years in the Hawai’i House of Representatives, including 10 years as Appropriations Chair. She reflected on the challenges leaders face when balancing statewide responsibility against district priorities. She noted that legislative leaders carry responsibility not only for their own actions but also for those of their colleagues. After moving into the executive branch, Lt. Governor Luke gained a deeper appreciation for the heavy burdens legislators carry. She emphasized the value of executive officials with legislative experience, as they better understand the complexities of budgeting, mandates, and legislative intent.
She drew inspiration from the TV series Yellowstone, likening the Dutton family’s fight to preserve their way of life to lawmakers’ duty to protect the values and needs of their constituents. She opined that preserving people’s way of life is one of the highest honors of public service.
Lieutenant Governor Luke reminded the Forum that being one of only 50 Senate Presidents, Majority Leaders, or Appropriations Chairs nationwide is both a privilege and a challenge. She acknowledged the sense of isolation that often comes with leadership but stressed the importance of mutual understanding and support among peers, such as that found in the Senate Presidents’ Forum.
Understanding the New Trans-Pacific Trade Environment
Barbara Weisel
Non-resident Scholar
Carnegie Endowment for International Peace
Ms. Weisel began by acknowledging the uncertainty of predicting trade policy outcomes. She noted that the Trump administration’s trade agenda is centered on reducing the trade deficit, addressing China, reshoring supply chains, and restructuring global trade relationships. These goals mark a sharp break from previous administrations, which worked closely with Congress under Trade Promotion Authority (TPA) to set trade objectives.
Unlike past practice, the administration largely bypassed Congress, relying on executive authority to impose tariffs and shape agreements. Traditional processes that required detailed consultation with Congress, states, and stakeholders were absent. Instead of broad multilateral trade deals like the Trans-Pacific Partnership, the administration is using tariffs as leverage to secure more limited, often unilateral concessions.
Unlike past practice, the administration largely bypassed Congress, relying on executive authority to impose tariffs and shape agreements.
The administration deployed multiple legal tools, including the International Emergency Economic Powers Act, Section 232 (national security) and Section 301 (unfair trade practices) to justify reciprocal tariffs on major trading partners—China, Canada, Mexico, and India—while also pressuring countries to lower barriers, purchase U.S. goods, or commit to investment in the U.S. Today’s enforcement mechanisms diverge from established norms, granting the U.S. unilateral power to raise tariffs if it judged compliance lacking.
Impact Among Asian Trade Partners
Asian partners, in particular, are unsettled by the shift in U.S. policy. Allies like Japan, Korea, and India face unexpectedly high tariffs despite longstanding security and trade partnerships. While the U.S. has withdrawn from free trade, the rest of the world has responded with regional and multilateral alliances. Many countries have responded by diversifying trade through new agreements, strengthening ties with China, or pursuing domestic reforms.
Meanwhile, China has capitalized on U.S. unpredictability, using soft power and regional agreements like the Regional Comprehensive Economic Partnership (RCEP) to reinforce its role as a reliable trade partner. RCEP is the world's largest free trade agreement, which aims to foster economic integration by reducing tariffs on over 90% of goods over 10–15 years, promoting free trade, and establishing rules on investment and intellectual property. The agreement covers roughly a third of the world's population and global economic output, including the 10 ASEAN (Association of Southeast Asian Nations) member countries, along with Australia, China, Japan, New Zealand, and South Korea.
While the U.S. has withdrawn from free trade, the rest of the world has responded with regional and multilateral alliances.
Regional agreements and supply chains.
Economic Impact at Home
At home, the economic impact is mixed. Tariff revenues have tripled, but U.S. businesses largely bear the costs. Job growth is lagging, and the promised long-term benefits remain uncertain. States are experiencing uneven effects depending on their trade composition, raising political questions about which constituencies gained or lost. If courts struck down executive actions, congressional responses would depend heavily on state-level economic impacts.
Ms. Weisel concluded by urging states to take a proactive role. She suggested direct engagement with foreign partners to promote bilateral trade, competing for new investment packages pledged by allies, and clearly communicating the experiences of local businesses. She emphasized that unpredictability would likely continue, with tariffs, investment pressures, and political calculations shaping trade policy in the near future.
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Discussion
Comments are paraphrased for brevity.
Sen. Rod Bray (Senate President Pro Tempore, Indiana):
The administration’s focus seems to be on shrinking the U.S. trade deficit. How important is that goal?
Sen. Gregory Miller (Chair, Senate Transportation Committee, Louisiana):
One issue that hasn’t gotten much attention is the offshoring of services—not just manufacturing, but work like tech support, engineering, and cybersecurity. Many U.S. companies hire remote workers in countries such as India or Pakistan because it is far cheaper than employing American graduates. As a result, recent college graduates in fields like software engineering or cybersecurity often struggle to find jobs in the U.S. Unlike manufacturing, these service jobs could be brought back onshore fairly quickly, since they don’t require building new factories or facilities—yet this option has received little policy discussion.
Ms. Weisel:
The U.S. trade deficit can shrink in two ways: either through recessions that reduce consumer spending or by boosting exports. Because global trade is dollar-based, fixing imbalances is more complicated than simply negotiating trade deals. Opening foreign markets and lowering non-tariff barriers help, but the overall deficit may not fall if Americans keep consuming heavily without saving more. At best, policy shifts can change where the deficit impacts the economy, but not whether it exists.
Ms. Weisel:
A common criticism of President Trump’s trade policy is that it focuses heavily on manufacturing while largely ignoring services, even though the U.S. consistently runs a services surplus. Aside from some attention to digital trade, services have been left out of the agenda. At the same time, tech companies report thousands of unfilled jobs in the U.S., yet graduates often say they can’t find work—creating a disconnect that drives firms to rely on immigrant labor or offshore services. This raises national security concerns, since critical work in areas like cybersecurity is increasingly handled abroad.
Sen. Marilyn Dondero Loop (Senate President Pro Tempore, Nevada):
Las Vegas has been hit hard by the drop in tourism. For example, over Labor Day weekend the city usually draws about 325,000 visitors, but numbers were down by 6,000 to 8,000. That decline means fewer hotel rooms filled, fewer workers needed, and ripple effects across the economy. The question is how U.S. trade policy is affecting U.S. tourism overall.
Ms. Weisel:
This issue is more about immigration than trade, even though travelers are counted in trade statistics. Past trade agreements sometimes included entry commitments, but those were dropped because they became too controversial. Today, many foreign travelers worry about how U.S. border officials treat them, including phone searches and other hassles. As a result, some visitors—especially tourists—choose to go elsewhere rather than risk problems entering the U.S.
Sen. Stuart Adams (President of the Senate, Utah):
I worry about how much we outsource production. It’s cheaper abroad, but the U.S. depends heavily on China for critical minerals—60% of mining and 90% of processing. If China cuts off supply, our defense systems and economy are at risk. COVID showed how vulnerable we are when shortages—like chips—halt entire industries. While global trade is valuable, we also need domestic capacity for national and economic security. Utah, with 40 of the 50 critical minerals, could help if permitting barriers were reduced, creating both security and economic opportunities.
If critical minerals and next-generation industries are truly priorities, the U.S. needs a clear plan—identifying future sectors, investing strategically, and partnering with allies like Australia and Canada.
Sen. Bill Ferguson (President of the Senate, Maryland):
Other countries are asking whether U.S. trade and industrial policy is a temporary shift or a lasting change. Are these moves just a 3–4 year experiment under one administration? Or are they a structural shift that will define American policy for the long term? How they answer that question shapes how they plan and respond.
Ms. Weisel:
Once tariffs are imposed, they are very hard to remove. The Biden administration inherited Trump’s tariffs on China but kept them in place due to politics, lobbying, and revenue concerns. Other countries recognize this and assume U.S. tariffs are likely to stick.
At the same time, they see that the U.S. has weakened its commitment to the WTO and the old trade system. In response, some countries are forming new trade groups outside the WTO, with higher standards and rules on issues like secure supply chains. The hope is that eventually the U.S. will join these efforts, even if it won’t return to the old model.
Sen. Scott Surovell (Senate Majority Leader, Virginia):
Virginia has invested heavily in its port—over half a billion dollars—to handle large cargo ships. Yet in the past six months, both imports and exports have declined, affecting coal, soybeans, pork, and even semiconductors. During Trump’s trade battles, countries shifted suppliers for goods like soybeans, and those markets never returned.
The concern is whether trade lost during disputes ever truly recovers. Businesses want stability and predictability before making major investments. But constant shifts in U.S. trade policy raise doubts about how long recovery takes—or if full recovery is possible at all.
Ms. Weisel:
Trade relationships often don’t recover once buyers switch suppliers; they build new ties and prefer to keep them. That makes recovery from trade disputes uncertain. In fact, the current situation is unprecedented, so no one knows how long recovery might take—or if it will happen at all.
Current trade/tariff policies keep partners off balance and give the U.S. leverage, but this undermines trust.
Uncertainty is now part of U.S. trade policy. Even new deals, like the $600 billion fund with Japan, include the right to reimpose tariffs. Allies such as Japan, Korea, Australia, and India have already been burned—first by the U.S. abandoning the Trans-Pacific Partnership (TPP), then by shelving later initiatives. Trade policy used to be stable across parties, but now it swings dramatically, leaving partners wary of investing political capital in U.S. agreements.
Sen. Gary Stevens (President of the Senate, Alaska):
In The Long Game, by Rush Doshi, he observes that China plans decades ahead, while U.S. trade policy swings wildly—tariffs at 50%, then 10%, 100%, 125%. Our approach looks erratic, theirs steady. So the real question is: what is China doing right that we are getting wrong?
Ms. Weisel:
China plans decades ahead, while U.S. trade policy is often short-term and grievance-driven. America doesn’t need to copy China’s state-run model but does need a bipartisan, long-term strategy that builds on its strengths: financial markets, innovation, and global leadership. Competitiveness should come from setting global rules and leading supply chains, not just reacting to China.
Sen. Dafna Michaelson Jenet (Senate President Pro Tempore, Colorado):
What can the states do to develop trade missions? What should our outcome goals be?
Ms. Weisel:
Trade missions create real opportunities for deals by connecting companies with interests in each other’s markets. Right now, many officials are eager for genuine partners and would welcome state-level engagement, regardless of federal politics. If anyone wants to explore connections in Asia, I can help with introductions.
Ms. Weisel:
At critical minerals conferences, much of the debate focuses on permitting, but the deeper question is: what is the administration’s long-term vision? Other countries still embrace global trade, while the U.S. is trying to reshore manufacturing and reduce dependence on China. If critical minerals and next-generation industries are truly priorities, the U.S. needs a clear plan—identifying future sectors, investing strategically, and partnering with allies like Australia and Canada. Right now, policy seems reactive and piecemeal, leaving uncertainty about whether the U.S. can secure the resources needed for electric vehicles, advanced technologies, and long-term economic security.
Natural Disaster Mitigation and Management
Rising Risks
Wildfire is no longer confined to the western U.S. Climate change, invasive vegetation, and aging infrastructure have made nearly every state vulnerable. Recent wildfires in Los Angeles and Hawai’i show how rapidly disasters spread, killing dozens and destroying thousands of structures. Hawai’i is especially vulnerable—isolated, dry on leeward sides, overrun with invasive vegetation, and having limited firefighting resources.
Climate and Fire Conditions
Wildfire risk is increasing nationwide as rising temperatures, wind, and dry conditions create ideal fire weather. Hawai’i faces unique challenges: fewer firefighting resources, limited weather monitoring, and inadequate infrastructure. Fires there can be triggered by utility failures, worsened by vegetation, and spread rapidly into communities.
© 2024 Underwriters Laboratories Inc.
The Lahaina Fire
In August 2023, the Lahaina fire destroyed 2,000 structures and killed 102 people, mostly older residents. Downed power lines, poor evacuation routes, and communication breakdowns left many trapped. Firefighters were overwhelmed, and hydrants lacked water pressure. Survivors often received no alerts due to power and cell outages.
Wildfire risk is increasing nationwide as rising temperatures, wind, and dry conditions create ideal fire weather.
Findings and Recommendations
In August 2023, the Lahaina fire destroyed 2,000 structures and killed 102 people, mostly older residents. Downed power lines, poor evacuation routes, and communication breakdowns left many trapped. Firefighters were overwhelmed, and hydrants lacked water pressure. Survivors often received no alerts due to power and cell outages.
Policy Responses
Hawai’i has since created a state fire marshal, launched climate resilience initiatives, and passed a “green fee” to fund wildfire prevention and environmental projects. Priorities include unifying agencies, hardening infrastructure, expanding warning systems, and addressing unmanaged lands.
Key Takeaways
Wildfire risk now affects nearly every U.S. state. The first step in reducing catastrophic losses is vegetation management—paired with modern codes, better infrastructure, and stronger communication systems to protect communities.
It is important to ensure that communities adopt the most current codes and standards.
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Discussion
Comments are paraphrased for brevity.
Mr. Ron Kouchi (President of the Senate, Hawai’i):
On the day of the fire, Senator Tim Richards texted me that Kohala, on the Big Island, faced fast-moving fire. But in that area, ranchers and farmers quickly cut firebreaks with bulldozers and used water tankers, protecting a nearby resort and stopping the advance. On that evening’s news, everything looked stable. By the next day, Lahaina was gone. On O’ahu, reports were sparse—a stark warning about our preparedness and communications. By the time the National Guard was alerted, winds were too strong to fly, and we couldn’t pre-deploy resources from O’ahu to Maui as we normally would.
Sen. Cathy Giessel (Senate Majority Leader, Alaska):
I appreciated your focus on vegetation control—it was both your first and last point. A forester at a recent Pacific Northwest conference stressed the same message: the West faces the highest wildfire risk, much of it on unmanaged federal land. He also noted the value of Indigenous knowledge—tribes used controlled fire to thin forests, improve food security, and sustain ecosystems. Alaska and Hawai’i share this heritage. How can we better incorporate Indigenous knowledge into wildfire strategy?
Mr. Alkonis:
Indigenous people in Hawai’i did not face invasive grasses, so today’s wildfire challenges are new in that respect. In California, tribes like the Tongva and Chumash practiced controlled burns for centuries to sustain ecosystems. Early settlers resisted, seeing fire only as destructive. The book Burn Scar by Char Smith documents these conflicts and how Indigenous practices are slowly influencing U.S. policy toward using fire as a management tool.
Fire research is challenging to conduct. Therefore, building codes update on a three-year cycle, which means safety standards are always catching up. That's why it's so important to ensure that the adoption of the most current codes and standards occurs in our communities as well.
Mr. Alkonis:
The U.S. has about a million firefighters—360,000 are career firefighters, represented by the International Association of Fire Fighters (IAFF). While some labor groups have resisted volunteer roles, many states depend on them and couldn’t function otherwise. Resistance varies by region, but in Hawai’i there was little pushback before Lahaina, since most 911 calls were for medical emergencies for visitors rather than fires. The disaster revealed how urgently more responders were needed.
Sen. Lonnie Paxton (Senate President Pro Tempore, Oklahoma):
Does Hawai’i utilize trained volunteer firefighters as part of your firefighting force? Is there resistance from the professional firefighters to using trained volunteers? When I say trained volunteer firefighters, I mean people who run the station, drive the trucks, gear up, and fight fires. In my state, there are about five volunteers for every paid firefighter. I’ve been one for 34 years, and we simply couldn’t function without them. Volunteers make the system work, and they do it cost-effectively.
Sen. Dafna Michaelson Jenet (Senate President Pro Tempore, Colorado):
One of our biggest challenges is insurance. Commissioners ask how we can keep properties covered and attract more insurers.
Mr. Alkonis:
The answer is incentives: encourage residents to create defensible space and adopt proven safety measures such as smaller vents, boxed eaves, Class A roofs, skirting for raised homes, and dual-pane tempered glass. If states can show strong compliance, they can go back to insurers and demonstrate lower risk, making coverage more sustainable.
The Insurance Institute for Business & Home Safety provides recommendations and a certification process for the
Wildfire Prepared Home. Visit WildfirePrepared.org.
Mr. Alkonis:
Some states are now mandating wildfire protections. In California, new homes in high-risk zones must meet stricter codes, and existing homes must maintain defensible space surrounding the structure: 0 to 30 feet cleared, with a new “zone 0” requiring nothing combustible within 5 feet. Beyond that, vegetation must be thinned and maintained. Still, insurance remains a challenge. California’s insurer of last resort has grown from 150,000 policies five years ago to 600,000 today, with residents paying steep premiums for wildfire coverage.
Pacific Rim Security Briefing
The Indo-Pacific is one of the most consequential regions in the world. It holds seven of the world’s 10 largest militaries, nearly 60% of the global population, and about 60% of global GDP. What happens here directly shapes U.S. security and prosperity.
A free and open Indo-Pacific is directly tied to
a free and prosperous United States.
China
China has accelerated military activity. The People’s Liberation Army conducted large-scale rehearsals, not just exercises, across every domain—air, land, sea, space, and cyber. In one day alone, they deployed 152 warships, including three-quarters of their amphibious force, and 200 landing craft with 43 brigades practicing landings and urban operations. They also staged “Strait Thunder 2025,” surrounding Taiwan with 76 aircraft, 15 ships, and missile strikes on mock infrastructure targets. And China uses “gray-zone” tactics such as water cannons and ramming to intimidate the Philippines, a U.S. ally.
Russia and North Korea
Russia and North Korea add to the challenge. Despite its war in Ukraine, Russia has expanded its Pacific Fleet with seven new submarines and claimed recent exercises involving 150 vessels and 15,000 personnel. North Korea has unveiled new weapons, deployed more than 12,000 troops, and sent millions of shells and hundreds of missiles to Russia.
Increasingly, China, Russia, and North Korea cooperate in a transactional but coordinated way that undermines regional stability.
Implications of a Pacific Conflict for the U.S.
The consequences of conflict would be severe. Analysts estimate that war in the Western Pacific could cause a 9–10% contraction in U.S. GDP, a 7% rise in unemployment, and over 500,000 excess “deaths of despair,” deaths due to depression, alcoholism, suicide, and starvation as the result of a bad economic situation. This shows how tightly the American economy and well-being are tied to security in the region.
U.S. strategy depends on credible deterrence. That means forward-deployed forces such as the U.S. 7th Fleet, the Fifth and Seventh Air Forces, and the 25th Infantry Division. Alliances multiply U.S. power: two nations create four times the effect, three create nine times. State partnership programs and the defense industrial base—shipyards, aircraft plants, research labs, and universities across the country—are equally critical.
Peace endures when deterrence holds.
At present, U.S. Indo-Pacific Command oversees about 380,000 personnel. This will grow by 34,000 when the Fourth Infantry Division joins on October 1, making up 60–70% of all U.S. operating forces. Every state contributes, whether through the National Guard, industrial production, or education. The choices made now by government, industry, and communities will shape 21st-century security.
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Discussion
Comments are paraphrased for brevity.
Sen. John Arch (Speaker of Legislature, Nebraska):
How is AI impacting your work?
Admiral Paparo:
We’re living through an information revolution where the ability to pair machine thinking with human judgment will decide who prevails. The key question is who can best team people and AI with the right tools and techniques.
At the tactical level, AI is already changing combat: inexpensive, unmanned systems and one-way attack drones alter the character of assault and maneuver on the battlefield. Beyond drones, AI improves industrial production (faster, cheaper, better) and enables recursive learning in robotics, speeding capability development. Operationally, AI reshapes command and control—helping generate, monitor, and optimize orders across large formations.
AI also transforms information warfare: it changes how actors sense the battlefield and shape adversary perceptions, and it affects both kinetic and non-kinetic employment of force. Sustainment, protection, and logistics likewise benefit from AI-driven optimization.
At the strategic level, massive open-source and classified data streams plus advanced analytics enable commanders to model adversary intent and explore operational moves; future agentic tools may reason about entire campaign games [Note: Agentic AI is a type of artificial intelligence that can make decisions and perform tasks autonomously, often without human intervention].
Data quality, compute power, policy, and talent are national security priorities.
But tools alone aren’t enough: success depends on matching the right people to the right AI and on starting now—iterating, learning, and improving rather than waiting for perfection. INDOPACOM already uses AI-enabled processes such as recording, transcribing, and feeding decision matrices to speed and sharpen decisions.
Finally, there is an essential moral dimension: warfare is human and violent, so humans must remain in control of lethal choices. We must uphold the laws of armed conflict and avoid abdicating moral responsibility to machines even as we exploit AI’s advantages.
Sen. Bill Ferguson (President of the Senate, Maryland):
Are current U.S. tariffs affecting geo-political relations and our military alliances? And are we over-indexing China’s power?
Admiral Paparo:
I've not seen tariffs have a profound effect on our security relationships. However, Xi Jinping has proven adept at driving regional alignments. His aggressive posture and coercive behavior have pushed historically fraught neighbors closer together in ways that serve Beijing’s strategic aims.
That pressure is producing new and deeper security ties: trilateral exercises among Korea, Japan, and the United States; reciprocal access agreements between the Philippines and partners like Australia, Canada, and Japan. These relationships are now expanding as a direct response to China’s military buildup and day-to-day coercion.
Economic and security policy are inseparable.
States are trying to insulate security ties from tariff and trade disputes, but in practice economic security is national security—relationships among militaries and defense ministries help smooth political ups and downs.
History offers useful perspective. In the late Cold War the U.S. once worried it lagged behind the Soviets; encounters with defectors and captured equipment revealed both strengths and surprising weaknesses. That experience taught us to test assumptions and to probe for exploitable gaps.
Critical, continuous assessment is central to maintaining credible deterrence and preserving advantage.
Today we train as if adversary systems and operators and their gear and tactics are first-rate, then look systematically for weaknesses—such as top-down culture, corruption, logistical gaps—and design ways to amplify those vulnerabilities. A top-down culture is one of China’s weaknesses that we can exploit. They're having profound corruption issues with their senior officers and have been on a firing spree.
Sen. Ron Kouchi (President of the Senate, Hawai’i):
On my small home island of Kauai, we have the Pacific Missile Range Facility, a unique site where testing can be done underwater, on the ocean surface, and in the air. It is the only facility of its kind in the world. And this small island, which once had a Russian population, is subject to Russian intelligence activity.
Admiral Paparo:
The scale of efforts to undermine U.S. security and that of our allies is profound and alarming. You’ve likely seen briefings outlining the threat. Adversaries are embedding cyber tools into critical municipal infrastructure—targeting water and sewer systems, electric grids, and other essential services. These are not isolated incidents, but a pattern of infrastructure attacks designed to disrupt daily life and exert coercive pressure. The result is a new form of assault: cyber-enabled operations that can damage public health, hamper emergency response, and threaten economic stability. Such attacks directly erode national resilience and allied trust, making them a central security concern.
Sen. Cathy Giessel (Senate Majority Leader, Alaska):
Alaska faces frequent incursions by Russian aircraft and vessels, along with joint exercises that are deeply concerning. We would like to see a stronger U.S. military presence in our area.
Admiral Paparo:
My area of responsibility runs from the U.S. West Coast to the India–Pakistan border, pole to pole. That includes direct responsibility for Alaska’s homeland defense. The 11th Airborne Division and 11th Air Force are assigned to Indo-Pacific Command, and I work closely with U.S. Northern Command because of our overlapping areas. Forces entering Alaska pass through my command, and I collaborate with U.S. Senator Dan Sullivan and General Gregory Guillot at NORTHCOM/NORAD on northern security.
I agree on the requirement for more naval capability in those northern waters, because the Arctic and northern waters are increasingly contested.
I agree on the requirement for more naval capability in those northern waters, because the Arctic and northern waters are increasingly contested. At the same time, energy demand from Southeast Asia’s fast-growing economies—Vietnam, Indonesia, Malaysia, the Philippines, and Thailand—will surge. Renewables alone cannot meet this demand, so natural gas, including from Alaska, will become critical. As Alaska transitions to export natural gas, trade routes linking it to the Western Pacific will grow in value and face greater pressure. That makes enhanced capability in Alaska essential to meet Indo-Pacific Command’s mission.
Sen. Gregory Miller (Chair, Senate Transportation Committee, Louisiana):
The situations in Ukraine and Taiwan echo Czechoslovakia before World War II: small states surrounded by aggressive powers. Then, the question was whether Britain, France, and Poland had the will to stand up to Germany. Today, the question is whether we have the political will to defend Taiwan. The U.S. has the military capability, but our mixed policies—tariffs, trade disputes, and signals of reluctance to fight—give China and Russia reason to wait for the right moment to look to Taiwan. Even without a full invasion, our actions risk pushing Taiwan away and emboldening adversaries.
Admiral Paparo:
The Taiwan Relations Act (H.R. 2479, 1979) requires the U.S. to retain the capacity to resist any use of force that would threaten Taiwan’s political, social, or economic system and to provide Taiwan with defensive capabilities and services. Beyond legal obligations, Taiwan matters because it produces roughly 94% of the world’s 2–7 nm semiconductors—designed in the United States, with lithography tools made in the Netherlands, and largely fabricated in Taiwan—so a disruption would have huge global economic effects, including on U.S. GDP, employment, and public health.
Taiwan is also a regional hinge. If it were coerced or taken by force, other Western Pacific states (Japan, India, South Korea, the Philippines, ASEAN nations) would face a stark choice: submit to China’s pattern of economic coercion or pursue costly militarization, possibly including nuclear options. That shift would destabilize alliances, raise the risk of rapid-warning nuclear postures, and threaten stability where about 60% of global economic activity occurs.
Protecting Taiwan’s security is legally required, economically vital, and central to preserving regional balance.
Because of those stakes, U.S. policy rests on deterrence built from the Three Communiqués, the Six Assurances, and the Taiwan Relations Act, plus practical readiness: we must offer the President credible options that preserve U.S. capabilities and choice. Meanwhile, China pursues influence and disruption—cyber tools, united-front activities, and funding of groups—to buy time and frustrate U.S. decision-making. My duty is to keep U.S. options open, minimize the human and material costs of conflict, and present clear, executable choices to civilian leadership.
Sen. Bob Duff (Senate Majority Leader, Connecticut):
What actions has the U.S. military taken to strengthen deterrence, especially in the light of China’s aggressiveness? And what is the military role in cybersecurity? China in some ways has their tentacles in our country already in a lot of places that are maybe primary or secondary targets, which could be related to what they ultimately do to Taiwan.
Admiral Paparo:
Anything that strengthens and shows the unity of our alliances improves deterrence. China was most unsettled by the Ukraine war not because of the fighting itself, but because of the solidarity of nations that imposed sanctions and supported Ukraine.
Anything that strengthens and shows the unity
of our alliances improves deterrence.
Deterrence isn’t absolute—countries always push as far as they think they can. Xi Jinping’s ambitions drive China’s behavior, which has grown more assertive since the 2008–09 financial crisis. Their official message has shifted from “hide our capabilities and bide our time” to “dare to fight and be ready.”
China is building military and nuclear strength at alarming rates, with stated goals of being able to take Taiwan by 2027, fully modernizing its military by 2035, and becoming the dominant global power by 2049. Like Lenin’s dictum—often quoted as “Probe with bayonets: if you feel mush, keep pushing; if you feel steel, pull back”—China constantly tests the limits of deterrence.
That’s why binding our national interests with allies, showing shared values, and demonstrating collective resolve are essential to constrain China and maintain stability.
Sen. Rob Wagner (President of the Senate, Oregon):
Our daughter is a recent college graduate and was just accepted into the Marine Corps, and she leaves for Officer candidate school in January. What advice would you have in terms of how my wife and I should both support her, and in terms of her future career?
Admiral Paparo:
As parents, I want you to know we will care for your daughter with the same seriousness we give our own children in uniform. We will protect her, help her grow into the best Marine and citizen she can be, and return her to you stronger than when she arrived.
She is becoming an officer of Marines, and that means leading with morale, skill, and connection. Morale comes from physical, mental, and spiritual balance; from being tactically and technically proficient in her field; and from deep bonds with her nation, her unit, and her fellow Marines.
Equipment doesn’t win battles—will and confidence do. Leaders must embody hope, backed by strategy, and show confidence in their country, their service, and their people. By caring for body, mind, and spirit each day, striving to master her craft, and staying true to her bonds, your daughter will inspire Marines to follow her anywhere—and to win.
Sen. Marilyn Dondero Loop (Senate President Pro Tempore, Nevada):
What can be done to encourage our young to go into the military divisions?
Admiral Paparo:
I’ve been in the military for 38 years, though I first joined intending to serve only four. My family’s service history—my father, uncles, and grandfather—all did short enlistments, and I felt an obligation to follow. I thought I’d serve, grow as a person, and then move on.
What kept me was the people, the mission, and the opportunities. I came from a modest background, and the military gave me education, skills, and experiences I never would have had otherwise. It has been a powerful source of growth and social mobility.
Today, fewer families have military ties, so young people often don’t see its benefits. Only about 25% of high school graduates meet military entry standards, but those who do gain discipline, skills, and a stronger sense of citizenship. Many join to serve the nation, to become better versions of themselves, or to find structure and purpose.
Only about 25% of high school graduates meet military entry standards, but those who do gain discipline, skills, and a stronger sense of citizenship.
The military transforms lives, especially for those from difficult backgrounds, by giving them role models and a community. Veterans leave with qualities that make them highly valued in the workforce. That’s why we need to work harder to share the benefits of service and inspire more young people to join.
Budget Resiliency in a Rapidly Changing Fiscal Environment
Research at Pew Charitable Trusts emphasizes stability, structural balance, and long-term resilience, with the goal of helping states maintain sustainable budgets. This discussion on budget resiliency comes at a critical time as states face weakening tax collections and rising spending pressures. Federal policy changes and uncertain funding add to the challenges, though reserves built during prior surpluses have provided stability.
Current Fiscal Outlook
States entered FY2026 cautiously, with many lowering forecasts due to uncertainty about federal policy. Pandemic-era revenues had surged nearly 40% above trend but later declined, marking the first revenue contraction outside a recession in decades. Spending pressures and weakening tax collections have created structural challenges, though strong reserves remain a bright spot.
State Reserves and Policy Actions
Rainy day funds had reached historic highs by 2024, though some states began modest drawdowns. Policymakers face questions about how to manage reserves going forward, balancing immediate needs with long-term risk management. Stress tests and long-term budget assessments increasingly guide state decisions, with several states raising fund targets after these analyses.
Federal policy changes and uncertain funding add to the fiscal challenges facing the states.
Federal and Natural Disaster Pressures
Federal funding shifts have added uncertainty. Federal Medicaid expenditures could decrease by $1 trillion over 10 years, SNAP reductions are projected at $186 billion over 10 years.
Credit: The Pew Charitable Trusts
Concurrently, natural disasters are emerging as a growing fiscal risk. Analyses showed that in some states, federal disaster aid had exceeded reserves, raising concerns about fiscal capacity. Leaders were encouraged to measure costs more systematically, manage disaster funds strategically, and invest in mitigation to reduce long-term risks.
In recent years, the cost of disaster, response, and recovery has been significant and growing quickly.
Infrastructure and Other Long-Term Risks
Deferred maintenance on roads and bridges underscores the infrastructure funding gap, with many states unable to meet targets for key assets. Thirty-three states expect to miss at least some of their benchmarks for roadway conditions, preservation and maintenance funding, or both over the next decade, and 24 states reported a combined $86.3 billion funding gap over 10 years. Other long-term pressures include rising Medicaid costs and demographic shifts, requiring states to strengthen tools for structural balance and scenario planning.
Key Takeaway
Despite strong fiscal positions, states faced overlapping challenges: slowing revenues, spending pressures, natural disaster costs, and federal uncertainty. Ms. Murphy’s recommendations emphasized measurement, management, and mitigation. Long-term budget assessments and budget stress tests are essential tools to analyze the fiscal risk posed by recessions to help states sustain resiliency and prepare for future risks.
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Discussion
Comments are paraphrased for brevity.
Sen. Scott Surovell (Senate Majority Leader, Virginia):
Virginia relied heavily on the federal government to cushion past recessions, but recent budget cuts, agency moves, and procurement losses make that support unreliable. High inflation, tariffs, immigration limits, and workforce pressures suggest persistent cost increases. Federal policy uncertainty—especially around Medicaid—adds further risk. Medicaid spending had already grown from about 10% to nearly 30% of the budget. A larger uninsured population could drive health costs even higher. With constant shocks and broken economic patterns, forecasting seems unreliable. How can any model account for such unpredictable risks?
Ms. Murphy:
The question of whether past models still predict accurately is fair. Relying only on historical data, like the last major downturn, is no longer sufficient. Instead, states are exploring methods that model mild, moderate, and severe recessions while assuming less federal stimulus than in recent crises. The value of this approach lies in estimating risks and planning state-level responses under reduced federal support, as Utah and Maryland have shown.
Sen. Stuart Adams (President of the Senate, Utah):
Responsibilities that were once federally funded, such as highway construction, have shifted back to the states. Therefore, Utah required its state agencies to report on what would happen if federal funding were reduced or eliminated. For some agencies the impact was minor, but for others—especially Medicaid—the effect was enormous. This exercise not only provided decision-makers with data but also forced agencies to confront how dependent they were on federal support.
The state’s revenue pattern resembled a roller coaster, rising rapidly in strong economies and dropping sharply during downturns. This volatility caused problems, such as giving teachers raises in good years and then cutting salaries when revenues fell—a cycle considered unsustainable and destabilizing. To address this, Utah applied a trend line through the revenue ups and downs and then restructured spending. Roughly $2 billion of ongoing revenue was allocated to one-time expenses, such as road construction and building projects. In good years, this reduced reliance on borrowing; in downturns, funds could be redirected to cover recurring expenses like salaries.
This method helped stabilize the budget during the 2007–2009 recession. By shifting ongoing revenue away from one-time projects and into essential services, the state weathered the downturn as well or better than most others. Leaders considered this approach more flexible than relying on a Rainy Day Fund, since savings accounts were difficult to draw on for recurring costs like teacher pay.
Ms. Murphy:
And, as Utah’s Legislative Fiscal Analyst reported, while the state had not predicted COVID, its contingency toolkit and crisis plan proved effective and allowed leaders to maintain budget stability and reassure businesses and residents that finances were under control, freeing attention to focus on health, safety, and economic support.
Sen. Bill Ferguson (President of the Senate, Maryland):
Maryland is one of the few states to project budgets 10 years out, not just five. This often means starting sessions with a structural deficit and cutting to balance. But those projections can cause problems. For example, a 10-year education commitment, projected to create a $2 billion deficit, raised concerns with rating agencies. Moody’s downgraded the state, citing long-term structural imbalances and federal uncertainty, even though the budget remained balanced and taxes were raised to sustain it. While long-term planning is the responsible thing to do, it may expose risks that short-term models might have obscured. The state’s authority for a three-member board—the governor, comptroller, and treasurer—to cut up to 25% of the budget was seen as a strength, but it could not offset unpredictability in federal funding and workforce impacts.
While long-term planning is the responsible thing to do, it may expose risks that short-term models might have obscured.
Sen. Jonathan Dismang (Chair, Senate Joint Budget Committee, Arkansas):
Moody’s and other agencies helped highlight the need for stronger reserves. Arkansas was once publicly ranked at the bottom with no savings, but since then the state built a much stronger position. It now holds $1.8 billion in a catastrophic reserve, $1.5 billion in other set-asides, and total reserves that exceed expectations.
To address disaster risks, the state created a captive insurance plan covering schools, higher education, and government buildings. By investing $50 million in reserves and $38 million for first-year premiums, the state was able to buy reinsurance and stabilize insurance costs—a major benefit so far.
Sen. Gregory Miller (Chair of Transportation Committee, Louisiana):
Louisiana has faced repeated disasters: Katrina, Isaac, Ida, Laura, Delta, Gustav, Ike, and more. After Katrina, the state mishandled a surge in revenues, cutting income taxes and relying on short-term fixes, which led to years of budget instability. In the last decade, Louisiana stabilized its finances by creating a Revenue Stabilization Fund alongside its Rainy Day Fund. Oil and corporate tax windfalls were redirected into these funds rather than used to expand programs. This discipline helped build record reserves.
Current priorities include addressing unfunded pension liabilities, funding permanent teacher pay raises, and tackling major infrastructure needs without raising taxes. With a two-thirds vote, Louisiana tapped reserve funds for construction projects. Given that the state relies more heavily on federal dollars than any other state, leaders closely monitor federal fiscal policy.
Sen. Bob Duff (Senate Majority Leader, Connecticut):
Since 2017–2018, Connecticut has used a volatility cap as a fiscal guardrail, saving billions and directing surplus revenue to pay down its historically high pension debt. While effective, this created tension between the Legislature and executive branch, as some argued those funds should support education, health care, or other needs.
In today’s unprecedented environment, traditional forecasting is difficult. Beyond revenue swings, leaders also have concerns about underfunded transportation systems and the economic impacts of natural disasters. Poor infrastructure—bridges, roads, and delayed repairs—hurt state revenues, especially compared with countries that invest heavily in transit. The challenge is how to better measure and factor in these less tangible but significant costs when planning for long-term fiscal stability.
Ms. Murphy:
The challenge is not only measuring the liability of deferred maintenance but also the lost growth and productivity from failing to invest in new projects. Similar questions apply to health care, education, and food security.
Research increasingly focuses on how climate change alters infrastructure costs. Hotter temperatures and shifting precipitation patterns shorten the lifespan of roads and bridges, requiring new engineering standards and higher replacement costs. Models are being developed to better inform capital plans, prioritize maintenance, and manage resources.
While no model can capture all uncertainties, the goal is to build fiscal flexibility. By strengthening tools, projections, and reserves, states can adapt quickly when inevitable shifts occur, reinforcing long-term resiliency.
Building the Talent Pipeline:
Lessons from the Heartland and Beyond
Heartland Forward
Heartland Forward (HF) is a nonpartisan “think-and-do” tank that provides applied research, on-the-ground programs, and convenings for states and local communities. Its mission is to accelerate economic growth in the middle of the country—a 20-state region that, taken together, comprises the world’s third largest economy. President Angie Cooper was invited to discuss her organization’s programs, with particular focus on workforce development.
Talent Pipeline (rootEd)
In collaboration with rootEd Arkansas, Heartland Forward places advisors in rural high schools to guide juniors and seniors toward military, college, apprenticeships, or technical training. To date, approximately 20,000 students have been served: 98% created a post-secondary plan; 83% pursued further education/training; non-BA entrants saw more than $11K in median wage gains; and the program has 700+ employer partners. The rootEd program is active in Arkansas and operating in Missouri, Idaho, and Texas.
Health Workforce
Through its Health Caucus (AR, OK, KS, MO, IN, TN, KY), Heartland Forward advances policies on maternal/mental health and workforce shortages—e.g., model legislation to expand community health workers and nursing pathways that keep graduates in rural communities (piloted in Southeast Missouri via a U.S. DOL grant).
Heartland Forward integrates a 20-state region that, together, comprises the world’s third largest economy.
Broadband to Jobs
The Connecting the Heartland initiative supports deployment and adoption. A multistate jobs board (with Pew) lists 400+ training providers (live in OK, TN, LA, AR, IL) to staff broadband build-outs. The initiative emphasizes “non-deployment” adoption funds to translate access into workforce gains.
AI Readiness
Heartland Forward convenes cross-sector salons so that states can lead rather than regulate in fear. The number of state AI bills jumped from 29 (2019–2023) to 1,000+ (2024). Only about 43% of Heartland Gen Z uses AI regularly. Approximately 10% learn about AI in school, and fewer feel workforce-ready, while 75–80% of workers expect employer training. Heartland Forward also flags data-center impacts (energy, water, land) and community benefits.
For access to Heartland Forward best-practice briefs, Pulse updates, and technical assistance—including support for accessing the approximately $50B Rural Transformation program, visit HeartlandForward.org.
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Discussion
Comments are paraphrased for brevity.
Sen. Rod Bray (Senate President Pro Tempore, Indiana):
Indiana has spent the past two years redesigning high school education to incorporate apprenticeships, inspired by Switzerland’s Zurich model, considered the global gold standard. Hundreds of educators, policymakers, and business leaders visited Switzerland to study the system firsthand.
Beginning in 10th or 11th grade, students start exploring career paths and spending significant time outside the classroom in paid apprenticeships. While trades remain part of the mix, Indiana is also launching apprenticeships in fields like banking and healthcare—areas traditionally considered “white-collar.”
A key feature of Indiana’s apprenticeship program is that industry, not schools, designs the curriculum.
A key feature is that industry, not schools, designs the curriculum. Students rotate between classrooms and workplaces, earning both wages and credentials as they complete their education. By graduation, they have real-world experience and credits that prepare them for careers or further study.
The program launches on a small scale next year, with plans to expand steadily. Indiana’s ambition is to make apprenticeships a mainstream option, ensuring fewer students fall through the cracks while building a stronger talent pipeline aligned with workforce needs.
Sen. Ron Kouchi (President of the Senate, Hawai’i):
Our Ways and Means chair, working with the Lieutenant Governor, has been intentional about shaping a true K–12 apprenticeship system—the only state-run one in the nation. We moved away from “academies” and “certificates” to emphasize apprenticeships that lead directly to jobs for students who don’t pursue college.
A key challenge is finding qualified teachers to teach in apprenticeship programs, as many tradespeople are retiring.
A key challenge is finding qualified teachers to teach in apprenticeship programs, as many tradespeople are retiring. To address this teacher deficit, a private partner donated vans so students can split time between school and worksites—such as automotive shops—when schools lack instructors. This model is expanding into agriculture and other fields, giving students hands-on pathways while easing staffing shortages.
Sen. Hanna Gallo (Senate President Pro Tempore, Rhode Island):
Rhode Island has expanded apprenticeships across new high schools, integrating trades like carpentry and EMT training with fields such as nursing and dental assistance. Students graduate ready for jobs, and legislation now ensures apprenticeship work also counts toward college credit.
In some cases, a trade school partners with labor groups to train students who may struggle in traditional classrooms, keeping them engaged and on track to graduate with practical skills. Rhode Island also runs small programs in correctional facilities to teach trades to incarcerated people preparing for release. Early results show graduates, including those who start small businesses, are finding stable employment and avoiding recidivism.
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SPF’s Fall Forum concluded with a celebration of Founder and former Executive Director Rose Swan on her retirement. A tribute to Rose will appear on our website at senatepresidents.org.