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ALEC.ORG

ALEC Annual Report

LIMITED GOVERNMENT • FREE MARKETS • FEDERALISM 2016 ALEC Annual Report

2016 STATE LEGISLATURES

BY PARTY

Now more than ever, your focus should be on the states. Right now, we are at a crossroads in American history where an incredible number of i important decisions about our future are going to be made—and they are going to be made by the states. The truth is the vast majority of decisions 4,176 3,136 66, 5V that affect people’s lives are made in state Republicans Democrats Other capitals, not Washington, DC.

At the same time as we are on the cusp of a BY GENDER new era, conservatives have also made historic gains at every level of government. Over the past eight years, conservatives won nearly 1,000 state legislative seats, more than 20 percent of the nation’s governorships and nearly 15 percent of Congress. Today, almost 60 percent of all state legislators believe in limited government, free Men 74% 5,470 Women 24% 1,778 markets and federalism. Men* *135 unreported Women*

Electoral victories are great, but then what? After the confetti settles, legislators have to legislate. TOP FIVE LEGISLATIVE ISSUE AREAS After the victory, what comes next? # Economics and Public Finance 17,055 bills ALEC comes next. 1 # Health 2 16,804 bills # Crime and Law For generations, ALEC has been where legislators 3 16,154 bills go to better understand how and what to # Education bills legislate. At ALEC, legislators gain the intellectual 4 14,201 # Taxation and policy bona fides to be good stewards 5 9,396 bills of people’s hard earned dollars. They learn from each other about what worked and what didn’t so as to not repeat the mistakes of their BILLS INTRODUCED VS. ENACTED predecessors or colleagues from different states. Together, and with the help of hardworking state legislators nationwide, we can make limited government a reality across the country. vs. Sincerely, 81,159 25,368 Bills and Resolutions Bills Enacted Introduced Lisa B. Nelson Chief Executive Officer Data provided by: Quorum American Legislative Exchange Council 4 2016 POST-ELECTION POLITICAL PROFILE OF STATE LEGISLATURES

WA ME MT ND MA VT OR MN NH ID RI SD WI NY WY MI CT IA PA NJ NV NE Political Trifectas: 24 Republican 7 Democrat OH UT IL IN DE CO WV CA VA MD KS MO KY NC DC TN OK AZ NM AR SC

LA MS AL GA TX LA AK TX

FL

HI

32 Republican 14 Democrat 3 Split 1 Unicameral

Political Trifectas: 24 Republican 7 Democrat

ALEC MEMBERS ARE MORE COLLABORATIVE AND MORE EFFECTIVE THAN ANY OTHER GROUP OF STATE LEGISLATORS

ALEC MEMBERS COLLABORATE ALEC MEMBERS ENACT MORE ON LEGISLATION* MORE LEGISLATION*

ALEC 2.71 ALEC 1.19 OVERALL 1.0 OVERALL 1.0

ALEC 2.27 ALEC 1.29 NON-ALEC 1.0 NON-ALEC 1.0

ALEC 1.83 ALEC 1.18 REPUBLICANS 1.0 REPUBLICANS 1.0

ALEC 2.38 ALEC 2.14 DEMOCRATS 1.0 DEMOCRATS 1.0

* 1.0 = Average Legislator Data provided by: 20162016 ALECALEC AnnualAnnual ReportReport

2016 ALEC brings together the best and brightest minds that are fighting for limited government nationwide. In the run-up to the 2016 presidential election, ALEC hosted Vice President and five presidential candidates.

Mike Pence Scott Walker Vice President Secretary United States Senator Governor United States Housing and Urban Development Texas Wisconsin

6 American Legislative Exchange Council ALEC I was for ALEC before it was cool. Meeting Highlights

–Vice President Mike Pence ALEC meetings are where the action is. Legislators from around the country come to learn from one another and hear from the best and brightest—those who may one day lead our nation.

In 2016, ALEC brought together Governors Scott Walker, and , as well as Senator Ted Cruz, neurosurgeon Ben Carson and CEO to address state legislators from across the country. The highlight of the year was surely hosting then governor of Indiana, now Vice President Mike Pence who shared the famous line, “I was for ALEC before it was cool.” Certainly, Pence has been a friend to ALEC and a longtime proponent of limited government, free markets and federalism.

As a result of the contributions from members and donors, ALEC meetings provide an opportunity for members to network and learn from national policy leaders. ALEC conferences are widely considered to be among the nation’s most respected state-level policy engagements, providing an exchange of ideas and differing views—a forum and Mike Huckabee Carly Fiorina format unmatched by other state legislative Former Governor Former CEO organizations. Arkansas Hewlett-Packard

7 2016 ALEC Annual Report

Exchange of Ideas

“As a female legislator–a young, ALEC truly embodies the idea of a laboratory for democracy, and the states are conservative female paving the way for the future. Legislators from all 50 states proactively share ideas and work together in the nine ALEC issue-focused task forces to create legislator–this has model policies. These policies address critical, state-based issues and expand been a phenomenal opportunity for all Americans. Last year, members developed policies focusing opportunity.” on education reform, free speech and energy innovation. Legislators don’t always agree, and that’s the point. This debate opens the floor for a constructive –Representative Christina Hagan discussion on what benefits hardworking Americans best. Ohio

ALEC ANNUAL MEETINGS HIGHLIGHTS

Topics Discussed: 20+ Different Networked with • Privacy Issue 2,500+ Attendees • Smart Cities Workshops • Free Speech Learned about trending topics • Tort Reform Learned from and hot button issues with • Tax and Fiscal Policy hours of training 120+ in 3 days • Health Care Policy Experts 110+ • Education • Federalism Attendees Included: • State Legislators from Across the Country • 30+ Think Tanks • 200+ Industry Experts • 90+ Non-Profit Leaders American Legislative Exchange Council

The generosity of ALEC supporters allowed the organization to provide education and research on digital learning, free speech and EPA overregulation: “The Regional Tax

• Members of the Task Force on Education and Workforce Development Academy was great focused on the Digital Teaching and Learning Plan, which helps states because it specifically bring effective digital learning programs to classrooms. They also discussed defines the fiscal which states are best implementing digital learning programs while avoiding problems our states mistakes made in other states. are facing, but more

• Free speech advocates developed two model policies: one that promotes importantly it offers academic freedom on college campuses and another that protects against real solutions including government attempts to eliminate donor privacy. policy proposals and case studies.” • Since 2013, ALEC has provided states with tools to respond to the EPA

Clean Power Plan, a heavy-handed EPA regulation driving up electricity rates –Representative John Piscopo and doing little in the way of abating any significant atmospheric warming. Connecticut ALEC efforts to protect Americans against overregulation exemplifies how our education makes a difference.

STATES THAT ADOPTED ALEC MODELS RELATED TO THE CLEAN POWER PLAN

These states have adopted one of the ALEC model resolutions addressing the Clean 17 ADOPTED ALEC MODELS Power Plan or a similar resolution expressing concern or objection to the regulation. 2016 ALEC Annual Report

Through the direct support of members and donors last year, ALEC educated legislators across the nation, hosting events such as: “I wanted to be around the people • A luncheon with Governor Scott Walker showcasing Wisconsin’s success in achieving a top ten status for Wisconsin’s economic outlook as indicated in that were members the ALEC publication Rich States, Poor States: ALEC-Laffer State Economic at ALEC because Competitiveness Index. they care about our country, they care ALEC Vice President Jonathan Williams moderated a panel that included the Senate Committee on Finance Chair Senator Alberta Darling and Assembly about our state and Committee on Finance Chair Representative John Nygren and ALEC 2016 they care about National Chairman Senator Leah Vukmir. More than 130 individuals attended, each other.” including 30 lawmakers.

in WI –Senator Andre Cushing 130 Maine individuals 30 lawmakers

PROFILE PROTECT FREE SPEECH

In 2016, ALEC launched the Center to Protect Free Speech which focuses on three key areas: campus speech, donor privacy and commercial speech.

Wisconsin Senator Leah Vukmir is the is not an isolated topic. Free speech and First Chair of the Center to Amendment law bleed into multiple public policy areas such as Protect Free Speech. education, criminal justice, civic participation, healthcare, commerce She has seen firsthand and even technology. Free speech, open inquiry, tolerance on the impact of the college campuses, free association, the rights of businesses to government using reporting laws to engage in the free exchange of truthful information and donor silence individuals privacy for nonprofits and charities must be respected and in her home state. exercised without fear of retaliation, so that our society remains the In her role as chair, she marketplace of ideas. hopes to provide the tools for legislators to encourage actions that can be taken to promote free speech. American Legislative Exchange Council

• A congressional panel with state and federal legislators in Washington, DC regarding the balance of power between the states and federal government. Indiana Congressman Luke Messer, Harvard Law Professor Lawrence Lessig and Utah Congressman Rob Bishop hosted a panel on “I joined ALEC reversing federal overreach. because of the wealth of information • A Life Sciences Academy in Boston for state lawmakers focused on and opportunity for pharmaceutical innovation with tours of research and development facilities. networking.”

• The ALEC Center for State Fiscal Reform successfully hosted its inaugural regional Tax and Fiscal Policy Academy in Portland, Maine in late September. –Representative Alan Clemmons The Academy trained 25 lawmakers on topics including the intersection of South Carolina fiscal policy and innovation, a guide to sound pension practices, overcoming obstacles to tax reform and a budgeting toolkit for staying in the black. The

group also met with Governor Paul LePage and Maine business leaders to Tax and Fiscal Policy learn more about the state’s pro-growth reforms. Academy 25 in lawmakers ME

ALEC EVENTS HIGHLIGHTS 2016 ALEC Annual Report ALEC Publications ALEC produces dozens of publications each year that serve as valuable resources for state legislators across the country. ALEC ideas and publications are the product of countless hours of research, debate and discussion, and serve as toolkits for anyone who wants to increase the effectiveness and reduce the size, reach and cost of government.

MANDATORY MINIMUM SENTENCING REFORM

Prison definitely pays, but there’s one class of criminal that is an arguable exception: low-level, first-time drug of fenders . . . It makes no sense to lock away even one drug In recognition of the risingalec.org costs and shrinking benefits of offender whose case could be adjudicated in special drug - harsh sentencing laws, many states have begun to reconsid courts and handled less expensively through intensively su er their reliance on mandatory minimums for nonviolent and pervised probation featuring no-nonsense drug treatment drug offenders. For example, the Pennsylvania Sentencing - and community service. - Commission found “neither length of sentence nor the impo 13 sition of a mandatory minimum sentence alone was related to DiIulio continued that theme in a recidivism.” 17 A legislativeMARCH 2016 analysis in Washington state found - National Review that while incarcerating violent offenders provides a net public article: There is a conservative crime-control case to be made for benefit, imprisonment of property and drug offenders leads to repealing mandatory minimum drug lawsthe now. That’s a negative returns. conservative crime-control case, as in a case for promoting 18 public safety, respecting community mores, and reinstating Many states have gone further than simply studying the prob the traditional sentencing prerogatives of criminal-court lem and have adopted evidence-based, cost-effective sentenc judges. It is a conservative case, and I . . .STATE one of the few ac ing reforms. For instance, prosecutors in Michigan suggest - ademic analysts with a kind word for imprisonment, have ed to legislators that the state was “warehousing too many - come to embrace it. - low-level nonviolent offenders with a minimal role in the drug 14 - trade for too long in costly prison beds.” Independent research organizations have come toA similar PUBLICATION con OF THE AMERICAN LEGISLATIVE EXCHANGE COUNCIL FACTORrepealed most of its drug-related mandatory minimums. Pris clusions. The RAND Corporation looked at the cost effectiveness 19 As a result, Michigan on admittances fell and Michigan saved billions in tax dollars. of mandatory minimum drug laws and asserted: “[I]f reducing - More importantly, the crime rate fell 27 percent in the decade consumption or violence is the goal, more can be achieved by - after the repeal. Mandatoryspending additional Minimum money arresting, Sentencing prosecuting, and sentenc Reform Saves States Moneying anddealers toReduces standard prison terms Crime than by spending Rates it on sen tencing (fewer) dealers to longer, mandatory terms.” Written by Gregory Newburn, State Project Director, Families Against Mandatory- Minimums - “Many states have gone further than Other influential proponents of the “lock ‘em up 15and throw EXECUTIVEaway theSUMMARY key” model of crime control also believe the strategy simply studying the problem and have he Unitedhas goneStates too has far been and nowexperiencing recommend increasingly reducing thehigh prison Many pop states soughtadopted to accommodate evidence-based, the growth in cost-effective the pris- T levels ulation of incarceration, to more efficiently particularly fight crime.over For the instance: last three on population sentencingby building new reforms.”prisons; however, some simply decades. Several states have realized such levels are not could not- keep pace. In 2014, 18 states had exceeded the max- sustainable andUniversity have been of examining economist potential and author solutions Steven to D.imum Lev measure of their prison facilities’ capacity.3 Among them lower incarcerationitt wrote rates. several One influential proposed papers solution in which is tohe allowconcluded was , whose year-end 2014 prison population of 48,300 greater flexibilitythat pro-prisonfor judges policieswhen sentencing were a major nonviolent, factor in reducinglow- inmates - was 150 percent of its rated capacity and 171 percent risk offenders.crime By during allowing the 1990s. judges He to later depart found, however,from mandatory that asof the design capacity.4 Other states including Ohio (132 per- minimums forthe crime nonviolent, rate continued low-risk to offenders, drop and the incarceration prison popula cent), Massachusetts (130 percent) and Nebraska (128 percent) rates drop withouttion continued compromising to grow, public the safety.return on public safety dimin ished... “In the mid-1990s I concluded that the social bene - The Americanfits approximately Legislative Exchange equaled the Council costs of (ALEC) incarceration.” model And- To learn more about how the American Justice Safetytoday? Valve Dr. ActLevitt allows says, for “I thinkdiscretion we should during be sentencshrinking- the - Legislative Exchange Council helps develop ing of certainprison individuals. population Such by at a least sentencing one-third.” structure would innovative solutions in partnership with help to reduce the cost of incarceration without compromis- lawmakers and business leaders, or to become 16 ing public safety. a member, please visit www.alec.org.

THE PROBLEM American Legislative Exchange Council After remaining steady for most of the twentieth century, the 2900 Crystal Drive, Suite 600 number of people incarcerated in state prisons1 has increased Arlington, VA 22202 considerably over the last three decades. By the end of 2014, Tel: 703.373.0933 the state prison population totaled 1,350,958 inmates.2 Fax: 703.373.0927 www.alec.org THE STATE FACTOR • 3

State Factor: Mandatory Rich States, Poor States, 21st Report Card on Minimum Sentencing Reform 9th Edition American Education Saves States Money and The 9th edition of Rich States, Poor The 21st Report Card on American Reduces Crime Rates States: ALEC-Laffer State Economic Education assesses the educational The United States has been Competitiveness Index revealed a opportunities available to students experiencing increasingly high levels pro-growth trend across the nation nationwide, giving each state a letter of incarceration, particularly over the for 2016. Rich States, Poor States grade. The future of the American last three decades. Several states have examines the latest movements in education system has the potential realized such levels are not sustainable state economic growth. The data to be bright. While some states have and have been examining potential ranks the 2016 economic outlook risen to the top of the heap, no state solutions to lower incarceration of states using 15 equally weighted earned higher than a B+ in 2016. rates. One proposed solution is to policy variables, including various tax There is room to grow; to trust more allow greater flexibility for judges rates, regulatory burdens and labor families instead of regulators, and th when sentencing nonviolent, low- policies. The 9 edition of Rich States, to ensure that every student has risk offenders. By allowing judges to Poor States received an overwhelming an equal opportunity at the quality, st depart from mandatory minimums media response, reaching over 20 individualized education that 21 st for nonviolent, low-risk offenders, million households through national century success requires. The 21 incarceration rates drop without and local television and radio outlets. Report Card on American Education compromising public safety. The report received more than 300 was featured on One America News media hits, including The Wall Street Network’s shows Tipping Point and Journal, Investor’s Business Daily and The Daily Ledger. The Washington Times.

Criminal Justice Reform Center for State Fiscal Reform Education and Workforce Development American Legislative Exchange Council ALEC on Education For an online comparison tool, custom report cards and state education studies,

www.ALECReportCard.org visit www.ALECReportCard.org.

2016 UNFUNDED LIABILITIES PER CAPITA OF PUBLIC PENSION PLANS

VT 20 24 WA 34 19 18 NH 13 ME MT ND 36 42 MA 33 MN OR 6 3 RI 32 ID 15 31 SD WI 28 NY 40 CT 47 WY 23 MI 30 4 NJ 46 41 IA 49 PA NV 10 NE 48 2 IN OH DE 8 43 UT 35 IL 11 21 WV CA CO 29 12 VA MD 27 KS 39 MO KY 5 NC 17 45 16 1 TN AZ OK 22 25 NM AR 38 26 9 SC AL GA 14 37 MS TX LA 50 7 AK FL

1=BEST 50=WORST

HI 44

Article V: A Handbook for Keeping the Promise: Getting Unaccountable and State Lawmakers Politics Out of Pensions Unaffordable 2016: Unfunded Public Pension Americans realize that the nation is As lawmakers and trustees knowingly on the wrong path and Congress make inferior investment decisions, Liabilities Near $5.6 Trillion lacks the political courage to address sacrificing better returns in order to State public pension plans are now our challenges. The Handbook is an advance political agendas, pension underfunded by nearly $5.6 trillion–an invaluable guide for state lawmakers funding declines, jeopardizing increase of almost $900 billion from who recognize that the states have workers’ retirement benefits and State Budget Solutions’ (SBS) last the power and the duty to rein in a leaving taxpayers to pick up the tab. comprehensive report in 2014. When federal government that is unable Unfortunately, many lawmakers and state pension funds are examined and unwilling to reform itself. The pension plan officials have other through the lens of a more realistic time is right for the states to exert priorities besides doing what is best valuation, pension funding gaps are the constitutional authority provided for workers. They see the billions of revealed to be much larger than reported to them by the Constitution’s framers pension fund dollars they manage as in official state financial documents. and to propose amendments that an opportunity to advance their own This report totals state-administered could set us on the right path again. agendas. This reckless decision to plans’ assets and liabilities and finds There is far more to fear from state place political agendas ahead of what’s nationwide total unfunded liabilities to be inaction against a dysfunctional and best for workers is known as pension $5.59 trillion. The only way to solve this overreaching federal government than fund cronyism, and this report exposes growing problem is for states to enact there is to fear from states banding these dishonest practices and shows meaningful pension reform. together to address some of America’s state and local policymakers what they most pressing problems. can do to address the problem.

International Relations and Federalism Center for State Fiscal Reform State Budget Solutions (SBS)

2016 ALEC Annual Report ALEC IMPACT IN THE STATES

Entertainment Innovation Academy Los Angeles, CA

The solution to an overbearing federal government is simple, and ALEC has been pursuing it for years. The states.

ALEC advances limited government, free markets and federalism in state legislatures across the United States by fostering efficient, effective, accountable and transparent government. That means we’re taking control from the hands of bureaucrats and giving it back to you.

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American Legislative Exchange Council

43rd ALEC Tax and Fiscal Annual Spring Policy Academy Meeting Task Portland, ME Force Summit Life Sciences Academy Boston, MA Indianapolis , IN MA Pittsburgh, PA RI

CT

NJ

DE

MD

DC

NBCSL-ALEC Criminal Justice Reform Coalition Meeting States & Washington, DC Nation Policy Summit New Legislators Tax Academy Washington, DC

Washington, DC

POLICY AND TESTIMONY LEGEND

TAX AND FISCAL POLICY 30 STATES CRIMINAL JUSTICE REFORM 7 STATES 45 HEALTH AND HUMAN SERVICES 4 STATES

EDUCATION 4 STATES ALEC COMMERCE, INSURANCE AND ECONOMIC DEVELOPMENT 3 STATES 30 PROGRAMS STATES 10STATES COMMUNICATIONS AND TECHNOLOGY 1 STATE

FEDERALISM 1 STATE MEMBERSHIP DONOR OUTREACH ENGAGEMENT 15 2016 ALEC Annual Report Financials ALEC donors and members support the operations and growth of the nation’s premier legislative organization promoting free market policy in the states. ALEC accomplishes its mission by educating legislators and individuals about sound policy and by providing them with a platform for collaboration with other stakeholders.

Other

Total Support 10% 26% Meetings

$10.3 M Membership 24% Support 6% Individuals

34% Support Meetings...... 26% Programming Individuals...... 6% Programming...... 34% Membership...... 24% Other...... 10% Legislative Services Fundraising 6% 7%

Programs Administrative 14% Research, Programs Education and Training...... 73% Research, Administrative...... 14% 73% Education and Fundraising...... 7% Training Legislative Services.. 6% American Legislative Exchange Council ALEC Reach State legislators and the people they serve engage with ALEC ideas through a variety of venues and platforms including public forums, broadcast and print news, social media and on the web. In 2016, ALEC reached more than 35 million Americans with research and plans of action to institute market-based reforms, sound tax policy and fiscally responsible government.

Speaking Engagements: TV Appearances: Interviews:

52 29 350 Plus

Radio Segments: Editorials: :

31 45 49,000 Likes YouTube: Blog Posts: Twitter:

329 Videos 401 11,300 Followers

Websites ALEC re-launched ALEC.org on January 1, 2016. The new website Broadcast and Social Media Print News improved the user experience and allows visitors to better engage, learn ALEC followers and ALEC scholars saturated and share free market policy. What’s engagement increased by American communities with more, ALEC surpassed one million nearly 400 percent growing talk of free market reforms in pageviews for the first time. from 10,000 followers to more than 350 interviews with nearly 50,000. Committed broadcast, print and online ALEC followers shared what outlets including the Wall they’ve learned about the free Street Journal, USA TODAY, market exhibiting a 552 percent Des Moines Register, National Public Forums increase in likes, shares and Review, Fox News and ALEC leaders and scholars positive reactions over the many more. spoke to more than five thousand course of the year. legisators and issue activists at 52 public forums in 2016. 2016 ALEC Annual Report

Leadership A dedicated team of state legislative leaders from across the country serves as the governing board of ALEC. They are among the vanguard for freedom who dedicate their time and resources to promote limited government, free markets and federalism.

2016 EXECUTIVE COMMITTEE

Sen. Leah Vukmir Sen. Jim Buck Sen. Wayne Niederhauser Rep. Jason Saine Rep. Gary Banz Chairman First Vice Chair Second Vice Chair Treasurer Secretary

2016 ALEC LEADERSHIP

Lisa B. Nelson Lisa Bowen Michael Bowman Bartlett Cleland Jeff Lambert Bill Meierling Jonathan Williams Chief Executive Officer Vice President, Vice President, Vice President, Vice President, Vice President, Vice President, Finance and Policy and Strategic Center for Innovation Member Relations Public Affairs Center for State Administration Initiatives and Technology Fiscal Reform

BOARD OF DIRECTORS Rep. Dawn Pettengill, Iowa Ms. Marianne Eterno, Guarantee Trust Life Rep. John Piscopo, Connecticut Insurance Sen. Leah Vukmir, Wisconsin, Chairman Sen. Bill Seitz, Ohio Mr. Kenneth Lane, Diageo North America, Inc. Sen. Jim Buck, Indiana, First Vice Chair Rep. Blair Thoreson, North Dakota Mr. Bill Leahy, AT&T Sen. Wayne Niederhauser, Utah, Second Rep. Curry Todd, Tennessee Mr. Don Lee, K-12 Vice Chair Speaker Linda Upmeyer, Iowa Ms. Frayda Levy Rep. Jason Saine, North Carolina, Treasurer Sen. Susan Wagle, Kansas Mr. Stephen Moore Rep. Gary Banz, Oklahoma, Secretary Mr. Michael Morgan, Koch Companies Rep. Phil King, Texas, Immediate Past Chair PRIVATE ENTERPRISE Public Sector Sen. Joel Anderson, California Mr. Chip Rogers, Asian American Hotel Sen. Bill Cadman, Colorado ADVISORY COUNCIL Owners Association Rep. Alan Clemmons, South Carolina Mr. Bill Carmichael, American Bail Coalition, Mr. Daniel Smith, Altria Client Services, Inc Sen. Andre Cushing, Maine Chairman Mr. Roland Spies, State Farm Insurance Rep. David Frizzell, Indiana Mr. Mike Blank, Peabody Energy Companies Speaker Philip Gunn, Mississippi Ms. Sano Blocker, Energy Future Holdings Mr. Pat Thomas, United Parcel Service Sen. Judson Hill, Georgia Mr. Jeffrey Bond, PhRMA Ms. Cynthia Bergman White, ExxonMobil Speaker Bill Howell, Virginia Mr. Josh Brown, Pfizer Inc. Mr. Bob Williams, State Budget Solutions Rep. Norine Kasperik, Wyoming Mr. Steve DelBianco, NetChoice Mr. Steve Woods, NFIB Speaker Ray Merrick, Kansas