States are currently in a race to the bottom, sacrificing privacy concerns for the sake of economic growth. The FAA is in the process of selecting six test sites for unmanned aerial drones and states are in a vicious competition for the accompanying jobs.
Some states, like Washington and North Dakota, have a natural advantage, due to their already well-established drone industry or favorable testing conditions. The rewards are promising; the Association for Unmanned Vehicle Systems International (albeit a biased source) estimates that the drone industry could create as many as 100,000 jobs by 2025.
The problem is that when the competition gets fierce, state and local governments start to try to sweeten the deal for manufacturers, often at the expense of the rest of the populace. Sometimes state and local governments dole out ill-advised tax breaks and credits costing taxpayers millions, other times it's ditching environmental regulations. Now, it's privacy concerns.
While states like Florida and Virginia are seeking to regulate drones, others are shying away for fear of losing jobs. North Dakota, for instance, backed down from a bill which would have required the police to obtain a warrant before using drones and required that the images collected by drones be destroyed within 90 days. The bill passed the House with bi-partisan support but flopped in the Senate. One state senator explains, "Now that we've defeated that bill in the Senate, it sends a clear message to the FAA that North Dakota’s open for business and wants to continue to play an important role in developing the UAS industry."
The race to the bottom could easily be abated by federal regulation. Most drones will fly in federal airspace, and the FAA is therefore tasked with laying out some ground rules by 2015. In the vacuum, however, states are left to make their own policy. Currently, 39 states are considering laws regulating the use of drones. This, however, means a patchwork of laws and regulations which would be less than ideal. It would also allow some states to game the system by weakening protections to entice employers.
Some drone use is relatively uncontroversial; drones that monitor crops are benign. Drones that monitor people are less so, and raise important constitutional questions. Already police stations in Seattle and Oakland have faced pressure when they purchased drones for policing use. A Congressional Research Service report from last month raised numerous legal quandaries presented by drones. It's clear, however, that drone regulations should be designed to protect citizens, not merely attract jobs.