This story is not technically a state-mandated policy, but the CUNY system of colleges in New York is centrally managed and closely tied to city and state government (most of the Board of Trustees is appointed by either the mayor or governor, with one seat each set aside for faculty & student representation).
In the past few years, more of the basic curriculum decisions have been removed from faculty and mandated by central administration. For example, one initiative called Pathways was put in place over faculty objections to set maximum credit hours for all programs and core classes, and also mandate acceptance of all of these credits in transfers from junior to senior colleges. To meet this requirement, programs have been forced to cut science lab courses, foreign language requirements, etc. In mid-2013 the CUNY-wide faculty held a vote on the issue, with 92% voting "no confidence" in Pathways.
In the particular area of math requirements, CUNY is open-admissions and required to accept all students from the New York system with a high school diploma or equivalent. A majority cannot pass basic entry skills tests in reading, writing, algebra, or arithmetic. These students thus enter remedial classes for these skills, the success rate is very low, and therefore the graduation rate is very low (around 20% over 6 years, in line with other community colleges around the nation). Many faculty will assert that most students are effectively unable to read college-level texts.
So this causes political pressure on the trustees to raise graduation rates, which is seen as a failure on the part of the institution and faculty. A great deal of "churn" has occurred in the last few years with changes to math remediation; the entry tests have changed, the acceptance scores have been modified up and down, the exit exam to remediation has been changed by central fiat several times, etc.; in each case hoping that a majority of students would begin passing, but success rates stay intransigently the same.
So in my experience the more the political elements begin mandating certain acceptance criteria, the likelihood is great that they will inspect and complain about why the next level then has low success rates (in the aftermath of lowered entry standards). This pressure rolls in the direction of mandating higher passing rates, which is ultimately accomplished by lowering standards for that next level, and so on. For example, the newest CUNY community college (Guttman) has no faculty governance, no disciplinary departments, no remediation courses, and no basic skills requirements for graduation -- and it is likely that meetings are currently being held to expand on that model and remove basic writing and algebra/arithmetic requirements throughout the system, which would hopefully raise the desired graduation rates.
In short: The more the political class tightens its grip on acceptance and graduation criteria, the more academic systems will slip through its fingers.