North Carolina General Assembly Week in Review

July 2, 2010

Pardon Our Dust

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The biggest item on the General Assembly’s summer agenda has finally reached its conclusion.  On Wednesday, legislators gave their final approval to a $19 billion state budget plan after weeks of deliberation that concluded just hours before the start of the 2010-2011 fiscal year.  Governor Perdue signed the bill after the House (66-50) and the Senate (28-15) approved the measure on near party line votes in both chambers.   For the first time in seven years, North Carolina begins its fiscal year with a new spending plan in place.


Health and education spending – the two most contentious areas of the budget plan – received cuts in the bill, which reduces spending across all categories of government in order to cope with an $800 million revenue shortfall caused by the recession.  The plan uses money from the state lottery to stave off cutting teaching jobs, although school boards could order furloughs.  It cuts $50.7 million to in-home care services for Medicaid recipients, which means 18,000 of the 38,000 people currently participating would lose benefits.  And while the General Assembly may have wrapped up its business on the budget, additional changes may be triggered by actions in Washington, DC the budget relies on $519 million in federal Medicaid money that may not come.  Should the U.S. Congress fail to deliver extra Medicaid funding, the budget includes a contingency plan that would raid reserve funds, cut the state’s contribution to the retirement system and cut another 1 percent from overall state spending.


Efforts to raise revenue in the coming months and years are at the heart of incentives legislation that has been approved by the House but awaits further action by the Senate.  The Keep North Carolina Competitive Act (HB 1973) has been placed on the Senate calendar for next week after the Senate Finance Committee gave its approval to the bill on Thursday.  In present form, the package includes incentives for film production companies, interactive media producers and eco-industrial parks, among others.


Meanwhile, the House and Senate both worked on ethics legislation this week in hopes of having a compromise reached before the legislative session concludes.  While there is still work to be done, both chambers are crafting legislation to reduce the potential or perception of what supporters call “pay-to-play” politics, in which campaign donations allegedly are used to seek to influence government decisions and appointments by giving to candidates or elected officials. The House tentatively approvedby a 86-4 vote a wide-ranging measure that would limit political contributions by vendors with   state contracts and require state board and commission members to disclose their fundraising activities for the officials appointing them.  The Senate bill got delayed last week after Republicans complained about a Democratic provision that would have expanded voluntary public financing to candidates for five additional members of the Council of State. The expansion was deleted, and the Senate bill approved Thursday received bipartisan support after at least two GOP amendments were added. The two sides likely will negotiate a compromise since legislative leaders and Governor Perdue say it’s critical to get a package passed before the General Assembly adjourns.


Now that the budget has been signed into law, it appears that legislators will wrap up any unfinished business next week before concluding the 2010 Short Session, and adjourning the two year 2009-10 Session sine die.