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April 29, 2011

Pardon Our Dust

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House Unveils Budget Proposal

The full House Appropriations Committee approved a $19.3 billion spending plan this week after almost 9 hours of debate and considering almost 100 amendments. The House proposal reduces spending by $900 million more than the Governor’s budget proposal, following instructions by House leaders to allow the temporary tax increases to expire in July. Facing an estimated $2.5 billion budget gap, the budget proposal includes $100 million in new or increased fees. The proposal additionally sets aside $230 million in reserves for a separate tax package to be considered in the coming weeks. It is anticipated that about $130 million of that $230 million will be used to lower the income tax rate and provide some tax relief for small businesses

The budget proposal is scheduled to be voted on by the full House Tuesday and Wednesday of next week.  Highlights of the budget include:

  • Sets aside $230 million for a tax-package.
  • Appropriates $10 million to the One North Carolina Fund, an economic incentives account aimed at recruiting business to NC. (Same as Governor’s proposal)
  • Eliminates $68 million allotment for the Gold Leaf Foundation.

Abolishes the Tobacco Trust Fund and the Health and Wellness Trust Fund,

Reduces Smart Start funding by 20 percent.

•    Transfers More at Four to Department of Health and Human Services.
•    Shifts $85 million in transportation funding to repairs on bridges and other safety-related projects.
•    Increases the tolls on the state’s ferries and adds tolls to the majority of those that are free to passengers.
•    Cuts $8.7 million a year from state spending for high school driver’s education classes, and authorize local schools to charge students up to $75 each.
•    Transfers some DENR oversight programs into DHHS and Dept of Agriculture.
•    Requires Dept. of Commerce to set up an online database for grants and incentives awarded.

Medical Malpractice Bill Moves to Conference Committee

Last week the House passed an amended version of Senate Bill 33, which reforms North Carolina’s medical malpractice system, including provisions such as capping non-economic damages (not including scars, disfigurement, loss of limb, injury or death) at $500,000 and providing periodic payment of future economic damages. This week the Senate voted not to concur to the amendments made to the measure in the House, which now sends the bill to conference committee where members of the House and Senate will work together to reach a compromise.

Senate Passes New State Health Plan Proposal

The General Assembly is still trying to close a $515 million gap regarding North Carolina’s waning state employees’ health insurance plan.  The Senate passed along party lines this week 31-17 on an adjusted plan from the one Gov. Perdue vetoed earlier.  The new plan still requires all active employees – including teachers – to pay a minimal monthly premium for the first time (almost $11 a month). The noticeable difference between this proposed bill and the previous one the Governor vetoed is a price reduction for Medicare-eligible retirees from $16.54 to $ 10 a month.  These lower range of costs would be paid for by an increase in co-payments for generic drugs from $10-$12.  Gov Perdue proposed the drug co-pay to be $15 in her budget.
The amended plan now moves to the House for consideration. It is unclear whether or not Gov Perdue will veto this new proposed plan.

Negotiations Continue on Terminal Groins Legislation

Following passage in the House, the Senate this week rejected revisions to their bill that would allow terminal groins in our state after being banned for decades. The House amended the original Senate bill to only allow three structures – two publicly built and one private and prevented local government from borrowing money for a project unless the debt was approved by a referendum. In contrast, the original version would have placed no limit on the number of terminal groin projects. The bill sponsor, Sen. Harry Brown, R-Onslow, iterated his opposition to the changes during the House committee discussions, stating that he believed limiting the number would result in a situation where the towns with the most money would be able to build groins, while those that need a groin the most won’t. “To me, it’s a fairness issue,” Brown said.
The differences will now be worked out in a conference committee comprised of House and Senate members.
Changes to Eminent Domain Rights Advances

The House, with a 98-18 vote, approved House Bill 8 this week that would ban government condemnation for private development purposes. Before passing, the bill was amended by sponsor Rep. Stam (R-Wake) ensuring that public utility companies would not be affected by the change. A similar bill passed last session in the House, but failed to clear the Senate.  If the bill makes it through the Senate this session it would be put the amendment to the constitution on the general election ballot in 2012. The measure is anticipated to receive bipartisan support in the Senate.  

Lawmakers to Study Auto Insurance Reform

The Senate Insurance Committee voted this week to send two auto insurance reform bills (Senate Bill 490 & Senate Bill 477) to a study committee. The two bills are aimed at restructuring current policies to create fairer rates in auto insurance for North Carolinians. The proposals would limit the insurance commissioner’s ability to regulate premiums and phase out a surcharge that insured motorists pay to subsidize liability coverage for some drivers, which is currently 4.2%.  SB490 sponsor Sen. Rucho (R-Mecklenburg) advocating for the issues to be studied closer, stated in committee “Not to look at reform and modernization would be wrong.”