NCGA Week In Review, 5/30-6/3

June 6, 2011

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General Assembly Sends Final Budget Plan to the Governor

Following the Senate voting 31-19 along party lines to pass their updated $19.7 billion budget, the House followed suit voting to concur on Friday evening and early Saturday morning. The final budget plan, which is now on the Governor’s desk won a supermajority in the House with a 73-45 vote retaining the five Democrats needed to secure an override vote: Reps. Jim Crawford (D-Granville), Bill Owens (D-Pasquotank), Dewey Hill (D-Columbus), Bill Brisson (D-Bladen) and Tim Spear (D-Washington).

The negotiated budget plan spends $300 million more than originally proposed on public schools while continuing to let the temporary sales and income taxes expire on time. The new version restores funding for teachers assistants for grades 1-3 and includes $62 million to hire over 1,100 teachers in lower grades. However, the updated plan includes a provision requiring local school districts to cut an additional $124 million at their discretion. The increase in education spending from the original Senate proposal is covered by cuts in several areas such as state building repairs, state pension fund contribution and forgoing the quarter-percentage point personal income tax cuts. Additionally, the new budget establishes a tax exemption for the first $50,000 of net income for small businesses. 

The revised budget proposal eliminates a number of provisions that were contentious among Senate and House Democrats:


  • State Bureau of Investigation: Remains under control of the Attorney General’s Office (Previous version would have moved SBI to the new Dept of Public Safety)

  • Board of Elections & Ethics Commission: Does not combine as previous versions.

  • Driver’s Education Classes: $45 fee
    (House’s previous version set fee at $75 while Senate’s version included no fee)

  • Hattaras-Ocracoke & Currituck-Knotts Island Ferries: Remain toll-free.
    (Senate’s previous version called for tolls while the House did not)

  • Mid-Currituck Bridge: Funding restored (Senate’s version eliminated funding)

  • Garden Parkway: Funding delayed but restored; taking $20 million for the current fiscal year and a $35 million appropriation for the next fiscal year. Appropriations are restored by half for the 2012-2013 fiscal year. (Senate’s version eliminated funding)


Review a summary of the final budget.
Review the full budget.

What Will the Governor Do?

The final budget proposal was delivered to the Governor’s desk at 10:15 Saturday morning. The Governor released a statement later that morning saying, “I am prepared to veto this budget if my review indeed shows what I fear – that North Carolina will move backwards under this budget plan.” The Governor’s office said Sunday that it will likely be several days before she decides what to do. Perdue has until 11:59pm on Tuesday, June 16th to decide what to do with the budget plan.  If the Governor doesn’t use her veto stamp by that time, the measure will automatically become law with or without her signature

Senate Republicans already have a veto-proof majority and if the five House Democrats vote again with their Republican colleagues, the House will be able to override a veto, as well.

Special Legislative Sessions Scheduled as Adjournment Approaches

Legislative leaders continue to indicate that this year’s legislative session will end by June 17th. It is anticipated that two special sessions will be scheduled before the General Assembly reconvenes in May 2012. The first special session would commence on July 11th to redraw congressional and legislative maps based on the 2010 Census. Then at a later, still undetermined date, legislators will return to Raleigh for a special session to deal with proposed constitutional amendments. A number of proposed amendments to the N.C. Constitution have come forward in this legislative session. Three have already passed the House: One placing term limits on legislative leadership, another reorganizing the public school governance and another protecting property owners from eminent domain abuse. Other proposals include an amendment to ban same-sex marriages and a broader legislative term limits measure.

House Passes Comprehensive Tort Reform

Following numerous committee discussions and hours of floor debate, the House passed H542: Tort Reform for Businesses and Citizens with an 85-32 vote. The bill, covering comprehensive tort reform includes provisions to ensure that juries receive accurate information on the actual medical bills paid in court cases; establishes appropriate standards for expert witnesses and sets limits on attorneys’ fees in small cases. The bill was amended on the floor, including changes that will allow a plaintiff to sue pharmaceutical manufacturers IF they can prove by clear and convincing evidence that the product approved by the FDA was not safe. Additionally the bill was changed to eliminate language that allows only 25% of the large damage awards to go to the victim, with the other 75% of a punitive award of more than $100,000 going to the state.

The bill now goes to the Senate for its consideration.

Workers’ Comp Reform Heads to the Senate

The House with an overwhelming majority passed major workers’ compensation reform, HB709: Protect and Put NC Back to Work. After extensive negotiations between parties on both sides of the issue, the final consensus bill was bipartisan and will achieve the first significant workers’ comp reform in the General Assembly since 1994. One of the primary objectives of this legislation was to bring North Carolina’s indemnity costs in line with surrounding states by limiting the duration of temporary total disability (TTD) benefits. The proposed legislation would place a 500 week cap on temporary total disability benefits, increase the cap on temporary partial disability benefits from 300 weeks to 500 weeks, improve the structure, operation and accountability of the Industrial Commission, improve communication between the employer and the doctor to better facilitate employee’s return to work and ensures that both parties have equal access to medical information.

The bill now heads to the Senate.

Governor & Final Budget Extends Unemployment Benefits

Governor Perdue signed Executive Order 93 last week restoring federal unemployment benefits.  Long-term unemployment benefits for an estimated 47,000 people have been tied up in a stalemate between legislative leaders and Gov. Perdue since they expired over a month ago.  Perdue refused to sign proposed legislation that tied the extension of unemployment benefits to a stop-gap spending plan that would serve as back up if a state budget was not finalized by July 1st.  The governor was able to use her authority as the state’s chief executive to extend the benefits since they are not state funded. Additionally the final budget includes a provision that restores the benefits.