NCGA Week in Review – June 3 – June 9

June 10, 2013

Pardon Our Dust

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House Releases Budget

The House released their version of the budget Sunday evening, two days after Appropriations subcommittees approved portions of the proposal. The bill will be debated on the House floor later this week. The proposed budget calls for $20.6 billion in spending for the 2013-2014 fiscal year, which is $12 million less than the Senate plan. Like the Senate plan, the House plan does not give pay raises to state employees and teachers. While both chambers set aside $1.2 billion over the next two years to pay for the increasing costs of Medicaid, the House plan provides $36 million more for the Department of Health and Human Services. Several differences between the two chambers’ plans will have to be ironed out before the budget can be sent to the Governor. The chambers are divided on education policy, and other issues such as whether to move the State Bureau of Investigation from the Department of Justice to the Department of Crime Control and Public Safety. The House plan also includes far less policy than the Senate plan. The differences will be debated in conference committee after the House passes their proposal.
House Tax Reform Plan Passes Preliminary Vote
The House tentatively approved Rep. David Lewis’s comprehensive tax overhaul on Friday.  The plan would cut tax revenues by $579 million in the fifth year of the plan, when the majority of provisions will have taken effect. $1.7 billion in revenue will be cut throughout the first five years of the plan. The plan eliminates the three personal income tax brackets and replaces them with a 5.9 percent flat rate. It doubles the size of standard deductions, meaning that the lowest-income tax payers would be taxed effectively a zero rate. The sales tax would expand under the proposal to cover services such as auto repair and appliance installation, as well as entertainment events and movie tickets. Supporters of the plan argue that it would lead to job creation and economic growth. Meanwhile, opponents of the proposal claim that the loss of revenue could lead to the state not having enough money to pay for essential state services in the future.  The House tax plan is competing with two different Senate proposals that would overhaul the existing tax structure.
Fracking Bill Heads to Back to Senate
The House passed Senate Bill 76 on Friday, which would set a March 2015 date for North Carolina to begin issuing permits for hydraulic fracturing. The House’s version of the bill allows the Department of Environment and Natural Resources (DENR) to issue permits but requires lawmakers to approve the state’s regulatory framework before the permits could be considered valid. The Senate version of the bill does not require approval by the legislature. The House plan does not allow the injection of fracking waste fluid into the ground and would allow DENR to regulate and fine land agents who use misleading or unethical practices to convince property owners to sign leases. Supporters of the bill claim that S76 provides certainty to the industries interested in fracking in North Carolina. Opponents argue that the legislature should wait until the EPA releases a new study on fracking in the fall so they could know more about possible environmental impacts. The bill now heads back to the Senate for concurrence. Should the Senate fail to concur, a conference committee will be appointed to negotiate the differences.
Racial Justice Act Repeal Passes House
The House passed a bill Wednesday that would repeal the Racial Justice Act and clear the way for executions to resume in North Carolina. Under the Racial Justice Act, convicted murderers can have a death sentence reduced to life in prison if they can prove that race played a major role in their cases. Nearly all of North Carolina’s 156 death-row inmates have appealed their cases under the act, which has slowed down the judicial process. White convicts who were convicted by white juries have used the act to appeal their cases. The state has not carried out an execution since 2006 because of various legal appeals. Those in favor of the repeal claim that the act led to a de-facto moratorium on capital punishment. Meanwhile, those against the repeal argue that there is sufficient evidence that many North Carolina juries are racially biased.

Please contact the Raleigh McGuireWoods Consulting team if you have any questions or comments:

Harry Kaplan, Senior Vice-President
Jeff Barnhart, Senior Vice-President
Franklin Freeman, Senior Vice-President
John Merritt, Senior Vice-President
Johnny Tillett, Senior Vice-President
Rita Harris, Vice-President
Bo Heath, Vice-President
Kerri Burke, Assistant Vice-President
Sarah Wolfe, Research Assistant
Katy Feinberg, Strategic Communications