NCGA Week in Review – May 19, 2014

 

North Carolina’s General Assembly is back in session. Wednesday, May 14^th kicked off the short session that is expected to last six weeks and focus on tweaks to the state’s $21 billion two-year budget. Although three main priorities stand at the forefront of this session’s goals, the opening day protests and nearly one-hundred bills filed suggest an agenda involving more than just the state budget, teacher pay, and coal ash.

 

As they returned to Raleigh on Wednesday, state lawmakers gathered in the House and Senate Chambers where session opened with a special visit from NASCAR racing legends. Both the House and Senate passed resolutions honoring the state sport and NASCAR Hall of Fame inductees for their economic and philanthropic contributions to North Carolina. The Hall-of-Famers shared the spotlight as crowds of educators filled the public seats and stood along the upper chamber walls. Their “I Love Public Schools” t-shirts symbolized the pressure felt among lawmakers to address teachers’ salary. 

 

At the close of the day, it was clear lawmakers wasted no time. By Wednesday at 5:00 PM, nearly one-hundred bills had been filed, with that number continuing to rise on Thursday. Those bills included legislation to create the framework for a new economic development partnership, House Bill 1031, which is expected to lead the job recruiting, marketing and other Commerce Department functions this summer. Other notable legislation involved the Governor’s Budget Proposal, the Governor’s coal ash plan, and an omnibus tax measure.

This budget fulfills a commitment to raise the base pay for those teachers who have up to seven years of experience. The 7.1 percent salary increase from $30,800 to $33,000 annually in the upcoming year is coupled with a further commitment to raise the base salary to $35,000 for the 2015-2016 school year. The immediate pay increase lays the foundation for long-term education and teacher compensation reform. This budget also reverses the salary “freeze” for affected state employees, by providing a two percent salary increase.

 

In addition to teacher pay raises, this budget increases spending for public schools, community colleges, and universities by $196 million. A few of the goals for the increased spending are to fund a master’s degree salary supplement, to double spending on textbooks, to assist community colleges in closing the “skills gap,” and to establish the North Carolina Scholarship for the Education of Returning Veterans (NC SERV).

 

This budget increases the funding for the Oil and Gas Regulatory Program and Mining & Energy Commission by 35 percent to ensure that the exploration and production of energy is done in an environmentally conscious manner. It includes an initiative to convert or close the state’s coal ash ponds and eliminates special exemptions for utilities. It also provides $3.46 million in recurring funds to continue the clean-up of residential leaking underground storage tanks along with $1.3 million in new funds to protect the state’s drinking water, lakes and waterways.

 

The state will carry over sufficient funds to cover the cost of Medicaid, which anticipates a $70 million cost overrun for the current 2013-2014 Fiscal Year. To provide a further cushion for the upcoming year, the budget includes a Medicaid Risk Reserve Fund of $50 million, which supplements the $506 million increase already built into the biennium budget. Governor McCrory’s budget also increases funding for NC Pre-K, oversight for County Child Welfare Operations, and foster care.

 

The core functions of the Department of Transportation are supported with an additional $43 million for the Highway Fund in 2014-2015, for highway maintenance, preservation and resurfacing. The Highway Trust Fund’s Strategic Investment Program will also increase by $57 million.

 

Senate Bill 729, sponsored by top Senate leaders Phil Berger, R-Rockingham, and Sen. Tom Apodaca, R- Henderson, is the plan that Governor McCrory proposed last month. The bill would gradually close some coal ash storage basins. Apodaca said that would be a starting point for legislators to develop a final bill regulating coal ash. The bill sets aside money to pay for it: $1.4 million to fund 19 permanent positions and associated costs to carry out the regulatory law, as well as sets a timetable for closing the Riverbend, Asheville, Dan River, and Sutton plants.  SB 729 would also impose a moratorium on how coal ash material is used in structural fill products until rules are established to ensure public health. 

 

The first major piece of legislation headed for a vote in the House is an omnibus tax measure, House Bill 1050, that the House leadership hopes is not controversial, but is likely to generate plenty of conversation. After an in-depth study by the Revenue Laws Study Committee during the interim, the House moved forward Thursday with a wide-ranging tax bill that would scale back the powers of local governments to tax businesses and place a new tax on electronic cigarettes.