Pardon Our Dust
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While the threat of severe weather may have sent lawmakers home a bit early this week, members of the North Carolina General Assembly still had a week packed full of committee meetings, bill filings, and floor votes. Even though the severe weather across the country delayed the shipment of vaccine doses to a handful of states, North Carolina has administered 1,882,628 doses of the COVID-19 vaccine with over half a million North Carolinians already completing both doses of the shot. For more information on vaccination data or individual eligibility, click here.
As of Thursday morning, in the state of North Carolina, there were 833,423 confirmed cases of the coronavirus, 9,774,085 completed tests, 10,766 deaths, and 1,892 current hospitalizations. As we all continue to feel the effects of the global pandemic and adjust to a new normal, we want to highlight a few ways our clients across North Carolina have worked to support residents and make this time a little easier for those throughout the state. Read more about what our clients are doing to help by clicking here.
For more information on COVID-19 in North Carolina, click here to visit the Department of Health and Human Services website, and be sure to stay up to date on the latest federal guidelines issued by the Centers for Disease Control and Prevention (CDC) by clicking here.
Summer School
This week, House Speaker Tim Moore (R-Cleveland) unveiled his plan to try to make up some of the lost ground students have experienced due to COVID-19 and almost a year of remote instruction. HB 82: Summer Learning Choice for NC Families outlines a summer learning program that would give priority to students who are at high risk of course or grade failure but would allow students who do not meet the high-risk criteria to participate should there be enough seats available. The summer programs would not be required or mandated for any group of students, Speaker Moore and other bill sponsors explained to the House Committee on Education K-12 Wednesday afternoon. Local education agencies (LEAs) would notify parents of high-risk students that their child is eligible to participate in the program but the final decision of whether to enroll in the program would be left up to the parent.
Teachers participating in the program would be offered short-term contracts with their school to staff and instruct these programs, but would not be required to participate. Each LEA would have the flexibility to offer their own contracts to teachers and other school personnel in order to incentivize staff to engage with the program. Bill sponsors hope to get the legislation through by April since that is when principals begin to contract with teachers for the next school year.
Speaker Moore explained to the committee that the programs would offer transportation to and from the school, a meal, and essentially everything that schools typically provide during the year. He noted that HB 82 would allow LEAs to use federal funds to operate these programs, including their share of the $1.8 billion appropriated by the legislature in SB 36: 2020 COVID Relief Bill Modifications.
Another one of the bill’s sponsors, Rep. Jeffrey Elmore (R-Wilkes), spoke to the committee about the intent of the bill, emphasizing the need for creative and innovative thinking when it comes to the program in order to incentivize students and teachers to take part. Rep. Elmore outlined the program as a way for teachers to offer instruction or activities that they may not have the time to do during the typical school year, especially with the lack of hands on learning opportunities available to students over the past year.
Speaker Moore, Rep. Elmore, and other bill sponsors expressed to members that they know it is not a perfect solution, but that it is a place to start. They encouraged feedback from lawmakers, the public, and educators in hopes of addressing any concerns, making the bill strong enough to pass with unanimous support. HB 82 was up for discussion only during the committee meeting Wednesday but will be back before the group next week when committee chairs plan to discuss any amendments and vote the bill out of committee.
Classroom Return
The bill that would require all schools in North Carolina to reopen for some form of in-person instruction made its way to the Governor’s desk this week. SB 37: In-Person Learning Choice for Families has been moving through the General Assembly over the last few weeks as lawmakers push for students to return to the classroom. Last week, the Senate decided not to go along with the changes the House made to bill, sending it to conference committee over the weekend. The conference report received its final votes this week after members reached an agreement on bill language that would direct schools to come up with and implement alternative work options for teachers that are at high risk of severe illness due to COVID-19. The provision would also allow for the alternative work option for teachers that are caretakers of a minor at increased risk due to COVID-19. The conference report was adopted with a 31-16 vote in the Senate and a 77-42 vote in the House – both of which are veto-proof majorities.
SB 37 requires all LEAs to reopen for in-person instruction for the remainder of the school year. Schools would be required to offer Plan A, complete in-person instruction with minimal social distancing, or Plan B, a hybrid of in-person and remote instruction with moderate social distancing, for all students grades K-12. A remote option would remain available for all students should parents decide to stick with remote learning. Schools would be required to follow the health and safety protocols outlined in the Department of Health and Human Services (DHHS) guidance document, StrongSchools NC Public Health Toolkit (K-12).
Shortly after SB 37 started to move through the legislature, Governor Roy Cooper (D) held a press conference with Superintendent of Public Instruction, Catherine Truitt (R), State Board of Education Chairman, Eric Davis, and DHHS Secretary Mandy Cohen urging schools to reopen under Plan A or Plan B, but did not mandate the districts to do so. The DHHS guidance document also endorses only a Plan B option for middle and high school students, not Plan A, because of their increased risk of spreading of the virus compared to K-5 students.
As the bill made its way through the General Assembly and over to the Governor’s desk, Superintendent Truitt issued a press release expressing her support for the legislation. However, Governor Cooper is still unlikely to sign the bill. The Governor expressed his concerns about the legislation in a press release and during a press conference Thursday, stating that he would continue to urge schools to reopen for some form in-person instruction while also working with the legislature to come up with a new bill that he could sign. It is unclear whether Gov. Cooper will veto the bill, though it did pass with veto-proof majorities in both chambers, or simply run out the clock and let the bill become law without his signature.
Budget Forecast
North Carolina’s financial future is looking much brighter than many experts expected, especially when compared to other neighboring states, according to the recently released consensus revenue forecast and budget projections. Both the consensus revenue forecast, presented by NCGA senior economist Dr. Barry Boardman, and the biennium budget outlook, presented by Jennifer Hoffmann, were brought before the Joint Appropriations Committee Wednesday morning. The consensus revenue forecast and budget projections are typically needed before the Governor or the General Assembly release budget priorities or funding suggestions for the upcoming biennium.
While not outlined in statute, the informal consensus revenue process has been conducted the same way for years. The General Assembly’s Fiscal Research Division and the Office of State Budget and Management each develop their own independent forecasts before coming together, discussing any differences they may have, and putting together a consensus report. The consensus revenue forecast projects $4.13 billion in over collections, which is almost $2 billion higher than what was projected earlier in the year.
This increase is the result of federal stimulus packages, last year’s delayed tax filing deadline, and the K-shaped recession and recovery. Forecasters found that middle and upper income individuals experienced much less of an impact financially over the last year but that the recession has hit lower income individuals, such as restaurant and service industry workers, particularly hard. Once these jobs go away or when these types of businesses close, it takes a while for them to come back.
North Carolina’s economy has fared well through the recession because the state’s tax structure relies more on upper and middle-income individuals or households to collect revenue in addition to the mix of industry across the state. The tech and banking industries, for example, have done extremely well during this time, and while the state does rely some on struggling industries, such as hospitality and tourism, it does not rely on them at the same level as a state like Florida.
The state has also been able to capture additional revenue from sales tax collections, which increased about 8%. This increase, in large part, comes from the exponential growth in online sales throughout the last year. North Carolina was able to capture this revenue through both the marketplace facilitator provision passed during the last legislative session as well as the Supreme Court decision in South Dakota v. Wayfair, Inc.
Overall, both presentations showed lawmakers that they are likely to have much more money to plan their budget for the next biennium with than most originally anticipated.
Upcoming Legislative Meetings
Monday, February 22
4:00PM Senate: Session Convenes
5:00PM Senate: Rules and Operations
Tuesday, February 23
8:30AM House: Appropriations, Education (Joint)
8:30AM House: Appropriations, Justice and Public Safety (Joint)
8:30AM House: Appropriations, General Government (Joint)
8:30AM Senate: Joint Appropriations on Education/Higher Education
8:30AM Senate: Joint Appropriations on Justice and Public Safety
8:30AM Senate: Joint Appropriations on General Government and Information Technology
10:00AM House: Health
1:00PM House: Local Government
1:00PM House: Education – K-12
2:00PM House: Homeland Security, Military, and Veterans Affairs
3:00PM House: Judiciary 1
3:00PM House: Energy and Public Utilities
Wednesday, February 24
8:30AM House: Appropriations, Transportation (Joint)
8:30AM Senate: Joint Appropriations on Department of Transportation
11:00AM House: Judiciary 3
12:00PM House: Alcoholic Beverage Control
Thursday, February 25
11:00AM House: Education – Universities