A budget agreement was reached over the weekend. If all goes according to plan, the conference report will be posted later today and voted on by the end of the week, finalizing the $22.3B spending plan for 2016-17. Sources close to the final negotiations tell us the standard deduction will be raised to $17,500 over two years. State retirees get a one time bonus. State employee pay will rise 3% with half across the board raises and the other 1.5%, a mix of bonuses and merit pay. The average teacher pay is raised to over $50k with further pay increases over three years.
Passing of the budget signals the end of the short session is near. The July 4th adjournment goal is within reach.
What’s left? 466 bills have gotten some kind of action in 2016 with hundreds still on the table for consideration before adjournment.
- What is it? Constitutional protections, energy issues, education changes, additional regulatory reforms and of course whether incentives or free markets are better for economic growth.
- Where is it? Things get crazy in the last minute flurry of the session. Late night sessions, quickly called meetings, back room negotiations, completely changed bills. It’s hard to keep up.
- Why does it matter? Some of the remaining bills are bad ideas; some are very good. Some things are time sensitive. If not done before short session adjournment, the next time for action is when the new General Assembly convenes in late January 2017, with any real action mid to late March. A delay can mean costs and risk – to your pocketbook, to your property, to your freedom. Some ideas will move forward, others will expire with the final strike of the gavel.
Here’s the breakdown – what is it, where is it and why it matters – on what we’ll be watching this week:
- HB 3, Constitutional amendments to ensure eminent domain protections, mandate 2 ½% of General Fund into savings until savings reach 12% of total General Fund, lower cap from personal income tax from 10% to 5.5% and preserve the right to hunt and fish
- Passed Senate Rules Committee, on Senate floor for Monday, expected to pass by required 30 (or more) votes and go to House.
- Protecting property rights with an eminent domain amendment is long overdue. More on this one here.
Coal Ash Management
- SB 71 Requires Duke Energy to provide safe water supply to households with private wells living within close proximity to coal ash basins, makes 2.5 million tons of coal ash available for re-use into concrete, sets out a system for classification and an associated closure plan for each coal ash impoundment with public comments, input from Department of Environmental Quality, Environmental Management Commission and final approval by the Coal Ash Management Commission and addresses separation of powers questions regarding appointments to the Coal Ash Management and other commissions.
- Passed the General Assembly and ratified on June 1, 2016, Governor vetoed on June 6, 2016, sent back to General Assembly, referred to Senate Rules Committee. The bill can either be re-written to comply with the governor’s objections, or the veto can be over-ridden with three-fifths of those members present and voting.
- Without this bill, complete removal of all coal ash must begin by July 17, regardless of the danger or threat each basin poses. Cost estimates for this exceed $10B, paid for by energy customers. A measured approach, as set out in this bill is needed to avoid unnecessary huge increases in energy costs. Although there has been mixed reports on danger to water supplies to households near coal ash basins, peace of mind for those folks requires the proposed clean water supply provisions now. A NC Supreme Court decision requires clarification and compliance with separations of powers laid out in the state constitution with appointments to the Coal Ash Management Commission.
- HB 1080 offers turnaround help to failing schools. Think of this as the Education Super-heros Bill. Thousands of kids are stuck in failing schools with no hope to get out, test scores are plummeting, opportunity is rushing past them. Years of failed policies have failed; it’s time to call in the Super-heroes. Five of the worst schools get an expert no-nonsense turnaround team with authority to restructure the school and get them back on track. School districts with an ASD school could expand that flexibility to three additional schools creating an innovation zone. And finally where needed, a superhero principal with a proven record could be called in to take over a school, make changes.
- Passed House 60-49, passed Senate Education Committee with some changes, on Senate calendar for Monday. If passes, will have to go back to House for concurrence.
- Failing schools are failing kids. Previous reform attempts have not worked. It’s time to call in the super-heros. Save the kids. We can’t wait on this one.
- HB 169, Regulatory Reduction Act of 2016 is actually the Senate version of reg reform; SB 303 Regulatory Reform Act of 2016 is the House version.
- HB 169 in it’s original version passed the House 72-35, went over to the Senate and was replaced with Senate reform language, passed the Senate 30-15, sent back to House where it was referred to House Reg Reform Committee.SB 303 passed the Senate 40-9, went over to the House where the House replaced with it’s version of reg reform. It passed the House 111-0, went back over to Senate, Senate voted not to concur.We anticipate that parts of the two bills (and possibly other regulatory bills) will be combined into one final Regulatory Reform Act of 2016.
- A very good idea endorsed by JLF, requires all rules with significant financial cost of $10M over 5 years get additional scrutiny and those rules with $100M cost over 5 years require legislative review and approval. Other provisions continue regulatory reforms begun in 2011, moving towards getting government off the backs of citizens and businesses so free markets can work and NC’s economy can grow.
- HB 1007, amend occupational licensing boards/statutes, fixes NC law to comply with SCOTUS decision in the NC dental whitening case, increases transparency to monitor the activities of occupational licensing boards, makes boards liable for costs and legal fees that workers incur in fighting boards if the worker prevails, requires boards to acknowledge that they aren’t legal adjudicators. It sunsets all occupational licensing boards with 1,500 or fewer licensees in Nov 2019.
- A Proposed Committee Substitute was introduced in Senate Finance Committee 6/21/16 for discussion only. The bill would have to be brought up again in committee, the PCS accepted, then heard and voted on for it to move. The new language is not available on line, but you can access it here (Occupational licensing).
- North Carolina has the 4th most restrictive occupational licensing in the country. Sun- setting the boards as outlined in bill would affect 23 of NC’s 57 licensing boards, freeing over 17,000 workers from a tax on their jobs. Removing barriers to enter professions offers more opportunity and freedom to workers. See more here.
New Markets Tax Credit
- Identical bills SB 826 and HB 1090 have been introduced, titled “Prosperity and Economic Opportunity for All NC” includes a provision expanding crowd funding, establishing a new markets tax credit and various other expansions of carve-outs, special tax treatments and cronyism. The Crowd funding piece was put into another bill.
- HB 1090 was heard “for discussion only” in House Finance Committee. They allowed comments from two people – one was a venture capitalist company representative set to make a lot of money from the special carve outs, the other was me. The House bill sits in House Finance Committee; the Senate bill has a serial referral (if it passes, it moves on) to Commerce, then Appropriations, then Finance. Hopefully we were able to remind legislators that more incentives/special credits/crony carve-outs are the wrong way to go and they will hold fast against enacting new market credits.
- Eliminating carve-outs, special treatment, targeted credits and corporate welfare programs has set NC on the right track towards economic growth, New Market Tax Credit takes NC in the wrong direction.
Repeal Certificate of Need
- HB 161 Proposed Committee Substitute, complete repeal of Certificate of Need (CON) in 2021. The repeal language is not available online, but you can access it here (Certificate of Need).
- Original language of the bill would adopt the bobcat as NC’s official state cat, passed the House on 4/27/15 and was sent to Senate. On 6/7/16, the bill was gutted and amended with language to repeal CON in 2021. It was introduced as a PSC for HB 161 in the Senate Health Committee and was heard “for discussion only” The Health Committee would have to bring it up again for a vote for it to move. We are not optimistic but ever hopeful.
- NC’s 4th most restrictive in the country CON laws limit access, drive costs up, restrict innovation and interfere with the doctor patient relationship, putting bottom lines before patients. JLF has argued since 2005, that it is time to restore healthcare freedom, repeal Certificate of Need Laws in NC. Although it is doubtful that HB 161 will get a full hearing and a positive vote by short session adjournment, significant progress was made this session. A provision in the budget waived certificate of need laws to provide desperately needed mental health beds. We believe this gives us a compelling argument for CON repeal in 2017.
- HB 657, Math Standard Course of Study Revisions, offers choice to high school students between an integrated curriculum of Math 1, Math 2 Math 3 or the traditional track of Algebra 1, Geometry, Algebra II.
- HB 657 started out as a bill directing the Board of Governors to study fixed tuition at the university system, passed the House 117-0 and was sent over to the Senate in April of 2015, where it sat for over a year. Earlier this month, the Senate gutted the original language and replaced it with the provision described above. The Senate passed their version of H 657 33-13. It went back to the House, they voted not to concur with the Senate changes. A conference committee has been appointed to work out the differences and present a new version for an up or down vote in both chambers. BTW: The fixed tuition idea from the original language of H 657 was integrated into the budget with a pilot program at WCU and UNC-Pembroke.
- Every student learns differently and the best education is the one that meets that students’ needs. Charters and vouchers offer schools of choice, what about choices in classes and instruction also? The opportunities are limitless. If this idea does not get approval in the short session, it’s an idea worth pursuing in 2017, along with on-line classes and other individualized learning initiatives.
National Security over Wind Farms
- .HB 763, modifies the permitting process for wind farms allowing the Dept of Military and Veteran Affairs to consider and review applications.
- Another gut and amend bill, the original language went through the House as a Regulatory Reform bill in April 2015. It was changed in the Senate on July 15, 2016 to the Military Operations Act of 2016, passed the Senate 33 to 14, gone back over the House and currently sits in the House Rules Committee.
- Don Carrington in a September 2015 Carolina Journal piece warned of possible interference with military operations and illegal drug trafficking surveillance posed by wind farm turbines constructed in eastern North Carolina. Threats to national security as well as maintaining North Carolina’s strong military population makes keeping wind farm interference under check a good idea.
In a few days, the 2015-16 will come to close and with it all the pending bills expire. The new General Assembly will start all over again when they convene in January of 2017.