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NC Legislative Update: June 1, 2018

June 1, 2018

This Week

Lawmakers made a swift transition this week, shifting the focus from regular business, to the state budget.  There have been rumors since early this year that the General Assembly might utilize an unrelated bill in a Conference Committee, for changes to the second year of the State’s biennial budget.  The significance of this is that a Conference Report cannot be amended.  Those rumors became a reality this week when lawmakers unveiled the Conference Report to Senate Bill 99 on Monday evening, now entitled Appropriations Act of 2018.  In total, the budget for the 2018-19 fiscal year spends $23.9 Billion, a 3.85% increase from the previous year.  Now that the budget has been addressed, the next few weeks are expected to be hectic from now until adjournment, which some are predicting could be as early as June 15th.

While the budget was in the spotlight, lawmakers also addressed several other pieces of impactful legislation.  Mecklenburg County was the center of two notable bills that made their way through either chamber.  The Senate moved legislation to redraw the judicial districts for Superior Court seats within Mecklenburg County.  The county currently has eight Superior Court Judges in three districts.  North Carolina has not redrawn judicial districts in decades, which has created significant population disparities in judicial districts across the state.  Mecklenburg County, which has massive population disparities in its existing three districts, was touted by lawmakers as an example when they first proposed a statewide judicial redistricting bill.  Senate Bill 757 would increase the number of districts from three to eight, with one judge for each district.  The county’s 21 District Court seats would also run in those districts.  The bill passed the Senate 34-15 on party lines.  The House Rules Committee noticed a same-day meeting Friday afternoon to hear a PCS to the bill to include a Wake County judicial redistricting plan.

The way you choose judges could change dramatically. Why that worries critics. – Charlotte Observer

Mecklenburg was also the subject of a charter school bill in a PCS to House Bill 514, which would allow four towns within the county to create their own charter schools.  Residents of the towns of Mint Hill, Matthews, Huntersville, and Cornelius, have been unhappy with the county’s student assignment plan.  Debate on the measure escalated quickly when Democrats began raising the issue of race, asserting that the bill would essentially resegregate those communities.  While the bill affects just those towns, some fear the measure could have statewide implications.  The measure passed its second reading 30-20, with five Republicans voting with Democrats against the measure.  It is calendared for its final reading on Monday.

Bill to let towns start charter schools moves forward – WRAL

The Senate Agriculture, Environment & Natural Resources Committee unveiled a PCS to House Bill 361, which now addresses leases for shellfish production.  The bill would allow non-residents of the State to lease up to 300 acres for shellfish production, with a few exceptions.  Stakeholders expressed concerns with large corporations entering the state to the detriment of smaller existing operations.  Currently, a resident may lease up to 50 acres.  Others raised concerns that if the cap is raised to 300 acres, it should be divided into smaller tracts so that the obstruction to boaters in navigable waters is limited.  Since the bill was for discussion only, the Committee has not yet adopted the PCS and will need to do so at a future meeting.

Budget

Restrictions on Conference Reports prevent members from being able to submit amendments, forcing members into voting “aye” or “no” on the Conference Report as presented.  Budget writers released the proposal Monday evening and moved directly into joint committees throughout Tuesday, holding joint meetings of the Appropriations, Finance, and Pensions/Retirement Committees to review the proposal.  The Senate debated the bill Wednesday and Thursday, while the house debated the bill Thursday and Friday.  The bill passed the Senate largely on party lines 36-14, with only Sen. Don Davis (D-Greene) breaking ranks and voting with Republicans. The House ultimately passed the budget 66-44, largely along party lines, with Rep. John Blust (R-Guilford) joining Democrats in voting against it.

The budget ultimately passes as a Conference Report every year, but not until after the regular committee process has been completed in each chamber.  While Democrats opposed several specific items included in the proposal, the bulk of their dissent focused on the lack of transparency and inability to participate in crafting the budget through the committee and amendment process.

The budget proposal now goes to the Governor, who will have ten days to take action on the budget.  Gov. Cooper (D) is expected to veto the legislation.

Some highlights of the budget include:

Notable Provisions

  • Increases the savings reserve “rainy day” fund to $2 Billion, intended to supplement the State’s revenues during the next economic downturn.
  • Provides a 2% increase for State employees and raises minimum State salary to $31,200, which equates to $15 an hour, affecting roughly 12% of State employees.
  • Average 6.5% increase in teacher pay, slightly higher than the 6.2% that lawmakers had previously scheduled for the upcoming school year.
  • Average 6.9% increase in principal pay.
  • Average 8% salary increase for State Highway Patrol officers, setting minimum salaries to $44,000.
  • Average 4% salary increase for correctional officers.
  • Provides an additional $60 Million for disaster relief and recovery.
  • Eliminates the International Recruiting Office at Commerce and instead directs the money to the Economic Development Partnership for recruiting foreign businesses.
  • Allocates an additional $10 Million to expand rural broadband.
  • Delays the implementation of the Jordan Lake Rules until 2020 and allocates $1 Million to the NC Policy Collaboratory to study the lake’s pollution.  It also directs DEQ to rewrite rules using the results of the study once it is completed.

Education

  • Overall funding increase of $700 Million in public education funding.
  • Reinstated the $500,000 that was cut from the UNC School of Law last year.
  • Provides $35 Million overall to school safety initiatives.
  • Directs $241 Million in lottery funds for building or upgrading school facilities.
  • Extends the virtual charter school pilot program.
  • Allows municipal governments to use property taxes to open charter schools.

Health & Human Services

  • Fully funds the NC Pre-K waiting list.
  • Provides an additional $8.6 Million for the energy assistance program.
  • Provides $5 Million for the opening of Broughton Hospital.
  • Provides funding to audit  Medicaid eligibility at the county level.

Transportation

  • Increases the amount of money DOT may can spend on transformative projects from $5 Million to $10 Million and increases the cap for five years worth of projects from $10 Million to $100 Million.
  • Withholds state funds for the Durham/Orange Light-Rail Project.
  • Directs DMV to vacate their current location in downtown Raleigh and move to a leased space outside of the city limits, somewhere in Wake County or a surrounding county.
  • Directs that the $92 Million the State received from the Volkswagen settlement emissions lawsuit will be allocated by the NCGA rather than the Governor.
  • Delays MAP Act moratorium one more year to July 1, 2019.
  • Requires legislative approval if the administration attempts to change or cancel the contract for I-77 toll lanes.

Since the budget document could not be amended, it was not possible to correct any unintentional errors or omissions.  One example is the unintended omission of funding for the Suicide Prevention Hotline.  Lawmakers have said there will be a budget technical corrections bill before they adjourn.

Republicans release legislative budget with pay raise for teachers, principals – N&O
North Carolina budget adjustments advance in the legislature – AP
Acrimonious budget debate roils House – WRAL
Adjusted State Budget Diverts $50 Million From Childhood Development Programs – WUNC
Anti-abortion pregnancy clinics and Christian hunting clubs get money in NC budget – N&O
Republicans release legislative budget with pay raise for teachers, principals – N&O
Democrat compares budget process to rape, NC to North Korea – N&O

In Other News

Speaker Moore (R-Cleveland) highlighted a recent ranking from the National Education Association (NEA), a national teacher union that noted NC had the third fastest rising teacher pay in the United States over the last five years.

Teachers Union Ranks N.C. Pay Raises 3rd Largest in the Nation Since 2013-14 – Press Release


In addition to providing Government Affairs Services, the Nexsen Pruet Public Policy team provides attorneys and clients with a newsletter summarizing the week's activities and conveying the inner workings of the legislative process and state government in Raleigh during the legislative session. Please feel free to pass this along to your clients or other interested parties. If you would like to receive the update in your inbox, please email kdjones@nexsenpruet.com to be added to the list. If you are interested in learning more about how Nexsen Pruet can help you achieve your public policy goals and acquiring legislative representation in North Carolina or South Carolina, please reach out to Sandy Sands at ssands@nexsenpruet.com or TJ Bugbee at tjbugbee@nexsenpruet.com.

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