This week, House lawmakers continued the difficult task of writing North Carolina’s budget for the coming fiscal year. In an attempt to shore up our state’s expected $4 billion shortfall, House members are considering a number of money-saving measures. It is challenging to decide where and how to save money, but these hard decisions are unavoidable if we are to meet our Constitutional duty to balance the budget in the face of a 20 percent drop in revenues.
Many important, effective and popular programs are going to be eliminated or severely cut back as we refine our budget over the next few weeks. At the same time, we may have to increase some fees.
These budget saving measures may be painful in the short term, but they are necessary if we are to protect programs and services that enable us to provide a quality education at all levels, meet the health needs of our most vulnerable persons, maintain and cultivate jobs, and keep us safe in our homes, neighborhoods and schools.
We are trying to spur the economy when we can and protect people’s investments in their homes. This week, we approved several bills that could help the state attract new investment and new building. I have included some information about those bills below.
I hope you will contact me if you have questions, or if I can be of service. Thank you as always for your support and your interest in our state.
Economy
_ The House approved a bill this week that may help North Carolina bring in a new company that would be required to invest $1 billion. The bill (SB 575) changes the way corporate income tax liability is calculated for multi-state taxpayers by considering only the company’s sales in the state when determining their tax bills. The existing formula also accounts for companies’ property holdings and payroll. The change applies only to companies that invest $1 billion or more over a nine-year period. No company in the state currently qualifies for the incentive. The proposal also requires companies to locate in one of the state's poorest counties, provide health insurance, meet a wage standard, and forego other state grants or tax breaks before they can qualify for the incentive.
_Counties and municipalities in North Carolina would be authorized to provide development incentives in exchange for reductions in energy consumption under a bill that passed the House this week (SB 52). More specifically, counties and municipalities would be able to grant incentives to a developer or builder if they agree to construct a new development or reconstruct an existing development in a way that significantly reduces energy consumption.
_The State Treasurer’s office would be given more flexibility to increase investment income and better manage risk under a bill that passed the House this week (SB 703). The bill would allow the treasurer to invest up to 5 percent of the state’s portfolio in commodities such as timber, real estate and treasury inflation protected securities, or TIPS. The bill does not allow investments in derivatives or other risky assets.
Notes
_On Wednesday, members of the House officially honored the 100th anniversary of the High Point Furniture Market and the memory of its founders (HJR 1538). On March 1, 1909, the first Southern Furniture Market opened in High Point to showcase the products of High Point and North Carolina furniture manufacturers. This first High Point Furniture Market was the culmination of efforts by regional furniture producers and High Point civic leaders, including J.J. Farris, Charles F. Long, and D. Ralph Parker.
_ Miss USA, Kristen Dalton, visited Raleigh this week to address members of the General Assembly. The reigning beauty queen is from Wilmington, and is a student at East Carolina University.
Please remember that you can listen to each day’s session, committee meetings and press conferences on the General Assembly’s website at www.ncleg.net. Once on the site, select "audio," and then make your selection – House Chamber, Senate Chamber, Appropriations Committee Room or Press Conference Room.
Prepared with the assistance of the Speaker’s Office of Communications
From the Office of Representative Jimmy L. Love, Sr. - May 21, 2009
After two weeks of long sessions and committee meetings dealing with bills that have no monetary impact, the House of Representatives has turned its focus to crafting the next budget. The outlook is grim, as I have shared with you a number of times, but we are doing our best to accommodate a 20 percent drop in revenue.
As always, education will remain our top priority and it’s a priority we share with both Gov. Perdue and Senate budget writers. Education cannot be spared from cuts, though, since it comprises nearly 60 percent of our budget. Our aim is to trim judiciously so that we protect the classroom and allow our children to receive the best possible instruction we can provide.
As we approach Memorial Day, it is fitting to acknowledge some measures we have taken this legislative session to improve the lives of veterans and members of the Armed Forces in North Carolina. These measures include everything from making it easier for them to renew their drivers’ licenses and cast timely ballots to protecting our severely injured veterans from being denied unemployment insurance benefits if they lose a job as a result of injuries sustained in war.
Memorial Day was established in 1868 to pay tribute to individuals who have made the ultimate sacrifice for our nation. We must never forget the importance of their oaths and their sacrifices.
As always, I welcome any thoughts or ideas you may have to share with me and I hope you will let me know if I can be of any service.
Honor Fallen Soldiers
_On Thursday, members of the House honored the life and memory of the fallen soldiers who served our great nation in Operations Iraqi Freedom and Enduring Freedom in Iraq and Afghanistan with a House Joint Resolution (HJR 1652). In the resolution, the General Assembly expressed profound gratitude to the North Carolinians who were killed in the line of duty during these military operations. Each North Carolinian who was killed in the line of duty while carrying out these operations is named in the resolution.
Transportation
_ The Division of Motor Vehicles would be allowed to waive the commercial motor vehicles skills test for qualified military personnel who have operated similar vehicles for at least two years prior to applying for a commercial driver’s license under a bill that has passed the Senate (SB 423 = HB 271). The legislation, which is now in the House Committee on Transportation, would also waive the requirement if the applicant has completed a similar skills test while in the military.
_Two bills would make it easier for members of the military reserves to renew their drivers’ licenses after they receive deployment orders. A bill that has passed the Senate (SB 809) would allow members of the Armed Forces to renew their drivers’ licenses upon receipt of deployment orders and give them a 60-day grace period for an expired license after they are released from military duty outside of the United States. A second bill (HB 98) would have the same provisions as SB 809, except that it would allow only a 30-day grace period.
_The NC Division of Motor Vehicles would be authorized to produce military wartime veteran special plates based on defined periods of war under a bill that has passed the House (HB 1143). The bill is now in the Senate Committee on Finance.
_Legislation meant to ensure that certain special license plates that are available to military veterans are issued to the right people has passed the House (HB 1094). The bill is intended to prevent impostors from purchasing certain military license plates including plates that indicate the recipient of a Purple Heart, Distinguished Service Cross or Bronze Star. Applicants for these military plates would have to provide proof that they qualify for the plates. The bill is now in the Senate Committee on Commerce.
Employment
_State and local governments would be encouraged to use military veteran contractors under a bill that has passed the House (HB 912). State policy already encourages and promotes the use of small contractors, minority contractors, physically handicapped contractors, and female contractors in state purchasing of goods and services. The bill has now been sent to the Senate.
_House lawmakers have passed legislation regarding unemployment insurance compensation for certain severely disabled veterans who have been discharged due to a service-connected disability (HB 1124). If enacted, severely injured veterans could receive unemployment benefits if they lose their job because of a disability incurred or aggravated during active military service or because of the veteran’s absence from work to obtain care and treatment for that disability. The bill is now in the Senate Committee on Commerce.
Miscellaneous
_ North Carolina’s absentee voting laws would be improved under a measure that has passed the House (HB 614). The bill is specifically intended to improve the ability of military and overseas voters to cast timely ballots. The bill is now in the Senate Committee on Judiciary I.
_Uniformed public safety officers would be authorized to wear military service medals during the business week prior to Veterans Day and Memorial Day, the day of Veterans Day and Memorial Day, and the business day immediately following Veterans Day and Memorial Day under a bill that passed the House on Monday (HB 631). Employers would have the right to prohibit the wearing of service medals if it’s determined they pose a safety hazard to the officer or to the public. The bill is now in the Senate Committee on State and Local Government.
Notes
_Members of the General Assembly honored former Insurance Commissioner Jim Long this week for his nearly 30 years of service to the state. Long was Insurance Commissioner from 1985 until his retirement last year. His 24 years on the Council of State was the third-longest tenure of any official. Long was a native of Alamance County who also served two terms in the House of Representatives. He died in February as the result of a stroke. He was 68.
Please remember that you can listen to each day’s session, committee meetings and press conferences on the General Assembly’s website at www.ncleg.net. Once on the site, select "audio," and then make your selection – House Chamber, Senate Chamber, Appropriations Committee Room or Press Conference Room.
Prepared with the assistance of the Speaker’s Office of Communications
As always, education will remain our top priority and it’s a priority we share with both Gov. Perdue and Senate budget writers. Education cannot be spared from cuts, though, since it comprises nearly 60 percent of our budget. Our aim is to trim judiciously so that we protect the classroom and allow our children to receive the best possible instruction we can provide.
As we approach Memorial Day, it is fitting to acknowledge some measures we have taken this legislative session to improve the lives of veterans and members of the Armed Forces in North Carolina. These measures include everything from making it easier for them to renew their drivers’ licenses and cast timely ballots to protecting our severely injured veterans from being denied unemployment insurance benefits if they lose a job as a result of injuries sustained in war.
Memorial Day was established in 1868 to pay tribute to individuals who have made the ultimate sacrifice for our nation. We must never forget the importance of their oaths and their sacrifices.
As always, I welcome any thoughts or ideas you may have to share with me and I hope you will let me know if I can be of any service.
Honor Fallen Soldiers
_On Thursday, members of the House honored the life and memory of the fallen soldiers who served our great nation in Operations Iraqi Freedom and Enduring Freedom in Iraq and Afghanistan with a House Joint Resolution (HJR 1652). In the resolution, the General Assembly expressed profound gratitude to the North Carolinians who were killed in the line of duty during these military operations. Each North Carolinian who was killed in the line of duty while carrying out these operations is named in the resolution.
Transportation
_ The Division of Motor Vehicles would be allowed to waive the commercial motor vehicles skills test for qualified military personnel who have operated similar vehicles for at least two years prior to applying for a commercial driver’s license under a bill that has passed the Senate (SB 423 = HB 271). The legislation, which is now in the House Committee on Transportation, would also waive the requirement if the applicant has completed a similar skills test while in the military.
_Two bills would make it easier for members of the military reserves to renew their drivers’ licenses after they receive deployment orders. A bill that has passed the Senate (SB 809) would allow members of the Armed Forces to renew their drivers’ licenses upon receipt of deployment orders and give them a 60-day grace period for an expired license after they are released from military duty outside of the United States. A second bill (HB 98) would have the same provisions as SB 809, except that it would allow only a 30-day grace period.
_The NC Division of Motor Vehicles would be authorized to produce military wartime veteran special plates based on defined periods of war under a bill that has passed the House (HB 1143). The bill is now in the Senate Committee on Finance.
_Legislation meant to ensure that certain special license plates that are available to military veterans are issued to the right people has passed the House (HB 1094). The bill is intended to prevent impostors from purchasing certain military license plates including plates that indicate the recipient of a Purple Heart, Distinguished Service Cross or Bronze Star. Applicants for these military plates would have to provide proof that they qualify for the plates. The bill is now in the Senate Committee on Commerce.
Employment
_State and local governments would be encouraged to use military veteran contractors under a bill that has passed the House (HB 912). State policy already encourages and promotes the use of small contractors, minority contractors, physically handicapped contractors, and female contractors in state purchasing of goods and services. The bill has now been sent to the Senate.
_House lawmakers have passed legislation regarding unemployment insurance compensation for certain severely disabled veterans who have been discharged due to a service-connected disability (HB 1124). If enacted, severely injured veterans could receive unemployment benefits if they lose their job because of a disability incurred or aggravated during active military service or because of the veteran’s absence from work to obtain care and treatment for that disability. The bill is now in the Senate Committee on Commerce.
Miscellaneous
_ North Carolina’s absentee voting laws would be improved under a measure that has passed the House (HB 614). The bill is specifically intended to improve the ability of military and overseas voters to cast timely ballots. The bill is now in the Senate Committee on Judiciary I.
_Uniformed public safety officers would be authorized to wear military service medals during the business week prior to Veterans Day and Memorial Day, the day of Veterans Day and Memorial Day, and the business day immediately following Veterans Day and Memorial Day under a bill that passed the House on Monday (HB 631). Employers would have the right to prohibit the wearing of service medals if it’s determined they pose a safety hazard to the officer or to the public. The bill is now in the Senate Committee on State and Local Government.
Notes
_Members of the General Assembly honored former Insurance Commissioner Jim Long this week for his nearly 30 years of service to the state. Long was Insurance Commissioner from 1985 until his retirement last year. His 24 years on the Council of State was the third-longest tenure of any official. Long was a native of Alamance County who also served two terms in the House of Representatives. He died in February as the result of a stroke. He was 68.
Please remember that you can listen to each day’s session, committee meetings and press conferences on the General Assembly’s website at www.ncleg.net. Once on the site, select "audio," and then make your selection – House Chamber, Senate Chamber, Appropriations Committee Room or Press Conference Room.
Prepared with the assistance of the Speaker’s Office of Communications
The Raleigh Report
From the Office of Representative Jimmy L. Love, Sr.
May 15, 2009
The past two weeks in Raleigh have been extraordinarily busy as we approached the legislative “crossover” deadline. The deadline requires that all bills unrelated to spending or the budget pass out of at least one chamber or not be eligible during this biennium.
Our hard work this week has paid off, as we have made significant progress on legislation that I believe makes our state a better place to live. Among other things, we have passed legislation to protect homeowners and to add transparency to government and campaign financing. The following information highlights some other bills of interest that passed the House this week.
As always, I welcome your comments and suggestions, and I hope that you will contact me if I can be of any assistance. Thank you for taking an interest in state government.
Health
_A bill that would prohibit smoking in bars and restaurants passed both the House and the Senate this week (HB 2). The intent of the legislation is to protect North Carolinians from the harm of secondhand smoke. The bill now goes to the governor to be signed into law.
Education
_ Proposed legislation would direct the State Board of Education to study the length of school lunch periods to determine whether students have adequate time to eat. The bill (HB 1470) passed the House last week and is now in the Senate.
_Educators could intervene sooner to help at-risk students through plans intended to improve their school performance under a bill that has passed the House. Existing law allows personal education plans to be developed based on students’ performance on end-of-grade tests. A proposed bill (HB 804) would allow educators to step in if they determine the student is at risk of failing based on grades, observations, state assessments or other factors. The bill now goes to the Senate.
_The State Board of Education would be directed to develop or identify academically rigorous honors-level high school courses in healthful living under a bill that passed the House last week (HB 901). The bill is now in the Senate.
_A bill that would change the school starting date for students passed the House this week (HB 593). The legislation would require local boards of education to conduct a public hearing before determining the opening and closing dates for North Carolina public schools. The bill is now in the Senate.
_The Board of Governors at the University of North Carolina, in conjunction with the Department of Public Instruction and the North Carolina Independent Colleges and Universities, may be asked to study increasing the compulsory school attendance age. Proposed legislation (HB 188) would change the compulsory attendance age from 16 to 17 or 18 if a student hasn’t already received a high-school diploma. The Senate will consider the bill next.
_The high school graduation project would no longer be required under a bill that passed the House this week (HB 223). The legislation, introduced by Representative Love, would direct the Program Evaluation Division of the General Assembly to study the cost and effectiveness of requiring a high school graduation project. This legislation now goes to the Senate.
_The cap on the number of charter schools in the state would be increased from 100 to 106 under a bill that passed the House this week (HB 856). If enacted, the legislation would also direct the State Board of Education to develop a process of oversight to enable a timely response to inadequate school performance. The bill is now in the Senate.
_ Legislation to allow voter preregistration for qualified 16- and 17-year-olds and to encourage local boards of education to promote registration and preregistration of students (HB 1260) has passed the House. The legislation would also expand instruction on the importance of voting in the high school social studies curriculum. The bill is now in the Senate.
Protecting Homeowners
_ Homeowners associations would be required to make reasonable and diligent efforts to locate and notify a lot owner prior to filing a claim of lien for assessments -- the legal right to keep or sell somebody else's property as security for a debt, under a bill that passed the House this week (HB 806). The bill is now in the Senate.
_North Carolinians who have been victimized by predatory mortgage lenders would be helped under a bill that passed the House this week (HB 1523). The primary intent of the S.A.F.E. Mortgage Licensing Act is to ensure that mortgage loan originators operate ethically. The legislation, now pending in the Senate, would give the Commissioner of Banks broad authority to enforce this law.
Crime/Justice
_Storing and preserving DNA and biological evidence related to a crime would be the responsibility of the law enforcement agency investigating the offense under a bill that passed the House this week (HB 1190). Under existing law, clerks of court are responsible for storing such evidence, but bill supporters argue that law enforcement is better equipped for the job. The bill is now in the Senate.
_The state would be required to collect, maintain and publish statistics on the use of deadly force by law enforcement that results in death under a bill that passed the House this week (HB 266). The bill is now in the Senate.
_Taking indecent liberties with a student would be added to the list of sex offenses that require registration under the sex offender and public protection registration program under a bill that passed the House this week (HB 209). The bill is now in the Senate.
_Leaving a child unattended in a motor vehicle would be made unlawful under a bill that passed the House this week (HB 827). The law would apply to children under the age of nine. The bill is now in the Senate.
Campaign Financing
_The threshold for reporting campaign contributions would be lowered to $500 under a bill that passed the House this week (HB 388). Existing law exempts candidates who raise less than $3,000 from having to submit detailed reports of contributions, loans and expenditures. The intent of the legislation is to provide more information about how candidates raise and spend their money. The bill is now in the Senate.
_Candidates for political office could market legal services or promote other commercial activities not connected to their political campaigns without being subject to additional campaign reporting under a bill that passed the House last week (HB 1048). The bill would allow candidates to be mentioned in mailers and TV ads for their businesses, aligning North Carolina’s law more closely with the US Supreme Court decision on nonpolitical communications. The bill is now in the Senate.
_ Political candidates would not be able to accept campaign donations from a company or officers of companies that have active contracts with the state under a bill that passed the House this week (HB 961). The intent of the so-called Pay to Play legislation is to prevent possible conflicts of interest by candidates and state contractors. The Senate will consider the bill next.
Improving Government
_The state Department of Administration (DOA) would be directed to consider the fuel economy of state vehicles under a bill that passed the House last week (HB 1079). Existing law does not require the department to consider fuel economy when buying a new vehicle. The intent of the bill is to reduce the state’s carbon footprint and reduce fuel costs. DOA would be directed to submit a report outlining the quantity and cost of fuel saved. The bill is now in the Senate.
_The authority of the Division of Emergency Management would be expanded under a bill that passed the House last week (HB 381). The bill, which is now in the Senate, would give the division the ability to administer grant money and to serve as the lead state agency for hazard risk management.
_An act to clarify that a Silver Alert may be issued for a person of any age passed the House this week (H1129). The Silver Alert System is a statewide system used to notify people about missing persons believed to be suffering from dementia or other cognitive impairments. The bill is now in the Senate
_Legislation that improve North Carolina’s absentee voting laws passed the House last week (HB 614). The Senate will now take up the bill, which is specifically intended to improve the ability of military and overseas voters to cast timely ballots.
_Certain executive branch employees would be prohibited from registering as lobbyists for six months after leaving employment with the state under a bill that passed the House this week (HB 1136). The bill is now in the Senate.
_State and local governments would be encouraged to use military veteran contractors under a bill that passed the House this week (HB 912). The bill is now in the Senate.
_ More local mental health agencies would be required to report how they are spending money twice a year under a bill that passed the House this week (HB 672). The intent of the legislation is to require more transparency and accountability for state-funded mental health providers. The bill is now in the Senate.
Miscellaneous
_Legislation that is meant to restore the quality of water in North Carolina’s Jordan Reservoir passed the House this week (HB 239). If enacted, the legislation would provide for improvements in the management of the Jordan Watershed. Jordan Lake is an important drinking water source for many Triangle-area communities. The bill is now in the Senate.
_A bill that passed the House this week would prohibit mercury in unlined landfills, and would require state agencies, including community colleges and public universities, to recycle lights and thermostats containing mercury (HB 1287). If enacted, the legislation would also require the removal of products containing mercury from buildings prior to demolition. The Senate will consider the bill next.
_The North Carolina State Lottery would be prohibited from selling lottery tickets at businesses that primarily exist to cash checks or money orders under a bill that passed the House this week (HB 1289).
_Children in North Carolina would be further protected from cyber bullying under a bill that passed the House this week (HB 1261). If enacted, the legislation would make cyber bullying a criminal offense punishable as a Class 1 Misdemeanor. The bill is now in the Senate.
Notes
_On Wednesday, Veterans from across the state came to Raleigh to talk to lawmakers about their legislative priorities this session.
Prepared with the assistance of the Speaker’s Office of Communications
From the Office of Representative Jimmy L. Love, Sr. May 7, 2009
This has been a pivotal week in Raleigh as we work to develop the budget and address the state’s economic situation. This week, we received the most updated and accurate financial figures available to us, and I would like to share them with you. The following information is directly from a memo prepared by Barry Boardman, Ph.D., our chief economist in the Fiscal Research Division of the General Assembly. The numbers he presents below represent a consensus between the Fiscal Research Division and the Office of State Budget and Management.
Thank you as always for your interest in our state and please contact me if I can be of any assistance.
Current Year Revenues
The estimated revenue shortfall for the current year has risen from $2.217 billion to $3.167 billion, an additional decrease in revenues of $949.5 million over the January forecast. Estimates are for General Fund collections to fall an unprecedented 10.8% below what was collected in FY2007-08. Looking over collections data dating back to 1971, the state has never experienced a fall-off in collections of this magnitude. Of the last two recessions, only the 2001-02 baseline shortfall was of major significance at 6.2%.
Most of the change in the May forecast is due to an unparalleled fall in April income tax collections. April 15 final payment checks fell 39.7%. A primary reason is the widespread impact of the recession. Declines in all sectors of the economy have accelerated losses in income, especially from capital gains in the equity and real estate markets. The January forecast envisioned a decline in final payments of 25%, which was greater than the last two recessions (20-21%), but nowhere close to the 39.7% decline actually experienced this April.
In many years a “ballooning” effect can occur at this time of the year when first-quarter estimated income tax payments from high-income individuals track the final payment experience. For example, estimated tax payments fell 40.7% this April. This compares to the 29.1% decline in January.
The revised sales tax estimate is essentially the same as the January estimate. The reason is the growth of this tax has slowed at the expected rate. Baseline sales tax collections for the year are expected to finish down 6.5% over last year. Heavy losses for the first and second quarter of 2009 of 9% will result in a baseline loss of 6.5% for the fiscal year.
Withholding tax receipts on wages and salaries rise and fall more gradually than some of the more volatile taxes. The January forecast had built in slower growth for the latter part of the year due to the continued employment losses. Therefore, little change was made to withholding in the April update for the rest of the fiscal year. Through April withholding receipts are down 1.6% and this downward trend is expected to continue.
Outlook For The 2009-11 Biennium
The recession that began in December 2007, spurred by the housing market downturn, spread throughout the economy during 2008. The global financial market collapse in October 2008 sent an already contracting economy into a prolonged and severe recession. It appears now that the worst may be behind us, but there remains a long way to go. Based on the latest survey of national forecasters, compiled by the Wall Street Journal, indications are that an economic recovery is unlikely until the last quarter of this year. We agree with most of these and other analysts that the economic recovery is still 4 to 6 months away and the State’s experience will track closely with the national picture. This recession stands to be the longest economic contraction since the Great Depression.
Employment has always been a lagging economic indicator, not changing direction until well after the turn in the business cycle. This means, in North Carolina, employment gains may not occur until the end of 2010. Since the January forecast, employment outlook for the state has been downgraded. Employment is now expected to experience losses closer to 3% in FY 2009-10 rather than 1%.
Employment is closely tied to personal income and employment losses from layoffs and cutbacks by key businesses such as the financial sector have dampened the prospects for income growth over the biennium. The January forecast envisioned 2.1% and 4.9% growth in personal income for the respective fiscal years. Those numbers have been lowered to a negative 0.3% (-2.5% in wage & salary) and positive 2.4%, respectively.
During the last few years, retail sales in North Carolina closely tracked the fortunes of the residential real estate market and consumer confidence. Reasons included gains from the sale of homes, the ability to increase financial resources from home equity loans and mortgage refinancing, and the increase demand for furniture and appliances for new homes. Sales in the foreseeable future will not be fueled by wealth from real estate. Plus, with tighter credit, lower employment, and stagnant or falling wages sales tax collections will continue to fall the first part of the biennium with only a modest rebound expected in 2010-11. The forecast has baseline sales taxes falling in 2009-10 by 4.0% and a mild up-tick of 2.1% the following year.
A key reason for another year of volatile April income tax revenue was capital gains on stocks and real estate. We think these were down 35% for 2008, following a 27% increase in 2006 and 34% in 2007. During the past cycle an unusually large share of the rise was due to real estate. This sector continues to be in decline, plus at the same time stock prices had fallen by nearly 40% at the end of 2008. The forecasting challenge is to acknowledge the long-term historical pattern of capital gains: a couple of years of hyper-growth is always followed by steep declines. For this reason the revised revenue forecast assumes another year of large losses eroding any gains with another 40% drop for the 2009 tax year and as losses continue to mount a cautious 20% decline for 2010 tax year.
Corporate profits are expected to decline through 2009. Rapid depletion of inventories has helped some businesses going into the rest of 2009 and 2010, but the severe global recession will assure weak demand for products even after the U.S. begins its recovery. Corporate income is always very volatile with yearly swings by as much as 30% to 40%. Through April, corporate income tax collections were down about 18%. For the upcoming biennium we think these receipts will be flat reflecting the very mild economic recovery, plus the losses from the lengthy recession will continue to be taken against the bottom line.
Putting all these assumptions together leads to an estimated 1.9% lower baseline of General Fund revenues in 2009-10, and 3.2% growth in 2010-11. These rates compare to 9.2% in 2006-07, 3.1% in 2007-08 and the current unprecedented projection of -10.0% for 2008-09.
The revenue outlook for the 2009-11 biennium reflects a continuation of a severe and prolonged economic slowdown, with only a mild, slowly developing, recovery in 2010. Employment will lag behind the recovery and revenue collections will lag behind improvements in the employment picture. Therefore, the prospects for revenue collections to return to long term growth patterns is not expected any earlier than 2011.
Notes
_Members of the House officially honored the life and memory of Roscoe Jacobs, Sr., former Chief of the Waccamaw Siouan Tribe, with a resolution on Wednesday (HJR 343). Chief Jacobs not only worked for the betterment of his tribe but also for his community, actively participating as a member of numerous organizations, including the Columbus County Chapter of the American Red Cross and the North Carolina Commission of Indian Affairs. Chief Jacobs died on January 27 at the age of 86.
_Members of the State Employees Association of North Carolina gathered at the General Assembly on Tuesday to lobby lawmakers working on next year’s budget.
Please remember that you can listen to each day’s session, committee meetings and press conferences on the General Assembly’s website at www.ncleg.net. Once on the site, select "audio," and then make your selection – House Chamber, Senate Chamber, Appropriations Committee Room or Press Conference Room.
From the Office of Representative Jimmy L. Love, Sr. April 30, 2009
From the Office of Representative Jimmy L. Love, Sr.
April 30, 2009
Governor Bev Perdue received the latest information about our revenue picture and announced that the state collected $1 billion less in taxes than had been anticipated. The governor had to take quick action to make up the shortfall, since our constitution requires that the state end every fiscal year with a balanced budget. In this case, she has two months to find $1 billion in savings, in addition to the $2.2 billion for which she had already planned. That forced her to turn to salaries. Personnel costs make up about two-thirds of the state’s total yearly budget.
The Governor made a number of decisions to balance the budget, including pulling money out of our reserve funds. Part of Gov. Perdue’s solution is to withhold one half of one percent of the annual salary of each state employee, including teachers. The total savings for the salary plan amounts to $65 million. Legislative leaders and leaders in the judicial system have agreed that employees in our branches will participate in any reductions or furloughs the governor orders. This applies also to the salary I receive for being a state legislator.
There has been some confusion about the governor’s order. Simply put, it applies to all state employees. The money will be deducted in equal amounts over the next two months. To calculate the total amount of the reduction, divide your yearly salary by 200. That is the total amount of the deduction. In exchange, each employee is being given an additional 10 hours of leave time for this calendar year. In addition, the plan will not negatively impact insurance, vacation, retirement, or longevity pay.
Decisions such as these are not easy and we know these are difficult times, but if the governor had not acted the state would not have been able to meet its financial obligations, including its payroll.
We also heard from some of our state residents this week during a rare budget public hearing. For nearly three hours, we were fortunate to hear from people with interests in education, the environment, our prisons and our tax code. Budget-writers in the House welcome this guidance and we anticipate your input will help us craft a better budget.
Thank you as always for your interest in our state and please contact me if I can be of any assistance.
Crime
_The Innocence Inquiry Commission could soon have the authority to compel people who have pertinent information about a court case to testify. A bill that passed the House this week (HB 937) would also allow the head of the Commission to grant limited immunity to the witness from prosecution for previous false statements made under oath in prior proceedings. The bill is now in the Senate.
_Lawyers representing inmates on death row may be permitted to meet with their clients on the same day that the court rules on the inmate’s appeal. The proposal (HB 1037) helps ensure that death row inmates hear the court’s decision from their own lawyer, rather than from another source. The bill passed the House and is now in the Senate.
_Alleged criminals who plead guilty or no contest to a criminal offense would be more clearly notified of the limitations on their ability to file an appeal under a bill that passed the House this week (HB 1039).
Education
_School officials would be required to make a reasonable attempt to notify a parent or guardian before administering corporal punishment on a student under a bill that passed the House this week (HB 442). The legislation also would allow parents in school districts that permit corporal punishment to exempt their child from corporal punishment all together. If enacted, the law would not outlaw the practice of spanking entirely. Almost one half of North Carolina’s 115 school districts permit spanking as a means of punishment. The bill is now in the Senate.
Miscellaneous
_Automated calls to protect the public health, safety, or welfare would be allowed under proposed legislation that came out of the House this week. The system is intended to inform telephone subscribers that they have purchased products or medication that may be subject to a safety recall; that the telephone subscriber has not picked up a filled prescription drug or that an account maintained by the telephone subscriber may be subject to potential fraudulent activity. The calls could not be used for any commercial purposes. The bill (HB 1034) now goes to the Senate.
_A security audit of the state lottery would be performed every two years instead of annually under a proposed law (HB 205). Lottery officials say they already undergo multiple and sometimes duplicative audits.
_Legislation that would provide a Survivor’s Alternate Benefit for survivors of law enforcement officers killed in the line of duty passed the House this week (HB 766). If enacted, the principal beneficiary of an officer who has completed 15 years of service would be entitled to the survivor’s benefit should that officer be killed in the line of duty. The bill is now in the Senate.
Notes
_ Members of the General Assembly welcomed the University of North Carolina at Chapel Hill men’s basketball team this week to officially honor them for an outstanding season culminating in the 2009 NCAA Division I Championship (HJR 1517). The team won the 2009 NCAA Division I Championship by defeating Michigan State with a score of 89-72, the largest margin in a title game in 17 years.
_Members of the General Assembly officially honored the fallen members of the Salisbury Fire Department with a House Joint Resolution on Thursday (HJR 690). On the morning of March 7, 2008, the Salisbury Fire Department responded to a fire at the Salisbury Millwork. While working to extinguish the fire, two members of the Salisbury Fire Department, Victor Anthony Isler, 40, and Justin Edward Monroe, 19, lost their lives. Victor Anthony Isler is survived by his wife, Tracy; his son, Victor Jr.; and his daughter, Ryan-Ann. Justin Edward Monroe is survived by his parents, Eddie and Lisa Monroe, and his brother, Mark.
_The NC Forestry Association visited the General Assembly on Tuesday. “The NC Forestry Association is a private, nonprofit partnership of more than 4,200 forest managers, landowners, mill operators, loggers, furniture manufacturers, educators and others concerned about the long-term health and productivity of the state's forest resources and the industries they support.” For more information, please visit: http://www.ncforestry.org/.
_The Land for Tomorrow coalition visited the General Assembly on Wednesday. “The Coalition is a statewide partnership of concerned citizens, businesses, interest groups and local governments urging the General Assembly to protect the state's land and water resources before they are irreversibly lost.” For more information, please visit: http://www.landfortomorrow.org/.
Please remember that you can listen to each day’s session, committee meetings and press conferences on the General Assembly’s website at www.ncleg.net. Once on the site, select "audio," and then make your selection – House Chamber, Senate Chamber, Appropriations Committee Room or Press Conference Room.
Prepared with the assistance of the Speaker’s Office of Communications
April 30, 2009
Governor Bev Perdue received the latest information about our revenue picture and announced that the state collected $1 billion less in taxes than had been anticipated. The governor had to take quick action to make up the shortfall, since our constitution requires that the state end every fiscal year with a balanced budget. In this case, she has two months to find $1 billion in savings, in addition to the $2.2 billion for which she had already planned. That forced her to turn to salaries. Personnel costs make up about two-thirds of the state’s total yearly budget.
The Governor made a number of decisions to balance the budget, including pulling money out of our reserve funds. Part of Gov. Perdue’s solution is to withhold one half of one percent of the annual salary of each state employee, including teachers. The total savings for the salary plan amounts to $65 million. Legislative leaders and leaders in the judicial system have agreed that employees in our branches will participate in any reductions or furloughs the governor orders. This applies also to the salary I receive for being a state legislator.
There has been some confusion about the governor’s order. Simply put, it applies to all state employees. The money will be deducted in equal amounts over the next two months. To calculate the total amount of the reduction, divide your yearly salary by 200. That is the total amount of the deduction. In exchange, each employee is being given an additional 10 hours of leave time for this calendar year. In addition, the plan will not negatively impact insurance, vacation, retirement, or longevity pay.
Decisions such as these are not easy and we know these are difficult times, but if the governor had not acted the state would not have been able to meet its financial obligations, including its payroll.
We also heard from some of our state residents this week during a rare budget public hearing. For nearly three hours, we were fortunate to hear from people with interests in education, the environment, our prisons and our tax code. Budget-writers in the House welcome this guidance and we anticipate your input will help us craft a better budget.
Thank you as always for your interest in our state and please contact me if I can be of any assistance.
Crime
_The Innocence Inquiry Commission could soon have the authority to compel people who have pertinent information about a court case to testify. A bill that passed the House this week (HB 937) would also allow the head of the Commission to grant limited immunity to the witness from prosecution for previous false statements made under oath in prior proceedings. The bill is now in the Senate.
_Lawyers representing inmates on death row may be permitted to meet with their clients on the same day that the court rules on the inmate’s appeal. The proposal (HB 1037) helps ensure that death row inmates hear the court’s decision from their own lawyer, rather than from another source. The bill passed the House and is now in the Senate.
_Alleged criminals who plead guilty or no contest to a criminal offense would be more clearly notified of the limitations on their ability to file an appeal under a bill that passed the House this week (HB 1039).
Education
_School officials would be required to make a reasonable attempt to notify a parent or guardian before administering corporal punishment on a student under a bill that passed the House this week (HB 442). The legislation also would allow parents in school districts that permit corporal punishment to exempt their child from corporal punishment all together. If enacted, the law would not outlaw the practice of spanking entirely. Almost one half of North Carolina’s 115 school districts permit spanking as a means of punishment. The bill is now in the Senate.
Miscellaneous
_Automated calls to protect the public health, safety, or welfare would be allowed under proposed legislation that came out of the House this week. The system is intended to inform telephone subscribers that they have purchased products or medication that may be subject to a safety recall; that the telephone subscriber has not picked up a filled prescription drug or that an account maintained by the telephone subscriber may be subject to potential fraudulent activity. The calls could not be used for any commercial purposes. The bill (HB 1034) now goes to the Senate.
_A security audit of the state lottery would be performed every two years instead of annually under a proposed law (HB 205). Lottery officials say they already undergo multiple and sometimes duplicative audits.
_Legislation that would provide a Survivor’s Alternate Benefit for survivors of law enforcement officers killed in the line of duty passed the House this week (HB 766). If enacted, the principal beneficiary of an officer who has completed 15 years of service would be entitled to the survivor’s benefit should that officer be killed in the line of duty. The bill is now in the Senate.
Notes
_ Members of the General Assembly welcomed the University of North Carolina at Chapel Hill men’s basketball team this week to officially honor them for an outstanding season culminating in the 2009 NCAA Division I Championship (HJR 1517). The team won the 2009 NCAA Division I Championship by defeating Michigan State with a score of 89-72, the largest margin in a title game in 17 years.
_Members of the General Assembly officially honored the fallen members of the Salisbury Fire Department with a House Joint Resolution on Thursday (HJR 690). On the morning of March 7, 2008, the Salisbury Fire Department responded to a fire at the Salisbury Millwork. While working to extinguish the fire, two members of the Salisbury Fire Department, Victor Anthony Isler, 40, and Justin Edward Monroe, 19, lost their lives. Victor Anthony Isler is survived by his wife, Tracy; his son, Victor Jr.; and his daughter, Ryan-Ann. Justin Edward Monroe is survived by his parents, Eddie and Lisa Monroe, and his brother, Mark.
_The NC Forestry Association visited the General Assembly on Tuesday. “The NC Forestry Association is a private, nonprofit partnership of more than 4,200 forest managers, landowners, mill operators, loggers, furniture manufacturers, educators and others concerned about the long-term health and productivity of the state's forest resources and the industries they support.” For more information, please visit: http://www.ncforestry.org/.
_The Land for Tomorrow coalition visited the General Assembly on Wednesday. “The Coalition is a statewide partnership of concerned citizens, businesses, interest groups and local governments urging the General Assembly to protect the state's land and water resources before they are irreversibly lost.” For more information, please visit: http://www.landfortomorrow.org/.
Please remember that you can listen to each day’s session, committee meetings and press conferences on the General Assembly’s website at www.ncleg.net. Once on the site, select "audio," and then make your selection – House Chamber, Senate Chamber, Appropriations Committee Room or Press Conference Room.
Prepared with the assistance of the Speaker’s Office of Communications
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