This week, negotiators continued to move closer to a final budget plan. The job is more difficult than it has been in previous years because of a dramatic drop in state revenue. We have already agreed to eliminate dozens of programs and have proposed deep cuts in many of those programs that remain. At the same time, we must meet our federal obligations to fund Medicaid and to educate our continually growing number of students. Those two budget areas combined -- education and Medicaid -- comprise about 70 percent of our budget, giving us little leeway as we look for additional savings and efficiencies.
Some critics have said that budget writers in the General Assembly have exaggerated the level of cuts that are needed. As someone who is working closely with the budget, I want to assure you that this is not true. Budget writers had to cut more than $2 billion in spending, which meant carefully scrutinizing items even as little as a few hundred dollars. The state also must rely on more than $1 billion in one-time federal stimulus money to pay for some programs. This money has to be used carefully. It is not an ongoing revenue source that we can rely on in future years. To replace some of that non-recurring money, legislators are reluctantly proposing some tax increases. The size of the tax package has not been determined, but whatever amount is added to the budget will help the state preserve programs in education and health care. It is critical that we act, rather than simply do as our critics have done and both complain that the cuts are too deep and refuse to act to restore some of the lost money.
We did receive a bit of good news this week. After examining corporate returns, the NC Department of Revenue determined that next year the state will get about $150 million more in one-time revenue than had previously been expected.
Outside of budget negotiations, several important pieces of legislation were approved by the General Assembly. The following information highlights some bills of interest that the House has taken up throughout the week.
Safety
_Boating safety education would be required prior to operating a vessel with a motor of 10 horsepower or greater under a bill that has passed both bodies of the legislature (SB 43). The legislation would require a boater safety education course of anyone born after Jan. 1, 1984. It now returns to the Senate for a concurrence motion.
_ A new anti-bullying law has been ratified by the General Assembly and now goes to Gov. Perdue to be signed into law. The legislation (SB 526) would require public school districts to approve anti-bullying measures that name specific groups as possible targets. Supporters of the bill contend that the legislation helps protect students from potential prejudices. Opponents argue that the legislation creates special protected classes of students. The legislation defines bullying as behavior that places students or school employees in fear of harm or damage to their property.
Energy/Environment
_Water quality in the Jordan Reservoir would be improved under a bill that has been ratified by the General Assembly (HB 239). Jordan Lake is an important drinking water source for many Triangle-area communities. The legislation has now gone to Gov. Perdue to be signed into law.
_State lawmakers have ratified legislation that will direct the NC Department of Administration to consider fuel economy when purchasing state vehicles (HB 1079). Under existing law, the department is not required to consider fuel economy when buying passenger vehicles. The intent of the bill is to reduce the state’s carbon footprint and reduce fuel costs. If the bill becomes law, the department would be directed to submit a report outlining how much fuel and money the vehicles save. The bill has now gone to Gov. Perdue to be signed into law.
Education
_North Carolina charter schools will now be authorized to give multiple birth siblings some priority for admission to charter schools. Under the legislation, multiple birth siblings applying to a charter school through a lottery would have one chance for admission, just like other students. If they were selected, all of the siblings would be admitted. The legislation will apply beginning with the 2009-2010 school year. The bill (HB 316) now goes to Gov. Perdue to be signed into law.
_The "Healthy Youth Act" has now passed both bodies of the legislature (HB 88). Under the newly modified legislation, all students will be exposed to both abstinence-only and comprehensive sex education. The proposal also allows parents to remove their children from any portion of the course. The bill has generated a significant amount of debate, with supporters saying that the current abstinence-only curriculum lacks important information. Opponents argued that the existing curriculum provides students with all the information they need. The bill now goes to Gov. Perdue for her signature.
Miscellaneous
_North Carolina will establish a Financial Literacy Council to coordinate and expand the financial education available to all North Carolinians. The legislation is meant to promote financial education in public schools and across the state. The bill has now passed both bodies of the legislature and will go to Gov. Perdue to be signed into law (SB 1019).
_Uniformed public safety officers will now be officially 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 (HB 631). The legislation includes a safety measure that allows employers of a uniformed public safety officer to prohibit the wearing of service medals if the employer determines it poses a safety hazard. The legislation must now be signed by Gov. Perdue before it becomes law.
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.
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. June 18, 2009
The House of Representatives passed a budget proposal over the weekend that would help our economy while also investing in education and health care. Approval of the package leads us to the next phase of the budget-writing process, and I am among those members who are negotiating with the Senate over a final proposal to present to Gov. Perdue.
Despite the large amount of work we’re doing on the budget, we continue our work to improve and refine legislation that makes our state a better place to live. The following information highlights some bills of interest that have made it through the House this week.
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.
Crime
_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 has been ratified by the General Assembly (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 now goes to Gov. Perdue for a signature.
Improving Government
_State facilities that provide mental health, developmental disabilities, and substance abuse services would be required to disclose certain information about death reports, facility police reports, and incident reports under a bill that has passed both bodies of the legislature (SB 799). The intent of the legislation is to improve transparency. Conferees will be appointed from each chamber to negotiate a final version of the bill.
_ Legislation that would expand the ability of counties and municipalities to form joint emergency management agencies has been ratified by the General Assembly. Currently, a county can only form joint agencies with municipalities within its borders. This proposal (HB 380) would allow counties to also work with other counties, as well as municipalities within the partnering county. Gov. Perdue must now sign the bill for it to become law.
_State lawmakers have ratified legislation to clarify that counties and cities have the authority to order evacuations in certain emergency situations (SB 256). The legislation also clarifies that the Emergency Management Immunity Statute applies to counties and cities in these situations. The bill has now gone to Gov. Perdue for her signature.
Miscellaneous
_Last week, lawmakers ratified a bill that will establish a minimum motor fuels tax rate, which will be effective for two years (SB 200). From July 1, 2009 through June 30, 2011, the gasoline tax will go no lower than 29.9 cents per gallon. Fiscal analysts at the General Assembly have projected that establishing this floor on the gas tax could generate approximately $67.5 million in new revenue for the coming fiscal year. The extra revenue would be utilized for highway and bridge projects across the state. The bill was signed into law by Gov. Perdue this Tuesday, June 16, 2009.
_An act to reduce plastic and non-recycled paper bag used on North Carolina’s Outer Banks has passed both bodies of the legislature (SB 1018). Under the law, no retailer shall provide customers with plastic bags unless the bag is reusable or used for some unpackaged items. The legislation would also restrict the substitution of paper bags for plastic bags. Paper bags could only be substituted for plastic if the bag is a recycled paper bag, or if the retailer offers certain specified incentives to customers who uses the their own reusable bags instead of the bags provided by the retailer. The bill now returns to the Senate for concurrence.
_A portion of U.S. Highway 17 and U.S. Highway 70 will be designated as “The U.S. Marine Corps Highway: Home of the Carolina-Based Marines since 1941” under a bill that has been ratified by the General Assembly (HB 1021). The bill now goes to Gov. Perdue to be signed into law.
_History and Geography curricula in public schools would be modified under a bill that has passed both bodies of the legislature (HB 1032). The legislation would amend middle school curriculum to require a one-year course on North Carolina history with United States history integrated into the instruction, instead of a course with a focus on national history with state history integrated into it. After the bill is ratified, it will go to Gov. Perdue to be signed into law.
_The ban on texting while driving has been ratified by the General Assembly (HB 9). The intent of the legislation is to improve safety on North Carolina’s roads and highways. Once effective, violators of the law would face the penalty of a $100 fine plus court costs. The bill has now gone to Gov. Perdue to be signed into law.
Notes
_On Thursday, members of the House officially honored the life and memory of William Oliver Swofford, American pop singer and native son of North Carolina, with a joint resolution (HB 1653). Oliver was a world-renowned musician who died on February 12, 2000, at the age of 54, in Shreveport, Louisiana.
_In the past two weeks, three new members have been sworn into the North Carolina House of Representatives. Rep. Rosa Gill of Wake County replaced former Rep. Dan Blue, who left the House to fill the Senate seat vacated by the late Sen. Vernon Malone. Rep. Frank Iler of Brunswick County and Rep. Dan W. Ingle of Alamance County, replace former Rep. Bonner Stiller and former Rep. Cary Allred, respectively. Both Stiller and Allred resigned from the General Assembly.
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
Despite the large amount of work we’re doing on the budget, we continue our work to improve and refine legislation that makes our state a better place to live. The following information highlights some bills of interest that have made it through the House this week.
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.
Crime
_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 has been ratified by the General Assembly (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 now goes to Gov. Perdue for a signature.
Improving Government
_State facilities that provide mental health, developmental disabilities, and substance abuse services would be required to disclose certain information about death reports, facility police reports, and incident reports under a bill that has passed both bodies of the legislature (SB 799). The intent of the legislation is to improve transparency. Conferees will be appointed from each chamber to negotiate a final version of the bill.
_ Legislation that would expand the ability of counties and municipalities to form joint emergency management agencies has been ratified by the General Assembly. Currently, a county can only form joint agencies with municipalities within its borders. This proposal (HB 380) would allow counties to also work with other counties, as well as municipalities within the partnering county. Gov. Perdue must now sign the bill for it to become law.
_State lawmakers have ratified legislation to clarify that counties and cities have the authority to order evacuations in certain emergency situations (SB 256). The legislation also clarifies that the Emergency Management Immunity Statute applies to counties and cities in these situations. The bill has now gone to Gov. Perdue for her signature.
Miscellaneous
_Last week, lawmakers ratified a bill that will establish a minimum motor fuels tax rate, which will be effective for two years (SB 200). From July 1, 2009 through June 30, 2011, the gasoline tax will go no lower than 29.9 cents per gallon. Fiscal analysts at the General Assembly have projected that establishing this floor on the gas tax could generate approximately $67.5 million in new revenue for the coming fiscal year. The extra revenue would be utilized for highway and bridge projects across the state. The bill was signed into law by Gov. Perdue this Tuesday, June 16, 2009.
_An act to reduce plastic and non-recycled paper bag used on North Carolina’s Outer Banks has passed both bodies of the legislature (SB 1018). Under the law, no retailer shall provide customers with plastic bags unless the bag is reusable or used for some unpackaged items. The legislation would also restrict the substitution of paper bags for plastic bags. Paper bags could only be substituted for plastic if the bag is a recycled paper bag, or if the retailer offers certain specified incentives to customers who uses the their own reusable bags instead of the bags provided by the retailer. The bill now returns to the Senate for concurrence.
_A portion of U.S. Highway 17 and U.S. Highway 70 will be designated as “The U.S. Marine Corps Highway: Home of the Carolina-Based Marines since 1941” under a bill that has been ratified by the General Assembly (HB 1021). The bill now goes to Gov. Perdue to be signed into law.
_History and Geography curricula in public schools would be modified under a bill that has passed both bodies of the legislature (HB 1032). The legislation would amend middle school curriculum to require a one-year course on North Carolina history with United States history integrated into the instruction, instead of a course with a focus on national history with state history integrated into it. After the bill is ratified, it will go to Gov. Perdue to be signed into law.
_The ban on texting while driving has been ratified by the General Assembly (HB 9). The intent of the legislation is to improve safety on North Carolina’s roads and highways. Once effective, violators of the law would face the penalty of a $100 fine plus court costs. The bill has now gone to Gov. Perdue to be signed into law.
Notes
_On Thursday, members of the House officially honored the life and memory of William Oliver Swofford, American pop singer and native son of North Carolina, with a joint resolution (HB 1653). Oliver was a world-renowned musician who died on February 12, 2000, at the age of 54, in Shreveport, Louisiana.
_In the past two weeks, three new members have been sworn into the North Carolina House of Representatives. Rep. Rosa Gill of Wake County replaced former Rep. Dan Blue, who left the House to fill the Senate seat vacated by the late Sen. Vernon Malone. Rep. Frank Iler of Brunswick County and Rep. Dan W. Ingle of Alamance County, replace former Rep. Bonner Stiller and former Rep. Cary Allred, respectively. Both Stiller and Allred resigned from the General Assembly.
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. June 15, 2009
In the past year, as the global economic crisis that has gripped the world finally reached North Carolina, tax collections in our state slowed significantly. The most recent projections show that our revenue this year will be about $4.6 billion short of expectations. At least 34 other states will also have smaller budgets in the year ahead, and the revenue picture is expected to worsen in many places.
Faced with this crisis, we have scoured our budget looking for efficiencies, outdated programs and ways to save limited resources. We ended up with a proposal that eliminated about $3.7 billion in spending – the largest budget reduction in the history of our state – and made difficult choices to do away with some needed programs and services that we can’t afford. We worked hard to protect as much of our investment in education as we could without devastating other areas of our budget. We also added new taxes and some fees so that we could retain those services that we – and you – hold most dear. Our proposed $785 million revenue package would allow the state to:
_ Protect class sizes, teacher pay and prevent some teacher layoffs
_ Restore 2,590 K-3 teacher jobs and about 600 UNC system jobs.
_ Restore about 350 school counselor and social work jobs and about 350 principal and assistant principal jobs.
_ Restore community college jobs
_ Restore money for students at risk of dropping out of school
_ Restores money for low-wealth counties
_ Minimize program cuts and layoffs in our nationally renowned Smart Start early childhood program
_ Restore cuts to Medicaid program, which provides health care to an increasing number of our residents
_ Restore funding to some community-based mental health programs and other services for the mentally disabled
_ Restore Medicaid physical therapy, occupational therapy, and speech therapy programs
_ Restores cut to basic support care services for vocational rehabilitation, and restore funding for independent living programs in vocational rehabilitation
_ Restore funding for 179 jobs in the state courts and for 155 Victim Witness Legal Assistants
_ Partial restoration of operating reserves for the Department of Environment and Natural Resources, the Department of Agriculture, the Department of Commerce and the Department of Labor
Even with this revenue increase, we rely heavily on cuts to balance this budget. For every $1 in proposed new revenues, we have recommended about $3 in cuts.
The information below highlights the proposed two-year budget being considered by the House. These numbers do not reflect any of the proposed restorations, which will not receive a final vote until Saturday. We will then negotiate the differences in our plan with the Senate before presenting a final proposal to Gov. Perdue for her signature.
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 and Jobs
_ Workforce Investment Act (WIA) ARRA Funds ($79.8 million):
Would appropriate federal American Recovery and Reinvestment Act (ARRA) funds for workforce development as follows:
_ Local Workforce Development Boards: $56.7m
_ State Administration: $ 1.5m
_ Statewide Projects: $ 8.1m
_ North Carolina Community College System 12 and 6 Program: $13.5m
_ Regional Economic Development Partnerships ($5 million):
Would transfer $5 million from the cash balances remaining in various fund codes within the Department of Commerce that are being transferred to the General Fund
_ Commerce Boards and Commissions:
Would move $69 million in funds for Utilities Commission, State Banking Commission, ABC Commission, ABC Warehouse and several other groups from independent control to General Fund. The move creates more accountability for these programs and frees up money for other programs within the Natural and Economic Resources budget area.
_ Financial Assistance Funding (-$2 million)
Reduces funding for financial assistance within the Ag Cost Share program
Education
_ Teacher Pay:
Teacher pay alone comprises 32.4 percent of our total budget. Despite this large percentage, we were able to hold teacher pay steady in a very difficult year.
_ Enrollment Growth ($157 million):
Would fully fund enrollment growth as the community colleges deal with increasing enrollment and demand for worker training programs. According to the 2008-09 spring semester census, enrollment has increased by 15,259 full-time equivalents (or FTEs) above the 2008-09 budgeted enrollment of 201,625. This is a 7.6% increase and brings 2009-10 budgeted enrollment to 216,884.
_ UNC Need-Based Aid ($47 million):
Would increase the UNC Need-Based Student Financial Aid Program to accommodate growth in eligible students and hold current recipients harmless from increased costs. There is $116.4 million appropriated from the Escheats Fund for the program.
_ Resident Status for Nonresident Students ($28 million):
Would save $28 million by repealing the resident status granted in 2005 to nonresident students on full scholarships. Campuses will no longer be reimbursed for this tuition discount.
_ Dropout Prevention ($26 million):
Would continue a House initiative to provide small grants to community-based dropout prevention programs across the state. To date, about 140 programs have received grants through the program.
_ Increase Class Size (-$786 million)
Would decrease funding for the Classroom Teachers allotment consistent with increasing the student-to-teacher funding allotment ratio currently set by the State Board of Education for each grade by 2 in FY 2009-10 and by 3 in FY 2010-11
_ At-Risk Student Services (-$120 million):
Allotment would be reduced by about 31% in FY 2009-10 and 22% in FY 2010-11 from the continuation budget levels of $226.6 million in FY 2009-10 and $228.0 million in FY 2010-11.
_ Teacher Assistants (-$260 million):
Would eliminate funding for Teacher Assistants (TAs) serving students in Grade 3 at North Carolina public schools. Funds will be allotted on the basis of ADM in grades K-2. LEAs may continue to place TAs in grade 3 classrooms if they so choose.
_ Public School Transportation (-$60 million):
Would reduce funding for the allotment, which supports the salaries of transportation personnel as well as the maintenance of yellow buses, by approximately 15% in both years of the biennium
_ Literacy Coaches in Public Schools (-$24 million):
Would eliminate funding for all 200 Literacy Coaches
_ More at Four (-$20 million):
Would reduce General Fund support for More at Four by 11.6%. The Office of School Readiness shall use the average FY 2008-09 average reimbursement rate of $5,000 per slot in allocating funding. The FY 2009-10 continuation budget includes $86 million in General Fund and $84.6 million in Lottery support for this program. A related provision, includes More at Four amongst a list of programs to be examined for consolidation in one entity solely responsible for early childhood programs, beginning in FY 2010-11.
_ Community College Tuition Increase (-$61 million):
Would increase curriculum tuition by $8 per credit hour, from $42 to $50. Tuition for full-time students will increase by a maximum of $256 per year, from $1,344 to $1,600.
_ UNC System Tuition Increase (-$69.5 million):
Would increase annual tuition by the lesser of $200 or 8% at all UNC institutions in FY 2009-10. This tuition increase is applied to both resident and nonresident students at the undergraduate and graduate levels.
_ Resident Status for Nonresident Students in the UNC System (-$28 million):
Would repeal the resident status granted in 2005 to nonresident students on full scholarships. Campuses will no longer be reimbursed for this tuition discount.
_ Aid to UNC Hospitals (-$20 million):
Would reduce the $46 million annual appropriation to UNC Hospitals by $10 million
Health
_ Medicaid Swap With Counties ($519 million):
State continues with plan to take on Medicaid costs once paid by counties, freeing up money in those communities for other local needs, such as education. Under the plan, every county would be able to count on at least $500,000 in additional revenue.
_ Medicaid Growth ($408 million):
Adjusts budget to allow for Medicaid caseload growth.
_ Consolidate Case Management Services ($139 million):
Would save $324 million by consolidating case management services throughout the Medicaid program and using greater case management by Community Care of North Carolina.
_ Implement a Preferred Drug List ($90 million):
Would save $90 million by implementing a preferred drug list
_ Provider Rate Reductions (-$310 million)
Would reduce Medicaid provider rates by 5.5% in FY 2010 and 6% in FY 2011. Applies to all public and private providers except for federally qualified health centers, rural health centers, school-based and school linked health centers, State institutions, hospital outpatient, pharmacy, and the non-inflationary components of the case-mix reimbursement system for skilled nursing facilities.
Transportation
_ Secondary Road Improvement Funds Reprogrammed to Maintenance ($126 million):
All FY 2009-10 funding and half of the FY 2010-11 funding for the secondary roads improvement program from the Highway Fund is reprogrammed to statewide maintenance programs to prevent further deterioration of the state highway system due to reduced transportation revenues and maintenance expenditures.
_ Intrastate System (-$168 million):
Reduces funds for the Intrastate System to $359,883,973 for FY 2009-10 consistent with new revenue estimates and statutory formula
_ Urban Loops (-$68 million):
Reduces funds for the Urban Loops to $113,674,786 for FY 2009-10 ($34,597,070 NR) ($33,276,334 NR) consistent with new revenue estimates and statutory formula
_ Public Transportation Funds (-$42 million):
Funding to the New Starts program is reduced. The total budget for the Public Transportation Division is $74,647,962 in FY 2009-10 and $75,493,962 in FY 2010-11.
_ Small Construction Funds (-$28 million):
Funds for small construction are reduced to align overall expenditures for the Highway Fund with projected revenues for the 2009-11 biennium. The total budget for small construction is $7,000,000 in both years of the biennium.
_ Contingency Funds (-$6 million):
Funds for contingency construction are reduced to align overall expenditures for the Highway Fund with projected revenues for the 2009-11 biennium. The total budget for contingency construction is $12,000,000 in both years of the biennium.
Energy and Environment
_ Farmland Preservation Trust ($2 million):
Transfers $2 million from the cash balances remaining in various fund codes within the Department of Commerce that are being transferred to the General Fund.
_ Clean Water SRF ARRA Funding ($70.7 million):
Appropriates federal American Recovery and Reinvestment Act funds to the Division of Water Quality for the Clean Water State Revolving Loan Fund.
_ Drinking Water SRF ARRA Funding ($65.6 million):
Appropriates federal American Recovery and Reinvestment Act funds to the Division of Environmental Health for the Drinking Water State Revolving Loan Fund.
_ Leaking Underground Storage Tanks ARRA Funding ($7.5 million):
Appropriates federal American Recovery and Reinvestment Act funds to the Division of Waste Management for the Commercial Leaking Underground Storage Tank program.
_ Oyster Reef Program (-$2 million):
Reduces funding for the Oyster Reef program by 50%, leaving $1,000,000 to continue the program.
_ Financial Assistance Funding (-$2 million):
Reduces funding for financial assistance within the Ag Cost Share program.
_ Neuse River Rapid Response Team (-$203,000)
Reduces funding for the Neuse River Rapid Response Team and eliminates two positions.
Justice and Public Safety
_ Close Eight Prisons (-$32.7 million)
We propose closing eight prisons in the 2009-10 fiscal year:
_ McCain Correctional Hospital will close on April 1, 2010. To maintain services associated with McCain, Hoke (April 1) and Odom (February 1) Correctional Institutions will be converted from medium custody to minimum, eliminating 155 positions. Additionally, Nash (October 1) and Pamlico (March 1) Correctional Institutions, both medium custody, will be double-celled with 99 additional positions.
_ Umstead Correctional Center will close Oct. 1 and Guilford Correctional Center will close Nov. 1, with a position reduction of 95. Lincoln Correctional will be converted to minimum custody on Sept. 1, and Warren Correctional will be double-celled for medium custody inmates on Nov. 1. Lincoln will lose 28 positions and Warren will gain 18.
_ The Wilmington Residential Facility for Women will close Sept. 1. The reduction for Wilmington is reduced by $168,740 in the first year of the biennium to allow for 10 additional contractual beds at the Center for Community Transitions in Charlotte.
_ Gates and Union Correctional Centers will close Oct. 1 and Haywood Correctional Center will close on March 1 with a total position reduction of 112.
_ Cleveland Correctional Center will close Dec. 1 with a reduction in positions of 50. Craven Correctional Institution will be double-celled effective Dec. 1 with a position increase of 7.
Notes
House Speaker Joe Hackney and Senate President Pro Tem Marc Basnight reaffirmed their support for the military this week by meeting with members of the National Guard and Reserve. The chamber leaders then each signed a resolution agreeing to work with reservists and Guard members who are deployed. Several staff members of the General Assembly and two representatives are active reservists.
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.
Faced with this crisis, we have scoured our budget looking for efficiencies, outdated programs and ways to save limited resources. We ended up with a proposal that eliminated about $3.7 billion in spending – the largest budget reduction in the history of our state – and made difficult choices to do away with some needed programs and services that we can’t afford. We worked hard to protect as much of our investment in education as we could without devastating other areas of our budget. We also added new taxes and some fees so that we could retain those services that we – and you – hold most dear. Our proposed $785 million revenue package would allow the state to:
_ Protect class sizes, teacher pay and prevent some teacher layoffs
_ Restore 2,590 K-3 teacher jobs and about 600 UNC system jobs.
_ Restore about 350 school counselor and social work jobs and about 350 principal and assistant principal jobs.
_ Restore community college jobs
_ Restore money for students at risk of dropping out of school
_ Restores money for low-wealth counties
_ Minimize program cuts and layoffs in our nationally renowned Smart Start early childhood program
_ Restore cuts to Medicaid program, which provides health care to an increasing number of our residents
_ Restore funding to some community-based mental health programs and other services for the mentally disabled
_ Restore Medicaid physical therapy, occupational therapy, and speech therapy programs
_ Restores cut to basic support care services for vocational rehabilitation, and restore funding for independent living programs in vocational rehabilitation
_ Restore funding for 179 jobs in the state courts and for 155 Victim Witness Legal Assistants
_ Partial restoration of operating reserves for the Department of Environment and Natural Resources, the Department of Agriculture, the Department of Commerce and the Department of Labor
Even with this revenue increase, we rely heavily on cuts to balance this budget. For every $1 in proposed new revenues, we have recommended about $3 in cuts.
The information below highlights the proposed two-year budget being considered by the House. These numbers do not reflect any of the proposed restorations, which will not receive a final vote until Saturday. We will then negotiate the differences in our plan with the Senate before presenting a final proposal to Gov. Perdue for her signature.
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 and Jobs
_ Workforce Investment Act (WIA) ARRA Funds ($79.8 million):
Would appropriate federal American Recovery and Reinvestment Act (ARRA) funds for workforce development as follows:
_ Local Workforce Development Boards: $56.7m
_ State Administration: $ 1.5m
_ Statewide Projects: $ 8.1m
_ North Carolina Community College System 12 and 6 Program: $13.5m
_ Regional Economic Development Partnerships ($5 million):
Would transfer $5 million from the cash balances remaining in various fund codes within the Department of Commerce that are being transferred to the General Fund
_ Commerce Boards and Commissions:
Would move $69 million in funds for Utilities Commission, State Banking Commission, ABC Commission, ABC Warehouse and several other groups from independent control to General Fund. The move creates more accountability for these programs and frees up money for other programs within the Natural and Economic Resources budget area.
_ Financial Assistance Funding (-$2 million)
Reduces funding for financial assistance within the Ag Cost Share program
Education
_ Teacher Pay:
Teacher pay alone comprises 32.4 percent of our total budget. Despite this large percentage, we were able to hold teacher pay steady in a very difficult year.
_ Enrollment Growth ($157 million):
Would fully fund enrollment growth as the community colleges deal with increasing enrollment and demand for worker training programs. According to the 2008-09 spring semester census, enrollment has increased by 15,259 full-time equivalents (or FTEs) above the 2008-09 budgeted enrollment of 201,625. This is a 7.6% increase and brings 2009-10 budgeted enrollment to 216,884.
_ UNC Need-Based Aid ($47 million):
Would increase the UNC Need-Based Student Financial Aid Program to accommodate growth in eligible students and hold current recipients harmless from increased costs. There is $116.4 million appropriated from the Escheats Fund for the program.
_ Resident Status for Nonresident Students ($28 million):
Would save $28 million by repealing the resident status granted in 2005 to nonresident students on full scholarships. Campuses will no longer be reimbursed for this tuition discount.
_ Dropout Prevention ($26 million):
Would continue a House initiative to provide small grants to community-based dropout prevention programs across the state. To date, about 140 programs have received grants through the program.
_ Increase Class Size (-$786 million)
Would decrease funding for the Classroom Teachers allotment consistent with increasing the student-to-teacher funding allotment ratio currently set by the State Board of Education for each grade by 2 in FY 2009-10 and by 3 in FY 2010-11
_ At-Risk Student Services (-$120 million):
Allotment would be reduced by about 31% in FY 2009-10 and 22% in FY 2010-11 from the continuation budget levels of $226.6 million in FY 2009-10 and $228.0 million in FY 2010-11.
_ Teacher Assistants (-$260 million):
Would eliminate funding for Teacher Assistants (TAs) serving students in Grade 3 at North Carolina public schools. Funds will be allotted on the basis of ADM in grades K-2. LEAs may continue to place TAs in grade 3 classrooms if they so choose.
_ Public School Transportation (-$60 million):
Would reduce funding for the allotment, which supports the salaries of transportation personnel as well as the maintenance of yellow buses, by approximately 15% in both years of the biennium
_ Literacy Coaches in Public Schools (-$24 million):
Would eliminate funding for all 200 Literacy Coaches
_ More at Four (-$20 million):
Would reduce General Fund support for More at Four by 11.6%. The Office of School Readiness shall use the average FY 2008-09 average reimbursement rate of $5,000 per slot in allocating funding. The FY 2009-10 continuation budget includes $86 million in General Fund and $84.6 million in Lottery support for this program. A related provision, includes More at Four amongst a list of programs to be examined for consolidation in one entity solely responsible for early childhood programs, beginning in FY 2010-11.
_ Community College Tuition Increase (-$61 million):
Would increase curriculum tuition by $8 per credit hour, from $42 to $50. Tuition for full-time students will increase by a maximum of $256 per year, from $1,344 to $1,600.
_ UNC System Tuition Increase (-$69.5 million):
Would increase annual tuition by the lesser of $200 or 8% at all UNC institutions in FY 2009-10. This tuition increase is applied to both resident and nonresident students at the undergraduate and graduate levels.
_ Resident Status for Nonresident Students in the UNC System (-$28 million):
Would repeal the resident status granted in 2005 to nonresident students on full scholarships. Campuses will no longer be reimbursed for this tuition discount.
_ Aid to UNC Hospitals (-$20 million):
Would reduce the $46 million annual appropriation to UNC Hospitals by $10 million
Health
_ Medicaid Swap With Counties ($519 million):
State continues with plan to take on Medicaid costs once paid by counties, freeing up money in those communities for other local needs, such as education. Under the plan, every county would be able to count on at least $500,000 in additional revenue.
_ Medicaid Growth ($408 million):
Adjusts budget to allow for Medicaid caseload growth.
_ Consolidate Case Management Services ($139 million):
Would save $324 million by consolidating case management services throughout the Medicaid program and using greater case management by Community Care of North Carolina.
_ Implement a Preferred Drug List ($90 million):
Would save $90 million by implementing a preferred drug list
_ Provider Rate Reductions (-$310 million)
Would reduce Medicaid provider rates by 5.5% in FY 2010 and 6% in FY 2011. Applies to all public and private providers except for federally qualified health centers, rural health centers, school-based and school linked health centers, State institutions, hospital outpatient, pharmacy, and the non-inflationary components of the case-mix reimbursement system for skilled nursing facilities.
Transportation
_ Secondary Road Improvement Funds Reprogrammed to Maintenance ($126 million):
All FY 2009-10 funding and half of the FY 2010-11 funding for the secondary roads improvement program from the Highway Fund is reprogrammed to statewide maintenance programs to prevent further deterioration of the state highway system due to reduced transportation revenues and maintenance expenditures.
_ Intrastate System (-$168 million):
Reduces funds for the Intrastate System to $359,883,973 for FY 2009-10 consistent with new revenue estimates and statutory formula
_ Urban Loops (-$68 million):
Reduces funds for the Urban Loops to $113,674,786 for FY 2009-10 ($34,597,070 NR) ($33,276,334 NR) consistent with new revenue estimates and statutory formula
_ Public Transportation Funds (-$42 million):
Funding to the New Starts program is reduced. The total budget for the Public Transportation Division is $74,647,962 in FY 2009-10 and $75,493,962 in FY 2010-11.
_ Small Construction Funds (-$28 million):
Funds for small construction are reduced to align overall expenditures for the Highway Fund with projected revenues for the 2009-11 biennium. The total budget for small construction is $7,000,000 in both years of the biennium.
_ Contingency Funds (-$6 million):
Funds for contingency construction are reduced to align overall expenditures for the Highway Fund with projected revenues for the 2009-11 biennium. The total budget for contingency construction is $12,000,000 in both years of the biennium.
Energy and Environment
_ Farmland Preservation Trust ($2 million):
Transfers $2 million from the cash balances remaining in various fund codes within the Department of Commerce that are being transferred to the General Fund.
_ Clean Water SRF ARRA Funding ($70.7 million):
Appropriates federal American Recovery and Reinvestment Act funds to the Division of Water Quality for the Clean Water State Revolving Loan Fund.
_ Drinking Water SRF ARRA Funding ($65.6 million):
Appropriates federal American Recovery and Reinvestment Act funds to the Division of Environmental Health for the Drinking Water State Revolving Loan Fund.
_ Leaking Underground Storage Tanks ARRA Funding ($7.5 million):
Appropriates federal American Recovery and Reinvestment Act funds to the Division of Waste Management for the Commercial Leaking Underground Storage Tank program.
_ Oyster Reef Program (-$2 million):
Reduces funding for the Oyster Reef program by 50%, leaving $1,000,000 to continue the program.
_ Financial Assistance Funding (-$2 million):
Reduces funding for financial assistance within the Ag Cost Share program.
_ Neuse River Rapid Response Team (-$203,000)
Reduces funding for the Neuse River Rapid Response Team and eliminates two positions.
Justice and Public Safety
_ Close Eight Prisons (-$32.7 million)
We propose closing eight prisons in the 2009-10 fiscal year:
_ McCain Correctional Hospital will close on April 1, 2010. To maintain services associated with McCain, Hoke (April 1) and Odom (February 1) Correctional Institutions will be converted from medium custody to minimum, eliminating 155 positions. Additionally, Nash (October 1) and Pamlico (March 1) Correctional Institutions, both medium custody, will be double-celled with 99 additional positions.
_ Umstead Correctional Center will close Oct. 1 and Guilford Correctional Center will close Nov. 1, with a position reduction of 95. Lincoln Correctional will be converted to minimum custody on Sept. 1, and Warren Correctional will be double-celled for medium custody inmates on Nov. 1. Lincoln will lose 28 positions and Warren will gain 18.
_ The Wilmington Residential Facility for Women will close Sept. 1. The reduction for Wilmington is reduced by $168,740 in the first year of the biennium to allow for 10 additional contractual beds at the Center for Community Transitions in Charlotte.
_ Gates and Union Correctional Centers will close Oct. 1 and Haywood Correctional Center will close on March 1 with a total position reduction of 112.
_ Cleveland Correctional Center will close Dec. 1 with a reduction in positions of 50. Craven Correctional Institution will be double-celled effective Dec. 1 with a position increase of 7.
Notes
House Speaker Joe Hackney and Senate President Pro Tem Marc Basnight reaffirmed their support for the military this week by meeting with members of the National Guard and Reserve. The chamber leaders then each signed a resolution agreeing to work with reservists and Guard members who are deployed. Several staff members of the General Assembly and two representatives are active reservists.
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. June 4, 2009
Much of the energy at the General Assembly this week has been focused on preparing the final version of the House’s proposed budget.
Our budget subcommittees are crafting their final budgets to submit to the full Appropriations Committee. After the bill is voted upon by the full committee, it will go the House floor for additional debate, and a final proposal could be approved as early as next week. A conference committee comprised of members of the House and Senate will then negotiate a final version of the budget to submit to the governor.
This budget will contain little good news, as I’ve warned for several months now. The global economic downturn has reached North Carolina and our tax revenue is down about 20 percent from last year. We will have to cut all areas of our budget to meet this smaller revenue target. Education, particularly our community colleges, will get smaller cuts, but still must be trimmed in this environment.
I regret it, but until our economy recovers, we will have to reduce services.
Thank you as always for your interest in state government. I have included some information below to update you about the progress of several pieces of proposed legislation. I hope you will be in touch if I can be of any assistance.
Justice
_Lawyers representing death row inmates may be permitted to meet with their clients on the same day that the court rules on the inmate’s appeal under a House bill that has passed the Senate. 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 now goes to the governor to be signed into law.
_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 has been approved by the Senate (HB 266).
Elections
_The Secretary of State would be required to notify potential candidates and political parties to remind them of the state law that prohibits an individual from holding two elected offices at once. The bill (HB 170) has now been approved by both bodies of the legislature and will go to the governor’s desk for a signature.
_ A bill that would make it unlawful for a school board member to willfully fail to discharge the duties of office has been approved by the Senate. House Bill 43, “School Board Members/Failure to Discharge Duty,” allows school board members who fail to discharge their duties to be charged with a Class 1 misdemeanor. They would be subject to removal from office by the court as a part of the punishment for the offense.
Health
_The Department of Health and Human Services would be directed to work with the Division of Medical Assistance, the Division of Aging and Adult Services, the University of North Carolina and East Carolina University Schools of Dentistry, the North Carolina Dental Society, and current special care dental providers to examine dental care options for special care populations under a bill that passed the House this week (SB 188). The intent of the legislation is to improve the availability of dental services for special care populations.
_Senate lawmakers have approved 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 jobs because of a disability incurred or aggravated during active military service or because of absences from work to obtain care and treatment for the disabilities.
Miscellaneous
_Youth employment protections would be enhanced by requiring the Commissioner of Labor to report on youth employment enforcement activities under a House bill that passed the Senate this week (HB 22). The objective of the legislation is to enhance the safety of children in the workplace by making more information available on workplace violations.
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
Our budget subcommittees are crafting their final budgets to submit to the full Appropriations Committee. After the bill is voted upon by the full committee, it will go the House floor for additional debate, and a final proposal could be approved as early as next week. A conference committee comprised of members of the House and Senate will then negotiate a final version of the budget to submit to the governor.
This budget will contain little good news, as I’ve warned for several months now. The global economic downturn has reached North Carolina and our tax revenue is down about 20 percent from last year. We will have to cut all areas of our budget to meet this smaller revenue target. Education, particularly our community colleges, will get smaller cuts, but still must be trimmed in this environment.
I regret it, but until our economy recovers, we will have to reduce services.
Thank you as always for your interest in state government. I have included some information below to update you about the progress of several pieces of proposed legislation. I hope you will be in touch if I can be of any assistance.
Justice
_Lawyers representing death row inmates may be permitted to meet with their clients on the same day that the court rules on the inmate’s appeal under a House bill that has passed the Senate. 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 now goes to the governor to be signed into law.
_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 has been approved by the Senate (HB 266).
Elections
_The Secretary of State would be required to notify potential candidates and political parties to remind them of the state law that prohibits an individual from holding two elected offices at once. The bill (HB 170) has now been approved by both bodies of the legislature and will go to the governor’s desk for a signature.
_ A bill that would make it unlawful for a school board member to willfully fail to discharge the duties of office has been approved by the Senate. House Bill 43, “School Board Members/Failure to Discharge Duty,” allows school board members who fail to discharge their duties to be charged with a Class 1 misdemeanor. They would be subject to removal from office by the court as a part of the punishment for the offense.
Health
_The Department of Health and Human Services would be directed to work with the Division of Medical Assistance, the Division of Aging and Adult Services, the University of North Carolina and East Carolina University Schools of Dentistry, the North Carolina Dental Society, and current special care dental providers to examine dental care options for special care populations under a bill that passed the House this week (SB 188). The intent of the legislation is to improve the availability of dental services for special care populations.
_Senate lawmakers have approved 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 jobs because of a disability incurred or aggravated during active military service or because of absences from work to obtain care and treatment for the disabilities.
Miscellaneous
_Youth employment protections would be enhanced by requiring the Commissioner of Labor to report on youth employment enforcement activities under a House bill that passed the Senate this week (HB 22). The objective of the legislation is to enhance the safety of children in the workplace by making more information available on workplace violations.
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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