United States: March 6, 2015 Legislative Update

In Like a Lion and Out Like a Lamb.

That's what we've always heard about the month of March in North Carolina.

  1. In like a lion.
  1. Madness.
  1. Out like a lamb.

Not many generations ago our lives were ruled by the weather. And so it has been on Jones Street. With winter storms behind us we officially entered "Madness" this week with bill introductions, committee meetings, floor debates, and unhappy people. And there is plenty of basketball still to come.

State of the Judiciary Address

For the first time since 2001, the Chief Justice of the North Carolina Supreme Court delivered a State of the Judiciary address to a joint session of the General Assembly and the Governor.  It had been 14 years since the State of the Judiciary Address had been delivered and the first time the Governor attended.

Chief Justice Mark Martin's address highlighted the fiscal needs of our underfunded court system which handles 3 million cases each year in a state with 9 million people.  In 2012 NC ranked 45th nationally in state per capita spending.  He highlighted the need to direct more resources to court reporting and expert witnesses as examples of what the courts need to better serve North Carolina citizens and businesses.  A compelling takeaway was that the Judicial Branch, co-equal to the other two branches of government, is funded at just $500 million in a state budget of $22 billion.  To put that in perspective, the Wake County Public Schools' budget is funded at $1.5 billion.

On a positive note, he highlighted the success of the Veterans Treatment Courts which help those who have served make the transition and thrive as civilians while offering particular support for the issues veterans have in our society.  He also noted that there is work being done to develop a master plan for instituting e-filing statewide.

Governor McCrory's newly-released budget recommendation increases court spending by $6 million next year, with $10 million additional in 2016-2017.  The final budget for the Judicial Branch will be agreed to by the House and Senate in the budget bill that then requires the Governor's signature.

 You can read Chief Justice Martin's address here.

Governor's Budget

Governor McCrory released his budget recommendations this week.  Remember that although the governor proposes a budget, his sole constitutional participation in the formation of the budget is to sign or veto a ratified budget bill; it is then his administration's responsibility to implement the enacted budget. Historically, legislators use the governor's recommendations as guidance and sometimes political cover for making tough choices. The budget process now underway is for the 2015-2016 and 2016-2017 budget years and would need to be implemented by July 1, 2015 to keep government on track.

In addition to the recommendation to bolster the Judicial branch, some of Governor McCrory's $21.5 billion budget highlights for 2015-16 are:

  • Raising the state's minimum starting salary for teachers to $35,000 per year
  • $99 million over the next year for NC Competes, a plan with incentives for economic development
  • Creation of a Department of Military and Veterans Affairs
  • Call for a $1.2 to $1.4 billion transportation bond, as well as a $1.2 to $1.4 billion general obligation bond for repairs and renovation of state buildings
  • Limiting the amount of state money the University of North Carolina system schools can spend on fundraising to $1 million
  • 5% pay raise for 700 state troopers
  • $8 million to rescue the ECU School of Medicine
  • $4.1 million reduction to the Department of Public Instruction (10%)
  • $10 million for a new film and TV production grant program
  • Restore the state's Historic Preservation Tax Credit program

Governor's Economic Development Quiver Passes the House

HB 117NC Competes – overwhelmingly passed the House this week with bipartisan support and heads to the Senate. This is Governor McCrory's quiver of incentives to lure business to NC (in particular, an auto manufacturing facility). The debate over incentives was similar to every other year's business recruiting efforts bill so no one even batted an eye at the Stam-Luebke alliance which is strange political bedfellows in every other instance. Opponents of the bill continue to argue that state incentives pit urban areas against rural ones. Of note, we heard little opposition to the adoption of single sales factor apportionment.

Gas Tax Debate

SB 20Update the Reference to the Internal Revenue Code, Decouple from Certain Provisions of the Federal Tax Increase Prevention Act of 2014, Modify the Motor Fuels Tax Rate, and Make Certain Reductions Within the Department of Transportation for the 2014-2015 Fiscal Year passed the House this week and will go back to the Senate for a concurrence vote. We are hearing the Senate will not concur and a conference committee will be appointed to settle the differences between the House and Senate-passed versions of the bill.  Both bills create a new gas tax floor:

  • House floor of $0.36 per gallon and eliminates 40 vacant positions at the Department of Transportation.
  • Senate floor of $0.35 per gallon and eliminates  500 vacant and filled Department of Transportation positions.

Gay Marriage

SB 2Magistrates Recusal for Civil Ceremonies - A House Judiciary Committee began debating the Senate-passed bill and invited public comment this week. Religious leaders on both sides of the issue commented further obfuscating the issue of religious freedom in a judicial setting. An interesting point made by the NC Association of Registers of Deeds is that 42 of NC's 100 Register of Deeds offices have three or fewer employees making the refusal to grant a marriage license by one employee a potential hardship for those seeking to tie the knot. That said, the Association did not take a position supporting or opposing the bill. The bill is still in committee for further discussion with a committee vote expected March 11.

Redistricting Local Bills

SB 181Wake County Commissioner Districts - was heard in a raucous Senate Redistricting Committee this week with very little public notice. Senator Barefoot introduced a bill that will add two additional members to the Wake County Commission. It would also align county commission districts with the Wake County School Board Districts which were the subject of bitter partisan bickering on Jones Street a year ago. Some of you may not be aware that the Wake County Commission was swept by Democrats in November, and they did not request this change. No vote was taken on the bill this week. The Wake Legislative Delegation will hold a hearing Monday.

SB 36Greensboro City Council Districts - was heard in the same committee meeting. This bill would eliminate at-large seats thereby reducing the size of the Board and take the vote away from the mayor. The sitting council opposed the bill and passed a resolution to that effect. We expect a committee vote this Tuesday.

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