June 9, 2000 Issue No. 5 The 2000 Short Session
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Bonds Campaign Gets Organized

T
welve of the state's top business and education leaders -- including a former U.S. Senator and four company presidents -- are spearheading the campaign to pass a $3.1 billion bond package for the state's community colleges and universities, Phil Kirk, president of North Carolina Citizens for Business and Industry (NCCBI) announced Friday.

Heading up the campaign will be Leslie Bevacqua, NCCBI vice president of governmental affairs. She will take a four-month leave of absence from the NCCBI staff beginning July 17 to run the day-to-day operations of the campaign. Until the campaign secures office space of its own next month, work on the campaign will done out of NCCBI's offices.

The campaign co-chairs, charged with directing the statewide effort to pass the bond package, are: Jim Broyhill, former U.S. senator; Mimi Cecil, secretary of the board of directors of the Biltmore Co. and chair of the board of Warren Wilson College; Mac Everett, First Union Bank Mid-Atlantic Region president and NCCBI chairman; Helen Newsome, president of the National Association of Community College Trustees; and Dr. Leroy Walker, former N.C. Central University chancellor.

The finance co-chairs, who will raise funds for the statewide campaign in order to educate North Carolina voters about the bond referendum are: William J. Armfield IV, president, Spotswood Capital LLC; Thomas Bradshaw Jr., managing director of Salomon Smith Barney Inc.; Bert Collins, president and CEO of N.C. Mutual Life Insurance Co.; Hugh McColl, chairman and CEO of Bank of America Corp.; John Medlin, chairman emeritus, Wachovia Corp.; Earl N. “Phil” Phillips Jr., president of Phillips Interests; and Dr. Ruth Shaw, executive vice president and chief administrative officer of Duke Energy.

Last week, Gov. Jim Hunt and three former governors -- Jim Martin, Jim Holshouser and Bob Scott -- were named honorary co-chairs of the campaign.

“The bond proposal is critical to help our community colleges and universities prepare for the future, “ Kirk said. “We couldn't be more pleased that these great citizens have agreed to lead our efforts on behalf of higher education in North Carolina.”

In May, the Michael K. Hooker Education Act was overwhelmingly approved by the General Assembly and Gov. Hunt signed it into law, placing it on the general election ballot in November. The proposal would allocate $2.5 billion for new construction, repairs and renovations for the UNC system's 16 campuses. Another $600 million would go for critical building needs at the state's 59 community colleges.

The state's Community College System expects 57,000 new students over the next 10 years, while the 16-campus University of North Carolina System predicts another 48,000 students to enroll. “But the campuses are not prepared to accommodate such booming enrollment growth,” Kirk said.

“Our community colleges and universities have made North Carolina into the great state it is today,” Kirk said. “But now they need help from the very citizens they serve. It's up to all of us to make sure that folks from all across this state show up on Nov. 7 and vote `yes' for the higher education bonds.”

The referendum has garnered widespread bipartisan support from education, government and business leaders across the state. State Treasurer Harlan Boyles has also endorsed the proposal, saying that it is a fiscally responsible way to support our community colleges and universities.


Legislative Actions
House Sets Schedule for Adopting Budget

House Speaker Jim Black has revised the timetable for adopting a budget in which the chamber possibly will pass a spending bill by next Thursday. The revised timetable replaces one that would have required the budget subcommittees to continue meeting in Raleigh over the weekend.

Appropriations Committee Co-chair David Redwine (D-Brunswick) said his panel will meet at 2 p.m. Monday. The full Appropriations Committee will meet at 8:30 a.m. Tuesday. That would set up a vote on a budget bill by the full House on Wednesday. Redwine and Appropriations Co-chair Ruth Easterling (D-Mecklenburg) met Wednesday and Thursday with their Senate counterparts to try to reach early agreement on major spending items as well as any special provisions.

It's now clear that the House and Senate leaders agree on a proposal to use a bookkeeping change in the way 12-month school employees are paid to free up $240 million that would go to refund intangibles taxes and to use a reserve created last year for bonuses under the ABCs program to provide another $125 million. That money, along with money from other budget cuts, would be used to replenish the Rainy Day fund ($100 million), to make contributions to the Repair and Renovation Fund ($50 million) and the Clean Water Management Fund ($30 million).

Open Beer Cans in Cars: The House on Thursday passed and Sent to the Senate a measure outlawing open containers of alcohol in cars, even if the driver has had nothing to drink. H. 1499 Interlock/Open Container Changes, the bill by Rep. Jim Crawford (D-Granville), brings North Carolina into compliance with a federal mandate. The state must adopt the law or risk losing up to $14 million a year in federal highway money. Under current state law, passengers in a car may possess an open beer can as long as the driver doesn't drink. Crawford's bill exempts limousines, taxis and the living quarters of recreational vehicles.

Taxing Internet Sales: The House on Thursday gave final approval to a bill that would help collect state sales taxes on catalog and Internet sales to North Carolina residents by out-of-state companies. Under the bill, H. 1624 Streamlined Sales Tax System by Rep. George Miller (D-Durham), N.C., Wisconsin, Michigan and Kansas would contract with a collector that would receive taxes from catalog and Internet retailers and distribute them to the states and local governments. N.C. is losing an estimated $120 million to $130 million a year in taxes from such purchases, despite efforts to collect them on state income tax forms. That loss is projected to grow as Internet sales increase. The measure now goes to the Senate. However, the process is entirely dependent on development of new software that e-commerce companies would use to detect where an order comes from, determine what state and local taxes might apply in that area, and apportion that tax to the state and local government.

Session Limits: The House Rules Committee on Wednesday opened debate on a Senate-passed constitutional amendment to limit the length of legislative sessions, S. 9 Session Length Limits, and heard the sponsor of the measure, Sen. David Hoyle (D-Gaston), say he was willing to remove a provision calling for four-year terms for members of the state Senate. Hoyle told the House panel he's willing to give up four-year terms or put the issue in a separate bill. "It's more important to get some certainty" on the length of sessions, Hoyle said. The panel did not vote on the measure.

Bill Lee Act Changes: The House on Thursday gave tentative approval to legislation making minor modifications to the Bill Lee Act, the state's centerpiece economic development policy. The bill, H. 1560 Modify Bill Lee Act by Rep. Gordon Allen (D-Person) adds airline maintenance facilities and other aircraft operations to the list of companies eligible for tax credits. It also says that any unusedportion of a tax credit may be carried forward for the succeeding 10 years if the company applying for the credit intends to invest at least $50 million on real property, machinery and equipment, or central office or aircraft facility property, as long as the company invests the $50 million within two years.

Committee Reports
* The House Finance Committee on Thursday favorably reported H. 1326 Dry-Cleaning Solvent Cleanup Amendments (Gibson).
* The House Environment and Natural Resources Committee on Thursday favorably reported H. 1618 Petroleum Discharge/De Minimus Report (Warwick) and S. 1328 Million Acre Open Space Goal (Odom).

State Government News
State Signs Unusual Environmental Clean Up Plan

State environmental regulators have reached an agreement with eight North Carolina manufactured gas plant owners to hasten the clean up of 27 abandoned coal gas operation sites across the state. Under the innovative agreement, the gas plant site owners together will pay the state $425,000 to fund the salaries of two Division of Waste Management engineers who will work exclusively on coal tar cleanup for three years. In return, the industries can accelerate their cleanup schedules by having qualified state personnel devoted to reviewing their work.

The agreement between the state Department of Environment and Natural Resources and the N.C. Manufactured Gas Plant Group is the state's first effort with directly funded state oversight. Using the funding provided by the parties, the state can hire staff dedicated to the assessment and cleanup of these sites without any cost to taxpayers. Prior to the agreement, the division lacked the resources to oversee these cleanups within a reasonable time. Second, this is the first cleanup planned between the division and a group of responsible parties with multiple sites.

Ralph Roberts, NC MGP chairman said, "Negotiating one master agreement for all of the MGP sites saves the division and the MGP Group members' time and money compared to negotiating 27 separate agreements. More importantly, having two division engineers dedicated to our sites will permit us to move forward with site cleanups. This will allow group members to remove liabilities from our books and put these properties back into productive uses. This agreement is good for the division, taxpayers, NC MGP Group members and the communities where the former MGP sites are located."

The unusual agreement came about when division officials suggested the various companies that owned abandoned coal gas plants conduct voluntary cleanups. The companies formed their own industry group, NC MGP, to negotiate with the division. The pact commits all group members to assessments and necessary remediations at each site. If three years is insufficient, those members with incompletely cleaned sights can renew the agreement, and provide additional funds for continued oversight. The division has agreed to prioritize cleanup operations in order to concentrate on sites with the highest environmental threats.

"I think that we have found something with this direct funding approach," said Bruce Nicholson, head of the division's Special Remediation Branch. "The group had no problem funding oversight positions because they wanted state oversight as much as we did. This allows us to get these sites cleaned sooner with less cost to taxpayers."

Group members include Duke Power, Carolina Power and Light, Public Service Co. of North Carolina, NUI North Carolina Gas (formerly Pennsylvania and Southern Gas), Piedmont Natural Gas, Greenville's Utilities Commission, and the cities of Rocky Mount and Wilson.

Manufactured gas plants processed coal to create coal gas, which was used before natural gas rose to popularity in the 1950s. The by-product, coal tar, was either sold, placed in on-site pits which have since been abandoned, or simply dumped into nearby stream beds. Over time, the coal tar, which contains carcinogenic constituents, has migrated through both soil and ground water. The cleanup will involve remove large volumes of contaminated soil, water, and, potentially, stream bed sediment.


State Plans Hearings on Water Supply Plan

The state Department of Environment and Natural Resources is seeking public input on a draft of the first ever State Water Supply Plan for North Carolina. The non-regulatory plan, mandated by the 1989 General Assembly, describes the major water supply issues facing state and local governments now and over the next decade and strategies for addressing these issues.

"For the first time we have a statewide review of what areas of the state are facing problems with having an adequate water supply and what we need to do to meet these future needs," said Bill Holman, secretary of the department. "If we are to ensure that all North Carolinians continue to have enough water, we must look at the entire state and coordinate the efforts of all our co mmunities."

The plan includes four recommendations:
1. Ground water withdrawals should be regulated in the 15-county Central Coastal Plain to ensure that these aquifers remain a productive, high-quality, sustainable water supply for the region.
2. Water systems using on average more than 80 percent of their available supply should actively manage their water demand and pursue additional water supplies.
3. All water systems should have a Water Shortage Response Plan to reduce the likelihood of serious effects during a drought or other water shortage.
4. Local governments are encouraged to seek regional water supply solutions where feasible, since increasing costs and regulatory requirements for new water supplies and treatment facilities make it less practical for communities to act independently to meet future water supply needs.

The plan, a compilation of more than 500 detailed local water supply plans, pulls together information that local governments should consider when planning their future water supply needs. It also provides current and projected water supply and demand information through 2020 for local systems. An atlas-style series of river basin summaries provides basin-specific information about factors affecting water demand, water use by type, and general water availability for each of the major river basins in the state.

Several informational meetings will be held across the state in late June to answer questions about water supply planning and to receive comments and suggestions about the draft plan. Interested parties are encouraged to review the plan at the N.C. Division of Water Resources web site at www.dwr.ehnr.state.nc.us/wsas/nc_swsp.htm. Anyone wishing to comment on the plan should send questions and suggestions to swsp@dwr.ehnr.state.nc.us or the Water Supply Planning Section, Division of Water Resources, 1611 Mail Service Center, Raleigh, NC 27699-1611, or call 919-733-4064. The final State Water Supply Plan, including updated local water supply plan information, will be released by November 2000.

School Merger Suit: Lawyers for the Kings Mountain school board asked a state administrative law judge to block a plan, approved last week by the State Board of Education, that would lead to the merger of Cleveland County's three school systems. Kings Mountain claims the merger plan is invalid and that the State Board of Education exceeded its authority when it approved the merger June 1. Kings Mountain school officials contend Gaston County must first approve the merger because part of the Kings Mountain district is in Gaston County. But Cleveland County, which supports the merger, counters that the Kings Mountain district was never officially extended into Gaston County and approval there is unnecessary. State Board of Education Chairman Phil Kirk said the board agrees with Cleveland County.

Economic Development News: Two of the state's most economically distressed counties got some good news recently.
* FCC Co. Ltd., a Japanese company, broke ground for a Scotland County plant that will create 125 jobs over the next three years. The company is building a $19 million plant to produce clutches for motorcycles, all-terrain vehicles and for automatic transmissions for cars. The company will occupy a 75,000-square-foot facility and expects to be fully operational by April 2001.
* Reser's Fine Foods held a ceremonial groundbreaking for a 180,000-square-foot food production and distribution center in Halifax County. The company, which makes and sells over 50 different kinds of potato salads, is investing $18 million and plans to hire 320 workers over the next three years.
Both companies are eligible for the maximum state tax credits because they are locating in Tier 1 counties.
Flying in the state helicopter to the Scotland County groundbreaking ceremony, Commerce Secretary Rick Carlisle and other state officials got a terrible scare when two Army helicopters suddenly appeared. The state helicopter had to make an emergency descent to avoid a mid-air collision. Observers said Carlisle appeared visibly shaken after the state helicopter landed safely.


Federal Government News
House Votes to Halt Ergonomics Rules

The U.S. House voted 220-203 on Thursday to block the Occupational Safety and Health Administration from enforcing ergonomics rules that the agency had planned to implement by the end of this year. The vote was on whether to delete an anti-ergonomics amendment from an appropriations bill passed last week. The amendment by Kentucky Cong. Anne Northrup was tacked onto a $339.5 billion measure funding education, labor and health programs in the coming fiscal year. In the mostly party-line vote, just 16 Democrats – mostly from the South – voted to block the ergonomics regulations. Fourteen Republicans, mainly from the industrial Northeast and Midwest, voted to let them take effect.

North Carolina's congressional delegation split 8-4 on keeping the anti-ergonomics amendment in the spending bill. Democrats David Price, Eva Clayton, Bob Etheridge and Mel Watt voted to strip the amendment from the bill. Democrat Mike McIntyre joined Republicans Richard Burr, Howard Coble, Walter Jones, Charles Taylor, Sue Myrick, Robin Hayes and Cass Ballenger in voting to keep the amendment. See the roll call.

President Clinton strongly supports OSHA's bid to enforce ergonomics regulations on an estimated 1.8 million businesses, and has said he will veto the bill if it reaches his desk.The language could disappear even sooner, when House-Senate bargainers craft a final version of the spending bill.

The vote was the second major defeat for organized labor in recent days, coming soon after Congress voted to extend permanent normal trade relations with China.
Business groups oppose the OSHA rules because they say they would cost too much. In a letter to House members, the U.S. Chamber of Commerce said the OSHA effort "exemplifies irresponsible government at its worst" and said it might include the vote in its annual rating of lawmakers' records, which can effect campaign contributions.Since taking control of Congress in 1995, Republicans have repeatedly approved legislation aimed at delaying the regulations.

Floyd Flap: Nine members of North Carolina's congressional delegation have signed a letter to Senate Majority Leader Trent Lott (R-Mississippi) urging him to drop delaying tactics that have help up Senate consideration of a House-passed bill that includes more than $300 million in federal disaster aid to North Carolina victims of Hurricane Floyd. The House passed the emergency relief bill in March but Lott has refused to let the Senate consider it because he believes it includes too much money for unrelated items. A Senate committee in May attached $250 million in Floyd aid to an agriculture spending bill, with Lott's approval. But Minority Leader Tom Daschle blocked a vote on that bill because, he said, spending bills should originate in the House.

Farm Aid: The U.S. Agriculture Department said 10,221 North Carolina farmers will receive $6.1 million to help offset low commodity prices. Nationally, the payments amount to $462 million to more than 600,000 farmers nationally who grow soybeans, sunflowers and other oil-bearing crops. The payments are being made under a farm aid package passed by Congress last year and are intended to help offset low prices for the crops. The payments will amount to $593 for a farmer who grew 100 acres of soybeans.

Education Grants: The U.S. Department of Education awarded $1.29 million in grants to UNC-Chapel Hill, Winston-Salem State, Appalachian and Elon College for technology training programs for teachers, Sen. John Edwards (D-N.C.) announced. The four colleges were among 122 nationwide that received a total of $128 million in grants.

Paying Taxes: Republican U.S. Rep. Charles Taylor (R-11th) paid a $3,583.50 property tax bill to Jackson County under protest and submitted a written request for a refund. Taylor and county officials are involved in a dispute over a law that cuts the tax rate for land under active forest management. The county says Taylor has not qualified for the lower rate and wants $17,989 in delinquent taxes dating to 1996. Taylor contends he is eligible for the tax break and disputes the tax claim.

Issues Briefing
Why We Oppose Taxpayer-financed Political Campaigns
An NCCBI position paper written by Phillip J. Kirk Jr., president

While most of the media attention has been focused on the attempt to create support for taxpayer-financed campaigns, there are strong reasons not to rush down this misguided path.

While I, too, am concerned about the escalating costs of political campaigns at every level, many of those who support taxpayer-financed campaigns are out to eliminate the influence of the business community and those who have been successful in life from the political arena.

Nothing in any taxpayer-financed campaign plan I have seen would diminish the influence and day-to-day political activity of the labor unions, teacher organizations, state and local government associations, plaintiffs' attorneys, foundations, and other special interest groups. They could continue to assign employees to do the grassroots work of the campaigns on a daily basis, such as the door-to-door distributions of campaign literature, staffing the important telephone banks to identify and turn out the vote, put up the yard signs, haul voters, address envelopes, etc.

The supporters of the taxpayers' financing campaigns would say that the business community could also assign employees to perform these tasks for candidates of their choice, but that demonstrates a complete misunderstanding of the business world. Employees have to be at work most of the time for the businesses and industries of this state to thrive and flourish or even to keep their doors open. Many people forget that businesses must make a profit to survive. Yes, I wish that more business people could seek public office or at least participate in the day-to-day grassroots political activities, but that is not the real world.

Supporting the taxpayer-financed campaign scheme is an easy way out of the growth in the campaign spending situation. I have given this issue considerable thought over the years. Most "solutions" tend to favor the wealthy candidates because the courts have ruled that there can be no limits placed on how much they can give to their own campaigns. I agree with this ruling. Other suggested reforms which try to place limits on spending result in favoring incumbents because of the many free advantages they possess.

There are less radical approaches than the taxpayers paying for campaigns they don't support. Political campaigns in England last approximately six weeks. Perhaps our primaries should be moved to September. Single-member districts in legislative, school board, city council, and county commissioner races would help reduce costs. Four-year terms for all officials would go a long way toward reducing time campaigning and money being spent. Raleigh businessman Jim Goodmon is performing a magnificent public service by donating some broadcast time to top statewide candidates. Hopefully, this generous gesture will be adopted by other news media. Of course, the media already provides a considerable amount of free news coverage. Government should not unduly reduce the media's ability to make a profit off political candidates although broadcasters charge the lowest rate for political ads.

I firmly believe that this "crisis" is largely a result of media-hype and the desire of many liberals and populists to create a crisis which they want to solve on the backs of the hard-working taxpayers. When citizens are polled as they leave the voting booths (even in reform-driven New Hampshire) or when they are polled in the "Your Voice, Your Vote" project in our state, campaign reform barely registers and is seldom mentioned in "open-ended" questions. Of course, if the question is "Do campaigns cost too much?" the response is usually "yes." In my many years of public speaking, I have never been asked a question about campaign costs. The public is simply not interested, but they will be if they find out some politicians are intent on spending their money for political campaigns — tax money which more appropriately could be spent on computers and textbooks; repairs to crumbling, leaking buildings on our college and university campuses; more employees for our mental health and court systems; and other many worthy uses of tax funds.

Finally, I submit this is not the "crisis" some claim it is. Americans spend more on potato chips each year than they do on all political campaigns, ranging from school board races and other local races to state campaigns to all federal races.

Taxpayer-financed campaigns are not the way to reform the process. We should continue to seek more reasonable solutions to a growing problem.


Names in the News

* Alphanumeric Systems Inc., based in Raleigh and owned by NCCBI board member Darleen Johns, was ranked 216th of the 500 largest woman-owned and operated businesses in the U.S. by Working Woman magazine. The ranking is based on annual revenues. Only companies owned by a woman were eligible for the list. In addition, the female owner must actively participate in running the business. Alphanumeric Systems was one of four North Carolina companies in this national ranking.

* James O. Roberson of Cary, president of Research Triangle Foundation of North Carolina, accepted the 2000 Career Achievement Award from the Association of University Related Research Parks at the group's annual conference June 9 in Boulder, Colo. The award is given to individuals who have made research and science parks a central focus of their careers, who have achieved success with one or more parks over a substantial period of time, and who have received peer recognition for advancing the field. During Robeson's 12 years at RTP, the park has grown from 50 to 106 R&D companies and from 32,000 to 43,000 full-time employees.

* Deputy Revenue Secretary Michael Hodges has been awarded the national Federation of Tax Administrators' 2000 Award for Leadership and Service. The award, presented during the group's annual meeting in Boston, is presented annually to someone who demonstrates "sustained and significant service" in administration of state taxes. A deputy secretary since 1996, Hodges helped oversee the development of the N.C. Department of Revenue's technology applications, including a new system that electronically reads data on income tax forms, and also led efforts to introduce electronic filing.

* Gastonia was one of 10 cities chosen by the National Civic League as an All-American City. Gastonia, with a population of 62,077, also was named an All-American City in 1963. The National Civic League cited the West Gastonia's Boys and Girls Club, where volunteers share talents to tackle serious problems facing 800 of the city's most disadvantaged children; Unity Place; and the Make Room for Reading literacy project as examples of Gastonia's efforts to improve the community. New Bern was one of 30 finalists for the awards.

* Sprint has contributed $48,500 to the state community college system for scholarships at campuses within the company's local service area. Last year, 86 students received scholarships through the program, now in its 17th year. The money funds two scholarships. The Sprint Scholarship pays 50 percent of annual tuition for qualified minority students and displaced workers. The Sprint College Transfer scholarships provide $500 a year to students enrolled in college transfer programs. Black students receive priority. To qualify, applicants must live in the state, attend the same school for the length of the scholarship and must have a 3.0 average.

* The A.J. Fletcher Foundation has pledged $50,000 to the N.C. Community Colleges Foundation's campaign to raise at least $5 million for an endowment for the system.

* SAS Institute, Cary, has given the UNC system has received a five-year, $3 million grant that will give students, faculty and administrators use of the company's computer software and services. Under the grant, SAS will license all UNC faculty, staff and students to use the company's products, with no limit on the number of users or computers.


Mark Your Calendar
NCCBI Chairman Mac Everett and President Phil Kirk have announced the following dates, times and locations of the Fall Area Meetings:

Triangle * Thursday, Sept. 7 * Lunch * Angus Barn
Asheboro * Thursday, Sept. 7 * Reception * Asheboro Chamber
Asheville * Thursday, Sept. 21 * Breakfast * Grove Park Inn
Hickory * Thursday, Sept. 21 * Lunch * Days Inn
High Point * Tuesday, Oct. 3 * Breakfast * String & Splinter Club
Winston-Salem * Tuesday, Oct. 3 * Lunch * Salem Academy
Greensboro * Tuesday, Oct. 3 * Reception * Grandover Resort
Elizabeth City * Monday, Oct. 16 * Lunch * To Be Announced
Rocky Mount / Wilson * Monday, Oct. 16 * Reception * Carlton House
Greenville * Tuesday, Oct. 17 * Breakfast * Hilton
New Bern * Tuesday, Oct. 17 * Lunch * New Bern Chamber
Kinston * Tuesday, Oct. 17 * Reception * Vermillions
Salisbury * Wednesday, Oct. 18 * Breakfast * Catawba College
Concord * Wednesday, Oct. 18 * Lunch * Philip Morris
Charlotte * Wednesday, Oct. 18 * Reception * Hyatt-South Park
Gastonia * Thursday, Oct. 19 * Breakfast * City Club
Statesville * Thursday, Oct. 19 * Lunch * Civic Center
Boone * Thursday, Oct. 19 * Reception * Broyhill Center / ASU
S. Pines / Pinehurst * Monday, Oct. 23 * Reception * Pine Needles Resort
Burlington * Monday, Oct. 23 * Lunch * Elon College
Fayetteville * Monday, Nov. 6 * Lunch * Fayetteville Tech CC
Wilmington * Monday, Nov. 6 * Reception * Hilton

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