JULY 16, 2004

ISSUE No. 11

2004 SHORT SESSION
Published every Friday during legislative sessions exclusively for NCCBI members

Agreement on borrowing for healthcare
facilities indicates budget deal is at hand


The General Assembly continued inching toward adjournment and possibly could wrap up work on a budget compromise this weekend. But a final version of the budget was not in place by our deadline this morning. Once an official spending plan for the fiscal year that began July 1 is in place, NCCBI will send you a wrap-up issue of the Bulletin concentrating on the final budget numbers.

One of the final pieces of the budget puzzle fell into place Wednesday when House and Senate leaders reached agreement on borrowing $463 million, mainly to pay for new healthcare facilities on UNC System campuses. However, Gov. Mike Easley wasn’t on board with the plan over concerns about such a large increase in the state debt and the use of certificates of deposit – which don’t require voter approval – to pay for the projects.

The five healthcare bond projects are $180 million for a cancer research hospital at UNC-Chapel Hill, $60 million for a cardiovascular disease center at East Carolina University, $35 million each for a UNC-Asheville health center; 4) $35 million for a bioinformatics center at UNC-Charlotte, and $28 million for a pharmacy school at Elizabeth City State University. The plan includes another $50 million for various construction projects to be split among other UNC system schools, $45 million for state parks and to acquire land around existing military bases, and $30 million for new juvenile prisons.

To fund those projects, the state would borrow $310 million fiscal year and $153 million next year. The deal also allows the use of other non-traditional borrowing schemes, including House Speaker Jim Black’s idea of using real estate certificates of participation. That method of borr0wing would allow the state to avoid payment on the principal for up to 20 years.

Another budget compromise was reached when House and Senate leaders said the final spending plan would include a pay raise for state employees of 2.5 percent or $1,000, whichever is greater. As previously reported, the final budget also will include $59 million for full funding of Easley's initiatives to reduce class size for third grade and to expand his More at Four prekindergarten program.
 

Senate panel amends, approves school calendar bill
T
he Senate Education Committee on Thursday favorably reported H 1464 School Calendar Changes after amending the bill to reduce the number of annual teacher workdays from 20 to 15. The version of the bill passed by the House cuts teacher workdays to 10. However, the amended bill continues to specify that schools will not open earlier than Aug. 25 and end no later than June 10. The bill was scheduled for a floor vote in the Senate today.

The House voted 67-40 on Wednesday to pass the bill, which would take effect for the 2005-06 school year. While the number of instructional days would remain at 180, the school year would be shortened from 220 to 210 days by cutting teacher workdays without changing teacher pay. Teachers now get up to 20 workdays, which is higher than the national average, according to supporters. How the change in schedule would possibly affect the cost of teacher pensions was one of the many points debated by the House. See how they voted.

The measure is supported by a diverse coalition of parents and the state’s tourism industry. Most education leaders oppose it. NCCBI took a more cautious approach that would mandate a study of the long-term impact of changing the school calendar led by the State Board of Education and the state Travel Council.

The measure would not apply to year-round schools and those that have lost at least eight days because of winter weather in four of the last 10 years. Those include school systems in Avery County, Alleghany County, Ashe County, Mitchell County, Yancey County, Watauga County, Madison County, Haywood County, Buncombe County, Davidson County, Lexington City, Thomasville City, Forsyth County, Granville County, Chapel Hill-Carrboro, Person County, Rockingham County, Rowan-Salisbury, Stokes County, Surry County, Mount Airy City, and Vance County.


House votes to override veto of billboard bill
T
he House voted 79-34 Monday night to override Gov. Mike Easley’s veto of the billboard bill. It was only the fourth time a governor had vetoed a bill passed by the General Assembly – all four by Easley – and the first time that a chamber of the legislature had overridden a veto. The 79 votes to override the veto were 11 more than the three-fifths needed under the state Constitution. See how they voted.

It remained unclear Friday whether the Senate also would vote on overriding the veto. Sen. David Hoyle (D-Gaston), the bill’s original sponsor, said a showdown vote was possible. The Senate’s original 34-11 vote for the bill is more than enough to override. Hoyle also said it was possible a compromise could be worked out and possible inserted into the overall budget bill.

The billboard industry has worked for 20 years to end North Carolina's system of allowing local governments to order billboards taken down without paying for them. Current state law allows local governments to order the removal of legally erected signs after allowing owners to keep them up a few years, a system known as amortization. North Carolina is one of only five states that allow amortization; the rest require monetary compensation, and federal law requires cash payments when billboards are removed from interstates, including those in North Carolina.

“This bill would require excessive payment of taxpayer dollars by our cities and counties that may prohibit communities from acting to relocate or remove these signs,” Easley said in announcing his veto. “I support fair compensation for the owners of billboards, but this formula is unfair to the cities, the counties and the taxpayers. It also effectively prohibits local governments from enacting their own rules regarding billboards and creates a windfall for the billboard industry. I believe a reasonable compromise can be reached that is fair to all parties.”

Easley’s three previous vetoes were sustained. In November 2002 he vetoed S 1283 over what he called unqualified appointments to various boards and commissions. In June 2003 he vetoed S 931 which stripped the State Board of Education of its authority to set teacher standards. In August 2003 he vetoed H 917 which raised fees charged by finance companies.


Conferees working on compromise on IT efficiency legislation
The Senate on July 9 failed to concur with House amendments to S 991 Improve State IT Efficiency / Project Management (Reeves) and conferees were appointed. The House conferees are Reps. Joe Tolson, John Sauls, Wilma Sherrill and Drew Saunders. The Senate conferees are Sens. Eric Miller, John Carrington and Tony Rand. The legislation will make significant changes in the way the state administers information technology, transferring much of the control from the Information Resource Management Commission to the state’s Chief Information Officer.

Opposition to the change is coming from several members of the Council of State, who don’t want to lose control of their departments’ IT functions and personnel.In a letter to Senate President Pro Tem Marc Basnight, Secretary of State Elaine Marshall and five other Council of State members protested putting their computer-system management under the control of a gubernatorial appointee. Marshall also said the change could lead to the state beginning to charge for online information now available for free.


Legislators give employers new tool to combat workplace violence
T
he House on Wednesday gave second- and third-reading approval to S 916 Prevent Workplace Violence (Clodfelter) and returned the measure to the Senate for concurrence in amendments. The legislation give employers new power to protect their employees from on-the-job violence by going to District Court to obtain a “no-contact order” on behalf of an employee when there's the possibility that violence could occur at work. It also would cover threats from disgruntled employees. Individuals already can seek a restraining order that applies to the home or workplace, but they are sometimes fearful to do so, lawmakers said. No prior injury to the person or damage to business property would be required before the order could be issued.

 
Chambers accept compromise dropping IRB wage standard
The House and Senate on Tuesday voted to accept a conference committee report resolving differences in bills they passed to eliminate the wage standard as a restriction on the use of industrial revenue bonds. S 1063 Eliminate Industrial Revenue Bonds Wage Standard (Hartsell) scraps a provision in existing law that says companies must agree to wages that are at least 110 percent of the county average before they are eligible for the bonds. The measure now goes to Gov. Mike Easley for his signature. Supporters of the change argued that the 110 percent wage standard penalizes some rural counties, particularly those hard hit by textile and furniture plant closings. As recommended by the conferees, the final version of the bill deleted a provision requiring companies using industrial revenue bonds to provide employer-paid healthcare benefits.

Correction: We were wrong last week in reporting that the House had concurred with Senate amendments to H 1463 Health Insurance Innovations Commission (C. Wilson, LaRoque and Church) and that the measure was enrolled. Actually, the House rejected the Senate amendments and conferees were appointed. The Senate amendment basically enlarged the size of the commission from 24 to 26 people. The House conferees are Reps. Earl Jones, Connie Wilson, Walter Church, William Daughtridge, Stephen LaRoque and Bill Owens Jr. The Senate conferees are Sens. David Hoyle, John Garwood, A.B. Swindell and Scott Thomas


Legislative Actions

The House on July 9 gave second- and third-reading approval to S 1210 Phase II Stormwater Management-1 (Clodfelter) and the measure was enrolled. The legislation creates temporary rules requiring 120 small towns and 30 rural counties to adopt regulations limiting stormwater runoff from construction sites as small as one acre. The action will keep the state in compliance with new EPA regulations that have been followed by larger cities and urban counties for several years.

The Senate on Wednesday concurred with House amendments to S 1218 Child Restraint Systems Modified (Purcell), legislation raising the minimum age and weight for children wearing safety seats. It requires children younger than 8 and weighing less than 80 pounds to use safety seats while riding in a vehicle. Violation of the law would result in a $75 fine plus court costs and two points in your driver’s license. State law currently requires motorists to place kids younger than 5 and less than 40 pounds in child restraint seats.
 
The House and Senate last Friday adopted a conference committee report on S 676 Revise The Banking Laws of North Carolina (Hoyle) and the measure was enrolled. The bill increases the annual license fee paid by a bank or trust company to the N.C. Banking Commission from $200 to an amount not to exceed $500.

The House on Monday concurred with Senate amendments to H 1083 Environmental Technical Corrections (Gibson) and the measure was enrolled.

The Senate on Thursday concurred with House amendments to S 0020 Regulate Professional Employer Organization (Bingham) and the measure was enrolled. It now goes to the governor for his signature. The measure requires professional employer organizations to be licensed by the state Department of Insurance.

The House on Thursday concurred with Senate amendments to H 1046 Aggressive Driving, and the measure was enrolled. It now goes to Gov. Easley for his signature. The legislation creates the new offense of aggressive driving. Conviction would result in five points against a person’s driver’s license, the same as passing a stopped school bus.

The House on Thursday gave third-reading approval to S 0074 N.C. Vineyard Amendments (Rand) and returned the bill to the Senate for concurrence in amendments. The measure would allow North Carolina wineries use brandy in their winemaking and let the Biltmore Estate Winery to sell wine produced at other wineries. Supporters said winemakers need to add brandy to wine produced from grapes grown during rainy years in order to ensure that a consistent alcohol content.


State Government
 
DOT board approves road improvement projects
he N.C. Board of Transportation awarded several highway improvement contracts during its July meeting that are part of the state’s N.C. Moving Ahead program. Included were:

$2.6 million to widen and repave U.S. 129 in Graham County from Airport Road to the Cherokee County line. The contract was awarded to the Harrison Construction Co. Inc. of Alcoa, Tenn.Work is scheduled to start at the beginning of August and is expected to be complete by the end of June 2005.

$5.2 million to repave eight miles of I-26 in Henderson and Polk counties from milepost 53.79 to milepost 61.75 and the ramps at Holbert Cove Road and N.C. 225. The contract was awarded to the Asheville Division of APAC-Atlantic Inc. Work is scheduled to begin at the beginning of August and is expected to be complete by August 2005.

$5.2 million for highway improvements on U.S. 401 from U.S. 401 Business in Hoke County to the U.S. 401 Bypass in Scotland County. The project includes drainage improvements, shoulder reconstruction, resurfacing and installation of traffic signals. Work is scheduled to begin in August with completion expected by June 2005.The contract was awarded to the Coastal Carolina division of APAC-Atlantic Inc. of Kinston.

$1.5 million to improve 0.475 miles of Pittsboro-Moncure Road in Chatham County from U.S. 15/501 to Old U.S.1.The project and includes milling and drainage improvements, shoulder reconstruction and resurfacing. Work is scheduled to begin in August with completion expected by June 2005. The contract was awarded to S.T. Wooten Corp. of Winston-Salem.

$790,000 for four projects in Pitt County. The first project calls for constructing a right turn lane on eastbound Greenville Boulevard at 10th Street adjacent to Burger King. The second project is to construct a right turn lane on southbound Greenville Boulevard at 10th Street adjacent to Hastings Ford and to extend the existing right turn lane on Greenville Boulevard north at Mobley Drive. The third project is to widen North Highland Avenue from 28 feet to 40 feet and construct curbs, gutters and a sidewalk from Patrick Street to River Street. The fourth project is to repair, widen and install curb and gutter on Main Street from Old Tar Road to Graham Street.

$1.4 million to improve 2.59 miles of U.S.1 from U.S. 421 to the southern city limits of Sanford in Lee County. The project includes shoulder reconstruction, resurfacing and improvement of pavement markings. Work is scheduled to begin in August with completion expected by May 2005. The contract was awarded to S.T. Wooten Corp. of Winston-Salem for $1.5 million.

$4.9 million for two projects in Mecklenburg County, including resurfacing and painting pavement markings on 7.6 miles of N.C. 16 from the Gaston County line to Lawton Road. The contract was awarded to Crowder Construction Co. of Charlotte. Work on the project will begin in August and is expected to be completed in December. The second project involves resurfacing, adding curbs and gutters and painting pavement markings on 4.9 miles of N.C. 16 from Queens Road to Old Providence Road. The contract was awarded to Blythe Construction Inc. of Charlotte. Work on the project will begin in August and is expected to be completed in November.



Status of the General Fund dollars in millions
 

Month of May

11 Months Year to Date

  Budget Actual Variance Budget Actual Variance
Tax Revenue            
Individual Income $416.7 $419.8 $3.1 $6,731.9 $6,804.7 $72.8
Corporate Income 1.0 -16.6 -17.6 594.5 610.4 15.9
Sales and Use 326.3 341.1 14.8 3,736.2 3,885.8 149.6
Franchise 24.5 23.3 -1.2 453.5 445.5 -8.0
Insurance -4.9 2.9 7.8 295.4 287.7 -7.7
Piped Natural Gas 5.6 4.8 -0.8 48.1 48.7 0.6
Beverage 17.7 18.1 0.4 158.2 163.8 5.6
Inheritance 8.9 13.8 4.9 98.1 118.2 20.1
Privilege License 2.9 2.7 -0.2 40.6 36.2 -4.4
Tobacco Products 3.4 3.6 0.2 35.8 39.9 4.1
Real Estate Conveyance Excise -0.5 -0.5 3.7 3.7
Gift 0.6 0.3 -0.3 19.9 16.5 -3.4
White Goods Disposal 0.4 0.4 0.8 0.8
Scrap Tire Disposal 0.9 0.9 2.1 2.1
Freight Car Lines 0.2 0.2 0.5 0.5
Other 0.2 0.1 -0.1 0.5 -0.5
Total Tax Revenue $803.9 $814.9 $11.0 $12,219.8 $12,464.5 $244.7
Non-Tax Revenue            
Treasurer's Investments 10.2 6.8 -3.4 103.5 72.4 -31.1
Judicial Fees 11.6 11.5 -0.1 126.7 126.3 -0.4
Insurance 7.0 1.9 -5.1 47.4 43.6 -3.8
Disproportionate share 100.0 97.1 -2.9
Highway Fund Transfer In 15.0 15.0
Highway Trust Fund Transfer In 63.1 63.1 252.4 252.4
Other -258.4 10.9 269.3 337.0 323.8 -13.2
Total Non-Tax Revenue -166.5 94.2 260.7 982.0 930.6 -51.4
Total Revenue $637.4 $909.1 $271.7 $13,201.8 $13,395.1 $193.3

 

General Fund actual expenditures year to date through May
Dollars in Millions 2003-04 2002-03 $Change
       
General Government $257.3 $243.5 $13.8
Education 7,822.4 7,463.6 358.8
Health and Human Services 3,114.5 3,179.9 -65.4
Economic Development 81.1 23.4 57.7
Environment and Natural Resources 193.6 182.2 11.4
Public Safety, Correction, and Regulation 1,333.0 1,217.1 115.9
Agriculture 40.6 40.1 0.5
Operating Reserves/Rounding 24.7 8.8 15.9
Total Current Operations $12,867.2 $12,358.6 $508.6
Capital Improvements:      
Funded by General Fund 27.6 31.2 -3.6
Debt Service 318.5 207.0 111.5
Total Expenditures $13,213.3 $12,596.8 $616.5
       



Economic Development

Nonwoven manufacturer picks Asheville for first U.S. facility
J
acob Holm Industries, a Danish nonwoven manufacturer, said it would build a $40 million facility in Asheville and create 70 new jobs. It will be the company’s first American location. The company will receive a $200,000 grant from the One North Carolina Fund and additional incentives from Buncombe County, the Asheville Area Chamber of Commerce and A-B Tech. The N.C. DOT also will assist with improving access to the new facility. Construction on the company’s 150,000-square-foot building on a 22-acre in the Asheville Commerce Park will begin in the next two months.


North Carolina absent from annual list of biggest deals
With the help of the Jobs Development Investment Grant program, North Carolina had a good year in attracting new and expanding industries during 2003 but we failed to land any of the Top 10 deals of the year, according to Site Selection Magazine. We came close when Boeing considered the Global TransPark for its $900 million jet assembly plant, which turned out to be the biggest deal of the year. Most southeastern states made the magazine’s annual list of biggest deals and honorable mentions – Virginia, Florida and Texas had two, while South Carolina and Georgia each had one, as shown in the chart below:

Top 10 Deals of 2003    
Boeing Co. Everett, Washington $900 million; 1,200 jobs
Ford Motor Co. Hermosillo, Mexico $1 billion; 2,000 jobs
Ford Motor Co. Wayne, Michigan $583 million; 7,029 jobs
Pfizer New York, New York $1 billion; 2,000 jobs
Philip Morris USA Richmond, Virginia $300 million; 450 jobs
Scripps Research Institute Palm Beach County, Florida $147 million; 2,800 jobs
Texas Instruments Richardson, Texas $3 billion; 1,000 jobs
Toyota San Antonio, Texas $800 million; 2,000 jobs
Volkswagen Puebla, Mexico $2 billion; 1,500 jobs
Wells Fargo Des Moines, Iowa $250 million; 2,000 jobs
Top 10 Honorable Mentions    
Boehringer Ingelheim Petersburg, Va. $260 million
Magna Cosma Bowling Green, Ky. $213 million
JetBlue Orlando, Fla. $160 million
Mack Trucks Hagerstown, Md. $150 million
New York Life Forsyth County, Ga. $140 million
Haverhill Haverhill, Ohio $135 million
Intel Costa Rica $110 million
Fuji Photo Greenwood, S.C. $100 million
Federal Express Boone, Ky./Hutchins, Texas 3,700 jobs
GEICO Amherst, N.Y. 2,500 jobs



Names in the News

E. Rhone Sasser, the former president and CEO of United Carolina Bank who now serves as chairman of the board of trustees of Blue Cross and Blue Shield of North Carolina, was reappointed as a trustee of Southeastern Community College.

Thomas W. Waldrep Jr., a director and attorney with the Bell, Davis & Pitt law firm in Winston-Salem, was sworn in as the new federal bankruptcy judge for the Fourth Circuit and assigned to the Middle District of North Carolina.


How They Voted

H 1464 School Calendar Changes
Sponsor: WILSON, C.
Third Reading
Outcome: PASSED
Time: Jul 14 2004 4:17PM
67 Ayes: Reps: Adams, Allen, B., Allen, G., Allred, Baker, Barbee, Black, Blackwood, Blust, Bowie, Capps, Church, Cole, Crawford, Creech, Culpepper, Daughtridge, Decker, Earle, Eddins, Ellis, Farmer-Butterfield, Frye, Gillespie, Goodwin, Gorman, Grady, Gulley, Hill, Hilton, Hunter, Jeffus, Johnson, L., Jones, Justice, Justus, Kiser, LaRoque, Lewis, McAllister, McComas, McHenry, McLawhorn, Michaux, Miner, Mitchell, Morgan, Munford, Nye, Owens, Parmon, Pate, Preston, Rayfield, Rhodes, Saunders, Sexton, Stam, Starnes, Stiller, Walend, Warren, Williams, A., Williams, K., Wilson, C., Wood, Wright
44 Noes: Reps. Alexander, Allen, L., Bell, Bonner, Bordsen, Brubaker, Carney, Coates, Culp, Daughtry, Dickson, Dockham, England, Fisher, Fox, Gibson, Glazier, Goforth, Hackney, Hall, Harrell, Holliman, Holmes, Insko, Johnson, C., Lucas, Luebke, McGee, Moore, Rapp, Ross, Sauls, Setzer, Sherrill, Steen, Sutton, Tolson, Wainwright, Walker, Warner, West, Wilson, G., Womble, Yongue
2 Not Voting: Reps. Clary, Cunningham
7 Excused Absences: Reps. Barnhart, Haire, Howard, McMahan, Miller, Ray, Weiss

H 429 Monetary Compensation/Outdoor Advertising
Sponsor: Culpepper
Veto Override
Outcome: PASSED
Time: Jul 12 2004 7:21PM
79 Ayes: Reps. Allen, B., Allen, G., Allred, Baker, Barbee, Barnhart, Bell, Black, Blackwood, Blust, Bonner, Bowie, Brubaker, Capps, Church, Clary, Coates, Cole, Crawford, Creech, Culpepper, Cunningham, Daughtridge, Daughtry, Decker, Dockham, Earle, Eddins, Ellis, Farmer-Butterfield, Fox, Frye, Gibson, Gillespie, Gorman, Grady, Gulley, Harrell, Hilton, Holliman, Holmes, Howard, Johnson, L., Jones, Justus, Kiser, LaRoque, McHenry, McMahan, Mitchell, Moore, Munford, Nye, Owens, Parmon, Pate, Preston, Ray, Rayfield, Rhodes, Sauls, Setzer, Sexton, Sherrill, Stam, Starnes, Steen, Tolson, Wainwright, Walend, Walker, Warner, West, Williams, K., Wilson, C., Wilson, G., Wood, Wright, Yongue
34 Noes: Rep. Adams, Alexander, Allen, L., Bordsen, Carney, Culp, Dickson, England, Fisher, Glazier, Goforth, Goodwin, Hackney, Haire, Insko, Jeffus, Johnson, C., Lewis, Lucas, Luebke, McAllister, McComas, McGee, McLawhorn, Michaux, Rapp, Ross, Saunders, Stiller, Sutton, Warren, Weiss, Williams, A., Womble
3 Not Voting: Reps. Hall, Hunter, Miner
3 Excused Absence: Rep. Hill, Justice, Miller
1 Excused Vote: Rep. Morgan


 

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