Archive for February, 2009

STIMULUS PACKAGE: WHO’S ON FIRST?

Thursday, February 19th, 2009

Legislators in Raleigh are using the Federal Economic Stimulus bill signed by President Obama this week as a guessing game. How much money will flow into North Carolina to help cover the $2.2billion budget deficit? How many jobs will be created? Where? How will the mortgage meltdowns be addressed? What does the General Assembly need to do?

Numbers released by the White House project 105,000 new jobs will be created in the Tarheel state and 7,800 of those will be in the 10th congressional district. The fifth district, which includes Alexander County, is projected to gain 7,500 jobs, primarily in construction of roads, schools, and healthcare. The 105,000 new jobs represent about one-four of the total number on the state’s unemployment rolls.

Fiscal research people are presenting legislators with trends in revenue and spending in various segments of the state budget. Growing larger in the shortfall of funds to cover state employees and retirees enrolled in the state self-funded healthcare plan. Some estimate an injection of $600 million will be needed by July.

LATE NEWS: State Sen. Dan Clodfelter who is studying the stimulous bill says the state could actually lose $740 million over the next two years. The bill seems to require parallel tax cuts to receive funds for highway construction.

…WITH THE SNAKEHANDLERS: One Catawba County legislator is being hounded by a Claremont resident who is convinced President Obama is not qualified to be president because “he was born outside the United States.” He wants his legislator to join a lawsuit challenging the President’s right to hold office. After lengthy discussions, the representative told the man, reportedly a former mayor, to join the lawsuit himself. “I just want you to do the right thing,” the caller said. “I have,” said the legislator as he hung up his phone.

MAKING THEIR CASE: Dozens of hosiery and textiles executives for this area will be in Raleigh March 18 to support continued appropriations for the CVCC Center for Emerging Manufacturing Solutions and its Hosiery Technology Center. Joining them will be representatives from the Textile Technology Center in Belmont. The event will include a breakfast for representatives and senators and visits to the leadership. The event is coordinated by Inform Inc. which represents the Hosiery Governmental Affairs Council and the Hosiery Technology Center as a lobbyist. This event has become an annual tradition for the legislators and industry spokespersons.

DOESN’T HURT TO ASK: Although the state has a $2 billion budget hole, legislators have introduced bills seeking $417 million in new appropriations, ranging from $200,000 to study the remains of Queen Anne’s Revenge, the flagship of Pirate Blackbeard, to $18 million to compensate victims of sterilization some 60 years ago. Other proposals would fund studies for new buildings at East Carolina University and UNC Chapel Hill and raises for community colleges staff and faculty.

GRAPEVINE TALK: Rep. Ray Warren is likely to end up as co-chair of the Catawba River Basin Commission, according to sources in the Legislature. His co-chair would be Rep. Becky Carney of Mecklenburg. Warren is a close friend to Speaker Joe Hackney and intensely loyal to the Speaker. Warren is losing a valuable ally. His legislative assistant Molly Freeman has announced her retirement. Molly was in Hickory last summer to present the North State Award to Suzanne Millholland who gave a valuable painting to the Hickory Museum of Art representing the Hudson River School. Molly will be leaving around April 1. She will be missed.

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STEPPING ON THE BRAKES

Thursday, February 12th, 2009

Over the past seven years, the state budget has grown by more than 40 percent. Education appropriations have expanded from about $7.6 billion per year to $11.4 billion. Medicaid expenses have leaped from $1.43 billion in 2001 to more than $2.9 billion in 2008—more than 110 percent. The annual bill for Medicaid is growing at a rate of 9.3 percent—unsustainable in the eyes of some legislators.

This week members of the General Assembly listened to fiscal research officials lay out the facts as budget writers prepared to develop a schedule with far less money than available in previous years. Today, the shortfall is expected to be $2.2 billion—more than 10 percent of the 2008-009 budget. The money available for the next year, beginning in July, is expected to be even less. Time to put on the brakes and put the gear in reverse. But how?

Every hour, 21 new people move into North Carolina. We are one of the five fastest growing states in the United States. This means more schoolchildren showing up at the schools in areas of the state attracting more people. Cutting funds for public education can be targeted only at teachers and personnel. Stopping growth of students is not possible. The only option for controlling costs for teachers seems to be larger classrooms, an option that is not popular.

HIGHER EDUCATION: Enrollment growth in the University of North Carolina system in 2003-2008 was 17.6 percent, compared to 15 percent for community colleges and 10.2 percent for public schools. This was the fifth highest in the United States. Taxpayers paid $8,854 for each fulltime student in the UNC system, compared to $6,773 as the national average—again putting N.C. 5th in the nation. We ranked 4th in the nation with higher education support per capita: $401. The national average is $277.

Not a bad thing, it can be argued. But legislators will be looking at affordability. The university system is the fastest-growing portion of the education budget. Over the past eight years the General Fund appropriations for the UNC system has grown by 58 percent.

MEDICAID: Some 18 percent of North Carolinians are getting healthcare services through Medicaid, one of the highest percentages in the nation. The growth in costs is almost twice the rate of growth in state tax revenue. Medicaid represents two-thirds of the funds allocated for Health and Human Service programs.

A CHAIR POSITION, BUT….Rep. Ray Warren is to be the first Hickory area legislator to chair a major House Committee in memory. He will preside over the Alcoholic Beverage Control Committee which may be dealing with one of the session’s hot potatoes: privatizing sales of liquor. Reportedly the state is losing money on the current ABC stores.

TRIVIAL PURSUIT: Of the 16 new members in the North Carolina House, five are Democrats and 11 are Republicans. There are 37 women—almost one-third of the House—of which 25 are Democrats and 12 Republicans. There are 21 African Americans, but none west of Charlotte.

HINT OF WHAT’S TO COME: The Western Piedmont Council of Governments made a presentation to the Morganton City Council last week and reported Burke County is losing population. Other Unifour counties are stagnant in population growth as the region continues to shed thousands of jobs.

When Legislative redistricting occurs two years from now, look for districts here to be expanded geographically to capture more people. The Charlotte and Triangle regions will have smaller districts and more legislators. This trend could further isolate the Hickory area and Northwestern North Carolina where fundamental, evangelist populations control elections. In some circles they are referred to as Republican snake-handlers.

In 2002, N.C. House Districts includes some 66,200 population and Senate Districts about 165,000.

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BIPARTISAN LEGISLATURE?

Thursday, February 5th, 2009

Democrats hold comfortable majorities in the North Carolina House and Senate, but signs of a bipartisan governing session have emerged.
Maybe the tone of President Obama has affected the constituents of our legislators. But the first two weeks of the legislative session have been marked with Republican-Democrat cooperation.

BIPARTISAN SENATE: President Pro-Tem Marc Basnight has named several Republicans as co-chairs of standing committees. They include Don East of Pilot Mountain, State and Local Government; Stan Bingham of Montgomery County, Health Care; and Richard Stevens of Wake, Education. Fletcher Hartsell of Concord is the chair of Judiciary 2.

BIPARTISAN HOUSE: Committees have not been announced for the House. But a bill to amend the constitution to allow four-year terms for legislators has been introduced by two Republicans and two Democrats. They are Reps. Becky Carney of Charlotte and Bruce Goforth of Asheville, Democrats, and Republicans Harold Brubaker and Julia Howard of Mocksville.

SENATE BUDGET CHAIRS: Sen. Linda Garrou of Winston-Salem will be the senior Appropriations Chair. Added to her team are co-chairs A.B. Swindell of Rocky Mount, Charlie Albertson of Duplin, and Charles Dannelly of Charlotte. The budget process starts in the Senate this session. Facing a $2.2 billion shortfall, Garrou has warned state employees to expect layoffs. Sen. Garrou said the budget will be developed without plugging in numbers that may come from the federal relief program.

Prediction: there will be no expansion budget with non-recurring appropriations and some line-item appropriations will be sharply reduced or eliminated. Some bills for local appropriations will be introduced to pacify homefolks. Those bills will die.

GETTING TO KNOW YOU: Lyndon Helton, Catawba County campaign manager for Gov. Perdue this week met with her appointments chief, Brynn Thomas. His objective was to discuss Catawba County appointments to state boards and commissions. He was accompanied by Paul Fogleman. Helton has said he will push for more appointments to open doors in Raleigh for the region. Thomas is the brother of former Sen. Scott Thomas and the son of former Sen. Joe Thomas. The family lives in Craven County, home to Gov. Perdue. Suzanne Gunter, former Hickory resident, was legislative aide to Scott Thomas.

ECONOMIC RECOVERY MONEY: Several Catawba County leaders reportedly are interested in forming a committee to promote the needs of the region which could be met with federal economic recovery funds. This includes lobbying with Sen. Kay Hagan. Rumors were floating that money would be dispensed by congressional districts which would not benefit this region. Others dismiss this plan because it would politicize the entire process and erode President Obama’s bipartisanship pledge.

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HERE WE GO

Monday, February 2nd, 2009

The 143rd session of the North Carolina General Assembly convened in Raleigh last week with seasoned leadership back in place. The House of Representatives elected Joe Hackney for a second term as Speaker and Marc Basnight was elected for an unprecedented ninth term as President Pro-Tem of the Senate. Presiding over the Senate was Lt. Gov. Walter Dalton of Rutherfordton who could be the first governor in almost 50 years from the western part of the state.

The re-election of Hackney was along party lines. Not one Republican voted for him, instead supporting Paul Stam of Wake County, minority leader. Still the mood of the day was festive, with family members on the floor as representatives and senators took the oath of office. Numerous buffet spreads were set up in the Legislative Building and the Legislative Office Building for legislators, their families and friends, and staff members to enjoy lunch following the formal sessions. The food and beverages were provided by legislators and their staffs.

SOMBER REMINDERS: Speaker Hackney and Sen. Basnight warned of the challenges posed by the economic crisis. Hackney referred to similar times in history when the state almost re-invented its government to responded to economic challenges. With a $2.2 billion shortfall projected for the current fiscal year and up to $3 billion for 2009-10 there will be some pain. And the adage from Louisiana Senator Russell Long will be recalled again: “Don’t cut him…don’t cut me…cut that guy behind the tree.”

Gov. Perdue has identified $1 billion in savings by freezing hiring, construction, and purchases, along with $200 million in reversions and budget cuts ranging from 1 to 7 percent. Another billion dollars is expected to flow to the state each year from the federal economic stimulus package.

ANOTHER 800-POUND GORILLA IN THE ROOM: A crisis in the outflow of funds in the state employee health plan will be a top priority. Some have said payments now are averaging $10 million a day and the shortfall is approaching $300 million. State employees do not contribute to the plan and their contracts prohibit they be required to do so. However, higher co-pay and higher prescription costs can be passed on to employees. Up to $200 million will be taken from the state’s savings—the rainy day fund—to cover this year’s costs.

ALL IN THE FAMILY: The staff person handling appointments made by the Governor is Brynn Thomas. Thomas is a member of an illustrious New Bern family with deep roots in politics. His brother is former Senator Scott Thomas, now District Attorney in Craven County, and his father is former Sen. Joe Thomas. A former Hickory resident, Suzanne Gunter, was Scott Thomas’ legislative assistant.

BRIGHT LIGHTS IN CATAWBA COUNTY: Despite the dark clouds hovering over the economy with rising unemployment and business struggles, people in Catawba County are fighting gloom. The turnout for the Catawba Democratic Party’s Inauguration Party last week reportedly was some 300, surprising a lot people. But give credit to the volunteers who worked the telephones and email marketing.

The kickoff campaign for the SALT Block cultural arts complex in Hickory attracted over 125 who were told some $3.2 million has been raised toward a $5 million goal. In a recession-dominated environment this is remarkable, the leaders acknowledged.

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