Our Informer

Beth Jones, chairperson of the Caldwell County Democratic Party is telling people she will seek the state senate seat now held by Jim Jacumin, a Burke County Republican. Some sources have quoted Jacumin as saying he will not run for re-election. Ms. Jones, a veterinarian, was in Raleigh last week visiting legislators and openly discussing her plans for a campaign.

HARBISON SEEKS POST: Joel Harbison of Alexander County is among the House nominees for a seat on the UNC Board of Governors. Harbison is an active Democratic party member and close friend of Rep. Ray Warren. He was in Raleigh two weeks ago and attended the popular St. Patrick’s Day party for legislators and politicos hosted by veteran lobbyist Zeb Alley.

COOPER 41, BURR 38: A recent poll by the Public Policy Council among 700 registered voters has Attorney General Roy Cooper defeating incumbent U.S. Senator Richard Burr in a head-to-head race. The poll results are especially interesting in a state that moved into the blue column last year after a generation (i.e. Jimmy Carter). Burr is a Republican finishing his first term next year. Moore, a former state senator, falls into the “blue dog” category of conservative Democrats.

SNAKES ALIVE: The ultra-right of the Republican Party, sometimes referred to as snakehandlers, were burning the email lists to legislators last week. They are fired up over the “Healthy Youth Act” which gives parents the right to choose how their children are given sex education. Snakehandlers prefer—demand—that abstinence only be taught in high schools. Count Rep. Mark Hilton as a spokesperson in this corner.

Hilton and his ultra-right supporters also are stirred up over a school bullying bill that would add sexual orientation to the list of offenses in school bullying, including race, religion, ethnic background, physical appearances. To Hilton and his ilk, sexual orientation is equated to gay, a firestorm word.

BLUE LAWS: Bills filed in the current session of the General Assembly would almost eliminate the so-called Blue Laws controlling activities on any Sunday. House bills would permit hunting on the Sabbath and allow ABC stores to operate on Sunday. They have not gone to committees for consideration.

SCHOOL CONSOLIDATIONS: Powerful Sen. Tony Rand has filed a bill that would mandate that the state provide funds for one school system in each county. Rand, a Democrat and majority leader, said the action would have the state $11.4 million a year. He argued in the Education Committee last week that given the financial climate, it is time to take the step to save money. His bill does not require mergers of systems, but local funds would have to support more than one system in a county.

Sen. Martin Nesbitt, a populist Democrat from Buncombe County, opposed the concept, noting that Asheville and some other districts have taxing authority. Bumcombe county voters are not inclined to support schools at the same level Asheville voters do, he argued. No committee vote was taken last week. If the bill passes the legislature, 15 school districts would not receive state funds, including two in Catawba County.

STIMULATING TALK: Several prominent citizens in eastern Catawba County are talking about recruiting federal stimulus funds to complete Highway 16 improvements between Newton and Charlotte. The push would involve discussions with Dempsey Benton, who heads up Gov. Perdue’s Federal Stimulus oversight office, and Transportation Secretary Gene Conti. The Catawba County citizens include Democrats and Republicans. Observers expect that Gov. Perdue will make the final call on major stimulus projects.

Joe Crocker, a popular banker in Hickory during the 1980s, has been appointed Assistant Secretary of Commerce by Secretary Keith Crisco. Among his areas of responsibility is Community Development which includes the Main Street program. As a Hickory resident for almost 10 years, Crocker served on boards for the Chamber of Commerce, the Hickory Human Relations Council and was the first African American member of the Hickory Rotary Club. His wife, Carol, was a member of the Hickory Choral Society.

PERDUE’S BUDGET: Gov. Beverly Perdue sent a $21.2 billion budget to the Legislature Tuesday. There were a few surprises, including a $1.00 per pack cigarette tax increase and 5 percent tax increase on alcohol products. The general response of legislators: it’s a good starting point. The proposed new taxes and a “truth in budgeting” provision that would freeze spending for any personnel vacancies got a cool reception, especially among House members. Sen. Linda Garrou, the senior appropriations chair, is known to oppose a tobacco tax. Democratic House members from Eastern North Carolina have said they would be doomed by a tobacco tax.

If budget writers reject the tax increases and the “truth in budgeting” provisions, they will have to find $658 million in additional cuts in expenses. If they reject the closing of seven correctional centers as proposed by the governor, the budget hole goes up to three quarters of a billion dollars. The cigarette tax would generate $350.2 million and the alcohol tax another $157 million. In the meantime, revenues from personal income taxes and sales taxes continue to spiral downward.

Some state employees are grumbling over the removal of longevity pay while others are saying they are thankful to have a job. The recession has pushed unemployment in the Triangle area to 8.8 percent which is a shock to residents of the Raleigh-Durham region. But compared to the 14 percent unemployment in the Hickory Metro—the highest in the state—the Triangle figures look good. Because the Hosiery Technology Center has played a leading role in preserving some 10,000 jobs in the state, Gov. Perdue left the center’s appropriation untouched.

UNC HICKORY STILL PUSHED: The concept of a state university campus in Hickory continues to circulate. The most recent discussion reportedly came from Dee Blackwell, director of the Western Piedmont Council of Governments. In his argument, Blackwell touts a Hickory campus as a branch of Appalachian State University, with dormitories, campus buildings and administrative complexes. Blackwell reportedly told Hickory legislators that such a development could pour $150 million a year into the Hickory area economy. Lenoir-Rhyne University has opposed another university campus in a city which has been its home for 114 years. With the state facing up to $3 billion budget shortfall, an ASU campus will be a long way off.

CRISCO VISIT: Secretary of Commerce Keith Crisco is coming to the annual Catawba Valley Pottery Festival in Hickory this weekend. Crisco, who lives in Asheboro, is a pottery enthusiast. The famous Seagrove pottery area is in his backyard. Crisco also was a speaker last week at a Legislative Breakfast sponsored by the Hosiery Governmental Affairs Council which is based in Hickory. He is owner of Asheboro Elastics Corp. and supports traditional manufacturing which has been under pressure as a result of globalization.

Next year will be the last election for legislators in their current districts. After the 2010 census, we go through the cantankerous redistricting ordeal, the most politically-charged undertaking of all. For western legislators, including those in the Hickory area, there will be dramatic changes. Each House District will get larger, reflecting the state’s population growth. Same for each Senate District. For House districts, the population goes up from 67,000 to an estimated 74,000. Senate districts will go from about 155,000 to 170,000.

Starting in the west, districts will grow in an eastward direction. Rep. Mitch Gillespie, whose home county of McDowell has 44,000, likely will pick up a bigger chunk of Burke, requiring the district of Rep. Hugh Blackwell to move into Catawba or Lincoln. Catawba’s tepid growth would accommodate two districts. Where will the three legislators with parts of Catawba—Reps. Mitchell Setzer, Mark Hilton, and Ray Warren—each find 7,000 new residents? The eastern movement toward the high-growth areas of the Triad and Charlotte could move Hickory or part of Alexander into the district of Rep. Edgar Starnes. Warren could be pushed into Iredell, not a welcome thought for a Democrat. Losing Warren would be a setback for Hickory in the minds of many city leaders He has risen up through the ranks of the House through his contacts with Speaker Joe Hackney and the leadership. Dominos also will fall as the senatorial district represented by 14-term Austin Allran expands into Alexander, Iredell or Lincoln.

Winston-Salem, Greensboro, High Point, Charlotte and Southern Iredell will have more representatives in Raleigh. For the Hickory Metro, it may be deja vue all over again.

NEW KID ON THE BLOCK: The town of Lake James is on the way to becoming the newest municipality in the Unifour. Rep. Mitch Gillespie who represents Morganton and western Burke, as well as McDowell, is filing a bill to authorize creation of the town. But strings are attached: no involuntary annexation, and no charges for access to the lake among them. Gillespie says Morganton is not opposing the creation.

Four years ago, citizens in Eastern Lincoln County tried to create the municipality of West Norman. That effort was fought by then Rep. Joe Kiser on behalf of the City of Lincolnton. Bitter feelings emerged and Kiser did not seek re-election. Lincolnton was concerned that state resources would be diluted, including Powell Bill funds for streets maintenance.

ANOTHER $100 MILLION: When Gov. Beverly Perdue took $100 million from lottery proceeds to help meet the state payroll, a lot of “I told you so” comments were heard. The money was supposed to be reserved for public education. But little attention has been given to another $100 million pulled to keep the state in operation as tax funds dry up. That money came from the Clean Water Management Trust Fund.

House and Senate Environment and Natural Resources Committees recently heard of the diversion during presentations by various agencies that are charged with conservation of lands. Funds are given to counties and non-profits for development of parks, updating waste water services, and protecting farmland and rivers.

IT’S COMING, IT’S COMING: Gov. Perdue has announced she will send her proposed budget to the Legislature Thursday, March 19. She has warned it will be painful, with some agencies being cut out completely. The plan then goes to the Senate which will produce its own version and then to the House budget writers. House Majority Leader Hugh Hollimon agreed there will be pain, but doubled some programs will be eliminated. Instead, there will be sharp cuts, some deeper than others.

Higher education is feeling the pain of the economic crisis and the suffering is likely to get worse. UNC President Erskine Bowles appeared before the Education Appropriations subcommittee last week to report he expects to take a reduction in appropriations in the next fiscal year. A 7 percent reduction, he said, is equal to a cut of 1,600 jobs: middle management positions, faculty, security personnel and downsizing of centers and institutions within the system. The UNC system also is anticipating larger classes and fewer courses.

Bowles said he hopes the Legislature will fund system-wide enrollment growth of 8,500 students at a cost of $45 million. He also pleaded for cuts to be non-recurring and that he be given the flexibility to determine how to make the cuts. Under present law, he does not have the authority to implement non-paid furlough days to save money.

In response to a question from Rep. Hugh Blackwell, Burke Republican, Bowles told the committee that 35 percent of students in the UNC system graduate in four years; 68 percent within six years. “Retention is not the focus,” Bowles said. “The focus should be on the quality of education.”

A former White House chief of staff and successful financier, Bowles described the current economic climate as the worst of his lifetime. At age 62, he hinted that he will not be head of the UNC system over the long term. “I am not going to grow old in this job,” he said.

CHALLENGES FOR PRIVATE SCHOOLS: Lenoir-Rhyne University and 35 other private colleges and universities also are expected to take less money from the state. North Carolina has appropriated $1,950 to private institutions of higher education for in-state students. This compares with about $10,000 for each student in a public university, considering all costs, including capital outlays.

Hope Williams, director of North Carolina Independent Colleges and Universities, made the case for continued state support. A chart with the percentage of fulltime and parttime students receiving need-based aid, showed 74 percent of Lenoir-Rhyne students receive support in varying amounts. Elon University reported 31 percent of its students receive aid, 51 percent of N.C. students at Davidson College, and 53 percent at prestigious Duke University. For Wake Forest, the figure is 56 percent. Elon’s report is the lowest in the state.

ASU HICKORY: After years of resistance, Appalachian State University has its own branch in Hickory. The Greater Hickory Higher Education Center now is the Appalachian State University Center in Hickory. Lenoir-Rhyne initially opposed the ASU foothold in Hickory and former Speaker Jim Black and Sen. David Hoyle, L-R alumni, consistently blocked efforts of ASU. Vocal advocates for ASU in Hickory are Jerry Phillips, retired businessman, and Jill Patton, city councilwoman.

SEX IN THE UNIFOUR: When some 1,000 fundamental Baptists rallied in Raleigh last week to cheer for a state constitutional amendment to prohibit same-sex marriage, Unifour legislators were cheering them on. Sen. Jimmy Jacumin of Burke read to the crowd passages from Genesis 2 and emphasis woman was made from the rib of man “to serve man.”

In the meantime, Rep. Mark Hilton introduced a bill allowing insurers to refuse to pay for contraceptive services or abortions for religious reasons. The bill extends to any drug or device that interferes with the development of an embryo after fertilization. This would apply to birth control pills.

BANKING ON BANKS: How secure are the banks in North Carolina? Senators in the Commerce Committee this week asked Joseph Smith Jr., commissioner of banks, about the health of the 134 banks in the state and the answer was generally encouraging. But the financial institutions here are not immune to the national virus. Some have received TARP funds to shore up balance sheets. Smith noted that the three banks operating in North Carolina with more than $10 billion in assets have 83 percent of all deposits. Banks with under $100 million have 1 percent of deposits. All of them have earnings problems, Smith asserted.

The news from the state budget offices gets worse with each week. Last month, the governor ordered a 7 percent across the board spending cut for state agencies. Last week, the order was for a 9 percent cut. And it could go higher. In the meantime, state administration employees were hearing rumors of mandatory unpaid furlough days—perhaps two a month. Travel has been curtailed. Legislative budget writers are warning of a lot of pain to come as they await the governor’s budget.

STIMULUS STIMULATES LEGISLATORS: Lawmakers learned last week that the state will get $6.1 billion from the $750 billion federal economic stimulus act. There are strings attached and accountability mandated. So complex is the program that Gov. Perdue has appointed former DENR Secretary Dempsey Benton to be the czar that oversees implementation in North Carolina.

The first installments of $1.42 billion will arrive in the next 60 days to help close the 2008-09 budget hole. Known as the State Fiscal Stabilization Fund, about $1.2 billion will shore up the education fund and $258 million is earmarked for the general fund.

Future payments will cover Medicaid–$918 million for 2008-09 and $1.37 billion for the following year—and $257.4 million for Title I grants to local education administrations. Anticipating a tough economy, the plan has $616 million for food stamps. Then there is $136 million to weatherize homes in North Carolina, $314 million for special education, $83 million for public housing capital funds, $67 million for child care and dozens of other social programs.

All this prompted Sen. David Hoyle to ask: “How many jobs will this create? Or are we just spending money?” Benton, who has been on the job less than two weeks, said details are being flushed out and the number of jobs created is unknown.

UNIFOUR CONTACTS: Two members of Gov. Perdue’s Cabinet have ties to the Greater Hickory area. Dee Freeman, Secretary of the Department of Environment and Natural Resources, is a Lenoir native and graduated from Hudson High School. He also worked in Maiden. Health and Human Services Secretary Lanier Cansler is a native of Newton and graduated from Lenoir-Rhyne University. He is a Republican and a former representative from Buncombe County.

CATAWBA RIVER WATCHDOGS: The House Water Resources and Infrastructure Committee has a strong delegation looking after the interests of the Catawba River Basin. The chair is Rep. Cullie Tarleton of Boone. Members include Reps. Ray Warren of Alexander, Hugh Blackwell of Burke, Mitchell Gillespie of McDowell, and Kelly Alexander of Mecklenburg. Other river basins are represented, but not to the degree of Catawba.

NEW FACE AT DOT: Transportation Secretary Gene Conti made his initial visit to the House Transportation Committee last week with good news and bad news. Bad: revenues are down: highway use tax by 21 percent, gasoline tax by 4 percent, and the Highway Trust Fund by 11 percent. Good: N.C. will receive $735 million for roads work from the Stimulus Fund and another $103 for transit. The $835 million doesn’t go very far compared to the $16 billion DOT says is needed.

The Yadkin River bridge on I-85 will cost $300 million, Conti said.

THERE WILL BE BLOOD: Dr. Scott Ralls, president of North Carolina Community Colleges, outlined options for the system if 7 or 9 percent cuts are mandated because of the economic crisis. Top core priorities, Ralls said, is maintaining salaries for faculty, updating equipment and technology, increasing healthcare jobs training, and technical education. Those areas represent 94 percent of the budget.

Reductions, he said, will require elimination of “categorical” programs. The Center for Emerging Manufacturing Solutions and its hosiery center at CVCC is listed as one of the “endangered” programs. Rough times ahead for appropriations chairs.

CORRECTION: The Informer recently reported that Rep. Ray Warren is the first legislator from this region to chair a major committee in recent times. Rep. Edgar Starnes of Caldwell chaired the Financial Services Committee in the 1990s under Speaker Harold Brubaker.