Our Informer

Day by day, week by week, the fiscal picture in Raleigh worsens. Even with about a billion dollars in U.S. stimulus money, legislators are looking at a shortfall of more than $4 billion. That’s almost 20 percent of the budget adopted last year, with just six weeks left in the fiscal year. Next year will be equally painful, the fiscal research staff has warned.

At Catawba Valley Community College, President Garrett Hinshaw has advised the board he is voluntarily taking a salary cut. CVCC could end up with $5 billion less than budgeted, it is reported. But Dr. Hinshaw remains undeterred and optimistic. In the meantime, applications at CVCC are soaring.

The N.C. House of Representatives budget writers were wrapping up presentations this week. It is expected that the House version will go to the Senate for conference next week. The Senate version was sent to the House before all the bad news arrived, so the conference will result in a start-over exercise for senators. Senators had developed a proposed $22 billion plan. It looks as if revenue will be just over $17 billion.

WHERE’S THE BEEF? The Senate Finance Committee has yet to unveil a proposed new tax code for North Carolina, so budget writers don’t know how deep cuts will be to education (48 percent of the budget), Medicaid, health insurance, transportation, corrections, and environment and commerce. The thinking is that when the public learns of the deep cuts to programs they support, the climate for a new tax code will improve. House leaders say this is wishful thinking and have shown no enthusiasm for changes to the tax programs.

CONVENTION CENTER PARKING DECK: The Hickory Metro Tourism leadership and the Catawba County Board of Commissioners have asked for permission to add a penny to the Hotel occupancy tax for Hickory and Conover. The revenue would pay off bonds for a multi-million parking deck at the Convention Center. Reps. Ray Warren and Mitchell Setzer introduced a bill that has been approved in the State and Local Government Committee and still awaits presentation to the Finance Committee. Proponents say the parking deck is needed to keep the MDI Food Show in Hickory, an event that fills up hotels and restaurants. Problem: Right wing Rep. Mark Hilton has said he does not support the bill. Lack of support by the entire legislative delegation from Catawba County could doom the effort.

SECOND THOUGHTS FOR ASU? Some legislators have been advised that Appalachian State University is backing away from taking over the Hickory Higher Education Center. The reason: cost and anticipated drop in revenue. The ASU takeover was seen as a major step toward having a state university presence in Hickory, some officials even anticipating a full campus a decade down the road. Cutbacks also have hit Lenoir-Rhyne University which announced layoffs representing 5 percent of staff. No faculty positions were involved.

CALM AFTER THE STORM: Last week hundreds of bills were pushed through House and Senate Committees as the May 14 Crossover deadline loomed. Bills that are not approved by either Chamber before the deadline are dead for the session. This week has been calm and neither chamber had an agenda for Monday night. Few committees are meeting, with all attention focused on the budget.

NOTE: Neither Chamber considered a bill to ban gay marriage. It is a dead issue for now much to the dismay of Republicans of the Hickory area who have pushed for a state constitutional amendment to prohibit same-sex wedding vows. State law now does not legalize same-sex marriages.

Two insiders at the General Assembly last week started talking about a tip about a breaking news story. (As you can guess, one is a journalist). The conversation was triggered by a bill that was being heard Wednesday by the Senate Finance Committee. The bill, shepherded by Sen. David Hoyle, essentially provides for a new formula to calculate tax bills for large corporations preparing to made huge capital investments in operations being located in North Carolina. Word is that corporation is coming to the Hickory area. Major technology companies make substantial capital investments.

The bill passed the Finance Committee. But GOP Sen. Tom Apodoca got sympathetic nods from senators of both parties when he expressed deep frustration of huge incentives for giant corporations when small companies are creating most jobs. Hoyle also agreed with Apodoca, but said the state must be competitive in recruiting 21st century companies.

DARK CLOUDS AND DARKER CLOUDS: Storms swept across Raleigh and the Piedmont last week, some bringing tornados. The darkest cloud hung over the House and Senate Appropriations Committees in joint session last week to hear the dismal news about the financial health of the state. April tax revenues were down 40 percent. The gap in the state budget now exceeds $4.2 billion. The $22 billion budget now must be pared down to just over $17 billion.

To put this in perspective, this is about half the funds allocated for Medicaid. It is more than half the money for universities and more than one-third funds for public schools. The Legislative Fiscal Staff predicted revenue to support a $22 billion budget will not return before 2013-14.

State employees have been asked take voluntary unpaid furloughs of one day a month and the House Appropriations Committee adopted legislation to protect their health insurance and retirement benefits. Instead, angry employees stomped around the Legislative complex, some confronting House Speaker Joe Hackney. This aroused anger among some Democrats who said the option will be permanent layoffs.

SO WHAT NEXT? Part of the hole will be filled with $1.4 billion in federal economic stimulus money—mostly earmarked for education and transportation. Maybe as early as this week Sen. Hoyle will roll out a new groundbreaking tax structure for the state that will bring more revenue. While the concept was to be revenue neutral with no new taxes, somewhere additional money has to be raised. Otherwise, old grandparents will be put out of nursing homes, school children will be in larger classes in makeshift facilities, and community colleges will have to cut back on enrollments in a time of need. Legislators say this is a no-win situation. None want to run for re-election after voting for a budget with new taxes. If so, it will be Democrats who pay the price.

BULLYING BILL HEADS TO HOUSE: The State Senate last Wednesday approved a bill that requires discipline for schoolyard bullying. Race, religious, physical problems and sexual orientation were included in the language that defines bullying. Ultra-right wing Republicans, including Catawba County Rep. Mark Hilton among their leaders, have fought the sexual orientation language claiming it encourages tolerance of homosexuality. Some of his associates say he has used this issue to fire up fundamentalists in Alexander County churches to set the stage for opposition to Democrat Ray Warren.

21st CENTURY MISSING LINK: Thirty years ago motorists traveling on I-40 had to detour on Highway 70 between Conover and Hildebran because the 10-miles stretch bypassing Hickory remained unfinished. It was in the administration of GOP Governor James Holshouser that the missing link finally was opened.

Now leaders in eastern Catawba County are pushing to complete an eight-miles link on Highway 16 between Newton and Lincoln County. Several met with DOT Secretary Gene Conti to push the project higher up the priority list. Among those meeting with Conti was former DOT Board member Ann H. Gaither of Newton. Conti was attentive, participants said, but gave no hope that immediate changes in schedule for completion can be expected. Unless….unless local funds are used to complete the project and the state reimburses the county for the cost. The idea of a county bond program was tossed around, it was reported. But residents west of Newton would have to be sold on the benefits.

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