SUBJECT: 2009 LEGISLATIVE SESSION MEMO #9

On Monday afternoon, the Program Evaluation Committee met and heard from Dr. June Atkinson. She requested an opportunity to discuss the Evergreen Report outlining the Governance issue for public schools. She requested the General Assembly take one of two actions; Run legislation to put a Constitutional Referendum on the ballot to have the State Board of Education appoint the Superintendent and change the terms (4 years) and the way State Board members are appointed, or by a vote of the people, to change or remove the State Superintendent’s position, change the law to give the State Superintendent the authority, she claims she clearly has in the Constitution, to manage and lead the Department of Public Instruction. The Committee also reviewed their future projects, which includes a program review of every state agency.

On Tuesday, State Treasurer Janet Cowell spoke to the Senate Appropriations Committee and warned lawmakers that short-term fixes to the state’s budget could harm the state’s AAA bond rating and this included furloughs for state employees. She reviewed the Retirement System and the $17 billion in losses and what will need to be done to stabilize the Plan. Employee contributions will have to increase from 6 percent up to 9 percent. The Retirement Plan will need major infusion of state funding, $600 million in 2010 and $900 million the following year. She responded to the question of “Truth in Budgeting” included in the Governor’s proposed budget. This was where Governor Perdue only budgeted salaries and benefits at 97 percent. Twenty-one states budget at 100 percent and 25 budget at less. This issue was a major point of discussion with the members as they heard from the other presenters, as well.

Erskine Bowles, President of UNC University System, spoke to the Committee next calling the possible eliminations of 73 jobs in the Governor’s proposed budget “ludicrous.”  The university system will have to cut hundreds of jobs, cut programs, increase class size, cut travel, telephone, middle management etc. to manage the $190 million flexibility cut.  He had requested three items; funding for enrollment ($47 million), need-based tuition aide, and no more than $125 million in non-recurring flexibility cut. He stated that 75 percent of the funds provided by the state are for personnel. He spoke in support of employee furloughs and told the Committee it could save as much as $80 million for every furlough day; however the Governor has stated that furloughs could damage the state for businesses looking for new locations. 

Next on the Agenda was Scott Ralls, President of the Community College System. He spoke of the need for funding for the 15,000 full-time students and for the 7.5 percent growth in enrollment in the community colleges. His other priorities beyond enrollment growth are faculty salaries, equipment, expansion of health care programs and technical education. The equipment issue is a major concern for Community Colleges. At the present funding levels equipment can only be replaced every 10 years.

Public Schools were last on the agenda and were limited to about twenty minutes for both the Superintendent and the new CEO and Chairman of the State Board. Dr. June Atkinson, State Superintendent, spoke first on the Federal Stimulus funding and how the funds could be spent.  Dr. Bill Harrison had the last ten minutes and he addressed the expansion funds the Governor provided in her budget, and then he spent the remainder of his time reviewing staffing at the Department of Public Instruction. They now employ over 807 individuals, an increase of more than 296 since 2001.  District Transformation has added 112 individuals and NC Wise has been another major part of the recent increases, which the General Assembly approved through Gov. Ops. He said there were mixed signals from the Superintendents about the Governor’s Flexibility cut of $144 million and then he said it was, in fact, a majority as Dr. Atkinson had said previously opposed this cut in favor of line item cuts. The meeting was adjourned with the bulk of the time being given to President Bowles.

Also on Tuesday, House Education met to discuss two controversial bills. They only had time for the HB 209 Sex Offenders Registry/Liberties with Students, which they moved to Judiciary III without prejudice and then they did not hear HB 223 No High School Graduation Project Required, bill. Word around the building was that the phones were ringing off the hook from people who wanted to see the bill pass and the Graduation Project eliminated.

Wednesday began with Senate Education and several more controversial bills. Senator Malone, chairing for the meeting, told members they would discuss the two bills, SB 66 Require Arts Education Credit for Graduation and SB 265 Fund Only One School System Per County. The Arts bill was amended to change the effective date to 2011 and to create a workgroup with DPI to plan for the arts education requirement for graduation. The one county funding for LEAs bill brought out many superintendents and board members, who were recognized from the remaining 15 LEAs.

The bill does not include several districts, but has the rest. There was very lively discussion from members who have more than one LEA in their district.

The Senate finally, after much negotiating, amended SB 287 the State Health Plan Act on the floor Wednesday and after much debate and a recess, they passed the amendment and the bill (the Republicans did vote against the bill) and sent it to the House. The major changes in the bill were the removal of the Pharmacy changes ($90 million in projected savings through mail order program). In order to find the funds to delete the pharmacy language, they had to increase the Dependent Coverage from 7.8 percent to 8.6 percent. They also increased the employer contribution to $4,515 and beyond that there were no other significant changes impacting the employees or employers directly. The bill is now in the House. The House Democrats caucused on Tuesday after session to try and come to consensus on the Senate Health Plan bill, but it was apparent they may not have enough votes. Next week should prove very interesting.

On Thursday, the House Insurance Committee met to begin discussing and passage of SB 287 State Health Plan $/Good Health Initiatives. Members discussed the issue of why this bill was not a long-term fix, but a short-term fix. The health plan problems were made known July 2008 and the House tried to make some changes, but the Senate would not agree to the bill in 2008. Now the State Health Plan will run out of funds to make payments to health plan providers sometime next week, according to legislators. Majority Leader Holliman told the members they would work on a long-term fix, but this bill was not it. Several Democrats expressed anger and frustration. Rep. Faison wanted to amend the bill to move the health plan to a calendar year program, but he was told he had to have a fiscal note, so he made the request. Rep. Howard wants to amend the bill with respect to medication for cancer patients and the Rep. Cole had four amendments, but they would not hear them. Rep. Gibson said he was just mad about the whole mess.

Also on Thursday, the Senate deadline for filing bills was extended to Noon and so there was a huge flurry of bills (more than 170 bills in just one day) introduced. The Senate subcommittee chairs have gotten their budget target numbers to submit their budget proposals for their areas. It is anticipated the Senate will finish their budget, including passage on the floor by Easter weekend (April 9). The Senate wants to have it to the House so that if the April 15th surprise comes in far below projected numbers it will fall to the House to cut more from the budget proposal. Check the bills on the calendar next week and provide any input to me by Monday afternoon. Bills Introduced:

House

HB 744 Diabetes Control Plans in Charter Schools

HB 750 Restore Contract Rights to State/Local

HB 753 School Bus/Activity Bus Operation

HB 764 2009 Speaker’s Appointments Bill

HB 770 Assignment of Twins to Charter Schools

HB 774 Fund High Priority Public Health Initiatives

HB 776 No Bullying Anyone at Public Schools

HB 779 Educational Governance Framework

HB 792 Teacher Assistant Salary Scheduled

HB 793 Salary Supplement/Some Automotive Teachers

HB 797 Funds for Testing Coordinators

HB 804 Amend Law Re: Personal Education Plans

HB 805  Workers’ Compensation/Calculation of Income

HB 815 Funds for CareerStart Program

HB 817 Establish NC Financial Literacy Council

HB 827 Unattended Children in Vehicles

HB 837 Remove Controlled Access Highway Restriction

HB 840 Limit Political Party Campaign Fund-Raising

HB 841 Statutory Changes for ARRTA (Federal Recovery) Funds

HB 843 Workers’ Compensation/Medical Diagnostic Testing

HB 856 Modify Charter School Law

HB 862 Study Retirement and Health Benefits

 

Senate

SB 730 Local Government Official Recuse from Voting

SB 738 Diabetes Control Plans in Charter Schools

SB 740 Reinstatement of Sick Leave/School Employees

SB 741 Increase Class Size for One Year Only

SB 754 Statutory Changes for ARRTA (American Recovery and Reinvestment Act) Funds

SB 762 Salary Supplement/Some Automotive Teachers

SB 771 Reallocate Lottery Funding

SB 773 Educational Governance Framework

SB 781 Workers’ Compensation/Choice of Physician

SB 788 Expunge Nonviolent Felonies/Young Offenders

SB 801 2009 President Pro Tempore’s Appointments

SB 805 DHHS Study/Influenza Vaccine Public Schools

SB 814 Students Under 16 May Attend Community College

SB 815 Intervention Plan After Unexcused Absences

SB 822 Education Infrastructure Act

SB 824 Bus Transportation/After-School Programs

SB 825 “Support NC Education” Special Plate

SB 844 Appropriations Act of 2009

SB 861 Purchase Service/Certain Employment

SB 864 Funds for Athletic Trainers at High Schools

SB 868 Remove Barriers/Teacher Lateral Entry Program

SB 869 Study/After School Child Care Programs

SB 871 Use Pre-Stimulus Federal Medical Assistance Percentage for Medicaid Hold Harmless

SB 877 Health Benefit Plan Provider Contracts

SB 894 UI/School Teacher Related Amendments

SB 897 Appropriations Act of 2009

SB 899 Freeze Lottery Proceeds

SB 927 Testing K-8 National Form Test

SB 931 Commercial Drivers License Changes

SB 933 Students Under 16 May Attend Community College

SB 947 No Standardized Testing Unless Required by Feds

SB 949 Teacher Assistant Salary Schedule

SB 950 Salary/Teachers with Advanced Degrees

SB 962 Probationary Teacher Appeals

SB 963 Expedite use of Federal Stimulus Funds

SB 977 Obesity Prevention in the Public Schools

SB 985 DPI/Curriculum on 1898 Wilmington Race Riot

SB 1012 Home Schoolers in Public School Program/Study

SB 1014 Lottery Trust Fund

SB 1016 State Minimum Wage/Inflation Increases

SB 1023 Safer Schools

SB 1026 Local Government Tort Claims Act

SB 1028 Encourage Volunteerism in Schools

SB 1030 After-School Child Care Programs

SB 1032 No State Payroll Deductions Politics

SB 1033 Study/Head Injuries in High School Athletics

SB 1037 Mandatory Physical Exams/State Health Plan

SB 1048 Juvenile Jurisdiction to Age 18 Years

SB 1050 Open Book Government

SB 1051 Performance Management & Accountability Program

SB 1052 Limit General Fund Expenditures

SB 1055 Labor/Mandatory Lunch Break

SB 1059 Provide COLAs for Retirees

SB 1060 Study Retirement and Health Benefits

SB 1061 Study Medical Treatments/Prescription Drugs

SB 1069 Economic Development thru Innovative Schools/Comm

SB 1070 Bereavement Leave/State and School Employees

SB 1071 Collaborative Project Funds

SB 1075 Salary Supplement/Some Automotive Teachers

House Committees:

Education:

HB 209 Sex Offenders Registry/Liberties with Students Favorable Report to Committee Substitute and forwarded without prejudice to Judiciary III.

HB 223 No High School Graduation Project Required Not heard

Education Appropriations Subcommittee:

HB 37 Pay Teachers the ABC Bonuses They Earned No Vote

HB 42 Science Safety in the Public Schools Favorable Report and referred Full Appropriations.

HB 92 North Carolina Science Olympiad Funds No Vote

HB 173 Kids Voting Funds No Vote

HB 184 Funding for Learn and Earn No Vote

HB 185 Communities in Schools Funds No Vote

HB 231 Positive Behavior Support Position Funds No Vote

Education Subcommittee Pre-School, Elementary, Secondary Education:

HB 531 Affordable Teacher Housing/Edgecombe County Favorable Report and re-referred to Finance

Education Appropriations:

HB 65 Students Under 16 May attend Community College Meeting cancelled.

Commerce:

HB 212 Health Insurance Pool Pilot Program Favorable Report to Committee Substitute and sent to the House Floor.

Election Law and Campaign Finance Reform:

HB 76 School Board Candidate Filing Fee Pulled and sent to Subcommittee.

HB 220 Write-In Candidate Rule No resolution

HB 357 Conform County School Board Vacancy Statute Favorable Report. This bill is a technical change to law. 

Finance:

HB 18 Speech Language Pathologist Qualifications Favorable Report and sent to House Floor.

Judiciary I:

HB 2 Prohibit Smoking in Public & Work Places Favorable Report to Committee Substitute. 

Local Government II:

HB 483 School Calendar Flexibility/Some LEAs Representative Haire presented the bill. The committee did not have time for discussion. The bill still has to go to Education after it passes this committee. People are being told Rep. Haire will not accept amendments to add their counties.

HB 499 School Calendar Flexibility/2 LEAs- Not Heard

Transportation:

HB 417 Drivers License Changes/Young Drivers Favorable Report and re-referred to Appropriations.

Ways and Means/Broadband:

HB 583 Clarify Local School Board Sovereign Immunity Pulled

Insurance

SB 287 State Health Plan $/Good Health Initiatives Democrats and Republicans were both upset about the urgency of passing this bill, that just came over from the Senate on Wednesday. The Committee will meet again Tuesday, March 31. It was clear that the House did not have the votes to pass the bill in Insurance today, and who knows what will happen when it goes to the Appropriations and the House Floor. The only question remaining is does the Governor have the power to appropriate the $250 million to the Health Plan to keep it solvent should the House get bogged-down over the bill.

Senate Committees:

Education/Higher Education:

SB 16 DPI/Curriculum on 1898 Wilmington Race Riot Not Heard

SB 66 Require Arts Education Credit for Graduation No Vote Amended to become effective 2011. A work group is to be established with representation from DPI and the Cultural Arts

SB 265 Fund Only one School System Per County No Vote. Senator Rand indicated that funding only one system would amount to a savings of $11.4 million to the State. 

House Floor:

HB 187 Encourage Policies to Facilitate Graduation Passed second and third reading and sent to the Senate. 

HB 2 Prohibit Smoking in Public & Work Places-Postponed

HB 212 Health Insurance Pool Pilot Program-Passed second and third reading and sent to the Senate.

HB 357 Conform County School Board Vacancy Statute Passed second and third reading and sent to the Senate.

Senate Floor:

HB 94 Clarify Definition of Retirement Passed second and third reading. Ratified and sent to the Governor. The Governor signed the bill on Thursday, and it is chaptered, 2009-11.

SB 287 State Health Plan $/Good Health Initiatives Passed second and third reading as amended and sent to the House. The amendments make the following changes: General Fund to appropriate $128,410,208 in 2009-2010 and $267,904,114 in 2010-2011 and the Highway Fund to appropriate $5,992,476 in 2009-2010 and $12,502,192 for 2010-2011. Physician will certify in writing a member’s participation in a smoking cessation program and exempts members from weight management program if medical condition prevents the attainment of a specified weight range or if the member is actively participating in an approved weight management program. Defines biotech medications, deletes Plan’s Maintenance Medication Retail Pharmacy Network initiative and rewrites language requiring the Plan to direct its pharmacy benefits manager to achieve $18 million in savings for 2009-2010 and $20 million in 2010-2011 through reduced reimbursements paid to pharmacies for prescription drugs, and deletes increase in out-of-network specialist copayments. The amendment raises the increase in premium rates from 7.8 percent to 8.6 percent (additional $40 per month), increases the maximum annual employer contribution by the state for each covered employee or retiree to $3,438 for Medicare-eligible employees and retirees, and $4,515 for non-Medicare employees and retirees effective July 1, 2009, raised the proposed increases to employee contributions for the same categories by $55 to $71 respectively effective July 1, 2010. 

Bills in Committees Next Week:

HB 218 Parent & Student Educational Involvement 

HB 223 No High School Graduation Project Required

SB 287 State Health Plan $/Good Health Initiatives

HB 386 LEA Sales Tax Refund 

HB 440 The Nicholas Adkins School Bus Safety Act

HB 536 Task Force on Sports Injuries in Schools

SB 22 Ban Texting While Driving

SB 375 Insurance/Coverage Hearing Aids

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