SUBJECT: 2009 LEGISLATIVE SESSION MEMO #11

Monday started off with a bang as the Senate began rolling out their budget in each of the separate subcommittees. The Senate Education Appropriations subcommittee met at 3:00PM, to review their section of SB 202 (Senate budget proposal).

On Tuesday, Senate Full Appropriations was scheduled to meet at 9:00AM, but they were still in caucus discussing the budget bill at 10:00AM. They finally convened and began hearing the bill. They were also given a set amount of time for amendments. At Noon, they recessed to get some lunch and returned to complete their work. As usual there were very few amendments. They finally finished in Appropriations about 3:30PM, approved the bill as amended, and went to the Senate floor to conduct their session. After session, Senate Finance met to rollout the Fees Bill. The Senate had decided earlier that the Finance bill would be presented separate from the budget. The Finance bill includes the taxes and other revenues needed to fund the appropriations budget. The word is that the Senate is planning to tax services and not significantly increase the taxes on tobacco or alcohol as proposed by the Governor in her budget. They are also planning to eliminate the Corporate Tax, which would also eliminate funds for school construction, since LEAs receive funds from this tax for school construction.

Meanwhile, in the House Committee meetings continued as members worked to get their bills approved. They also met to try and resolve the Health Plan legislation (SB 287) sent over two week ago by the Senate. One major change to the Health Plan this week resulted in an increase in the premium from 8.6 percent to 10.0 percent. This increase came as members had amended the bill last week and caused the costs of the plan to increase. Last week, the House moved the Healthy Youth Act (HB 88) out of the Health committee under rather unusual proceedings. The bill was placed back on the calendar for Tuesday again this week. They voted the bill out of committee again and it was sent to the House floor, but was sent back to Education Appropriations, on Wednesday afternoon, to handle the $200,000 fiscal note. Education Appropriations met Thursday morning to approve the bill and send it back to the House floor. The info9rmation on that meeting is listed below in Education Appropriations Committee.

On Wednesday, the House Appropriations met to consider HB 287 the State Health Plan bill. After more than ten amendments, some of which were ruled out of order by the Chair because of the fiscal impact, the bill passed by the narrow margin of 44-40 in a roll call vote. The State Employees Association had many members at the legislature all week lobbying members against the bill. SEANC is upset about the premiums, co-pays and deductibles. The providers are getting concerned because everyone was told earlier the health plan would be broke, by April 1. Then we heard they could hang on until April 10, and now that date is near and there are still not enough votes to pass the bill. Even after the bill passes the House and Senate will have to conference on the bill, since there are differences. The Republicans appear to be opposing the bill as a group. There were also numerous Democrats (mainly from Wake) who voted against the bill in the Appropriations committee. The Speaker will need to find enough votes, in the House, to pass the present bill, before he can calendar it. Every day that goes by without the issue being resolved has given SEANC the chance to talk with the members about the problems with the bill and they are gaining strength in converting Democrats to vote against the bill. NCAE has come out in support of the bill in the House.

On Wednesday, Senate Education met and passed a series of education bills. They went into session at 2:30PM and spent the next two hours addressing the budget provisions section by section and then hearing several amendments from Senate Republicans, which were not voted on or defeated. There was an effort by the Senator Phil Berger to use carry forward monies to reinstate the $60 million of the Corporate tax taken to fill a budget hole in the public schools funds.   Many counties had planned on those funds to pay for debts incurred in repair, renovation and construction projects.  Senate bill 202, the budget, passed second reading on Wednesday and third reading on Thursday.

The budget has been sent to the House. They will probably wait for the final April 15th tax collection figures before beginning their work.  It may be April 22nd or later until they see the revenue they have available to spend (budget). The April 15th surprise, usually more funds, is likely to be less by about $750 million or more.  The House is not planning to complete their budget until closer to the end of May (4-5 weeks).  On Wednesday, the House extended its bill filing deadline from Noon on Wednesday, April 8 to 1:00PM on Thursday, April 9, to give bill drafting a chance to catch up and finish bills.  

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