2009 LEGISLATIVE SESSION MEMO #20


On Sunday, the House Appropriations Chairs returned to review their draft budget plan. They met for several hours and were still working behind closed doors, to find revenue to manage the horrendous cuts to Health and Education, in the House budget proposal. Meanwhile, the phones in the legislature were ringing off the hook. People across the State were calling to advocate against the cuts to programs in the State budget. Members were also getting thousands of e-mails pleading for restoration of the cuts.

On Monday, they continued their work in the House and in the afternoon the Democrats met in caucus to discuss a possible revenue package yet again. The House finally set their calendar for Tuesday and scheduled Finance and Appropriations meetings for 8:30 AM. The Speaker told members to plan to stay all day and possibly into the night and they would likely be here through Friday.

Tuesday was a dash between House Finance Committee and Appropriations, one on the fifth floor and one on the sixth floor. House Finance began their meeting with the revenue package (HB 1588) and somewhere in the process they had their first amendment (Rep. Braxton-D) to take out the Tobacco Tax. This tax was projected to provide $122 million of the $937.6 million in the initial package. Later that day Rep. Faison and Wainwright, both Democrats, took out the beer and wine tax, which accounted for another $31.4 million in revenue. They met until 9:30 AM Tuesday evening and after much debate, the Finance Committee passed the revenue package by a vote of 16-13 (straight down party lines). The final revenue total was $783.6 million. The Finance package highlights will be sent under separate memo. House Appropriations met until 2:30 PM to review the budget bill and receive amendments. The Democrats and Republicans caucused several more times on Tuesday in order to work through the issues with the Finance package. Appropriations ran about 60 plus amendments in Committee and finally approved Senate Bill 202, proposed committee substitute with amendments rolled into a new PCS. It was referred to Finance, but not before a very bad amendment for public schools had been adopted. The fiscal staff had erred in making a cut to Civil Fines and Forfeitures in the latest public schools budget, which meant they had to find $15.5 million from somewhere else. Instead of cutting it from a line item funded category they had an amendment drafted to add a $15.5 million Discretionary Reduction. This was a problem for LEAs and School Boards who have been telling the members for months that they wanted line item cuts and not a discretionary cut. So efforts began to try and resolve this cut with some of the new revenue in the Finance package. Unfortunately, that would not turn out to be an easy task as the Education Subcommittee Chairs had committed to restore jobs through the areas mentioned in the Finance package first, and if there were any other funds they would try and reduce the Discretionary Cut. The Finance bill had a series of areas that were to receive funding if additional revenue was provided. Those areas included: Class Size, At-Risk, Low-Wealth, Instructional Support and Assistant Principals. These were the public school areas, but they were not listed with any specific funding amounts. Meanwhile, NCSBA was working on the Bus Tort Claims provision in the Justice and Public Safety section of the House budget. This provision would have moved all bus tort claims to public schools by July 1, 2009. The fiscal implication to LEAs was huge with Wake anticipating needing more than $750,000 to purchase insurance. If that wasn’t bad enough the provision, as it was written, would have left the settlement of the claims with the Attorney General’s office and left the LEAs with the bill. That begged the question, could school systems get insurance with this convoluted process.

On Wednesday, things started slowly in the House while Senate Committees had several key bills on the agendas. Senate Mental Health had HB 88 The Healthy Youth Act (comprehensive sex education) which had been modified by the Senate, much to the chagrin of both the opponents and advocates. There was not even enough space to get into the Committee room, but the discussion on the Hall was not good. Neither side liked the changes, though it was given a Favorable Report and went to the Senate floor, where on Thursday the vote was delayed until June 16th.  Another controversial bill this week in Senate Education was the HB 442 Corporal Punishment bill which also generated a lot of discussion. Several problems were raised by Democrats and Republicans including the reporting requirement. Senator Dorsett gave it a Favorable Report and it was sent to the Senate floor, where it too was pulled until June 24th. Around Noon on Wednesday, the House Appropriations Chairs were called into meet with all the subcommittee chairs to give them the funds that Finance had generated in their revenue package. The subcommittee chairs were then supposed to propose the distribution of these funds to the various allotments. The subcommittees received their instructions and they agreed to meet to go over the funds to be added to all areas of education in the budget. They added $138,958,000 back to Increase Class Sizes and modified the provision to only add two students from Grades 4-12, next they restored $70 million to At–Risk, $4.8 million to Low-wealth, $19.4 million to Instructional Support, $17.6 million to Assistant Principals and $2.9 million to the Discretionary Reduction ($15.5 total cut). The House Education Appropriations subcommittee met and voted favorably on the new revenue for education. The House Finance Committee met until 11:00 PM on Wednesday after reconvening around 8:30 PM to add the Finance package to the Appropriations bill (SB 202). The total education funding was $355 million for K-12, Community Colleges and Universities.

On Thursday, there were several committee meetings and the House came into Session at 11:00 AM to supposed have the budget bill on second reading, but a snafu had occurred and the word was they had to take it back to first reading because they changed the title of the bill. The new plan was to take as many amendments as they could, then adjourn and come back Friday night at 8:00 PM for second reading and stay until midnight to pass the bill on third reading. Two key education amendments that everyone had worked on hit the floor late in the day. The Bus Tort Claims provision amendment was first and eliminated the provision requiring LEAs to take over 100 percent of all claims. The amendment passed without discussion. The second amendment to eliminate the Discretionary Reduction and take the funds from At-Risk ran into problems with Rep. Alma Adams of Greensboro. Attempts were made to communicate with her Superintendent and in the end the amendment was pulled and a new amendment was drawn to take the funds from Career Technical Education, which had not seen any cuts in either the Senate or House budget. The cut was about a 4.5% cut in the first year and 3.5% in year 2. There was a great deal of consternation, but the amendment passed by a vote of 87-27 with only one inquiry. The House adjourned after 32 amendments, around 8:30 PM, and agreed to return on Friday at 8:00 PM for second reading with a few more amendments and then they will stay until 12:01 AM for third reading.

Once the House passes the budget it will head to the Senate where they will not concur and conferees will be appointed to resolve the differences and supposedly finish the State budget in the next two weeks (by July 1) or face the unenviable task of trying to keep the State running with less money in the form of a reduced Continuing Resolution.

The week is not over yet, so if there are any other major issues to develop with the House Budget tonight a brief e-mail will be sent Saturday to inform you.

House Committees:

Finance

HB 1588 Limit Corp. Deduction for Certain Salaries Favorable Report. This legislation contains the $784 million tax package.  After several lengthy discussions and amendments, the bill passed out of the House Finance Committee late Tuesday evening by a vote of 16-13.

SB 202 Appropriations Act of 2009 Favorable Report as amended.

Local Government II

SB 1028 Volunteers to Support Academic Success in School Favorable Report to PCS.

Pensions & Retirement

SB 202 Appropriations Act of 2009 Favorable Report and re-referred to Finance.

Transportation

SB 931 Commercial Drivers License Changes Pulled

Senate Committees:

Education/Higher Education

HB 442 Parental Involvement in School Discipline Favorable Report.

HB1032 Modify History and Geography Curricula Favorable Report to PCS.

Finance

SB 509 Revenue Laws Tech, Clarifying & Admin. Changes Favorable Report to PCS.

Judiciary II

HB 1261 Protect Our Kids/Cyber Bullying Misdemeanor Sent to a subcommittee.

Mental Health & Youth Services

HB 1046 Child Care Facilities Rules Favorable Report and sent to the Senate Floor.

HB 88 Healthy Youth Act Favorable Report to PCS. Provides one course and students or parents can opt out of the instruction on comprehensive sex education.

State and Local Government

HB 213 VSL Nonfamily Sick Leave Donations Favorable Report and sent to the Senate Floor.

House Floor:

SB 754 Changes for Bonds Authorization under ARRTA Passed second and third reading and sent to the Senate for concurrence.

HB 391 Community College May Offer Safety Driving Course Concurred and sent to the Governor.

HB 440 The Nicolas Adkins School Bus Safety Act Concurred and sent to the Governor.

HB 1031 Bldg. Standards/Pre-K Classes in Public Schools Concurred and sent to the Governor.

Senate Floor:

HB 9 No Texting While Driving Passed second and third reading. Ratified

HB 659 Study Existing Children/Youth Programs Passed second and third reading. Ratified

SB 509 Revenue Laws Technical, Clarifying, & Admin Changes Passed second reading.

HB 88 Healthy Youth Act-Rescheduled for June 16.

HB 213 Voluntary Shared Leave Nonfamily Sick Leave Donations Re-referred to Appropriations.

HB 442 Parental Involvement in School Discipline Rescheduled for June 24.

HB 1032 Modify History and Geography Curricula Passed second and third reading and sent to the House for concurrence.

HB 1046 Child Care Facilities Rules Passed second and third reading and sent to the Governor.

SB 754 Changes for Bonds Authorized Under ARRTA Passed second reading and calendared for June 15 for third reading.

Bills in Committees Next Week:

SB 287 State Health Plan $/Good Health Initiative

HB 687 Tax Credit for Children with Disabilities

SB 1030 After-School Child Care Programs

SB 1019 Establish NC Literacy Council

HB 229 Retired Teachers Return to Work

HB 1446 Amend Law: School Improvement Plans

HB 348 Modify Education Requirement of School Board Members

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