2010 LEGISLATIVE SESSION MEMO #6

The House and Senate started the week slowly. The House and Senate Education conferees met Monday and Tuesday and there was very little consensus, compromise or agreement on the differences. Many of the items were flagged. The main issue on Tuesday was the way the House used the lottery funds to minimize the cuts to public schools. Representative Yongue, the Appropriations Chair who is assigned to manage education, broke his femur last week and after surgery is undergoing rehabilitation for the next few weeks. He is expected to participate via conference call. Meanwhile committees continued to meet to keep bills moving to the floor for a vote.

On Wednesday, House and Senate budget conferees continued to meet late into the evening. The ten ton gorilla in the room continues to be the $500 million in Federal Medicaid funding that has not been appropriated to the States. Congress, specifically the Senate, does not have the votes to include the funding in the JOBS bill. The talk around the building was the budget writers were going to change the funding targets for the various areas of the budget, including education and try to continue to hammer out their differences. The cut to all of education would be somewhere around $300 million with public schools accounting for at least $185 million of the education share.  Based on the student population in Wake this additional cut could mean as much as another $18.5 million above the already planned and additional cuts. One of the ways to manage this cut to the State budget being discussed was implementing a mandatory furlough for employees paid by the State. The furlough option being discussed was for 5-7 days. This information was not confirmed and so we will have to wait and see, though some version of the Senate furlough provision (only in the Senate budget) will likely be part of the final budget. Another provision in the budget causing problems is the Drivers Education section 28.2, which requires the per pupil reversion of funds in 2010-2011. There was a great deal of work and meeting with members to try and modify the provision this week.  The request is for the study commission to provide a comprehensive report and recommendations on all aspects the Driver Training Program rather than making piece meal changes to it.

On Thursday, budget writers were still talking about working through the weekend to finalize their negotiations by Tuesday, but by days end many members had left town and while the budget writers worked into the evening they finally left and agreed to return on Monday. The word is they are still working on the lottery funds and how much will be distributed to the various education areas. They have been tinkering with the Capital appropriations and scholarships. If they can use more of the Capital funds to fund the class size portion in the lottery it will require less General Funds revenues freeing those up to be used in other parts of the education budget. The House had proposed limiting the Capital funding for 2010-2011 to $130 million a decrease of $17 million from 2009-2010 projections. The lottery funding is very complex and there are many issues surrounding these funds including the excess from this year, the Lottery Reserve Fund, the scholarships allotment, and the projections for next year on revenues which is a little over $100 million more than this year.

On Thursday, the full Senate took up a series of education bills. HB 1669 requiring school systems to use EVAAs or another compatible system was pulled from the Senate calendar. There was a great deal of discussion about this bill in the Senate Education Committee and Senator Davis was working on an amendment. He was concerned there was no clear understanding of what compatible meant and he wanted another entity, the State Board of Education, to be the authorizing agency to approve any other system beyond EVAAS. The bill will be back on the calendar Tuesday and it is hard to say at this point if it will be amended. If it is amended it will have to go back to the House for concurrence.

Meanwhile, the House got bogged down on Thursday for several hours debating HB 1973 “Keep North Carolina Competitive Act,” which included pages of tax refunds, tax credits, and other incentives to support businesses in NC. The other bill expected to take a long time to debate in the House was postponed until Tuesday June 22.

Other bills of interest this week were a series of JOBS Commission bills that passed the Senate on Thursday as well as the elimination of the high school graduation requirement. Senator Goodall ran two amendments to one of the JOBS bills to try and make a point about the cap on charter schools. His first amendment capped the number of Learn and Earn schools in the State, but he withdrew his amendment and the second amendment he ran was voted on by a majority of members to “lie upon on the table” and that was where it was left. The bills passed and they will be sent to the House. The legislation on the graduation project (HB 1684) allows LEAs to implement the project, but it is no longer a requirement for graduation in North Carolina public high schools.

The House and Senate budget writers have 8 days to resolve their differences. If they cannot reach an agreement on all the issues in the State budget they will have to approve a Continuing Resolution to keep the State running while they finish their budget work. The latest information on the $500 million hole is rather than adopting their budget with those funds cut they may come up with a different contingency plan should the federal funds not materialize as planned. The final budget continues to be a moving target and as has happened in previous years the budget train gets going down the track and all of a sudden it gets derailed and this may occur many more times before it gets where it’s going..

House Committees

Education:

HB 1826 SBOE Members Ex Officio top Econ. Dev. Comm. Favorable Report to Committee Substitute.

HB 1879 Study Raising the Compulsory Attendance Age Favorable Report to Committee Substitute and re-referred to Rules.

Insurance:

HB 1853 State Health Plan/Treat Teachers Equitably Pulled.

Finance:

HB 1973 Keep North Carolina Competitive Act Favorable Report as amended.

House Floor

HB 2054 Retirement Technical Corrections Passed second and third reading and sent to the Senate.

SB 66 A Comprehensive Arts Education Plan Passed second and third reading and sent back to the Senate.

HB 1973 Keep North Carolina Competitive Act Passed second reading and will be back on House calendar on June 21.

Senate Committees

Education:

SB 1119 Consolidate Regulation/Early Child Care & Ed Provider Favorable Report to Proposed Committee Substitute (PCS).

SB 1198 Education Cabinet Establish STEM Priority Favorable Report to PCS.

SB 1201 Add’l Flexibility/Cooperative Innovative High School Favorable Report to PCS.

SB 1202 Career Academy as Cooperative Innovative High School Favorable Report.

SB 1244 SBOE Members Ex Officio top Econ. Dev. Comm. Favorable Report to PCS.

HB 1669 Require Use of EVAAS in Schools Favorable Report.

HB 1684 No High School Graduation Project Required Favorable Report.

Pensions and Retirement and Aging:

HB 1853 State Health Plan/Treat Teachers Equitably Favorable Report to PCS.

Finance:

SB 1210 Increase Licensure Fees/Athletic Trainers Favorable Report.

SB 1251 State Health Plan/Treat Teachers Equitably Favorable Report to PCS.

Senate Floor

SB 1119 Consolidate Regulation/Early Child Care & Ed Provider Passed second and third reading and sent to the House.

SB 1198 Education Cabinet Establish STEM Priority Passed second and third reading and sent to the House.

SB 1201 Add’l Flexibility/Cooperative Innovative High School Passed second and third reading and sent to the House.

SB 1202 Career Academy as Cooperative Innovative High School Passed second and third reading and sent to the House.

SB 1210 Increase Licensure Fees/Athletic Trainers Passed second and third reading and sent to the House.

SB 1251 State Health Plan/Treat Teachers Equitably Passed second and third reading and sent to the House.

SB 1244 SBOE Members Ex Officio top Econ. Dev. Comm. Passed second and third reading and sent to the House.

HB 1684 No High School Graduation Project Required Passed second and third reading and sent to the House.

What’s Up Next Week

SB 1141 Task Force on Sports Injuries in Schools

SB 1151 Supplemental Nutrition Assistance Program

SB 1152 Study Child Nutrition Program

SB 1246 Four-Year Cohort Graduation Rate

HB 901 Honors Courses in Healthful Living Classes

HB 1676 Substitute Teacher Unemployment

SB 1115 Carteret Schools May Administer Oath

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