A Normal Short Session? No, Not Really.

Posted on May 21, 2020 by admin in Asheville, Budget, Cooper, Federal Government, McGrady, Newsletters, Pandemics, Transportation

This Week

After a one-week session devoted exclusively to COVID-related legislation — primarily appropriating funding from the federal CARES Act — it felt a bit like the start of the normal Short Session this week, except things weren’t totally normal. Still in place were the temperature checks for everyone entering the legislative buildings, including legislators and their staffs. Masks were still in evidence. Committee meetings occurred, but were short with little debate. Usually the legislative buildings bustle with lobbyists and ordinary citizens visiting legislative offices, but not many lobbyists were patrolling the halls, and almost no ordinary citizens made visits to their legislators’ offices.

The House completed action on three bills: House Bill 1067 [Modernize Debt Settlement Prohibition], HB1079 [Various Sales Tax Changes], and House Joint Resolution 1152 [Extend Certain Filing Deadlines]. In an unusual process, the bills were approved by voice votes. Had any of these bills required a roll call vote, proxies could have been used by Members not wanting to appear on the House floor, but these bills didn’t require roll call votes required by either the North Carolina constitution or House rules.

With impetus provided by the pandemic, HB1067 reforms debt settlement practices to provide more protection for debtors. HB1079 makes some very technical tax law changes relating to auctioneers and estate sale companies, expansion of a sales and use tax exemption for equipment purchased by a large “fulfillment facility” (aka: “a facility used primarily for receiving, inventorying, sorting, repackaging, and distributing finished retail products for the purpose of fulfilling customer orders”), and tax clarifications and exemptions for certain digital property. Unlike the other bills, HJR 1152 was only procedural. It extended a bill filing for House and Senate appropriations bills for an extra week until May 26.

Veteran legislators, staff, or lobbyists noted the session was different in ways that casual observers might not recognize. Ordinarily, one would see a lot of interaction between legislators, staff and lobbyists on the floor and in committee meetings; Much of the work is done when conversations occur and questions get answered or deals or compromises are struck.

There was very little in the way of sidebar conversations this week, and there were not the usual number of informal meetings. Key legislators and staff worked on legislation, but committee meetings via Zoom or Webex just don’t allow the back-and-forth communications that usually characterize the drafting of legislation. No one is excluded from asking questions in committee meetings, but the conversations are truncated because it is difficult to deal with the logistics. My sense is the lack of connection between legislators in these computer-facilitated meetings means that even more of the real decision-making as to what goes into a bill is left to a smaller set of Members and leadership staff.

As a relatively senior Member of the House, I don’t need a lot of mentoring to do my job, but more junior Members might find it difficult to figure out how to actually impact legislation since they don’t know all of the people. Clearly, lobbyists are having a difficult time. Newer lobbyists may not yet have relationships with legislators, the challenge is how does one nurture a relationship when one has almost no direct contact with policymakers. Unless one already has a relationship, it is hard to develop one via phone calls.

Lobbyists provide a useful function for legislators. They watch and monitor legislation and can serve as an early warning system when some complicated bill is moving quickly. They advocate for their clients, and their advocacy can help legislators sort out what the real impact of proposed legislation might be. Several lobbyists mentioned to me how hard it was to know what was happening. While notices still went out via the internet, often they didn’t get a verbal understanding of scheduling until a formal notice was sent out, making it difficult to research the impact of the proposed legislation and try to garner access to policymakers. This makes lobbyists jobs much harder and makes it more difficult for some legislators to familiarize themselves with the details of the bills.

With the need to limit committee meetings and sessions, the role of the House leadership has expanded. Until the pandemic, Members could easily affect the pace and the substance of the flow of bills to the House floor. That isn’t really true anymore. Social distancing requires that committee meetings be limited and have led to meetings of shorter duration. While House leaders have always possessed the ability to control the flow of business, they now are really controlling everything because of the difficult logistics of holding committee meetings and sessions.

The Budget Process

Until this year, North Carolina has had a fully adopted two-year budget. Sometimes the budget was delayed, but in no one’s memory has the State gone without a two-year budget. Because of Governor Cooper’s veto and the inability of the legislature to override the veto, North Carolina has been operating under a pieced-together one-year budget which included parts of the budget for FY 2018-19 and some mini-budgets passed last year. Normally, the Short Session is the time when adjustments are made to the second-year of the budget reflecting changes in revenue projections or priorities, but this Short Session will likely be one in which the legislature attempts to pass a one-year budget for FY 2020-21.

If this wasn’t a difficult enough task, that budget will be drafted during the pandemic. The pandemic has changed tax filing deadlines, so that income tax revenues for FY 2019-2020 have been shifted into FY 2020-21. While those revenues coming in July rather than April are likely to be similar, the pandemic has shut down businesses, created a sharp increase in the unemployment rate and will clearly affect everything from income tax revenues to sales tax revenues to gas tax revenues. The bottom line is we’re in uncharted territory and, even if Governor Cooper and legislative leaders are able to put aside past differences as to spending priorities, it will be hard to make the cuts necessary to balance the budget.

How much of a hole is there? Well, that number isn’t clear yet, and is likely to change. Estimates range up to $4 Billion, and there is agreement that it is at least $1 Billion. On Friday, legislators and the Governor are expecting the consensus revenue forecast compiled by the Governor’s and the legislature’s staff. Both the Governor and the legislature will be working from that forecast in putting forward their proposed budgets.

As recently as three months ago, the budget writers were expecting another budget surplus and there were monies for potential funding ranging from teacher pay raises to capital projects in a budget for the upcoming fiscal year. Now, the expectation is we will be okay in the fiscal year ending June 30 of this year, but have a multi-billion dollar deficit in the next fiscal year. So rather than looking to put more towards a range of priorities, budget drafters are going to look to make cuts — cuts that could equal a ten to fifteen percent cut of the total budget package.

One example of the budget pressures illustrates the problems budget writers face. While the NC Department of Transportation was expecting budget challenges caused by cost-overruns on projects as reflected in a State Auditor’s report, the pandemic resulted in people traveling less. Taxes charged on gas sales have plummeted, and reacting to the revenue drop has forced the Department to delay a range of road construction and repairs. The Department has started a rolling furlough of its employees that will ultimately furlough every employee for some length of time as it attempts to bring its expenses into line with its revenue projections. Similar problems, although probably not as severe, can be identified in other departments.

One unknown is whether the monies flowing from the federal government to the state can be used to backfill revenue losses. If they can, those monies will make it easier to balance the budget while funding the programs and projects that were expected to receive funding. If they can’t, then very hard decisions will need to be made.

As for the schedule, legislative leaders expect to pass a budget by the end of June. The House and Senate will start their work next week, culminating in a series of budget bills. Senate budget writers have already filed several bills addressing various programs or parts of the budget which are indicative of the approach that House and Senate budget writers will take in the coming weeks. The expectation is the process will move very quickly.

Besides the Budget

Of course, the usual Short Session is about completing work on bills started in the previous year. Usually, it includes working on local legislation or new issues that have arisen between sessions. Not all committees will be meeting during the Short Session, but some, for example, the State and Local Government Committee, will be very active moving what are clearly noncontroversial, local bills.

In that category is HB1154 [Greater Asheville Regional Airport Authority], a bill I introduced to spread out the appointments made by Henderson County, Buncombe County, and the City of Asheville to the airport board. Requested by the airport board, all members of the local legislative delegation — Republicans and Democrats, senators and House members — support the bill.

Several bills vetoed by Governor Cooper included provisions that everyone supports. For example, the Department of Environmental Quality had various technical changes in both last year’s budget and a regulatory reform bill. The Department still needs those changes made, but legislative leaders will need to run some sort of technical corrections bill to pick up provisions that got caught up in the budget fight with Governor Cooper last year.

In summary, legislators expect to conclude the business of the Short Session by the end of June. As in the past, the session is expected to be primarily dominated by the budget. This year presents, however, wholly new challenges; the legislature will not be simply amending a second year budget but instead a budget will have to be crafted to address a myriad of fiscal issues caused by the lack of 2019-20 budget and the pandemic’s impact. There will be less time devoted to other legislation. Noncontroversial bills, including many local bills, will move but once the budget is completed in a piece-meal fashion in late June, the intention is to adjourn and head home.

The COVID-19 Legislative Session

Posted on May 4, 2020 by admin in McGrady, Newsletters, Pandemics

The legislature came into session last Tuesday and by Saturday two, COVID-19-related bills passed unanimously and were headed to Governor Cooper. He has said he will sign the bills.

The session was unusual in many ways. Bills were filed electronically rather than in-person, and the COVID-19 bills were heard and crafted in virtual committees via Webex, Zoom and conference calls. The House’s Rules were changed to make accommodations to comply with social distancing requirements, including allowing a longer period of time to vote and the use of proxies. The bills also passed using a unique procedure where the COVID-19 bills in the House were put into a Senate bill and that ultimately included all of the various changes in policy made in light of the pandemic. The Senate then used a House-passed bill to move the spending portion of the COVID-19 package.

The monies being appropriated were not state funds. They were federal funds coming to the state following Congress passing four, federal COVID-related laws. Many legislators didn’t initially realize only monies coming from the federal government were being appropriated. They also didn’t initially realize that Congress did not allow these monies to be used to make up for lost revenues. Thus, whether local governments’ lost sales taxes revenues or the NC Zoo’s or NC Arboretum’s lost gate receipts, those lost revenues could not be replaced by the federal funds coming to the state. One other unusual fact about the bills is that they are explicitly tied together. Either they both become law or neither of them become law. With Governor Cooper saying he’ll sign the bills, they will apparently both become law.

The reason for using a House bill in the Senate and a Senate bill in the House was to allow for quick passage; this proves that if something has to be done, there are ways to expeditiously do it. The House bill passed by the Senate, and the Senate bill passed by the House necessitated only one vote in each chamber.

In House Bill 1043 [2020 COVID-19 Recovery Act], $1.52 Billion of the federal monies were appropriated as reflected in this chart:

While the 25-page bill is complicated, the largest allocations go to K-12 Education, Higher Education, COVID-research at NC universities, hospitals, state and local government and for COVID-19 supplies and support. Social services, including support for food banks, community health centers, and free and charitable clinics, are also funded. Expanding rural broadband got a $9 million boost.

Senate Bill 704 [COVID-19 Recovery Act] is a 70-page bill which is even more complicated than H 1043 since it includes all of the policy changes enacted in an effort to address the pandemic. Broadly, the bill includes tax relief provisions, unemployment changes, a wide range of changes related to K-12 education and an equally wide range of changes related to health care. Finally, there are a large number of provisions to ensure the continuity of state government during the pandemic.

Surprisingly, both bills don’t include any add-on provisions—with one exception — that weren’t in the bills moving through each chamber. The exception was a provision added by Sen. Chuck Edwards (R-Henderson) that authorized the Buncombe County Tourism Development Authority to use existing occupancy tax proceeds to provide grants up to $50,000 to businesses that promote tourism and patronage of lodging facilities that have been closed or suffered significant economic loss due to the pandemic.

Going into the session, everyone expected that the State would waive the accrual of interest on underpayments on a range of taxes, including income taxes. That relief was provided. Similarly, more flexibility was clearly needed in determining one’s eligibility for unemployment compensation, and that flexibility was provided.

Teachers and school administrators received a host of waivers, since the school year has been cancelled. Among those were an extension of various licensure requirements for teachers and administrators. The bill also establishes the school opening date for the 2020-21 school year of August 17, 2020, a little over a week earlier than past years.

One of the few controversial provisions included in the bill relates to health care liability protection for emergency or disaster treatment. The fear is health care providers may be subject to a host of civil and criminal liability unless given some limited immunity. A similar time-limited civil liability immunity to essential businesses for injuries or death resulting from customers or employees contracting COVID-19 at the business was enacted

Signing legal documents and getting them notarized is difficult during a pandemic so these things can now be done via video conference technology. An old anti-KKK law outlawing masks in certain situations was modified to make clear that such masks are legal to ensure the physical health or safety of the wearer or others, with an exception that the wearer must remove a mask upon request of a law enforcement officer during a traffic stop or when an officer has reasonable suspicion or probable cause during a criminal investigation.

During the pandemic, many constituents couldn’t renew driver’s licenses or vehicle registrations. The bill extended the validity of all credentials issued by the Division of Motor Vehicles for five months for any credential expiring between March 1, 2020 and August 1, 2020.

Rather than trying to read the entire 70-page bill to know whether a provision important to you or your business is included, the better way to get an overview of what is in the bill is to read the bill summary. Anyone having questions about any regulatory reform provisions, should not hesitate to contact my office. Moreover, the legislature is going to be back in two weeks and these bills are likely just the first of many COVID-19 bills that will be considered. Please send me other ideas for needed regulatory changes or let me know what your funding priorities are.

As noted above, at the present time federal funds may not be used to make up for lost revenues. Thus, lost sales taxes revenues or lost gate receipts cannot not be recouped from the federal funds, although various congressional offices advise that may change.
Some might assume the State could easily make up local governments’ lost sale taxes or the Zoo’s or Arboretum’s lost gate receipts since the state has been running budget surpluses in recent years. The problem with that assumption is that the time for filing and paying a whole range of taxes was moved. The state didn’t get the usual tax revenues in and around April 15th. It is likely we’re actually running a budget deficit in this fiscal year because those revenues will not come to the state until the next fiscal year. Moreover, the tax revenues for the next fiscal year are clearly going to be adversely impacted by the economic slowdown caused by the pandemic.

In other words, the state isn’t in a position to make up the revenue shortfalls for other governmental entities or nonprofits. While North Carolina is likely in a better position than many other states, it isn’t able to print money or run a budget deficit like the federal government to allow local governments and others to recoup their lost revenues.

One final observation. This week will probably be remembered as a time when bipartisan squabbling was put aside. The House committees that drafted the bills had Republican and Democratic chairs, and they largely worked by consensus. The bills passed unanimously and quickly. While there were differences of opinion, lawmakers were willing to compromise.
The only obvious partisan trend related to the wearing of masks. Republicans often didn’t wear them, and Democrats generally did. Of course, there were plenty of exceptions to that generalization, but I had to laugh when I heard a staffer quip that he never expected wearing or not wearing a mask would become a partisan fashion statement.
As for me, my constituents are probably not surprised to learn that I was sort of in the middle. I wore a mask during the two times I was on the floor to vote, and I voted a third time by proxy which didn’t require me to go to the floor. On the other hand, while crafting the final bills — much of which was done by the full Appropriations Chairs, which are all Republicans — it was rare to see a mask even though we were in tight quarters. I tried to stick to the end of tables, allowing me increased space, but it was usually only staff that consistently showed up with masks for meetings.

As already noted, the committee processes were all electronic. More importantly, no one other than legislators and staff were allowed in the legislative buildings, and legislators and staff had their temperatures taken prior to being allowed access to the buildings each morning.

It was strange not having the usual crush of lobbyists and constituents in the buildings or being stopped by reporters for a legislator’s perspective. Of course, the ReOpenNC group held a rally outside the legislative chambers , creating some difficulty in getting around — that made it feel just like normal.

The legislature will hold skelton sessions this week and next week before returning during the week of May 18th. That will likely kickoff a somewhat more normal Short Session. The House intends at this point to develop a budget, but serious budget work will have to wait until we get a consensus forecast of the state’s revenues for FY20-21.

COVID-19 Update

Posted on May 4, 2020 by admin in Pandemics

This is a COVID-19 Update as of last Saturday circulated by one of my colleagues, Rep. David Lewis. This one is very well done, and I just wanted to share it with you.

Chuck

Featured Stories

POLITICO: FDA authorizes emergency use of coronavirus drug remdesivir

The Food and Drug Administration on Friday issued an emergency use authorization for remdesivir, in a bid to help patients get quicker access to the first antiviral to show promise against Covid-19 infections.

WECT: NC starts releasing zip code level data on coronavirus cases

As you look at the zip code data in southeastern North Carolina, the darker blue areas are in harder hit Columbus County, with many cases in the Tabor City and Whiteville area zip codes. In Wilmington, the 28412 zip code has the darkest shade of blue. The data indicates the total number of cases and deaths by each zip code.

NEW YORK TIMES: As Businesses Resurface After State Shutdowns, So Does Divisiveness

Nearly a dozen states tentatively returned to public life on Friday, the first mass reopening of businesses since the coronavirus pandemic brought America to a standstill six weeks ago. But there were clashes across the country over how, when and even whether it should be done.

FOX 8: NC General Assembly unanimously passes $1.5 billion COVID-19 relief package

The General Assembly unanimously passed a $1.5 billion COVID-19 relief package Saturday in what’s being described as the “initial response” to the crisis.

Topline Numbers

Total Cases Worldwide: ~3,407,983*
Total United States Cases: ~1,126,021*
Total United States Deaths: 66,045
Total North Carolina Cases: 11,509*
Total North Carolina Deaths: 420

*note: some of these cases are “recovered”

Federal Action

UNEMPLOYMENT: First-time filings for unemployment insurance hit 3.84 million last week as the wave of economic pain continues, though the worst appears to be in the past, according to Labor Department figures.
COVID TREATMENT: The FDA has issued an emergency use authorization for remdesivir, in a bid to help patients get quicker access to the first antiviral to show promise against Covid-19 infections.
STAY-AT-HOME ORDERS: Mandatory stay-at-home orders have been issued in at least 41 states.

State Action

COVID-19 North Carolina Dashboard: We are now at 11,509 cases in North Carolina:
- 139,475 completed tests;
- 98 counties with cases;
- 502 people hospitalized;
- 420 confirmed deaths.
ZIP CODE DATA: DHHS started releasing zip code level data of the number of coronavirus cases for the first time.
COLLABORATIVE MODELING UPDATE: The Stay at Home Order and the strong actions of North Carolinians are helping to slow the spread of COVID-19, according to new research from Duke University, NoviSci, RTI International and the University of North Carolina at Chapel Hill. New research models from UNC Cecil G. Sheps Center for Health Services Research indicates a phased reopening will help avoid overwhelming our health care system.
GENERAL ASSEMBLY: Lawmakers gave final approval to two bills in a rare Saturday session, wrapping up the legislature’s first action on COVID-19 response. The votes in both the House and the Senate Saturday were unanimous, which is unusual for large legislation in a General Assembly so often divided by party.
STAY-AT-HOME ORDER: Governor Cooper’s Executive Order No. 135extends North Carolina’s Stay At Home order through May 8. The order extended the closure of restaurants for dine-in service and bars and the closure of other close-contact businesses through May 8.
UNEMPLOYMENT CLAIMS: The North Carolina employment market is fast approaching the thresholds of 1 million jobless claims and $1 billion paid out in state and federal unemployment benefits. The N.C. Division of Employment Security reported Tuesday there have been 875,632 state and federal unemployment insurance benefit claims filed statewide.

Resources

POLITICO: Live tracker: How many coronavirus cases have been reported in each U.S. state?
RAW DATA: The COVID Tracking Project
NCSL: COVID-19 STATE Resources
JOHNS HOPKINS: Worldwide Map of Global Cases
Coronavirus Emergency Loans, Small Business Guide and Checklist from the US Chamber
NC DHHS: NC Updates on COVID-19
CMS Coronavirus Waivers & Flexiblities
DHHS: WHAT TO DO IF YOU FEEL SICK.
Text COVIDNC to 898211 to get alerts about Coronavirus in NC.
Toll-free number 1-888-600-1685 to connect families in need of childcare options.
Toll-free Hope Line 1-866-578-4673 for older adults experiencing isolation from social distancing.
The Small Business Administration Customer Service Center can be reached at 1-800-659-2955. A helpful FAQs for small businesses during this time can be found here.
Parents who need food assistance for their children can text FOODNC to 877-877 to locate nearby free meal sites. Also available in Spanish by texting COMIDA to 877-877.

A Legislative Session During a Pandemic

Posted on April 21, 2020 by admin in McGrady, Newsletters, Pandemics

The North Carolina legislature will return to Raleigh in a week for its regularly-scheduled Short Session. However, not a lot about the session is expected to be like any previous Short Session. Substantively, the focus will be quite different from what I would have projected six weeks ago. Procedurally, the legislature will be making changes to conform the law to the new norms requiring no large meetings and social distancing.

Six weeks ago, the direction from House leadership was to start the preparation of a budget for Fiscal Year 2020-21 with the expectation the House would put forward its budget in May. Now, no immediate action on a budget will happen. With the change in filing dates for tax returns and a massive slowdown of the economy, the budget cycle is very different, and the expectation is we will put together a budget in late June or early July, when we have a better understanding of our pandemic-affected revenues and the new funding priorities related to the economic slowdown.

Prior to the pandemic the expectation was this would be a relatively short legislative session with the legislature finishing work on some legislation started last year and taking up a one-year budget, following Governor Cooper’s veto of the two-year budget last year. Now, there is no expectation regarding work on longer term issues like redistricting reform. The expectation is we’ll largely focus on pandemic-related issues: some funding issues and some changes to allow the state to bounce back from the terrible toll the pandemic has taken.

The Substance. Even without the pandemic, the upcoming legislative session was likely to be unusual because the typical two-year budget was not enacted last year. While the General Assembly passed a two-year budget, that budget was vetoed, and the legislature was unable to muster the required 2/3’s vote to override the veto; the House overrode the veto but the Senate failed to override by one vote. The legislature and Governor Cooper agreed on a series of mini-budgets addressing a range of issues including education, state employee pay raises,and disaster relief, but the budget under which the state is operating is a combination of those mini-budgets and the budget for Fiscal Year 2018-19. The effect was teachers and state employees continued to get paid and the state government continued to function, but teachers, college professors and others didn’t receive pay raises and few capital projects were undertaken.

One might think that the COVID-19 infection would lead to a resolution of the budget disputes, but that isn’t likely and not for the reasons one might expect. While there are still differences of opinion among legislators and the Governor on Medicaid expansion, funding of teacher raises, and spending on capital projects, those differences of opinion seem easy to resolve compared to the negative fiscal impact of the virus on the economy. With a constitutional requirement that the state budget be balanced, pay raises and a large number of capital expenditures seem no longer possible. Modifying tax filing deadlines and postponing payment of various taxes makes projecting the state’s revenues for the next fiscal year quite difficult.

Lacking accurate fiscal projections, the legislature will come into session next week and apparently take up a series of pandemic-related changes to state law dealing broadly with recovering from the pandemic. House Speaker Tim Moore (R-Cleveland) created the House Select Committee on COVID-19, and that committee divided into several working groups which are working on providing economic support, and addressing health care, education and the continuity of state operations issues. Each of the working groups has bipartisan leadership, and the usual bipartisan bickering has not been much in evidence.

My assignment is to the working group drafting legislation to shore up the state’s economy, and our focus has been primarily on a bill intended to increase access to unemployment benefits, waiving the accrual of interest on certain tax payments and extending certain tax related deadlines. Additionally, the working group is working on legislation to provide small business emergency loans and emergency assistance to commercial fishermen. The former proposal would appropriate $75 million to the Golden Leaf Foundation to provide bridge loan funding for small businesses adversely affected by the COVID-19 epidemic.

Each of the working groups is working remotely via conference calls, and one can listen to those calls by going to the legislative website.

Each working group has its own website, so the public can read the input provided by various people and groups, see the presentations made to each working group and can review draft recommendations. The Education Working Group is considering issues including providing budget flexibility to school boards in terms of how they spend their state allocations,changes or postponement for statewide testing and changes in the school calendar. The Continuity of State Operations Working Group has received input from all of the various state departments and is expected to put forward a set of regulatory changes to flex deadlines and changes in operations consistent with each department’s responsibilities.

The Health Care Working Group has a similar mandate as the Education Working Group in that a whole body of law may need to be flexed in response to the reality of providing health care at this time. Moreover, the state’s hospitals are vital but many of them are in dire straits because they are no longer able to perform elective surgeries and other procedures. The Health Care Working Group will apparently recommend various funding for providers using money coming from the federal CARE Act.

The expectation is that each of these working groups will draft necessary legislation and that legislation will be introduced next Tuesday when the session opens. The draft legislation being considered by the Economic Support Working Group is already online, and I expect bills will be recommended by the other working groups.

The current House schedule has us coming into session on Tuesday, April 28, when bills will be introduced. Those bills will be referred to standing committees which will consider them on Wednesday, April 29, and the House will likely vote on whatever bills clear the standing committees on Thursday, April 30. At that point, consideration of those bills will shift to the Senate.

House Members are being told to expect to be in session for two weeks at which point we’ve been told to expect to adjourn a date sometime later. A decision on when we will return may turn on our understanding of when we’ll have a good read on what the state’s revenues will be for the upcoming fiscal year. As a full Appropriations Chair, I expect in mid-June we will restart our work on the budget.

In terms of substance, one question is whether we’ll take up any legislation other than the budget when we return. My expectation is we will, although no one wants a long legislative session in an election year. Local bills might be able to move quickly through the legislature if they are noncontroversial. Moreover, if agreements can be reached on other bills that didn’t make it through the Long Session, they may get taken up. In order to prevent the legislative session from getting bogged down, it is doubtful that controversial bills will be considered. To be accurate, it isn’t even clear if the Senate will want to take up a budget for the upcoming fiscal year. As with last year, we could pass some mini-budgets and freeze other spending as reflected in the Final Year 2018-19 budget.

The Procedure

Neither the state constitution nor state laws anticipate a pandemic. Thus, there is no current provision for passing legislation without the legislature being in session—meaning a quorum of each body being available to vote on whatever bills come forward. However, just because no one anticipated the need for some way of voting during a pandemic, doesn’t mean the current law or the rules of each chamber cannot be complied with, while also ensuring the various executive orders regarding meetings and social distancing can be met.

Per an earlier adjournment resolution, the legislature will come into session on Tuesday. There is no need for a large number of Members to be in attendance. Once in session, the bills coming out of the various working groups can be introduced and immediately referred to one of the Standing Committees. On the following day, those bills can be heard in committee. There are several large meeting rooms intended for use by the entire membership of either chamber that can be utilized by committees, keeping members at the appropriate distancing requirements. We’ve been advised lobbyists and others will not be allowed in the committee rooms, but the hearings on the bills will be broadcast live for anyone to follow. The bills will have been filed the day before the committee hearings, and legislators can be directly contacted via email or phone if anyone has concerns or suggestions regarding any bill being considered.

When the bills come to the House floor, the usual procedure is to have all Members vote within 10 or 15 seconds with each Member seated at his or her seat. That will change. The voting will be staggered over some period of time allowing Members to come in to vote in shifts.

Congress uses a similar procedure to allow its Members to vote over an extended period of time. Some Members may be seated in the gallery, and the presiding officer can recognize them and have them cast their votes verbally. Additionally, leadership has indicated that a temporary rule will be adopted allowing Members to vote by proxy. Currently, a Member has to be in the House chamber to vote, but proxy voting will likely be allowed at least for the duration of the pandemic.

Going Forward

Most of the public legislative activity has been on the House side, and there is no clarity as to whether the state Senate will take up any legislation put forward by the House. However, there is clearly some common understanding that there are regulatory reform and funding issues on which both chambers and both parties probably agree. Therefore, my expectation is that there will be action by the Senate on some set of issues, but the initial part of the Short Session will only last two weeks or so. Thereafter, we’ll adjourn until we have a more accurate forecast of revenue numbers in late June or early July and can begin some work on a balanced budget and complete work on any noncontroversial matters still awaiting legislative action.

My primary reason for running for re-election in 2018 was to complete work on a number of initiatives, primarily dealing with nonpartisan redistricting, insurance coverage of autism, alcoholic beverage regulatory reform and funding of public lands. My fear is that the pandemic will thwart much of the work done on those issues. For example, one has to wonder whether there will be an opening for nonpartisan redistricting next year after another election occurs and the census is complete. Funding of public lands would have received a huge boost had last year’s budget been adopted. As things stand, those appropriations will likely be lost as the state moves to fund more pressing pandemic-related programs.

My one hope is that the bipartisanship that has been the norm in the North Carolina House in response to the pandemic will continue, that relationships between Members from different parties will grow and will allow next year’s legislature to work in a more bipartisan way to address whatever the challenges are.

The Budget & Redistricting Among Other Things

Posted on October 23, 2019 by admin in Appropriations, Budget, McGrady, Newsletters

It’s mid-October and the legislature is back after a short cooling off period. Leaving town ten days ago, the palpable tension caused by a snap vote to override the Governor’s veto of the budget permeated the legislature. While the House overrode the veto, Senate leadership’s effort to do the same has been complicated by the way things went down in the House. The conventional wisdom is that there will be no Senate override. Of course, that was the conventional wisdom before the House successfully overrode the veto.

With the budget in limbo, both chambers are proceeding with a series of mini-budget bills — essentially small parts of the vetoed budget run as separate bills. In recent weeks, the legislature has passed bills to fund transportation, the Raise-the-Age law, and raises for state employees, among other things. The mini-budgets haven’t included any of the harder issues involving the education, human services and capital budgets that were the reasons Governor Cooper gave for vetoing the budget.

On the agenda for this or next week in the House is a mini-budget for salary increases for teachers, instructional support personnel and assistant principals based on years of experience along with pay raises for principals consistent with the vetoed budget, House Bill 377 [Teacher Step Act]. A mini-budget to provide pay raises for UNC and Community College employees as well as the retiree 1% cost-of-living increase is also moving along with a mini-budget to fund the Department of Information Technology and information technology projects across state government: HB231 [UNC & Comm. Coll. Pay/Retiree Bonus] and HB398 [Info. Tech. Budget/2019-2021 Biennium] respectively.

During the break, staff worked on some of the larger mini-budget bills, essentially free-standing bills to fund the other state departments, including the Department of Public Instruction, the Department of Agriculture & Consumer Affairs, the Department of Environmental Quality and the Department of Health and Human Services among others. If the veto isn’t overridden, it is reasonable to expect some of these budgets will move, but it would be unreasonable to expect budgets relating to education, health and human services or capital projects will move since passage of these bills would likely draw more gubernatorial vetoes that couldn’t be overridden.

Most of my constituents have no idea what is going on. Recalling the recent partial shutdown of the federal government when Congress and President Trump were unable to reach an agreement on a budget, my constituents assume without a statewide shutdown, we have a budget in place for the current fiscal year and to some extent they are right. Without an approved budget, the state budget in effect is last year’s budget with respect to all recurring funding. Thus, teachers, college professors, state highway patrol officers, prison guards, and DOT personnel continued to get paid even after the veto. Under NC law, much of the pain of a budget impasse isn’t felt — at least not initially. Moreover, passage of the mini-budgets will relieve some of the pain since some range of workers will receive the raises included in the vetoed budget bill. For example, if HB377 passes in its current form, teachers, assistant principals, principals and instructional support personnel will get raises. Maybe they aren’t what Governor Cooper proposed or all of what would have occurred if the full budget was in effect, but they are still raises—sometimes substantial raises.

With no apparent shutting down of state services, the average constituent probably doesn’t feel much impact from the budget impasse. However, some people do. Having recently met with the Department of Social Services board in Henderson County, I know they can feel the pinch caused by an increase in caseloads resulting from an increasing population without an increase in workers. Local governments felt the impact when none of them were awarded grants by the boards of the Clean Water Management Trust Fund or the Parks and Recreation Trust Fund for recreation and water quality protection. There are substantial increases in funding for both of those trust funds in the vetoed budget. It is likely that some of them would have received grants, were the veto overridden.

A local non-profit, Muddy Sneakers, is impacted by the budget impasse. Muddy Sneakers was due to get recurring monies to continue the expansion of its program across the state, but its current funding is with non-recurring monies and no non-recurring monies are part of the stop-gap funding. One of the more peculiar funding issues relates to Western Carolina University. It has an aging power plant, and the legislature funded half of the costs of replacing it in last year’s budget with the other half included in this year’s budget. Well, those are non-recurring funds — one-time funding. The other half of funds to replace the power plant aren’t available yet.

Anyone who says they know how the budget impasse will be resolved is probably kidding themselves. I have no sense there is a resolution in sight.

Since we’re still in session, we’re also going about work on other bills that would have likely waited until the Short Session next year. For example, most of my time is being spent putting together another disaster relief package. The Cooper Administration has asked for additional funding and, rather than wait on that, House leadership has asked me to start working on another package, one that will finish up most work related to Hurricanes Matthew, Florence and Michael and begin work on Hurricane Dorian. Another project is potential funding for the Department of Transportation to ease its cash flow problems. The Department recently announced it was rolling back the start dates for various transportation projects due to cash flow issues caused, in part, by expenses related to hurricane damage to roads and bridges. Many legislators would like to keep construction projects on track so various bills are being prepared to address this issue.

What makes things difficult is that close coordination with the Senate is required. There is no point in the House spending a lot of time on a disaster relief package or some bill to address DOT’s cash flow issue if the Senate isn’t prepared to work on that issue and generally agree on a common approach to the issue. So before the mini-budgets move or before significant work is done on substantive legislation, the lead sponsors of legislation need to engage with their Senate counterparts.

The two substantive bills that have been worked on at great length that are still ripe for consideration are Senate Bill 315 [NC Farm Act of 2019] and SB559 [Storm Securitization/Alt. Rates]. The former bill is a broad, agricultural regulatory reform bill that has gotten hung up over a smokeable hemp provision in the bill. The latter bill is usually referred to as the Duke Energy bill, and it has drawn fire from a strange mix of opponents including consumer advocates, large manufacturers, and environmental organizations. I’m generally supportive of the Farm Bill and oppose the Duke Energy bill.

One of the biggest unknowns affecting the session is the pending redistricting lawsuits, one of which has already caused the legislature to redraw legislative maps for the upcoming election. The legislature is awaiting a decision on its most recent effort at drawing maps.

One of the primary reasons I ran for another term was to come back to hopefully change the way the state does redistricting of congressional and legislative seats. With the next census looming, this is the session the legislature needs to make changes in how it redistricts. Putting aside the legal issues, my view is that partisan redistricting (usually referred to as gerrymandering) should not be allowed. My expectation last year was one or more courts could outlaw partisan redistricting, and the most likely time for the legislature to take up the issue was immediately before the next census, perhaps when no one was sure which party would be responsible for doing redistricting.

While the U.S. Supreme Court ducked ruling on North Carolina’s redistricting process, the conventional wisdom is that the NC Supreme Court isn’t likely to duck the issue. If that is true, the legislature should take action to resolve the issue before the courts do.

This week, Rep. David Lewis (R-Harnett) who chairs the House Redistricting Committee scheduled a meeting of his committee to discuss various redistricting bills, including HB69 [Nonpartisan Redistricting Commission] and HB140 [The Fair Act] — bills on which I’m a primary cosponsor. These bills and others seek to do away with partisan redistricting. The last hearing on any nonpartisan redistricting bill occurred in 2011, and even though the committee will not mark-up a bill at this time, the hearing signals a willingness to consider the options.

While I might have my preferences when it comes to how we might change our redistricting process, at this point, my focus is keeping Republicans and Democrats together. Working with Rep. Robert Reives (D-Chatham), the Deputy Democratic Leader, we’ve laid out two ways of potentially addressing the issue. No redistricting legislation is going to pass unless it has strong bipartisan support, and our effort is to keep Members focused on the goal and try to keep them from opposing bills before they understand all of their options.

There is no Senate strategy at this time because, if a bill is moving in the House, it is probably only moving because lawyers advising House leaders on redistricting have pointed out the risks involved in the litigation. Those same lawyers are advising Senate leaders.

The President Pro Tem of the Senate, Sen. Phil Berger (R-Rockingham) has stated that the Senate will go home after next week. It isn’t clear exactly what that means, but most folks think it means we’ll be taking some time off before coming back to run some more mini-budget bills. No one seems to think that we’ll just pack up our bags and go home to only return for a Short Session next year. In other words, we may take a recess to a date sometime in the coming weeks or months, but before the end of the year. That schedule could be influenced by whatever decision is rendered by the court considering the active redistricting case.

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