Special Report to Blowing Rock News from the North Carolina Chamber of Commerce. April 29, 2011. RALEIGH, NC -- As a service to North Carolina residents and business owners, Blowing Rock News is pleased to re-publish these notes from the NC Chamber of Commerce report, "This Week at the Capital," a weekly collection of news briefs covering hot topics in the state legislature and public policy arena. 

House Budget Released

The House Appropriations Committee voted to approve the House budget proposal on Wednesday, one day after it was released from the House Finance Committee. The $19.3 billion proposal was approved on a voice vote after the Appropriations Committee debated for more than seven hours and held votes on more than 70 amendments. The 333-page bill presented by the House reduces spending by $600 million below Governor Perdue’s $19.9 billion proposal, with health and education operating with $900 million less than what the governor proposed. The budget writers were instructed by House Republican leaders to spend $1.4 billion less than Perdue, allowing Republicans to fulfill their promise of letting the temporary taxes expire in July, which are worth about $1.3 billion in revenues. Additionally, the House proposal would spend more than the governor’s proposal on the state's retirement system and “rainy-day” savings fund.   An accounting change also shifts more than $190 million to fund the state Highway Patrol out of the general operating fund. House Majority Leader Paul Stam (R-Wake) defended the spending cuts by arguing that “We're not doing it by raising tax rates,” and saying that the budget is not “draconian…It's right-sizing.” However, Rep. Mickey Michaux (D-Durham) told Republicans that "You don't have to be as vindictive in this budget as you are.” Members of the committee were successful in shifting money between departments and amending the budget to save the jobs of 20 prison chaplains, promote the wineries of the state and preserve various funds for historic sites and arts grants. Other proposals outlined in the budget will result in approximately $100 million in new or increased fees. The expanse of fees will be used to decrease the estimated $2.5 billion budget gap for next year. A complete listing of all fees that were recommended by the House Finance Committee can be accessed on the General Assembly website or by clicking here.

In addition to the fee provisions, the budget proposal approved by the House Finance Committee on Tuesday would set aside $230 million in reserves for a separate tax package to be considered in the coming weeks. It was reported that about $130 million of that $230 million would be used to lower the corporate income tax rate and provide some tax relief for small businesses. Speaker Thom Tillis (R-Mecklenburg) was quoted as saying, “Republicans are creating a separate tax relief bill for small business and possibly corporations and allowing more than $1 billion in temporary taxes to expire this year.”

Finally, the proposal would modify or eliminate three state funds that are financed by the national tobacco settlement. The Golden LEAF Foundation would forfeit two years of financing, the Health and Wellness Trust Fund would cease to exist at the year’s end and oversight of funds used to help tobacco growers would shift to the state’s Board of Agriculture.   The full House is expected to vote on the bill next week.

Medical Malpractice Bill Placed in Conference Committee

The House passed an amended version of S33: Medical Liability Reforms, sponsored by Sens. Tom Apodaca (R-Buncombe), Harry Brown (R-Jones) and Bob Rucho (R-Mecklenburg), on Wednesday of last week.  However, an amendment that creates exceptions to the $500,000 cap on non-economic damages passed on a vote of 67-49. The amendment was opposed by the medical community and the business community, as well as Rep. Johnathan Rhyne (R-Lincoln), who handled the bill on the House floor. The Senate voted not to concur with House changes to the bill on Wednesday of this week, sending the bill to a conference committee where members of the House and Senate will work together to reach a compromise.

Broadband Bill Advances

This week the Senate Finance Committee approved H129: Level Playing Field/Local Government Competition and amendments were debated on Thursday by the full Senate. The proposed legislation outlines which municipalities could offer broadband, television and telephone services to its citizens. It would also require towns and cities who want to provide the services in the future to hold public hearings about their plans, prevent them from using other public money for the project and take on debt without voter approval. The proposal would, however, exempt four municipal networks from the requirements, including Salisbury, Wilson, Morganton and Mooresville-Davidson. Other cities that have already spent money on a project, but are not operating, failed to receive such exemptions. A tentative vote from the Senate is expected to take place on Monday.

New Job Growth

Based on statistics provided by the U.S. Bureau of Labor Statistics, North Carolina has added 36,500 nonfarm jobs in the 12-month period ending in March. The state ranked 10^th in the nation for annual employment gains through the end of the first quarter. In March alone, the N.C. Employment Security Commission released information showing that North Carolina gained 13,900 nonfarm jobs, dropping the state’s unemployment rate to 9.7 percent.

North Carolina Chamber Competitiveness Update

Comments: