The 2019 session of the N.C. General Assembly began Jan. 9, both in the House and the Senate. The session ended on Halloween, which was Wednesday, Oct. 31. Lawmakers left without a budget, failing to override Gov. Roy Cooper’s veto, which came in June. To date, Cooper has vetoed 37 bills — 23 of which the General Assembly has overridden. During the session, however, lawmakers passed a host of mini-budgets, redrew N.C. legislative districts under a court order, and funded teacher pay and other raises for state workers.
They also implemented tax cuts, provided some money for disaster relief, and made moves to reform the state’s antiquated alcohol laws, as well as making some reforms to criminal justice system.
Meanwhile, lawmakers will return Nov. 13 to consider redistricting matters and possibly tie up a few loose ends, per a joint resolution. After that, they’ll return Jan. 14 to attend to the rest of the session’s unfinished business.
Here’s a look at a few items which may not have attracted big headlines over the final 48 hours of a hectic week on Jones Street:
Roanoke Rapids bailout
The N.C. House Finance Committee tacked a $7.5 million bailout for Roanoke Rapids to a bill aiming to give taxpayers a refund.
In August, Speaker of the House Tim Moore, R-Cleveland, and Senate Leader Phil Berger, R-Rockingham, announced House Bill 74, “Taxpayer Refund Act,” as a means of giving taxpayers back some of the money in the unexpected budget surplus. The revenue forecast estimated around $900 million more in tax collections than anticipated. Republican wanted to give a chunk of the money back to taxpayers. Under H.B. 74, married couples filing income taxes jointly would get up to $250 and individual filers would get $125.
The bill passed the Senate. It’s sat in the House since August.
The House Finance Committee resurrected the income tax refund bill, but with an additional rider: a bailout for Roanoke Rapids.
The new version of the bill, a proposed committee substitute to Senate Bill 105, includes a $7.5 million grant to Roanoke Rapids to help pay off a debt incurred by a failed theatre project. Rep. Julia Howard, R-Davie, added the grant to the bill. Howard is one of the senior finance committee chairs.
Roanoke Rapids borrowed around $21.5 million to build the Randy Parton Theatre. It was to be a joint venture with Dolly Parton’s brother, Randy, who would manage operations and perform shows. The theater opened in July 2007 and initially saw good attendance, but soon the venture lost its audience.
A few months later, Randy Parton was removed from the project after he almost went on stage while under the influence of alcohol. The theater was renamed the Roanoke Rapids Theatre. Roanoke Rapids was left with millions in debt.
With the General Assembly returning in November primarily to address redistricting, it’s unlikely the bill will see any action anytime soon. Currently the bill is in the House Rules Committee.
Vape tax fails
A tax on vaping and e-cigarette products flopped on the House floor Thursday.
Representatives tried to raise the tax on vapor products and e-cigarettes to the same level as other tobacco products with an amendment to Senate Bill 557. The tax would have jumped from 5 cents per fluid militer of e-liquid sold to 12.8% of the manufacturer’s cost.
Representatives sprung the amendment on the bill at the 11th in the House Finance Committee. Though the amendment passed the committee with strong support, it vanished in the House Rules Committee. Attempts to revive the amendment on the House floor were unsuccessful.
“As you look at this tax bill and look at this crisis that is worsening everyday, I think we should take every effort we can right now … to help our children stay healthy and alive,” Rep. Gale Adcock, D-Wake, said. “This [bill] is not a bad vehicle.”
House Speaker Tim Moore, R-Cleveland, ruled that the amendment was not relevant to the bill, and it failed 49-59.
“This is something that should not wait. I’m the parent of a teenage boy whose mother found these vape products in his overnight bag,” Rep. Darren Jackson, D-Wake, said. “That’s where you have to catch kids: you have to catch them early on, because once they start, it’s really hard to get them to stop.”
The only representative to speak against the amendment in the House Finance Committee, Rep. John Szoka, R-Cumberland, has pledged to address youth vaping with separate legislation.
Franchise tax/film incentives
North Carolina businesses and film production companies may get a big break.
Senate Bill 578, a measure involving both a franchise tax cut and grants to film producers, made it to the governor’s desk Nov. 1, despite attempts to kill and amend it. Both chambers passed the bill Oct. 31 by roughly party-line votes, the House voting 61-49, and the Senate 29-19.
Democrats opposed the franchise tax cut, saying the state can’t afford to lose the extra revenue. Rep. Darren Jackson, D-Wake, warned during floor discussion Oct. 30 that a recession would eventually hit the state and a dependable franchise tax would become essential.
“When you are going through a recession and things start to dive, you can kind of count on the franchise tax to hold you up and keep you from bottoming out,” Jackson said.
Republicans praised the tax cut for removing unnecessary burdens on the state’s small businesses and encouraging new ones to open.
“You want to talk about a tax that kicks you when you’re down, we can call that the franchise tax,” said Larry Yarborough, R-Granville.
Earlier in the day, the House Finance Committee had killed the bill after controversy over combining the franchise tax with an unrelated film tax grant provision that was intended to boost investment in the state’s film entertainment industry. The Rules Committee later revived the bill.
The conflict came up again Oct. 31 on the House floor, when Rep. Larry Pittman, R-Cabarrus, introduced an amendment to remove the film provision, tossing in a few spooky metaphors.
“It adds more vampires to the mix and makes the coven bigger,” he said. “We need to stop making more vampires.”
The governor has 10 days to sign or veto the bill. If he vetoes it, members may take an override vote in January when they return.
The legislature enabled failing rural hospitals to get more money.
Senate Bill 537 would create a rural hospital loan program, which would lend $20 million from taxpayers to distressed rural hospitals. UNC Health Care and the N.C. Local Government Commission would administer the loan program.
S.B. 537 would help fund distressed rural hospitals that needed to build new facilities or move to a new facility. To qualify for the loan, the hospital must give UNC Health Care its plan to recover financially.
The Senate rolled the loan program into a more comprehensive mini-budget that included social services reform and revisions to the Substance Abuse Professional Practice Act. It passed both chambers before the General Assembly adjourned.
Innovative School District
The House and Senate made several changes to the Innovative School District program and delayed the number of schools that must be added to the ISD.
Despite objections from Democratic lawmakers, Senate Bill 522 passed 33-16 in the Senate and 64-48 in the House. ISD — originally called the Achievement School District — became law in 2016. The program places the lowest-performing schools in the state under management of charter or education organizations for five years. The goal is to improve school performance through awarding greater flexibility not typically afforded traditional public schools.
Only one school, Southside Ashpole in Robeson County, has been transferred to the ISD. Carver Heights in Wayne County was poised to join the program in 2018, but significant local pushback and criticism over the selection process halted the transfer. Instead, the General Assembly passed legislation allowing Carver Heights to become a Restart School and stay under local control instead of joining the ISD.
Now some lawmakers hope to reform the program, providing more clarity to the selection process and avoiding a repeat of last year’s drama.
Editor’s note: This story was corrected after initial publication. The film incentive program is a tax-funded grant to production companies rather than a tax incentive. We regret the error.