The state House took center stage in the General Assembly this week by rolling out the Republican budget. Bills dealing with property rights, merit-pay for teachers, and redistricting also rose to the surface.
The Republican budget would spend $19.1 billion, about $800 million less than Gov. Bev Perdue’s $19.9 billion budget proposal. The budget passed the Appropriations Committee Wednesday. It will be considered on the House floor next Tuesday and Wednesday.
“This budget represents the largest tax cut in North Carolina history and will restore over a billion dollars into the private sector, which will help create desperately needed jobs,” said Speaker of the House Thom Tillis, R-Mecklenburg, in a news release.
The bill keeps the promise Republicans made on the campaign trail to eliminate the temporary, one-cent sales tax increase the General Assembly enacted in 2009. Perdue recommended keeping 75 percent of the elevated sales tax.
The budget maintains funding for all the state’s K-12 teachers while cutting funds for many teacher assistants. Protecting teaching jobs has been a priority for Perdue and Republicans.
What surely will be a contentious portion of the budget is the treatment of tobacco settlement cash and economic incentive money. Republicans would divert next year’s $68 million payment to Golden LEAF and eliminate the Tobacco Trust Fund and Health and Wellness Trust Fund. However, Republicans would give the governor $10 million more in the One North Carolina Fund to court businesses considering locating or expanding in the state.
The Republican budget also includes the pension contribution recommended by state pension’s board of trustees, roughly $785 million. The budget does not restore the shortfall created when the legislature shortchanged teachers and state employees in the current budget. To make up that shortfall, legislators would have to pay nearly $975 million in the next fiscal year.
Rep. Mickey Michaux, D-Durham, said the legislature shouldn’t even pay the $785 million recommended by the board of trustees. “We are sitting in the top 10 in terms of retirement funds. We are 97 percent funded in our retirement system,” Michaux said at Wednesday’s committee hearing.
As reported in Carolina Journal, the funding level is the subject of a national debate. Pension analysts say state pension plans across the country and in North Carolina have used overly optimistic investment goals to calculate a fund’s ability to pay retired workers. There are serious questions over whether states can keep their promises to employees.
Eminent domain amendment
The House also passed a bill that would give voters in 2012 the chance to alter the state’s laws governing eminent domain. Rep. Skip Stam, R-Wake, introduced the proposed constitutional amendment.
Before Thursday’s vote, Stam said the bill is “not for property rights, but the rights of people to own property.” It’s a reaction to the U.S. Supreme Court’s decision in the Kelo case, which allows governments to seize private property and transfer it to other private groups for a wide range of uses.
Stam’s bill would amend the state constitution to restrict state or local governments from seizing private property except for a narrow set of uses, including building a school, fire station, or road.
Any amendment to the constitution must receive a 60-percent majority vote in each legislative chamber and then be approved by voters. The bill passed the House by a wide margin, 98-18. It now moves to the Senate for consideration.
Rep. Joe Hackney, D-Orange, voted against it. He said, “I disagree, legally speaking, with almost everything the proponents have said. What this amendment does is take a settled area of law and makes it unsettled.”
This week, the House and Senate announced public hearings as part of the process to redraw the lines separating political districts. Every 10 years after the census, the states redraw the lines. It’s a monumental opportunity for Republicans, who will control the process for the first time in a century, to cement their legislative clout.
Sen. Bob Rucho, R-Mecklenburg, chairs the committee in charge of redrawing the lines. The hearings are scheduled through May 9, in 13 of the state’s 100 counties. More information on where the meetings will be held can be found on the General Assembly’s website under the “News and Information” section.
DOT rail spending
House Bill 422, requiring more legislative oversight of state spending on railroad projects, also passed the House Thursday. Rep. Ric Killian, R-Mecklenburg, sponsored the bill.
It went through a significant change in the committee process. Originally, Killian sought to stop the North Carolina Department of Transportation from spending the $545 million federal grant it was awarded to upgrade the commuter rail system across the state.
The bill now would require the DOT to report to, consult with, and gain approval from the General Assembly for certain rail projects. Approval would be required if the state would have to spend $5 million to match a federal grant or maintain a future rail system.
Two Republicans split with Killian in the transportation committee voting to strip the bill of the approval requirement. He ushered another amendment on the House floor restoring the approval requirement.
The bill passed Thursday by a 65-48 margin.
Merit pay for CMS
Another controversial measure passed the House Thursday. It would let Charlotte-Mecklenburg Schools develop a merit-pay system for its teachers and administrators.
This bill only affects Mecklenburg County. Such “local” bills usually have unanimous support from the local delegation, but Mecklenburg representatives are divided on this proposal.
“There’s a big trust issue with Charlotte-Mecklenburg Schools,” said Rep. Tricia Cotham, D-Mecklenburg. “Since buy-in is lacking at home, and trust is lacking at home, they’re asking the legislature to do the dirty work.”
The school board has been working for years on developing a merit-pay system. It’s been a goal of Superintendent Peter Gorman, but he’s had trouble getting teachers and the North Carolina Association of Educators to support it.
Sponsor Rep. Ruth Samuelson, R-Mecklenburg, said both groups are now supporting her bill. Cotham disagreed.
Samuelson said the bill is needed to give CMS the legal authority to change how it pays teachers. She also said the bill needed to pass the House before the “crossover” deadline, which allows bills that have passed one chamber to be considered by the other before the end of the two-year legislative cycle.
“The work that needs to be done is work that needs to be done there [CMS], not here,” Samuelson said, referring to designing the pay structure and testing needed to ensure the best teachers earn the most money.
Samuelson said the bill would be held in the Senate until CMS finalizes its plan. Opponents said even if the deadline were to pass, there were other ways to make the bill gets through the General Assembly before the 2012 election.
Anthony Greco is an associate editor of Carolina Journal.