RALEIGH – This week, the General Assembly begins tackling the budget for the next two-year cycle in earnest, as the House Appropriations Subcommittees release their budget worksheets. Republicans also expect to take a closer look at the federal grant for faster commuter trains.

This legislative session the budget starts in the House, and this week the spending subcommittees charged with education, health and human services, justice and public safety, natural and economic resources, transportation, and general government will release their initial proposals. Republican leaders laid additional groundwork for their budget by refuting Gov. Bev Perdue’s deficit estimates last week. In a news conference, GOP leaders said the state’s impending deficit is actually $2.5 billion rather than the $1.9 billion Perdue and others claim.

“It’s time to face the facts. The state is broke,” said Senate President Pro Tem Phil Berger, R-Rockingham. “People expect the politicians who made this mess to do more than demonize us for cleaning it up.”

During that news conference, Berger released figures showing the state will collect slightly less than $18.8 billion in taxes next fiscal year. That figure does not include the extension of a temporary 1 percent sales tax enacted two years ago. His figures also showed with no changes, the state would spend a bit more than $21.3 billion. Every state agency is bracing for budget cuts.

Republicans have promised not to extend the sales tax or raise any other taxes. The budget proposal Perdue issued in February would only reduce the sales tax by 0.25 percent, thus keeping the state’s sales tax rate higher than it was when she took office.

Split over rail spending

Republicans are taking a closer look at federal taxpayer money the N.C. Department of Transportation accepted to finance faster train service between Raleigh and Charlotte.

Rep. Ric Killian, R-Mecklenburg, is pushing a bill giving the legislature more control over spending federal taxpayer money to upgrade the state’s railroad corridor between Raleigh and Charlotte.

The Charlotte Business Journal reported Friday that Sen. Bob Rucho, also a Mecklenburg County Republican, said the General Assembly will drop any opposition to the $545 million grant the state has been awarded. Rucho later told Carolina Journal the story was not accurate. He said he doesn’t think there’s anything the General Assembly can do to halt the project. He also said DOT already has spent some of the money.

“We’re not going to oppose it,” Rucho said. “We’re not overly thrilled about the fact that the N.C. Department of Transportation obligated the state of North Carolina and the General Assembly to pay for the new maintenance of this $545 million” project.

Senate leader Berger issued a statement late Friday. “The Senate Republican Caucus has not made any formal decision regarding legislative efforts to reject this rail money,” Berger said. “Although, I personally do not think the legislature will be able to unwind this transaction.”

Killian’s bill is sitting in committee. He said it’s unlikely there will be a vote this week. “My bill is still alive,” Killian said Friday. “I don’t know how anyone could make the statement that the GOP is dropping any opposition.”

The bill is aimed at grinding the project to a halt. It says, “Department of Transportation shall not apply for, accept or expend any grant funding from the federal government for any high-speed rail project unless the project has been approved through an act of the General Assembly.”

Killian said Speaker of the House Thom Tillis, R-Mecklenburg, encouraged him to file the bill. Tillis’ spokesman also said the speaker supports the legislative process and indicated there is no effort to derail Killian’s bill. He also said Tillis believes the bill raises important questions that need to be answered.

The main one is whether an executive branch agency can commit to a project that will require the state to make future payments. The legislative branch, i.e. the General Assembly, controls the state’s purse strings. The commuter rail project will require annual operating subsidies.

Final House vote on charters

Another rift is developing between Republicans in both legislative chambers over expanding charter schools in North Carolina. Lifting the state’s cap of 100 charter schools was one of Republicans’ top 10 priorities while campaigning in the fall.

The divide is over whether new charter schools should provide transportation and food to low-income students. The House is poised to pass a bill requiring new charter schools to provide food service and transportation for poor students. Busing would only be required for kids living within three miles of the school.
The Senate’s bill did not require food service or transportation. It did stipulate charter schools must have a plan to provide both.

Once the House passes its version, the two chambers will work out the differences in a conference committee. The House is expected to take its final vote Monday. Perdue has refused to say if she will allow the bill to become law.

Marking history

Both chambers of the General Assembly will celebrate the 235th anniversary of the Halifax Resolves, the first articles passed by any colony declaring independence from Great Britain. The resolves passed on April 12, 1776. After their passage, several colonies followed, culminating with the Continental Congress endorsing the Declaration of Independence July 4, 1776.

The House and Senate will be holding special events Tuesday in the state Capitol building to mark the anniversary.

MAJOR LEGISLATION:

The General Assembly’s calendar, including list of the regularly scheduled committee meetings, can be found here.

House Bill 792, Gfeller-Waller Concussion Awareness Act, Rep. Dale Folwell, R-Forsyth

House Bill 498, Wake School Board Presiding Officer Voting, Rep. Nelson Dollar, R-Wake

House Bill 168, Farms Exempt from City Annexation/Extraterritorial Jurisdiction/Zoning, Rep. Norm Sanderson, R-Pamlico

Senate Bill 187, Outlaw Red Light Camera Systems, Sen. Don East, R-Surry

Anthony Greco is an associate editor of Carolina Journal.