Four big questions as lawmakers return from summer vacation

by Patrick Gannon, The Insider, July 14, 2015.

The General Assembly has returned from its week-long break in the middle of this year's legislative session. Here are four questions that may or may not be answered in the next couple of months as legislators get back to business.

1) Who will win the game of budget chicken?

Before the vacation, the House and Senate hadn't even appointed budget conferees, lawmakers from both chambers who will negotiate final details of the $21 billion-plus state budget. Few people expect a budget compromise to be reached any time soon, even though the new fiscal year began July 1. The House and Senate spending plans are far apart in many key areas, including education, transportation, taxes and Medicaid. With so much dividing them, expect a game of budget chicken to ensue as each chamber fights to get its way. It could go on for some time. This, perhaps more than anything else this session, will reveal how strong the House and its new speaker, Rep. Tim Moore of Cleveland County, will prove to be against a stubborn Senate that comes out on top more often than not.

2) Will the Senate's new tax proposals make it into law one way or another?

The Senate budget includes an array of new tax policies, including a huge change in the way sales tax revenues are distributed across the state, further cuts in the corporate and personal income tax rates and new sales taxes on various services, including advertising, repair and maintenance and veterinary services. The House so far has acted cool to the idea of making major changes to the tax code this year. Instead, some members want to allow the dust to settle from tax changes made in 2013. But the new tax proposals are in the Senate budget, so if the House wants to keep them out of the final spending plan, it might have to give up something big in return. Of course, the tax provisions could always be stripped from the budget and handled separately, which would mean an even longer summer on Jones Street.

3) Will big changes be made to Medicaid?

This is another issue that firmly divides the two chambers, as both have far different opinions on how the government insurance program for the poor, elderly, and disabled should be managed by the state into the future. This is also another issue that might be better handled outside of budget negotiations, but that's where it's being considered – at least for now. It's also possible that a decision on Medicaid will be put off again.

4) Will Gov. Pat McCrory be happy when lawmakers go home?

The governor, his cabinet secretaries and other allies are aggressively pushing for the "ConnectNC" bond proposals for infrastructure and transportation to be placed on the ballot for voters to decide this November. McCrory's office has issued about a dozen press releases since mid-June about the bonds, which would pay for hundreds of road projects across the state and improvements at community colleges, universities, state parks and ports and elsewhere. But the General Assembly – so far – is standing in the way.

The McCrory administration also has touted for months the need for a new historic preservation tax credit program after the old program was abolished recently by the Republican-led General Assembly. Such a program is included in the budget of the House, but not the Senate, where such incentives programs aren't well received.

If the governor doesn't get at least one of his top priorities through the Legislature, it won't look too good for him.