Heard on the Street Posted: Thursday, April 2nd, 2009 The Senate Budget
What’s going on with the Senate version of the budget? Why aren’t there any public budget hearings in the Senate? Are the rumors true that the Senate intends to pass a budget before the April 15th tax returns are totaled? What is SB1093? It looks pretty much like the Perdue Budget. Is this the budget bill that will be run? What’s going on in Room 605 of the Legislative Office Building?
These are a few of the questions that have circulating this week. While there is much speculation, most everyone is in the dark, except for those few holed up inside Room 605 where we understand the Senate is up to its old tricks of making budget decisions behind closed doors. Beyond that everything is speculation because nobody is being told anything.
Senate Bill 1093 isn’t an exact mirror of Governor Perdue’s budget but it doesn’t vary much. There has been speculation that the Senate would just pass it and throw the whole budget mess over to the House. One way or another, the House is going to end up with the mess and we can only hope their negotiations will be more public than those taking place in the Senate.
The Senate budgeting process is much like the weather. Everybody complains about it but nobody does anything about it. The ones who could, meaning the Senators themselves, won’t.
The latest unemployment rates sent another shock wave through the government complex. Corporate income tax payments were down from last year by more than 30 percent and many anticipate personal income taxes will drop even more, putting the state’s revenue picture even more doubtful. A growing number are saying it will be difficult for state leaders to cut budgets enough to balance the state’s books, and tax increases will be necessary. For more discussion on this topic be sure to read this week’s My Spin column.
Easley under the microscope
Earlier this week a caller pondered if North Carolina was the most corrupt state in the nation? He had just read the News and Observer column about Mike Easley’s chummy relationship with Rick Henricks and wanted to know if the N&O was just fishing or was this the tip of the iceberg on another round of ethics and corruption scandals?
We did some nosing around and it might appear to be the tip of the iceberg. We understand subpoenas have been issued and the investigation has expanded vertically and horizontally beyond the N&O story and will include other prominent North Carolinians as well as at least one state agency. We have spoken with several sources who tell us this story could be BIG.
Some Democrats are protesting that all these investigations are the result of an overzealous Republican US District Attorney and are screaming for the Obama administration to move quickly in replacing George Holden. This is highly problematic, however, if investigations lead to indictments and Holden’s removal looks like a cover-up for corruption.
Atkinson to sue
Superintendent of Public Instruction June Atkinson has confirmed that she intends to follow through with a lawsuit against the state to clarify the role of her office. We understand that a press conference will be held tomorrow to announce the suit in the offices of the North Carolina Institute for Constitutional Law. Bob Orr, former Supreme Court Justice and head of NCICL, tells SPINCycle that this lawsuit has some real implications for the state and includes several key questions the court should clarify. Chief among them is whether the legislature has the authority to redirect the duties of a constitutionally elected state officer? If so, can it then change the duties of the State Treasurer, State Auditor, and Attorney General? How does this play into separation of powers issues? And were the changes made in the 1970 revision of the Constitution valid? Much more on this discussion on this week’s NC SPIN. Be sure to catch this interesting and informative debate.
What’s happening with Pender County redistricting?
The Supreme Court recently ruled that the House legislative district for Pender County was unconstitutional and must be withdrawn. Several weeks have passed and there has been no acknowledgment of the verdict or announcement of action being taken. Some are questioning the lack of response, speculating that perhaps other parties might need to become involved to ensure compliance.
Some wonder whether the redistricting can be accomplished by just rearranging Pender and perhaps one other county or whether this might have the domino effect of changing House districts throughout Eastern Carolina.
These decisions have real importance because the redrawn district(s) could impact elections in 2010. Whoever is serving in the legislature at that time will have a voice in the redistricting that will take place following next year’s Census.
Smoking ban filtered
Representative Hugh Holliman won a victory of sorts yesterday in the House by passing a smoking ban, but only after a protracted debate that resulted in his bill being greatly watered down. The final bill was a bit bizarre in stating that smoking would be banned in establishments that served or employed persons under 18, but not other businesses.
Tobacco is getting beaten up pretty badly right now. The feds just instituted a huge federal tax on tobacco, Governor Perdue wants to add a dollar per pack in additional state taxes, and now there’s a smoking ban.
Judging by the vote in the House yesterday it looks unlikely that Perdue will get her dollar a pack tax passed….maybe some increase but not that much. Tobacco still has many powerful friends.
Hagan in a bind
Word from Washington is that the card-check legislation giving labor unions easier access to organization within companies may be doomed. Pennsylvania Senator Arlen Specter won’t support the legislation and Democrats won’t get the necessary votes for passage. All this leads to speculation about how this leaves N.C. Senator Kay Hagan. The Greensboro freshman angered many business leaders with her open support of the bill. Labor, who spent large sums getting her elected, don’t feel she has been vocal enough on their behalf.
Medical Malpractice back in the news
At the direction from our legislature, the NC Medical Board proposed a new rule last year that would require reporting for all medical malpractice awards amounting to $25,000 or more. Doctors were not happy with the threshold, stating that many cases are settled out of court because insurance companies say it is cheaper to settle than to wage expensive lawsuits. Whether a doc is guilty of malpractice or not isn’t established in many of these instances, even though the settlement might lead people to believe guilt. The Medical Society wanted the award amount raised to $150,000, believing that if there was legitimate malpractice the settlement would be at least this amount.
The North Carolina House split the difference and decided to set the amount at $75,000. If a bill isn’t passed in this session the $25,000 threshold will be implemented. Look for docs to become very active in lobbying for the greater amount.
NC SPIN will discuss this topic in the next two weeks. Look for the discussion.
Universities making job cuts
NC State University announced yesterday they are cutting positions in anticipation of budget cuts next year. So far we’re told 31 have been given pink slips but that number could increase to 150 if budget cuts reach 7 percent or more. SEANC, the State Employees Association has said the cuts are premature and criticized UNC President Erskine Bowles for advocating them. Bowles says he is only being a proactive manager trying to manage the university’s affairs. Look for discussion on this topic in the next two weeks on NC SPIN.
McColl on the economic crisis
Charlotte Banker Hugh McColl led Charlotte’s Bank of America for many years. The former Marine is known for his no-holds-barred reactions to issues.
The Queen City has been humbled and frightened over the impact the economic crisis, especially among big banks, has had on this once booming city. In a very thoughtful speech made to Charlotte’s City Partners Vision banquet last week, McColl provided consolation and encouragement to the leaders and residents of the city. The Charlotte Observer reprinted his remarks and, while they focus primarily on Charlotte, they have value for every North Carolinian to read and heed.
Alcoa case could have long term implications
Governor Perdue has filed a motion with the Federal Energy Regulatory Commission to deny the relicensing of Alcoa’s hydroelectric plant on the Yadkin River. This case has many implications but points to the growing debate about water, specifically who owns and controls water in our rivers.
This debate is being staged even as South Carolina has a court suit over who controls waters from our state flowing into the Palmetto State and there are controversies in Asheville and Fayetteville over water systems. And the drought discussion is about to emerge again because winter rains haven’t resolved dry conditions in the state. Look for this debate to continue. ");
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