Heard on the Street Posted: Thursday, April 23rd, 2009 Things heating up
It took four months but things are heating up at the General Assembly. Some significant legislation is being discussed and voted upon in both houses.
Heat on Easley
Even though temperatures are up and down the heat is being increased bit by bit on former Governor Mike Easley, and the man who prosecuted those on the wrong side of the law for many years isn’t acting like he learned many lessons from these scofflaws. The News and Observer’s Andy Curliss (the obvious successor to former investigative reporter Pat Stith) and his colleague, Ryan Teague Beckwith, are on this story like white on rice, as is Carolina Journal’s Don Carrington. The N&O won’t be scooped and you can expect every few days there will be another wrinkle. Easley and his attorney, John Wallace, are on the ropes. They cannot stonewall the reporters’ questions by claiming cover from an ongoing investigation, because at this time it hasn’t been officially reported there is an ongoing investigation. And they certainly don’t know how much the N&O knows, so they must be careful what they say. There are two ways for the Easley camp to go here: Either tell all or say nothing. From what we are hearing the best advice would be to clam up and tell reporters you can’t wait for the truth to come out, at which time you will make a full statement. The Grand Jury and the FBI are definitely involved in this process and the case is being carefully and deliberately put together.
Here’s how this will unfold: Expect this to drag out for several months as some prominent citizens are implicated and many rumors floated, some completely bogus but others containing elements of truth. We expect questions to include why Easley needed a security detail we are told was 25 Highway Patrol Troopers and where these troopers stayed while Easley spent so much time in Southport. The role of the Highway Patrol will be studied and there are at least two real estate transactions we hear are being investigated, along with details about the air travel not reported and cars furnished the former first family.
If all this isn’t enough entertainment and drama for you, there is also added the issue of the replacement of U.S. District Attorney George Holding. Republicans, expecting that President Obama and Senator Kay Hagan will soon pull the plug on the Bush appointee, are already posturing to keep Holding’s staff in place long enough for the Easley investigation and others to play out. This might contain more suspense than a Twilight Zone episode.
Vernon Malone
The big buzz early this week focused on the death of Senator Vernon Malone, who died unexpectedly at his home over the weekend. Few outside Wake County may have known him but he was a wonderful, gentle man who did great things. His unassuming humility and gentle ways in later years contrasted with the sometimes fiery school board chairman who led the merger of Wake County and Raleigh City Schools. His life of service included time as chairman of the Wake County Board of Commissioners and three terms as State Senator, most currently co-chair of the important Education Appropriations Committee. His funeral was today.
Speculation as to who might be named by the Wake County Democratic Party to replace Malone focuses five possible successors. Bernard Allen, II, son of deceased Representative Bernard Allen, is making phone calls to Democrats asking them to support his nomination for the Senate post. The younger Allen is currently Vice Chair of the Wake Democratic Party. Marlowe Foster, a lobbyist with Pfizer is another candidate. A third name is Wake School Board chair Rosa Gill, and a fourth is former DMV Commissioner Alexander Killens. The one name that keeps coming forward is Dan Blue, current House member and former Speaker of the House.
Most believe Blue would be the one person who could do the most for Wake County, the African American Community and the Democratic Party. Some wonder why Blue might even consider a transfer from the House to the Senate. After all, he is a very important voice in Joe Hackney’s House. But that may be the very reason why Blue might accept an appointment. Blue ran for the Speaker’s post and lost to Hackney, who is in his second term. There is little reason to believe the House leadership structure will change anytime soon.
Blue could play a significant role in the Senate, especially if some of the current leadership might be retiring, as anticipated, in the next term.
A growing number are saying the ideal scenario would be appointing Blue to the Senate and someone else to replace him (perhaps Gill or Killens) in the House. This should be interesting to follow.
State to take over Halifax Schools
Late Wednesday afternoon Governor Perdue announced that the state would “intervene” with failing Halifax County Schools and present their plan to Judge Howard Manning next week at the hearing he ordered to learn what would be done. According to the press release from the Governor, “Under the intervention plan, NCDPI staff will provide intensive support and oversight to coach principals in effective instructional and school leadership, to provide tools to help central office personnel better guide the school district, and ensure that teachers get the necessary support and resources needed to improve student learning.”
This is education-speak for the state moving in and taking over. They will keep whatever they find worth saving and discard what isn’t working, including principals, teachers, and administrators.
This is historic, the first time in anyone’s memory that the state has taken over a school system. The message will be heard across the other 114 LEA’s (school systems) across the state.
Philip Morris shutdown will further hurt economy
North Carolina’s already record-high unemployment will take another leap in July when Philip Morris closes its cigarette plant in Concord, laying off 1,100 people. The company had announced in 2007 that it would shut down next year but Wednesday’s announcement accelerated the schedule.
This will be one of the largest layoffs of the year and will affect the local as well as the state economy. How much it might impact lawmakers as they work to pass a budget is unknown.
House budget 2-3 weeks away
We are told that passage of a budget by the House is at least two and possibly three weeks away. This time frame would give the House plenty of time to factor in the April personal income tax returns. While a final total won’t be released we are hearing that personal tax collections are about 700 million below anticipated levels, a figure that is still better than some had feared. Give House Speaker Joe Hackney credit. He has instructed appropriations chairs to take their time and do a thorough job in crafting a budget. This is no time for knee-jerk budgeting. We need a steady hand and Hackney appears ready to provide it.
Senate Tax Reform
In typical Senate fashion very few know for sure what was discussed and included in the Senate’s Finance package. What we know is what we’ve been told. Income tax rates, both personal and corporate are to be reduced. Taxes on certain services are to be added, while others are excluded. Taxes on alcohol and tobacco will be increased. The package is being hailed by some in the news media as a “sweeping overhaul,” but so far it just looks like a tax increase. Some will benefit, such as businesses and some individuals, but the net effect is $500 million in new tax revenues. This is hardly Tax Reform and we have no reason to believe it to be more than yet another bandage on an already burdened tax code. For more discussion about tax reform read My Spin, “Tax Reform is Like Pumping Water.”
Asheville water woes
We’ve reported to you before about the arguments between the City of Asheville and their legislative delegation. The City wants to be able to charge non-resident water customers more than resident taxpayers, use water revenues to fund other city projects, and to be able to use the extension of water service in exchange for voluntary annexation. Area legislators oppose these concepts and there are strained relations. The city spent $500,000 on a court case, which was dismissed by the Supreme Court. We talked with Representative Bruce Goforth, the Buncombe Democrat who represents the district in the legislature.
This story goes back to the Great Depression, when both Asheville and Buncombe County were bankrupt. The city and county worked together to merge 7 water systems into one water system, which was jointly owned and operated until the city took control of it. Agreements made back in 1933 stipulated that water rates could not be different for different parts of the county.
But the discussion once again opens the discussion about who owns and controls water in our state. It is a growing question that begs answering. Look for more on this on future editions of NC SPIN.
School calendar back on the legislative calendar
We told you before this session of the General Assembly opened that one battle that would be fought concerned the setting of the school calendar. Angered by “calendar creep” that saw the opening of school earlier and end dates later each year, the tourist industry led successful legislation that pegged the opening of school no earlier than August 25th and the adjournment no later than June 10th. School systems have balked at the law for five years and the House Education Committee passed legislation that would allow school to open on August 15th. This fight hasn’t even begun yet. Tourism is big business in this state and the earlier openings affect families taking vacations. Parents complain that the traditional three month summer vacation will be effectively reduced to two months.
Aren’t we essentially talking about year-round schools?
Cutting summer school?
There’s no doubt local school officials are facing serious budget problems. Their solutions might raise eyebrows, however. Some schools are talking about cutting back or eliminating summer school. Other school systems in the country, faced with the same problems, are going to four day school weeks. This week’s NC SPIN talks about the options and also poses a question Rob Christensen raised in a recent News and Observer column. Which has greater funding priority for the state, public schools our public universities? Read Christensen’s column and catch the debate on this week’s NC SPIN.
Video poker
Following Judge Howard Manning’s ruling that essentially said that if anyone in the state has video poker everyone must be allowed to have it, Representative Earl Jones (D-Guilford) has introduced legislation that would allow video poker throughout the state. The bill would require more stringent guidelines than previous laws required. The Department of Revenue would regulate the machines, charging a license fee of $5,000 for each machine and the state would receive a percentage of revenue from each machine as a tax. Further, we are told each machine would be hooked up, by Internet, to a control room at the Revenue Building where officials could instantly examine every machine and determine how frequently they are used and the gross revenues of each machine. Pretty high tech, eh? Already opposition is lining up to kill this legislation, but something must be done and this is a good point on which to begin debate.
NC SPIN will discuss the plan next week, so be sure to catch it.
Big controversy
We hear there is a big controversy brewing between Time Warner Cable, AT&T, and the municipalities in our state over who should have authority to establish WiFi in each community. Should be some interesting discussion. Stay tuned.
Health Plan – Band Aid or Permanent Cure?
The on again, off again State Health Plan has finally found a compromise solution in the legislature, ending over a year of uncertainty about how to keep the plan solvent. The final agreement would drop a proposal to shift from a fiscal year to calendar year, raise premiums for dependent coverage to 9 percent, create new co-pays for specialists, and include smoking cessation and weight loss initiatives. Representative Hugh Holliman, primary sponsor for the bill and House Majority Leader, said the compromise is just a fix and not a long term solution.
Are we to believe that our lawmakers have been working on this for almost one year and the best they can do is put a band-aid on this gaping wound?
Sheehan to dance
News and Observer columnist and occasional NC SPIN panelist Ruth Sheehan will compete Sunday in the Dancing Like the Stars competition as part of the Southern Women’s Show in Raleigh. Sheehan told your reporters that she has always been klutzy and never thought she would do something like the Salsa in front of a live audience, but now that she is competing against a bunch of TV types in the competition and would like to beat them. The whole thing is a fundraiser for the BubelAiken Foundation, which assists special ed children and the winner will be determined to be the star who raises the most money in donations. To help Sheehan out just visit the BubelAiken web site and follow the prompts. Thanks.
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