NC SPIN Online

Pretty quiet week
This week was pretty quiet in the capital with lawmakers ga-ga over the UNC Men’s basketball team Wednesday. Also North Carolina may be a hockey state after all. The Carolina Hurricanes won a seven game series again New Jersey, capped off by a Tuesday night game in which two goals were scored in 90 seconds to move the Canes into the next round of the playoffs. The games have gotten more buzz than many expected.

Furloughs are in this week
Governor Perdue was opposed to a furlough for state employees until she was in favor of a furlough. This week the Governor admitted that this year’s state budget was tanking and decided to reduce the pay for all state employees by one-half of one percent. In exchange state employees will get ten extra hours of leave next year.

Reactions to the furlough plan have been mixed, partially because it wasn’t explained very well at first. Teachers are incensed. This is the first time any Governor has ever included them in budget pain and they aren’t used to it.

But many observers question the Governor’s action. If she was going to take the certain heat and anger for cutting pay, why did she stop at only one-half of one percent? This only amounts to $70 million of a $1.2 billion hole she has to fill. If you were going to take the flak, why not mandate a two percent reduction? That would have raised about $200 million. It doesn’t make sense, unless you think this is only a precursor of things to come in next year’s budget.

By taking about $200 million from the federal stimulus dollars Perdue sets up an even larger problem for the budget that starts July 1, making the task of the House even more problematic.

What’s up with SEANC?
Political pundits and legislative observers are trying to understand why the State Employees Association of North Carolina ran radio ads in opposition to Representative Margaret Dickson (D-Cumberland) and Representative Hugh Holiman (D- Davidson). Dickson had favored furloughs for state employees and SEANC wanted her to know their opposition. Then, of course, the Governor instituted furloughs. But what was SEANC trying to accomplish two years before the next election? Why run the ads now? Don’t they recognize that both Dickson and Holiman have friends in the legislature who won’t like their actions? Isn’t SEANC concerned about pay issues for next year?

This group defies explanation.

Cash shortfall
We keep hearing concerns about whether or not there is enough cash in the state bank accounts to make the payroll and pay the bills coming due.

Manning to state: Fix it or else
As expected Judge Howard Manning heard from state education officials and Halifax County school leaders their plans for fixing the troubled school system that has huge failure rates in reading and math. The teachers and principals will be the ones going to summer school this year. Manning cautioned the educators that “we’re going to get it done (improvement) or else we are going to make some changes.” For more discussion on this be sure to catch this week’s NC SPIN.

What’s going on here?
Just under the radar screen for many is proposed legislation bearing the title “AgRELIEF Act (HB1364 and SB881). The bill is confusing, at best. As we understand it the bill would establish a cost-share program to assist farmers who hire legal farm workers. For reasons not explained this program would be housed in the State Treasurer’s office (not Agriculture?) Funds would be made through contributions from trusts and grants, not state funds, however the bill later states that the fund would consist of all funds from federal, state and local agencies as well as other funds. The proceeds of these funds would be invested but there is confusion over who determines what happens to earnings and who makes selection of who is to receive funds from the program. Many, including the Farm Bureau, are wondering why an act of legislation is necessary to establish what is essentially a nonprofit organization that can be legally established without legislation? If no state funds are to be used why is legislation needed? Why are so many, including Ag Commissioner Troxler, the NC Agribusiness Council, and NC Growers, actively supporting this bill? What do they know that we cannot see?

It is commendable that there are those who want to ensure the hiring of part-time farm labor here in this country legally. What isn’t so clear is what is going on that isn’t being explained.

What’s the deal on Beason?
The News and Observer ran a big story about former lobbyist Don Beason underreporting his income in past years from lobbying. Longtime capital observers have wondered what’s new? We knew several years ago it was not uncommon for a lobbyist to allocate a small percentage of fees to lobbying and a larger amount to consulting fees. Evidently the N&O has a smoking gun, someone who is willing to come forward and testify that he or she was instructed to underreport lobbying income. We will have to wait and see.

Basnight bridge to be built by private contractors
For many years Senate President Pro Tem Marc Basnight has been trying to get funding to build a 7 mile bridge from Currituck County to the Outer Banks but funding was never available. The News and Observer reports that a consortium of private interests will build the project, projected to cost as much as $650 million, and have it operating as a toll bridge as early as 2013. Travelers are expected to pay a toll of $10 to cross over the bridge, cutting off as much as one hour of travel time in peak summer months. While the news about the bridge was released, there has been no mention of what, if any, state funding will be allocated to the project.

Shareholders to Ken Lewis: “We aren’t happy”
Bank of America shareholders sent a loud and clear message to CEO Ken Lewis and the board of Bank of America, essentially telling them to be more responsive to shareholders. Lewis had previously served as a member of the board, Chief Executive Officer, and Chairman of the Board of BofA. The shareholders voted for a provision that separated the CEO and Chairman’s role, while returning Lewis to the Board. Many observers believe this is a signal to other public corporations to be more responsive to shareholders.

Natural Gas isn’t natural fit
For years economic developers in the northeastern part of the state complained because they didn’t have natural gas to offer prospective clients. At the urging of eastern legislators the state passed a $200 million bond referendum to run lines in the 14 counties, even though most economic projections indicated it was a money-losing proposition after the costs of construction were paid. An interesting article in this week’s Outer Banks Sentinel tells more.