Seven subplots of the 2014 General Assembly session

by Chris Fitzsimon, NC Policy Watch and NC SPIN panelist, May 13, 2014.

The previews of the summer General Assembly session are done, the pre-session fundraising events are winding down and the demonstrations and lobbying days are about to begin in what might be a legislative session as interesting for the subplots behind the scenes as for the bills lawmakers end up passing.

The issues themselves are not a secret. The state budget will dominate the session and it should. That’s why short legislative sessions in even-numbered years were created back in the 1970s, to allow state lawmakers to make adjustments to the two year budget they passed the year before.

Among the other topics that lawmakers are likely to consider this summer are a pay hike for teachers and state employees, a response to the coal ash spill into the Dan River, Governor McCrory’s scaled down version of Medicaid reform, a move to repeal the Common Core education standards, McCrory’s ongoing effort to privatize the state’s economic development efforts, a push to repeal or weaken the state’s certificate of need laws and ongoing efforts to speed up fracking in the state.

That’s not all they should do of course. In a perfect world, legislative leaders would realize the damage their recent decisions are doing to North Carolina and revisit their regressive direction of the last few years, particularly their deep cuts to education and the new holes they have torn in the safety net  that supports thousands of families.

That seems highly unlikely this year. With that as a backdrop, here are seven subplots to watch as the session unfolds.

1)  How will legislative leaders address the growing state budget shortfall for next year? 

Most of the discussion of the state budget problems has focused on the recent news that revenues in the current year are now projected to be $445 million less than forecast, thanks largely to the tax cut for corporations and the wealthy passed last session.

McCrory Administration officials and legislative leaders say they can fill this year’s hole with money left unspent in this year’s budget and savings from cost-cutting measures McCrory implemented earlier in the year.  Maybe, but this year is not the biggest budget problem, next year is.

Legislative economists have lowered revenue estimates for next year and when you include the expected Medicaid shortfall, there’s at least a $228 million hole in next year’s budget. And it might be much bigger.

Analysts at the Institute on Taxation and Economic Policy say that the revenue shortfall could grow by another $400 million beyond projections because of last year’s income tax cuts.

Governor McCrory’s proposal for a small raise for most teachers and state employees will cost roughly $300 million. That means lawmakers may have to come up with more than $900 million to pay for McCrory’s plan and balance the budget.

They have three choices—rethink last year’s unwise tax cuts and the next round of reductions set to kick in January 1, slash funding for universities, human services and other programs,  or ignore the growing budget hole and pass a budget they know will be unbalanced just to get through this election year.

A combination of the last two options is most likely.

2) What effect will the House Speaker running for the U.S. Senate have on the session? 

Speaker Tillis spent the primary season reminding people how conservative he is, endorsing a personhood amendment to the U.S. Constitution, questioning the need for any minimum wage—not just opposing an increase, and bragging about all the extreme legislation passed by the General Assembly under his direction for the last three years.

But now he is in a general election battle with Senator Kay Hagan and needs to appear less strident to appeal to moderate voters, or least tone down the tea party rhetoric that marked the primary.  That makes it unlikely there will be more far-right legislation passed this summer.

It also means that everything this General Assembly does will be under a national microscope as all eyes are on the Tillis/Hagan race that may determine which controls the Senate for the next two years.

Tillis has already come under fire for not stepping down as Speaker.  Legislators are prohibited by law from raising money from lobbyists for their legislative campaigns but that law does not apply to Tillis raising money for his U.S. Senate run, setting up potential pay to play charges the longer the session continues.

3) How will legislative leaders treat the newly “assertive” Governor McCrory?

Governor McCrory recently told the Charlotte Observer that he planned to be more assertive this year with the General Assembly, which seemed like news until he added that he had been “extremely assertive last year,” which nobody in Raleigh but McCrory believes. The newly assertive McCrory is not having too much luck so far.

Republican Senator Tom Apodaca said it was telling that neither Speaker Thom Tillis nor Senate President Pro Tem Phil Berger appeared with McCrory recently when he unveiled his latest teacher pay raise proposal.  It was also telling that Apodaca pointed that out.

4) How will the Republicans keep the battle over Common Core from highlighting their internal divisions?

A legislative study committee recently approved legislation that will repeal the Common Core education standards and replace them with state standards that a new created commission would develop. Common Core has some critics on the left worried about the corporatization of education, but most of the opposition to the standards comes from the tea party right who sees them as a communist or United Nations takeover of the schools, depending on which conspiracy theory they believe at the moment.

But business groups like the N.C. Chamber support the Common Core standards and the Chamber is a key backer of the Republican legislative majority. Governor McCrory supports Common Core too, though he has started his strategic retreat on the issue in contrast to his assertiveness pledge.   Former Florida Governor Jeb Bush supports Common Core too and he recently endorsed Tillis in his Senate race.

5) Will anybody stand up to Duke Energy on coal ash?

Not long after the massive coal ash spill into the Dan River, Governor McCrory seemed to say that the company should remove the coal ash from all 32 ponds across the where it is stored and relocate it to lined landfills that are far less likely to leak.

But McCrory’s latest proposal would not require Duke to remove the ash from all the ponds even though state officials admit that all the ponds are leaking and ash is seeping into the groundwater.

Senator Tom Apodaca has said that McCrory’s plan does not go far enough and Rep. Mike Hager said that McCrory’s proposal codifies Duke’s own response to the crisis.

McCrory worked at Duke for 28 years and his close ties to the company raise questions about how tough he will be on them.  Duke is also one of the most powerful special interests in Raleigh, with a battalion of lobbyists patrolling the legislative halls.

6) What happens to McCrory’s two big reform efforts this year?

Governor McCrory spends a lot of time talking about his push to reform state government in Raleigh. Two of his biggest reform efforts involve Medicaid and economic development.  Last year McCrory proposed privatizing Medicaid by turning it over to out of state for profit managed care companies.

He abandoned that idea in the face of massive opposition from hospitals, providers, and legislators in both parties.   Then McCrory Administration officials came with a plan to create Accountable Care Organizations (ACOs) to make networks of providers more responsible for controlling costs. It’s an idea that comes from the Affordable Care Act.   The state Senate leadership doesn’t seem too excited about that and Rep. Nelson Dollar said this week that Medicaid reform will not be happening this session.

The fate of McCrory’s plan to privatize the state’s economic development efforts by setting up a private nonprofit to recruit businesses is also up in the air.  Lawmakers are expected to pass legislation detailing how the nonprofit will operate but serious questions remain about the transparency and accountability of the new private group, not to mention the raft of problems in other states that have tried a similar approach

7) Can the House and Senate pass a budget and adjourn by July 4^th?

This might be the silver lining in this unusual year.  Republican legislative leaders want to pass a budget and handle a few other issues and go home. The longer they are in Raleigh, the more people remember all the extreme legislation they passed last year and the harder it will be for Tillis to campaign full time for the Senate.

But lawmakers always pledge to keep sessions short and they hardly ever do. Political and personal agendas often get in the way.

http://www.ncpolicywatch.com/2014/05/13/seven-subplots-of-the-2014-general-assembly-session/