In this Living
Income Update:
Issues Facing the NC General Assembly
Bush and Congress
Eyeing Cuts to Federally Funded Programs and Social Security
A NOTE FROM SORIEN: In this fifth year of email legislative updates
by the Justice Center, we have decided to broaden the update
to cover all of our issues and to rename it the Justice Center
Legislative Update (JCLU). PLEASE READ AND PASS IT ALONG TO ALL
THOSE WHO CARE ABOUT LOW INCOME NORTH CAROLINIANS. Language underlined
and in blue are links to more information on that topic. To find
more information about the Justice Center visit our web site
at www.ncjustice.org. To learn everything you ever wanted to
know about the General Assembly, legislators, legislation and
even where to park visit www.ncleg.net. To change your contact
information or to add or remove your name from the JCLU list
email sorien@ncjustice.org.
ISSUES FACING THE NC GENERAL ASSEMBLY
North
Carolina state legislators returned to Raleigh on January 26 for
their swearing
in and the start of the 2005-06 biennial session.
Democrats hold a majority in the House and Senate and easily elected
their new leadership. In a 100 to 20 vote, House members returned Jim
Black (D-Mecklenburg) to the Speaker’s position of the House
and gave a nod to former co-speaker Richard Morgan (R-Moore) by electing
him Speaker Pro Tempore. The 20 noe votes continue to be those Republicans
who have been fighting the Black-Morgan alliance since it was proposed
two years ago. Marc Basnight (D-Dare) was elected unanimously to a
record setting seventh term as President Pro Tempore of the Senate.
Legislative Committees
The Senate
has already appointed members to committees and created two new committees:
Mental Health & Youth Services and “ONE-NC” committee
on economic growth. They eliminated the committee on Health and Human
Resources (not the appropriations sub-committee) and some Select committees.
Click here to see the complete list of Senate committees and committee
members.
The House leadership has proposed several new committees but has not
yet officially appointed members to committees. Once the House does
this, session will begin in earnest.
Issues Likely to Come Up
Several issues have already risen to the foreground as likely to get
or require attention in the coming year. In their opening day speeches
Basnight and Black mentioned efforts to improve public education, health
care, the environment and jobs.
Revenue
Shortfall…again: The issue most likely to dominate the session is a projected $1.3
billion revenue shortfall. Legislative
fiscal staff presented the reasoning for the fifth year of budget shortfalls
citing sluggish job growth, little recovery in personal income and
sunset of three taxes. There are estimates that $116 million more in
revenues will be collected this year than previously expected, but
this fills only a small portion of the hole and still does not even
begin to address new services and programming needs such as meeting
the demands of the Leandro lawsuit, increase in the uninsured or helping
unemployed workers.
Other issues likely to arise this session include:
Taxes: The revenue shortfall guarantees that taxes will be
a major issue in the session. Contributing to the shortfall is the
sunset of three taxes currently collected. (1/2 cent sales, estate
tax & top income tax bracket) NC is also part of a multi-state
pact that requires the state to simplify sales and use taxes. The state
is in need of tax modernization and a long term tax reform plan to
ensure it can meet the needs of its residents. Read more about Taxes
in the 2005 Session in the Justice Center's latest Policy Brief by
Rob Schofield, Policy Director.
Public
Education: The North Carolina Supreme Court has affirmed
that the NC Constitution entitles all NC children to a sound, basic
education and the lower courts have found that not all children are
receiving such an education. The Governor and the state Department
of Public Instruction are already, as parties in the lawsuit, dealing
with how to address this and state legislators will be hard pressed
to ignore this large education issue again.
Incentives
for Business: Many legislators were unhappy with
the special session to provide Dell Corporation with over $200 million
in tax credits and grants. In addition, the William S. Lee act is
slated to sunset this year and jobs still are not growing fast enough
to replace
all those lost in the last four years. Finally, the 6th circuit Court
of Appeals just upheld an Ohio law suit that found Ohio’s incentive
plan, which is not unlike Bill Lee, is unconstitutional.
Unemployed
Workers: Many workers who lost their jobs due to plant closings or “downsizing” are working for much lower
wages or have stopped looking for work altogether. This is reflected
in a rise in poverty and a drop in statewide median income. The
Workforce Needs Study Commission made fourteen recommendations to the
2005 General
Assembly to help some of these struggling workers. Recommendations
include implementation of a state Earned Income Tax Credit, funding
for the Housing Trust Fund and expansion of health coverage to parents
of children eligible for the Health Choice program. A
bill has been entered to create a new Economic Crisis Relief Officer (SB 70, Dorsett)
to address the immediate needs of workers following a mass lay-off
or plant closing.
Health
Care: Several bills have already been entered in the House and Senate
to implement the recommendations
of the Blue Ribbon Medicaid Commission. Reducing or eliminating the county share of Medicaid
costs is a top priority, as are several proposals aimed at ensuring
coverage continues for young children. North Carolina has been experiencing
record growth in its percent of uninsured. Currently, 1.4 million North
Carolinians lack health insurance.
Housing:
The NC Justice Center, United Way of NC, the AJ Fletcher Foundation
and the NC Housing Coalition have teamed up to advocate
for increased funding to build affordable housing. In an effort to
help more laid off workers avoid home foreclosure these groups will
also work to expand the Home Protection Pilot Program to cover all
100 counties. Learn more about the Campaign for Housing Carolina.
Early
Childhood Development: Last year legislators prevented
a cut in the number of child care subsidy slots available but were
unable to reduce the waiting list for child care subsidies. This year
24,000 children currently wait for child care subsidy. Smart Start
did not see funding changes last year but was cut each of the previous
three years and More-at-Four remains one of the Governor’s highest
priorities.
State
Employee Pay: A recent study by the Office of State Personnel revealed
huge
inequities in pay for female state employees
as compared to males. While women make up 48.9% of the total state
workforce, they comprise 71.5% of the low wage occupations. In some
cases, women were also found to make an average salary lower than the
average salary of men within the same pay grade. Expect to see efforts
to improve pay equity and debate on how much raise to provide state
employees given the huge budget shortfall.
PRESIDENT BUSH AND CONGRESS EYEING CUTS TO FEDERALLY FUNDED PROGRAMS
AND PRIVATIZING SOCIAL SECURITY
This week President George Bush released his budget proposal for the
federal government and came to Raleigh to promote his Social Security
Privatization plan. The Justice Center has voiced concern about both
proposals. Extensive information is being produced by national organizations
on both issues. Click here for some links to get you started.
Social Security Proposal Would Put Social Security at Risk
On
Wednesday, the NC Justice Center, AARP NC Office, Older Women’s
League, the Campaign for America’s Future and the NC Chapter
of the AFL-CIO held a press conference to express concern about Bush’s
Social Security Privatization plan. Rob Schofield, Policy Director
of the Justice Center spoke of the Bush plan addressing projected Social
Security problems that would not come into effect for 40 or 50 years. “This
is the answer to a non-existent problem,” Schofield said. Bob
Jackson, NC Office Director for AARP noted that even if Social Security
is likely to have future funding problems reducing the revenue going
to the program will not resolve the problem and will only leave American’s
more at risk for benefit cuts.
Bush Budget would Cut Hundreds of Millions to NC
In
his effort to implement more tax cuts, President Bush has proposed
extensive
cuts
to domestic spending. Chief among them are $45 billion
in cuts to Medicaid over ten years. North
Carolina alone would lose an estimated $1.4 billion in the next ten
years. Cuts are also proposed
for entitlement programs such as food stamps and a cap is put on discretionary
programs. These would result in cuts in programs ranging from Veteran’s
health care, environmental protection, child protection from abuse,
housing, child care, public education and much more. In most cases,
the administration does not indicate exactly what would be cut but
rather passes the cut along to the states. States would then be forced
to either raise revenue of their own to replace federal funds or decide
which specific programs would be cut.
NEXT
WEEK: NC Justice Center’s 2005 Legislative
Agenda, Facts about North Carolina and more.
