August 30, 2002

IN THIS ISSUE:
• Lots of Action, But Not on the Budget
• Session Okayed for Another Month
• CHIP/Health Choice Won't Freeze...yet!
• Governor Releases Public Education Money
• Business Grant Program passes House
• STILL TIME FOR TANF! CONTACT CONGRESS

You can get a copy of the bills mentioned in this update at Http://www.ncleg.net.

LOTS OF ACTION, BUT NOT ON THE BUDGET

There were no public meetings to negotiate a final revenue package (Senate Bill 1292) and state budget (Senate Bill 1115). Rumors are that the House and Senate have been exchanging messages - though not meeting in person - to try to come to an agreement on how and how much new revenue to raise. Allegedly, the Senate is steadfast in wanting to raise the sales tax another half-cent, which would make it seven cents in many counties. The House has a two session history of not being able to get enough votes to pass this. All Republicans oppose it as a tax hike and several Democrats oppose another half-cent increase because it hurts the poor and middle class the most. The House did pass a revenue plan that closes some corporate loopholes, but apparently the Senate won't agree to that. The bottom line is that without a revenue plan, they don't know how much money they have to work with. Without that, they can't negotiate the final budget. Other rumors abound that they will simply recess until after the primaries on September 10. Definetly not the best way to speed along negotiations.

The lack of a budget creates many problems in state government. For one thing, every day the legislature does not pass a new revenue plan is a day they are not raising new revenue. That means the $2 billion budget hole must be filled in a shorter and shorter time period. So far we are two full months into the 2003 budget year. To combact lack of legislative action the Governor is taking unprecedented actions through Executive Order to cut costs. This has primarily come in the form of laying off state employees, some of whom are not laid off in either the Senate or House versions of the budget. In other words, it appears the final state budget will maintain certain state employee positions that have already been eliminated by the Governor. In addition, many programs are threatened with cuts in either the Senate or House budget but remain in limbo and in some cases without money, for two months now. The lack of a final budget has led to three actions this week alone, that are intended to keep government going when there is no budget.

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SESSION OKAYED FOR ANOTHER MONTH

The first bill is the Continuing Resolution (Senate Bill 1113) which allows government to continue until September 30 under a modified version of the budget for 2001-2002. We have at least another 30 days ahead of us, and I would guess more than that. Controversy surrounded this bill also, because the Senate used the bill to also eliminate their per diem reimbursement for the month of September and the House put the per diem back in. It ultimately passed without language to end the per diem.

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CHIP/HEALTH CHOICE WON'T FREEZE...YET!

In another bill, the Legislature gave the NC Department of Health and Human Services the authority to shift up to $5 million into the Health Choice Program (North Carolina's CHIP program) so that enrollment would not have to be frozen starting September 1. The state had not allocated enough money to continue the Health Choice program past September 1, even though plenty of federal money is available to NC. (For every one dollar the state allocates it can draw down almost three federal dollars, but you have to have those state dollars first!) Senate Bill 901, NC Health Choice Flexibility, allows HHS to come up with some money to put off the freeze a little longer, but the legislature needs to pass a budget with more money for Health Choice to avoid a freeze later this fiscal year. Representative Martin Nesbitt (D-Buncombe), Representative David Redwine (D-Brunswick) and Secretary of HHS Carmen Hooker Odom made a tremendous effort to prevent this freeze of Health Choice.

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GOVERNOR RELEASES PUBLIC EDUCATION MONEY

The third item trying to cope with the lack of a budget is yet another Executive Order from the Governor. In the order the Governor releases $29 million to public schools to cover the costs of enrollment growth. “Our public schools need these dollars now,” said Easley. “School has already started and enrollment is up. Schools have been patient long enough. Our children’s education cannot afford to wait on the budget process.” Both the House budget and the Senate budget allocate this money, but Easley's Order actually moves the money to the schools.

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BUSINESS GRANT PROGRAM PASSES HOUSE

The NC Economic Stimulus and Job Creation Act (House Bill 1734) passed Monday night with 81 voting for and a mixture of 34 conservative Republicans and more liberal Democrats voting against. During four hours of heated debate 10 more amendments were heard with six passing. While the bill is much improved, the net effect is still to take $15 million per year of state revenue in order to provide grants to businesses. Now, instead of the original three, seven people make the grants most of whom are not appointees of the Governor and two of whom are legislative appointees. There is a spending cap of $15 million per year and a little more in the way of reporting requirements. On the humorous side, the bill also now contains language encouraging the US Congress "to ban the use of tax and other financial incentives by states." The bill says such incentives are a burden and require more tax money or cuts in critical services which is not in the interest of the states. The bill is now in the Senate Finance Committee for review. Expect the Senate to pass it and possibly to weaken the protections that have been added during debate. Many people spoke eloquently and/or put forward good amendments to improve this bill including: Representative Martin Nesbitt (D-Buncombe), Representative Art Pope (R-Wake), Representative Jennifer Weiss (D-Wake); Rep. Verla Insko (D-Orange), Rep. Fern Shubert (R-Union), Rep. Bob Hensley (D-Wake), Rep. Mickey Michaux (D-Durham) and others.

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STILL TIME FOR TANF! CONTACT CONGRESS

Congress goes back into session on Tuesday September 4, so there is still time to call your congressional representatives and let them know it is important to pass TANF legislation this year and to allocate at least $11 billion more for child care subsidies over the next five years. You can contact your representatives easily through the Covenant with North Carolina's Children cyber lobbying website.


THERE IS STILL TIME TO CONTACT YOUR CONGRESSIONAL REPRESENTATIVES AND TELL THEM WE NEED WELFARE TO BE REAUTHORIZED NOW AND SIGNIFICANTLY MORE MONEY TO BE ALLOCATED FOR CHILD CARE SUBSIDIES.

BE A CYBERLOBBYIST AND VISIT THE COVENANT WITH NORTH CAROLINA'S CHILDREN CYBER LOBBYING SITE. THIS WILL HELP YOU SEND YOUR MESSAGE TO YOUR CONGRESSIONAL REPRESENTATIVES.

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