MVA Monitor – May 18

The 2018 Regular Session of the North Carolina General Assembly¬†(unofficially known as the “short session”) opened on May 16. Legislative leaders have suggested that the short session will actually be short this year, as there are not many major issues expected to come before the General Assembly.

The main focus of the session is likely to be adjustments to the two-year budget adopted in 2017. Legislative leaders have announced plans to increase spending by about $250 million over what was previously budgeted, while Gov. Roy Cooper has proposed spending about $850 million over the amount previously budgeted.

Additional items expected to be taken up include a pay increase for teachers and other state employees and proposals relating to school safety. The session also could include legislative approval of one or more state constitutional amendments that would be put to a referendum in the general election in November.

Beyond protests, what to expect from this legislative session (WRAL)

Issue Insights

State and Legislative Issues

Incentives Enhancements

This week, legislators unveiled a proposal to enhance some of the economic development incentives offered by the state. While leaders were quick to point out that the incentives were not tied to any particular project, the proposal came as rumors have swirled that Wake County is a leading contender for a massive East Coast expansion by Apple. The proposal mainly affects the JDIG program, which provides businesses with a grant based on the amount of personal income tax withholding generated from new jobs created. Under the proposal, the incentive would be enhanced by increasing the maximum percentage of withholdings that could be granted back to employers and increasing the number of years over which such grants could occur. The proposal also would lower the minimum job creation and investment thresholds applicable to these enhanced incentives.

While rumors are rampant in Raleigh that the project is Wake County’s to lose, other sources suggest Northern Virginia remains a strong contender. Both locations also remain in the hunt for Amazon’s second headquarters. The Apple project is expected to involve 10,000 – 20,000 new jobs with average salaries of about $130,000 and would result in billions of dollars in investment. Amazon has announced its project could result in as many as 50,000 new jobs and over $5 billion in investment.

As Apple considers Triangle, NC leaders propose changes to corporate incentives (Raleigh News & Observer)

It’s not just Amazon: Apple quietly explores Northern Virginia campus for 20,000 jobs (Washington Post)

Teacher March

On Wednesday, the opening day of the short session, thousands of teachers and their supporters gathered in Raleigh to rally for higher teacher pay and more funding for education generally. Estimates of the size of the crowd varied from 19,000 (the Downtown Raleigh Alliance) to over 30,000 (NC Association of Educators). The day began with a march down Fayetteville Street in downtown Raleigh to the General Assembly. Many educators then met with legislators throughout the day and gathered for another rally during the mid-afternoon on Bicentennial Plaza.

Thousands of NC teachers rally in Raleigh for more education funding (Raleigh News & Observer)

School Safety

In the wake of the tragic shooting at Marjorie Stoneman Douglas High School in Florida in February, the General Assembly has been studying ways to improve school safety in North Carolina. This has been evident as the General Assembly and Gov. Cooper gear up for the legislative session. The Governor has proposed additional spending of $130 million in 2018 on items broadly related to school safety. In addition, in the first two days of the session, legislators have introduced at least 10 different bills dealing primarily with enhanced school safety.

Gov. Cooper seeks $130 million for safer NC schools. Here’s how he’d spend it (Charlotte Observer)

Tax Bill

On Thursday, the Senate Finance Committee heard Senate Bill 715, Various Changes to the Revenue Laws. While it contains several different components, the bill includes provisions (known as the IRC Update) necessary to address federal tax law changes. The Senate Finance Committee proposes conforming to some of those changes and decoupling from others. In its current form, SB 715 is expected to increase state revenues by $59 million in the 2018-19 state fiscal year. The bill was recommended by the Revenue Laws Study Committee, but Thursday’s approval by the Senate Finance Committee was the first major step towards approval. The bill likely will be heard on the Senate floor next week.

Legislative Security

The opening of the 2018 Regular Session brings enhanced security at the legislative complex. Visitors to the Legislative Building (but not the separate Legislative Office Building) will be required to pass through metal detectors and have bags screened when entering the building. In addition, some entrances to the building have been closed, forcing all traffic through the two main entrances on the north and south sides of the building. In addition to firearms, knives, stun guns, and razors and box cutters, the list of banned items also includes aerosol containers, martial arts weapons, and animals other than service animals.

North Carolina, other legislatures warily begin security checks (Raleigh News & Observer)

Local Issues – Charlotte

Carolina Panthers Sale

On Wednesday, the Carolina Panthers officially announced the sale of the team to David Tepper. While the team did not release details of the financial package, the Charlotte Observer has reported the final price was $2.275 billion. The all-cash deal will be one of the largest sums ever paid for a professional sports franchise in North America. The sale must still be approved by 75 percent of the NFL owners. That approval is expected next week. The sale would become final in July and would require Tepper to sell his minority stake in the Pittsburgh Steelers.

Carolina Panthers announce deal to sell team to billionaire David Tepper (Charlotte Observer)

News Roundup