MVA Monitor – June 1

June 1, 2018

The big story at the General Assembly this week was all about the state budget.  Monday night, legislative leaders released the nearly 270-page bill that makes adjustments to the state budget for the fiscal year beginning July 1. The process was unusual in that the bill was released as a conference report, meaning it was subject to a straight up-or-down vote without the possibility of amendments. On Tuesday, the bill was presented in three separate committees. The Senate approved the bill in two separate votes on Wednesday and Thursday. The House followed suit on Thursday and approved the package with a final vote Friday. Debate on the bill was testy at times, with Democrats and Republicans trading barbs over the substance of the budget as well as the process.


Issue Insights

State and Legislative Issues

State Budget Process

After the Senate approved the proposed budget plan (36-14) with no debate Thursday morning, legislators in the House of Representatives heard and debated the second reading, ultimately passing the bill (72-45). The final House vote to approve the bill was held Friday morning and it will now go to the governor’s desk where he will sign, veto, or allow it to become law without his signature.

NC budget passes legislature – the next move is up to Roy Cooper (Raleigh News & Observer)

Pay Raises

The proposed budget released this week contains significant pay increases for teachers and state employees. On average, teachers will see a pay increase of 6.5 percent in the budget, while principals,  on average, will receive a pay increase of 6.9 percent. In addition, some teachers will be eligible for bonuses of up to $2,000. Other state employees also will receive a pay increase. All state employees will receive a pay increase of at least 2 percent, with some employees (like certain public safety workers) receiving larger increases. In addition, the budget creates a new “living wage” for state employees. Under the bill, all full-time permanent state employees will earn at least $31,200 per year – equating to a minimum hourly wage of $15.

Republicans release legislative budget with pay raise for teachers, principals (Raleigh News & Observer)

JDIG Changes

The proposed budget included significant changes to the state’s primary economic development incentive program. Under the legislation, more money would become available for the Job Development Investment Grant (JDIG) program, an incentive that provides grants to companies based on a percentage of the personal income tax withholdings of new positions created by the company.  In addition, the proposal would make it easier for a project to qualify as a “transformative project.”  Transformative projects are not subject to some of the limitations under the program that apply to other projects.  The proposal also scaled the program back in two ways.  For the first time, there would be a geographic limitation on grants under the program.  The proposal puts a cap on the grants that may be made to projects located in Mecklenburg and Wake Counties.  A frequent criticism of the program has been that it has primarily been used in the Triangle and Charlotte metropolitan areas.  The proposal also prohibits grants based on the income tax withholdings of individuals holding H-1B visas.  The federal H-1B visa program is a federal program that allows companies to bring foreign workers to the U.S. temporarily to fill jobs requiring highly skilled labor where there is a shortage of available labor in the market. Holders of H-1B visas are subject to state income tax.

NC Senate leader seeks ban on companies using state incentives to hire visa worker (McClatchy/Charlotte Observer)

Light Rail Funding

A line in the proposed budget plan would require municipalities seeking to deliver “high-cost projects” to have all other funding sources secured in writing before they are eligible for state money. Currently, the federal government can commit up to half of the funding for large transportation projects, but requires the other half of state, local and other funding to be committed first. The new state provision could disrupt local ambitions for the planned Durham-Orange light rail as well as future rail plans being considered by the Charlotte Area Transit System. Former Charlotte mayor and former U.S. Secretary of Transportation Anthony Foxx told the Charlotte Observer, “It’s a chicken or the egg thing. It’s impossible to get federal funding if the local funding package is incomplete.”

Durham-Orange Light Rail’s next hurdle: The state budget (Triangle Business Journal)

Municipal Charters

One of the few bills to move this week other than the state budget was a bill allowing several towns in Mecklenburg County to operate charter schools.  House Bill 514, Permit Municipal Charter School/Certain Towns, would authorize the Towns of Matthews, Mint Hill, Huntersville, and Cornelius to apply to open charter schools and grant priority enrollment to students living in those towns at those charter schools.  Under current law, only private non-profit entities may operate charter schools and charter schools are allowed only limited authority to grant priority enrollment to certain students (mostly siblings of current students and children or teachers or board members).  A separate provision in the state budget would allow all municipalities, in addition to counties, to spend tax dollars to support public schools. The bill received preliminary approval by the Senate on Thursday and is expected to be up for a final vote on Monday.

Bill to let towns start charter schools moves forward (WRAL)

Workplace Harassment 

Following the recent mandatory workplace harassment sessions in the General Assembly, Rep. Carla Cunningham (D-Mecklenburg) introduced House Bill 1044, which would create a system where employees could anonymously report workplace harassment. Bill sponsors say the current system gives people too little protection and no way to file a complaint confidentially. The bill would require the Legislative Services Commission and the Legislative Ethics Committee to develop a zero tolerance policy and create effective sanctions for sexual harassment (as well as other forms of workplace discrimination), which would apply to all legislative employees.

Under this plan from Democrats, sexual harassment complaints would be confidential (Raleigh News & Observer)

Local Issues – Charlotte

Project L.I.F.T.

Charlotte-area foundations and corporations announced $6.5 million in additional funding to continue Project LIFT, the public-private partnership launched in 2012 to serve West Charlotte High School and the eight elementary and middles schools within its feeder pattern. Some have criticized Project LIFT efforts, as schools within the learning community remain some of the most challenged in Charlotte-Mecklenburg Schools, despite an improving graduation rate at West Charlotte High. The additional funding will support ongoing research into successful strategies and partnerships with groups such as Communities In Schools, Read Charlotte and Heart Math Tutoring.

Despite controversy, donors pledge another $6.5 million for west Charlotte schools (Charlotte Observer)


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