The state budget remained one of the largest concerns at the State Capitol this week, even though negotiations between the two legislative chambers and between the Governor and the legislature largely remained behind the scenes. The Senate and House continued work on other legislation this week, advancing several controversial bills through committees. Legislative insiders remain hopeful, though far from convinced, that the 2019 Regular Session could be entering its final weeks.
Issue Insights
State and Legislative Issues
State Budget
Tensions flared earlier in the week between the legislature and the Governor, with both sides accusing the other of failing to negotiate in good faith. Senate leaders released a letter they sent to the Governor asking him to come to the table without any preconditions with respect to Medicaid expansion. The Governor responded that he has simply made his position on Medicaid expansion clear and has not issued any ultimatum about whether it is included in the budget. While the Governor supports Medicaid expansion, House and Senate leaders have both made it clear that they are not interested in expanding Medicaid at this time. The dust-up between the legislature and the Governor comes before the House and Senate have agreed on a compromise version to send the Governor. The legislature hopes to complete their negotiations in the next few days. The state’s new fiscal year is only 9 days away, but there is no threat of a government shutdown due to legislation enacted a few years ago that provides for continuing operations in case no budget is adopted by the start of the fiscal year.
Medicaid expansion shades North Carolina budget talks (Greensboro News & Record)
I.C.E. Cooperation
Legislation that would require local law enforcement to cooperate with I.C.E. (Immigration and Customs Enforcement) moved through several Senate committees this week despite emotional testimony from some in the audience. The bill would require local law enforcement to check the ICE database with respect to individuals in their custody and to hold individuals that have detainers issued by the federal agency. Participation in the federal program is currently voluntary. Several newly elected sheriffs in urban counties ran on a platform that included discontinuing participation in the program.
Metro sheriffs feel targeted by legislation requiring ICE relationship (WRAL)
Electric Rates
Legislation that would alter the manner in which electric rates are set advanced in the State House this week. SB 559 would a) allow utilities to use bond financing for certain storm recovery costs and b) authorize the Utilities Commission to fix rates for electric public utilities using “multiyear rate plan” and “banding of authorized returns” mechanisms. The first part of the bill has been uncontroversial, but the second part has drawn criticism from some opponents. With respect to the second part of the bill, critics have argued that it could allow utilities to earn significant excess profits over what is currently allowable. The bill passed the House Finance Committee on a party-line vote and was re-referred to the House Committee on Energy and Public Utilities.
Duke Energy multi-year rate plans tweaked, then approved by House committee (WSOC)
Local Issues – Charlotte
Arts Funding
The Mecklenburg Board of County Commissioners this week considered a proposal to raise the sales tax one quarter of a penny, which would create an estimated $50 million annually. Of that total, about half would go to the Arts and Science Council (ASC) to fund local arts initiatives. Proponents of the proposal suggest the designated revenue stream will help sustain the cultural sector, and they point to changes in workplace giving programs as one reason for reduced funds since the recession. Commissioners could vote in July to let voters decide as a referendum on the November election ballot.
Breakdown of $50 million appropriation of new tax revenue:
- $24.5 million – ASC (49%)
- $15 million – county parks and greenways (30%)
- $8 million – supplement teachers (16%)
- $2.5 million- Mecklenburg suburban towns for arts and parks projects (5%)
Local Issues – Raleigh
Soccer Complex
The owner of the NC Football Club and NC Courage and a local developer have announced plans for a massive sports and entertainment complex anchored by a soccer stadium just south of downtown Raleigh. The complex would be located off of South Saunders Street just inside the I-440 beltline. Full details of the plan will be released next week, but the two men have indicated that the proposal could involve as much as $1.9 billion in investment. Money for the project has not been included in either the Raleigh or Wake County budgets, but the project could compete for a portion of the local occupancy and meals tax revenues used for tourism projects.
North Carolina FC and Kane Realty set to reveal plans for new downtown sports complex (Raleigh News & Observer)
News Roundup
- SCOTUS Rules in Favor of Trust in Tax Case (Bloomberg Law)
- Democrat Cal Cunningham enters US Senate race, and draws fire from both sides (Charlotte Observer)
- Fayetteville physician Eric Mansfield is bidding for U.S. Senate (Fayetteville Observer)
- North Carolina GOP pushes back on redistricting allegations (Washington Post)
- North Carolina state Rep. Rena Turner to resign next week (Associated Press)
- Electronic voting machines could get reprieve in House bill (WLOS)
- RIP, Alexei. Governor Cooper’s black cat dies after lymphoma diagnosis (Charlotte Observer)