Lawmakers return to work under bright spotlight

Teacher raises and coal ash legislation top the agenda for the lawmakers and the governor. But expect battles over gas exploration, film incentives and more to mark the summer's short session.

Posted 9:00 p.m. May 10, 2014 — Updated 6:39 p.m. Jun 6, 2014

Mark Binker

RALEIGH, N.C. — When lawmakers return to work next week, they will do so under a brighter spotlight than has been focused on the legislative building than has been the case for quite a while.

House Speaker Thom Tillis is now the Republican nominee for U.S. Senate, preparing to take on first-term Democratic Sen. Kay Hagan. That means even small twists and turns that used to be followed by a small group of political insiders will be amplified on the national campaign stage.

"I do think it changes the dynamic in ways both favorable and risky to the speaker," said Ran Coble, the long-time executive director of the North Carolina Center for Public Policy Research. "It seems like everything that happens in this legislative session will be fodder for either a Tillis commercial or a Hagan commercial.

"Whatever he does, I think part of Kay Hagan's campaign will be to tie him to the legislature."

A recently Elon University Poll showed only 27 percent of voters approve of the job the General Assembly is doing. With 120 members in the state House, Tillis serves as the face of an often unruly body that has been the focus of protests over hot-button issues such as abortion and whose members have produced eye-catching bills, including one endorsing a state religion.

"We're going to go in. We're going to have a short session. It's going to be focused. It's going to be disciplined. We're going to get in and out," said Tillis, who said he plans to remain at the legislature despite facing a campaign in which attack ads are already on the air six months before Election Day.

Tillis' position is not completely unprecedented. Hagan herself ran while serving as a powerful budget chairman in the state Senate.

Coble noted there have been House speakers who have campaigned for other state positions, such as lieutenant governor and governor, while leading the House, but those were part of a different political era.

"I actually believe the more people who know about what we're doing, the better off they are and we are," said Senate President Pro Tem Phil Berger, who at one point was considering a U.S. Senate run himself.

While allowing for the possibility that he might feel differently after a session under national scrutiny, Berger said, "I think people having an interest in what we're doing is not a bad thing."

Asked what he thought the impact of the national campaign might be, Gov. Pat McCrory said with a chuckle, "Hopefully, it will make it a shorter session."

Occasional disagreements in the offing

Because Republicans hold veto-proof super-majorities in both chambers, there is little that Democrats can do to delay or derail legislation. But protesters with the "Moral Monday" movement pledge they will return for weekly protests to decry what they say are harmful policies. Such protests led to hundreds of arrests last year.

Some of the most interesting differences will arise among different Republican leaders.

Education, coal ash top state Senate priorities

Despite the House, Senate and administration all being controlled by Republicans, those three groups were occasionally at odds last year. McCrory, for example, vetoed a pair bills at the end of the 2013 session, only to see his objections overridden. House and Senate leaders differed over a number of measures, ranging from education to energy production to what to do with the Dorothea Dix property.

"Those are natural tensions that exist," said McCrory, who declared his working relationship with lawmakers "great."

Going into this year's session, many have speculated that Senators would be willing to drag out the session in order to extract concessions from House leaders, who would be eager to allow Tillis to be a full-time candidate. But Berger offered his full-throated endorsement of Tillis on Thursday, and it is likely he will have his own reasons for wanting to leave town. Some of his members, including Sen. Chad Barefoot, R-Wake, could face tough re-election campaigns and cannot raise money while in session. Also, Berger's son, Phil Berger Jr., has runoff primary July 15 in his bid to take the 6th Congressional District seat held by retiring Congressman Howard Coble.

A short session, however, means there won't be a lot of time to deal with thorny issues such as reforming the state's Medicaid program.

Earlier this year, the administration rolled out a plan that would create accountable care organizations, local groups that would accept a flat fee in exchange for caring for a Medicaid patient. The effort could help reduce costs in the program and tamp down cost overruns that have plagued the system.

"The longer we wait, the more difficult it's going to be," McCrory said Friday, saying he would push to "at least get to first base" this year.

But legislative leaders have been both cool to the proposal and skeptical that such a heavy legislative lift can be finished before July 1.

"I don't know that during the short session we're going to have the time, and I don't know that we will have the consensus on what long-term will be a solution to that particular issue," Berger said, forecasting that Medicaid reform may wait until 2015.

That said, lawmakers will have plenty on their plate:

BUDGET: McCrory said he expects to roll out his roughly $20 billion budget proposal as early as Wednesday.

He {{a href="blogpost-13625213" _fcksavedurl="blogpost-13625213" _fcksavedurl="blogpost-13625213" _fcksavedurl="blogpost-13625213" _fcksavedurl="blogpost-13625213" _fcksavedurl="blogpost-13625213" _fcksavedurl="blogpost-13625213"}}previewed the centerpiece of that proposal on Wednesday{{/a}}: A plan to raise state worker salaries $1,000 per year and to give teachers a 2 percent average raise while boosting pay for new teachers from $30,800 to $35,000 by the 2015-16 school year.

"I'm pretty confident in the numbers we'll be presenting," he said.

Neither McCrory nor his budget director, Art Pope, would lay out specifically where the money would come from for those proposals, aside from pointing to reserves set aside last year and cost savings from not filling jobs. But unexpected cost overruns in the Medicaid program and tax collections that have lagged $445 million behind expectations have prompted skepticism.

In particular, the year-old NCTracks computer system is not yet giving lawmakers promised information on the exact rate of Medicaid spending, meaning that budget writers will be working from estimates rather than hard data.

"The biggest challenge will be dealing with balancing the budget in the context of not knowing how much the Medicaid number is," Berger said.

Asked if the governor's proposal was feasible given the recent budget uncertainty, Rep. Craig Horn, R-Union, a chairman of the House appropriations subcommittee, said he is giving the governor the benefit of the doubt – for now.

"Now, the governor and his budget writer say they've found the money," Horn said. "As an appropriations guy, my response has to be: 'Show me the money.'"

EDUCATION POLICY: Aside from funding education, several key education policy items will land at the legislature as well.

In April, {{a href="blogpost-13591055" _fcksavedurl="blogpost-13591055" _fcksavedurl="blogpost-13591055" _fcksavedurl="blogpost-13591055" _fcksavedurl="blogpost-13591055" _fcksavedurl="blogpost-13591055" _fcksavedurl="blogpost-13591055"}}a the legislature's Education Oversight committee recommended to lawmakers that they pull the plug on Common Core standards{{/a}}. Those standards were developed by the states but became controversial after President Barack Obama's administration endorsed them.

Opponents of the measure tried to derail the bill in committee but were rebuffed by Sen. Jerry Tillman, R-Randolph, a former principal.

"You’re going on the false premise that some untested, not validated ... standards are OK to begin with," Tillman said.

His repeal measure has the backing of Lt. Gov. Dan Forest.

Meanwhile, business leaders, including the North Carolina Chamber, have lobbied lawmakers to keep the Common Core in place, saying the standards will help ensure students throughout the state are ready to tackle jobs or college when they graduate from high school. McCrory has also been a supporter of Common Core.

"I think we need to find some common ground and clarify the difference between high standards and the implementation of those standards," the governor said Friday, adding that the main differences among people on both sides of the issue seemed to be ones of "language" rather than "intent."

Berger, too, seemed unenthusiastic about the idea of a wholesale withdrawal from the standards.

"I think it's important for people to understand that there will continue to be a commitment by this General Assembly to raising standards for our kids. I think there are some well-documented concerns about specific problems with Common Core," Berger said. "I fully expect there to be a lot of discussion about that during the session. I can't, from the vantage point I have now, say exactly what's going to come of that."

Also on the education front: a Superior Court judge has recently found a law that would require local school systems to offer raises and four-year contracts in exchange for the teachers giving up their tenure rights to be unconstitutional. Although that decision affects only Guilford and Durham counties, lawmakers could find themselves dealing with the repercussions of that order this year.

COAL ASH: On Feb. 2, a Duke Energy plant near Eden spilled roughly 39,000 tons of coal ash into the Dan River. McCrory, Berger and other lawmakers say they will take up legislation that will require Duke not only to clean up the spill, but to move forward with closing down ash ponds at 13 other locations throughout the state. Although the exact form of the measure isn't settled, all agree the measure is a high priority.

"The bill on coal ash is a work in progress," said House Majority Leader Edgar Starnes, R-Caldwell.

Starnes said along with tweaking the state budget, including teacher raises, coal ash legislation is a priority for the session.

TAXES: One of the biggest issues during the 2013 session was a sweeping tax measure that lowered personal and corporate income tax rates.

Although budget writers will be coping with the results of that plan – it has produced $445 million less than lawmakers anticipated – don't expect to see any major changes this year.

"I think you'll see some legislative fixes and clarifications to some of the tax law changes," said Rep. David Lewis, R-Harnett.

Some of those fixes, he said, involve clarifying how the General Assembly intended a few items to work. Otherwise, he said, tax changes will involved "a comma here, a word there."

The biggest tax fight brewing involves incentives for the film industry.

Currently, filmmakers and television producers can get up to $20 million in rebates on their spending on productions filmed in North Carolina. That credit expires at the end of the year, and the industry is warning that North Carolina could lose jobs if it isn't renewed.

There have been dueling studies over whether the film incentives are good deal for state coffers, but lawmakers from film-dependent areas such as Wilmington say there's little doubt about the good the industry does for the economy.

"A lumber company I know in Wilmington makes a bundle on selling movie people lumber," said Rep. Ted Davis, R-New Hanover. "You take that film incentive away, I guarantee you that company will not be able to keep all the people they have."

That kind of knock-on effect, he said, plays out across the district.

Davis said he is waiting to see what the governor does in his budget. Although Commerce Secretary Sharon Decker has said she wants to keep some form of the incentives, it's unclear whether McCrory will go to bat for the industry, Davis said.

PUBLIC PRIVATE PARTNERSHIP: At the end of the last legislative session, lawmakers left a bill that would lay down rules for a new nonprofit job-recruiting agency unfinished. While {{a href="blogpost-12780461" _fcksavedurl="blogpost-12780461" _fcksavedurl="blogpost-12780461" _fcksavedurl="blogpost-12780461" _fcksavedurl="blogpost-12780461" _fcksavedurl="blogpost-12780461" _fcksavedurl="blogpost-12780461"}}the McCrory administration has moved forward with creating the agency{{/a}}, it is unclear what public disclosure rules will attach to the new nonprofit.

Decker and other administration officials have raised concerns about a version of the bill unveiled earlier this year that would apply restrictions to the nonprofit similar to the rules that govern state workers.

"We drafted a bill that was probably too stringent to be quite honest," said Sen. Harry Brown, R-Onslow, the majority leader in the state Senate. That said, he could not say what the final form the public-private partnership would take.

ENERGY: Both McCrory and Berger have expressed and interest in pushing ahead with opening the state to hydraulic fracturing, a process through which natural gas can be extracted from shale rock.

But a legislative committee on Thursday {{a href="blogpost-13630628" _fcksavedurl="blogpost-13630628" _fcksavedurl="blogpost-13630628" _fcksavedurl="blogpost-13630628" _fcksavedurl="blogpost-13630628" _fcksavedurl="blogpost-13630628" _fcksavedurl="blogpost-13630628"}}recommended changes that could slow down that process{{/a}}. In particular, lawmakers say they want to study "forced pooling," which allows gas companies to drill under property without the owners' consent if the company has already secured rights to enough neighboring land.

DIX PROPERTY: The city of Raleigh and state leaders have been wrangling over the fate of the 306-acre Dorothea Dix property for more than a year. Republicans threatened to vacate a lease signed by former Gov. Bev Perdue, a Democrat, that gives the city rights to build a "destination park" on the land. McCrory stepped in and helped defuse a legislative showdown over the matter.

Both sides agreed to try to negotiate a new deal. The city and state have exchanged {{a href="blogpost-13627084" _fcksavedurl="blogpost-13627084" _fcksavedurl="blogpost-13627084" _fcksavedurl="blogpost-13627084" _fcksavedurl="blogpost-13627084" _fcksavedurl="blogpost-13627084" _fcksavedurl="blogpost-13627084"}}three offers for the property{{/a}}, but they differ widely on price. McCrory said the state is still weighing the city's latest offer, which would include a piece of the Governor Morehead School for the Blind.

"I'm still waiting for a meeting with my team," he said.

The standstill agreement that gave the city and state legal room to negotiate expires on June 1.

PUPPY MILLS: Despite passing the House last year, a {{a href="blogpost-12429929" _fcksavedurl="blogpost-12429929" _fcksavedurl="blogpost-12429929" _fcksavedurl="blogpost-12429929" _fcksavedurl="blogpost-12429929" _fcksavedurl="blogpost-12429929" _fcksavedurl="blogpost-12429929"}}bill that would place basic health and safety standards on dog breeders{{/a}} did not get a hearing in the Senate. It has been the subject of vocal opposition, despite strong support by McCrory, who said he will push for the measure again this year.

"Some of the Raleigh culture allows only one or two of the legislators to stop something, and I don't think that's the type of government that's effective," he said. "I think, once we get the puppy bill legislation to the general public and to the floor, it will pass. The dilemma in this culture is often getting things to a vote and not allowing one or two legislators to have veto power."

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