Legislative agenda starts with tax reform, education policy

More than 100 of the 170 House and Senate members did not serve in state office just three years ago, marking the state's biggest legislative turnover since the 1970s. 

Many of these new faces are part of a Republican takeover of state government that swept away Democrats' century-long hold on power.  At its most ambitious, the Republican legislative agenda will alter everything from how the state takes care of its poorest citizens to how it regulates businesses. While there will be debate in each individual policy area, the GOP is really attempting a broader philosophical shift, observers say.

"It's a question of how we provide things we want and value," said John Quinterno, founder of South by North Strategies, a Chapel Hill company specializing in economic and social policy research.

Republican leaders say that the key to providing those things of value, such as public education and health insurance for the poor, is controlling costs and changing how taxpayers bankroll government.  

2013 N.C. General Assembly Issue Tracker

Lawmakers held a one-day organizational session in early January to elect leaders and set their rules for the session. But the heavy lifting of legislating – drafting bills, crunching numbers on the state budget and negotiating compromises – begins Wednesday, when the session opens in earnest. There are no hard-and-fast rules that govern when lawmakers have to finish their work, although the current budget does expire June 30, but Republican leaders have signaled that they expect a fast-moving session that should end in May or June.

Those high hopes for a speedy conclusion seem reasonable now. Republicans have super-majorities in both the House and Senate, and after two years of laboring under a veto threat from Democratic Gov. Bev Perdue, they are working with Republican Gov. Pat McCrory. Both legislative leaders and the governor share an agenda that on its surface seems in sync.

For example, all agree that a remake of the state's tax code is in order. 

"Everybody is talking about tax reform," Senate President Pro Tem Phil Berger said during a news conference with reporters earlier this month. "It's important for us because the current outline of our tax system is based on ... a 1930s economic model that is really not there. You've heard that from Republicans and Democrats over the years. We intend to move forward this time with a tax reform package."

For weeks, Sen. Bob Rucho, R-Mecklenburg, has been touting a plan that would eliminate the state's corporate and individual income taxes in exchange for raising the sales tax and applying it to more things. While that has been the most discussed plan, it has not been universally embraced, even by Republicans.

"There is no Republican proposal or plan," said Art Pope, McCrory's budget director. He said the outline Rucho is touting, which Berger backs, is only one of several options. Pope, who will advise the governor on what tax policy the state should pursue, said he worries that eliminating income taxes entirely could be bad for the state.

"To go there from where we are now is very difficult to do and has lots of impracticalities," Pope said. On the campaign trail, McCrory talked about the need to lower income taxes in order to be competitive with neighboring states, but he did not necessarily advocate for elimination of income taxes. 

It's also unclear how a House plan might look. 

"People always overestimate partisan conflict and underestimate institutional rivalry," said Ran Coble, executive director of the North Carolina Center for Public Policy Research. "There are still big differences between the House and Senate, and even the governor, even with those super-majorities."

As recently as 2008, Democrats held the executive mansion and both legislative chambers. Even with one party in control of most organs of state government – albeit with slimmer majorities than Republicans hold today – there were budget showdowns and public spats.

Both Berger and House Speaker Thom Tillis are said to be considering a run for the U.S. Senate seat now held by Democrat Kay Hagan. Neither legislative leader has directly said whether he will or won't run, but if both of them jump into the race, Coble said it would exacerbate the normal House-Senate rivalries. 

Some of those differences began to emerge last year. Tillis and House Republicans forcefully backed a plan to provide compensation to victims of North Carolina's eugenics program of the early to mid-20th century. The Senate refused to hear that bill. That was a small difference among many legislative accomplishments, but another sign that feuds are possible, even among lawmakers from the same party.

No list of pending legislative issues is likely to be complete. Lawmakers filed more than 2,000 bills during the past legislative session. Of those, 203 became law, with a handful of others passing as resolutions. However, there are some broad topics, such as tax reform, that are likely to come up and dominate the political news this spring.

Early in the session, legislative leaders in both chambers say they will pass a bill to require voters show identification when they go to the polls and to repay $2.4 billion borrowed from the federal government in order to pay unemployment claims. Along with McCrory, legislative leaders will have to decide whether North Carolina should run its own federal health care exchange under the Affordable Care Act and whether to expand the Medicaid program to cover up to 500,000 more people, as allowed by that federal law.

"There are major financial implications and human implications regarding this decision," McCrory told the North Carolina Association of County Commissioners on Friday. 

Lawmakers are also expected to push forward with changes to the state's education system. In particular, Berger said, the Senate would push plans to give schools more flexibility to hire and fire teachers and reward better performing teachers or those who take on tougher assignments. 

"You will see a renewed effort in that field," said Berger, R-Rockingham. 

Berger and others, including House Speaker Pro Tem Paul Stam, also said cutting back on regulations issued by state agencies would continue to be a legislative focus.

"I hope, by the end of the session, we'll have the craziest rules whacked down," said Stam, R-Wake.

He offered the regulation of those who braid hair for a living as one licensing standard that ought to be struck down. He said lawmakers make also try to loosen rules on food trucks. 

During his opening-day speech, Tillis, R-Mecklenburg, pointed to another possible area for action.

"We must protect our workers and their right to work, and we must send the very clear message to businesses already in North Carolina and those considering expanding here that North Carolina will continue to be the least unionized state in the nation," he said, garnering one of the biggest applause lines of the day.

North Carolina is already a right-to-work state by law, but Tillis said after his speech that it is possible lawmakers could push forward with a constitutional amendment.