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NCACC Legislative Brief
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Week of September 9, 2019

After taking an extended Labor Day break, the General Assembly was anything but quiet this week. Against the backdrop of the court ordered redrawing of legislative maps, the House voted to override Governor Cooper’s veto of the 2019-2021 budget. Additionally, continuing the work it started a few weeks ago, the General Assembly passed portions of the budget as individual pieces of legislation this week. The “mini-budget” bills passed this week focused on appropriations for school safety, prison safety, and disaster relief.

The House override of the Governor’s veto of the budget sets the stage for consideration of a Medicaid bill that has also been on the House calendar for weeks. Several weeks ago, House leadership signaled its willingness to consider a modified version of Medicaid expansion if the budget becomes law, when a committee approved House Bill 655 NC Health Care for Working Families in July. That bill provides for Medicaid coverage for certain individuals currently ineligible for Medicaid benefits, and includes a premium requirement, employment activities for beneficiaries, and indicates no state or local revenues will fund the program. House leadership previously indicated the House would consider the bill for a vote once a vote to override the Governor’s veto objection occurred. With the budget overridden in the House, House leadership indicated that consideration of HB 655 would likely occur next week.

Also next week, while the House and Senate are under deadline to finalize new legislative district maps, the House and Senate could continue to pass mini-budget bills, and the Senate could take up its own vote to override the Governor’s budget veto. If the Senate overrides the veto, the adjournment of the 2019 legislative session is expected to follow shortly thereafter.

House Overrides Governor Cooper’s Budget Veto

Nearly two and a half months after Governor Cooper vetoed the General Assembly’s 2019-2021 budget, the House voted this week in an unexpected move to override the veto of House Bill 966, 2019 Appropriations Act. After appearing regularly on the House calendar since the Governor’s veto, the House called for a vote on the override Wednesday morning. During the vote, the scene on the House floor was chaotic as Democrat members of the House voiced strong objection to the vote, and tried to gain recognition on the floor for points of order, as many of their colleagues were not present during the vote. The motion to override the Governor’s veto of the budget was initially approved by a margin of 55-9. That vote was later changed to 55-15 as several members present during the vote but, due in part to the chaotic scene, did not vote during the legislative session were later allowed to record their vote on the motion.
 
All eyes turn to the Senate as it will now consider an override vote of the Governor’s veto. President Pro Tem of the Senate, Phil Berger, indicated this week that the Senate might take up the override vote as early as next week. While Republicans do not hold a veto-proof majority in the Senate, the Senate previously approved the budget by a veto-proof majority of 33-15, with four Democrats voting for the budget.
 
The budget’s money report can be found here, while the budget special provisions can be found here. Highlights of the budget include:
  • Authorizes $1.5 billion from State Capital and Infrastructure Fund to K-12 schools for new construction, renovations and repairs through the 2028-29 fiscal year with intent to appropriate at least $500 million by the end of the 2021-2022 fiscal year.
  • Authorizes $400 million from State Capital and Infrastructure Fund to community college system for new construction, renovations, and repairs through the 2028-29 fiscal year
  • $100 million in lottery proceeds each year of the biennium for the Public School Building Capital Fund.
  • $67 million in lottery proceeds in 2019-20 and $81 million in lottery proceeds in 2020-21 for the Needs-Based Public School Capital Fund.
  • Provides funding for school safety grants for school resource officers, additional instructional support personnel (school nurses, psychologists, counselors, social workers), safety equipment, safety training, and the students in crisis program, some of which require a local match.
  • Transfers $15 million recurring from the State Capital and Infrastructure Fund for the GREAT grant for rural broadband.
  • Provides $9 million each fiscal year to the newly established Viable Utility Reserve. The funds will be used to provide grants to distressed water infrastructure entities for assessments and inventories, merger or regionalization studies, or infrastructure projects
  • Requires “marketplace facilitators” to collect and remit sales tax on behalf of third-party sellers beginning September 1, 2019.
  • Spends nearly $64 million to implement 2017’s “Raise the Age” legislation including additional court positions, housing, transportation, and $4.25 million in FY19-20 and $6.6 million in FY 20-21 to Juvenile Crime Prevention Councils.
  • Appropriates $112 million for continued Hurricane Florence Disaster Recovery including $9 million for local government assistance, $8 million to DEQ for resiliency projects, $2 million for future disaster studies; $2 million for a flood insurance pilot program, and $2 million for river flood gauges.

For more information on the state budget, please contact NCACC Legislative Counsel Adam Pridemore or NCACC Government Relations Coordinator Amber Harris.

Negotiations Continue on Sales Tax Flexibility Legislation

As previously reported by NCACC, the Senate voted not to concur with House changes to Senate Bill 681, Rural Health Care, Local Sales Tax Flexibility, Utility Accounts, which includes a provision on one of NCACC’s primary goals—greater sales tax flexibility. Both chambers have appointed conferees to negotiate a final bill. Because S681 includes several different provisions, it is possible that the conference committee could remove the sales tax flexibility language. As negotiations are ongoing, NCACC urges you to contact the House and Senate conferees and express to them how retaining the sales tax flexibility language will benefit your county.

Talking points to consider when contacting a conferee:
  • Please retain the sales tax flexibility language currently found in S681.
  • The provision is not a mandated sales tax increase, but rather authorizes counties, subject to voter approval, to levy an additional local option sales and use tax at either ¼ cent or ½ cent within current sales tax caps.
  • By supporting local option sales tax flexibility, you are giving each county a choice about expanding their revenue base to meet local needs.
  • The tax must be approved by voters in a referendum and it must be placed on the ballot in quarter-cent increments.
  • Counties are able to use specific ballot language designating “public education purposes” on the ballot.
  • Counties could use the tax for public school capital needs, teacher supplements, community college needs, or any public purpose, depending on the ballot language.
  • Counties spend on average 30% of their budgets on education and need this tool to help pay for the high costs of school construction, which add up to more than $8 billion statewide.
  • Counties appreciate every dollar appropriated by legislators to help meet these staggering needs.
  • Having this additional tool can help counties contribute more toward public education, or various mandated services for residents like social services, public health, safety and more.
 
For more information on sales tax flexibility, please contact NCACC Associate General Counsel Paige Worsham.

Other Provisions Affecting Counties in a Variety of Bills

Here is a list of other provisions appearing in various bills and impacting counties that received hearings or votes this week:

Senate Bill 683, Combat Absentee Ballot Fraud – The Senate voted not to concur with House changes to this legislation this week. The bill contains a number of provisions related to the security of absentee ballots. The bill requires that absentee ballots be signed by and returned to the county board by the voter or the voter’s near relative, and prohibits the collection of ballots by individuals or organizations. It also increases penalties for those convicted of absentee ballot voter fraud. Additionally, the legislation restores the last Saturday of early voting.

The bill also extends the deadline for the decertification of DRE voting machines used by a number of counties to December 1, 2020. A county seeking this extension must apply to the State Board of Elections and submit sufficient evidence showing that the continued use of the DRE machines does not jeopardize the security of the county’s elections, and demonstrate the county elections board has started the process to replace the DRE voting machines. An amendment was introduced and approved during the House floor debate that allows counties to test new machines during a simulated election.

The House and Senate will appoint conferees to negotiate a final version of the bill.
 
House Bill 555 Medicaid Transformation Implementation – The House voted to override the Governor’s veto of this legislation this week. The bill provides funding for the operation of the Medicaid program and the transition to managed care during the 2019-2021 fiscal biennium, and makes other necessary changes for the transition to managed care to begin as scheduled on November 1, 2019. However, after the Governor vetoed this bill in August, the N.C. Department of Health and Human Services announced the transition to Medicaid managed care would be delayed to February 1, 2020. The language and appropriation were previously included and approved as part of the 2019-2021 budget. It is not clear when the Senate will take up an override vote on the legislation, but it could come as soon as next week.
 
House Bill 935 Social Services Reform, which directs the N.C. Department of Health and Human Services to begin supervisory functions for child welfare and social services in seven regional offices next year with full regional implementation by March 2022 and extends the Social Services Regional Supervision and Collaboration Working Group (SSWG), was scheduled to receive a hearing in the House on Friday this week.

Legislation Addressing County Goals Still in Play

As the session winds down, legislation addressing Association priority legislative goals remains in committee or otherwise awaits action. Please contact your legislators to express your support for these important proposals:
 
House Bill 431 Fiber NC Act: allows local governments in under/unserved areas to build broadband infrastructure and lease that equipment to service providers. H431 gained approval in the House State and Local Government committee and now resides in the House Finance committee, though no date has been set for its hearing. NCACC encourages its members to call your House member(s), especially any of those on the House Finance committee, and urge them to support counties’ top legislative goal of expanding broadband access to unserved and under-served areas of North Carolina.
 

House Bill 79 Academic Alignment/Boards of Education & CC: allows local boards of education to align school calendars with the start of the local community college. The bill passed the House earlier in session and now sits in the Senate Rules committee.
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