June 19, 2015
Senate passes its version of state budget
By SANDY SEMANS
The North Carolina Senate created its own version of the state's budget this week.
House Bill 97,
the proposed state budget for the next two fiscal years beginning July
1, 2015 and ending June 30, 2017, passed the House on May 22. When
presented to the Senate, the bill included 329 pages and proposed
spending $22.1 billion for the next fiscal year.
On June 18, when the Senate gave the bill its final approval and sent
it back to the House for concurrence, the document included 508 pages,
but spending was cut back to $21.5 billion.
House members are already expressing dismay because the Senate version
of the budget is chock-full of policy issues commonly taken up in
separate bills, including a privatization of ferries study, Medicaid
reform, the bulk of Senate Bill 160 that creates a local-state matching funds program to dredge inlets, and what was SB 369 – redistribution of sales taxes.
The Senate also added the language in SB 369 to HB 117,
"The NC Competes Act," which is still in the Senate. When it was
received from the House, HB 117's focus was a proposed economic
incentives package, but when the Senate Finance Committee added in the
sale tax redistribution, it also pared back the proposed economic
incentives appropriation amount. The incentives don't appear in the
There seems little doubt among legislators that the House members will
refuse to sign off on the expanded legislation, so the bill seems
destined to be assigned to a conference committee that will be made up
of members of both chambers. Many are predicting that it could be
August before a deal is struck that will be approved by the majority in
each chamber and get the governor's signature.
Sales tax redistribution
Redistribution of sales taxes, if made into law as presented, would
shift the sales tax distribution over a period of four years to 80
percent based on population and 20 percent on point-of-sale over a
period of four years. Bill supporters say that the reallocation will
help poor counties by redistributing the wealth brought in by the more
Because of the high summer population, Dare's sales tax revenues based
on the current 75 percent on point-of-sale are among the highest in the
state, but its permanent population is estimated to be only about
35,000 so it stands to lose more revenues than any county in the state.
Dare County Finance Director Dave Clawson says that the redistribution
would cause a loss that would in turn cause Dare County to increase
property taxes by at least 7 cents by the end of the four-year
implementation because of a loss of $9.3 million in revenue used to
support the county's budget. Local towns would have to raise property
taxes from 3 to 5.5 cents to make up for the loss.
Senate projections are much lower, based on passage of an optional
half-cent sales tax that could be collected locally if approved by a
local referendum and increased sales tax revenues due to expanding the
sales tax base by adding maintenance and repair on tangible personal
property, such as vehicles, and to veterinary and pet services.
Privatization of ferry system
The Senate budget version also includes provisions to “ascertain market
interest for the private operations of the North Carolina Ferry system
or its component parts.”
The Board of Transportation is to issue a request for information and
to report back to the Joint Legislative Transportation Oversight
Committee (JLTOC) and the Fiscal Research Division no later than Feb.
1, 2016 on the results of the request for information and whether it is
more cost effective.
The JLTOC “shall study the feasibility and desirability of privatizing
the North Carolina Ferry System. The study shall include
ownership, governance, and regulatory issues related to (I) potential
privatization of the North Carolina Ferry System and (ii) privately
owned ferries currently operating in North Carolina.” The study
findings and any legislative proposals are to be reported to the 2016
Regular Session of the 2015 General Assembly.
Consolidation of school districts
A provision in the Senate version of the budget, if made into law,
would provide the State Board of Education with authority to
consolidate local school administrative units in contiguous
counties as necessary to ensure that all school systems have the size,
expertise, and other resources necessary to provide their students with
the opportunity to receive a sound basic education.
Hyde and Tyrrell counties, two of the poorest counties in the state are contiguous with Dare County, as is Currituck County.
In other action this week, HB 836
delivered a Christmas present of sorts to those fearing that requiring
photo identification to vote would reduce the number of voters. The
bill's primary focus is allowing electronic means to file absentee
ballots and other elections technology issues. But in a surprise move,
a provision was inserted in the bill which, if signed by the governor,
will allow voters with no photo identification to provide a utility
bill or other piece of mail to confirm their address, the last four
numbers of their social security number and birth date to obtain an
absentee ballot. The bill is now awaiting the governor's signature
needed to become law.
The requirement for a photo identification and the elimination of
same-day registration, pre-registration for teens, and out-of-precinct
provisional ballots is currently being challenged in court.
Semans is a retired newspaper editor and reporter who now works as a
free-lance writer. She lives in Stumpy Point. Her update on the
goings-on in this session of the General Assembly will appear weekly in
The Island Free Press, usually on Friday.)
PREVIOUSLY PUBLISHED 2015 LEGISLATIVE UPDATES
First bill filed would prohibit condemning property for economic development
Legislative Update: And they are off -- sort of
Legislative Update: The gold rush in Raleigh is underway
Legislative Update Most Bills Moving At Snails Pace But One Achieves Warp Speed
Legislative Update: Humor unleashed in the General Assembly
Legislative Update: Lawmakers made hay while the sun was shining
Legislative Update: Bill on dredging causes local turmoil
Legislative Update: 156 new bills filed this week
Legislative Update: Lawmakers keeping busy in Raleigh
Legislative Update: It was raining bills all week
Legislative Update: Occupancy tax provision is out of dredging bill
Legislative Update: Lawmakers take aim at N.C. Constitution
Legislative Update: More taxes and Constitutional amendments proposed
Legislative Update: Lawmakers racing the clock to get bills moved
Legislative Update: Rushing to meet the 'crossover' deadline
Legislative Update: A week of committee work in Raleigh
Legislative update: New taxes for fishermen and new purpose for occupancy taxes
Legislative Update: Bill aims at opportunities for Oregon Inlet Lifesaving Station
Legislative Update: Two days, two vetoes
Legislative Update: Sales tax redistribution bill gets more traction
Legislative update: Sales tax redistribution is back, will still hurt Dare