As the Session Turns
Remember in October when the North Carolina General Assembly (NCGA) passed a historic appropriation totaling nearly $800 million in response to Hurricane Florence? And remember how legislators designated half of the appropriation then but put the rest in reserves so they could strategically assign allocations in November? Well, they kept their word.
Not only did the month of November conclude with unseasonably warm weather but also the passage of Senate Bill (SB) 823, the Hurricane Florence/Supplemental Act. Or as I like to call it, the sequel to Senate Bill 2.
SB 823 is relatively simple compared to SB 2. The largest component of the nearly $300 million bill is $240 million for farmers whose land, crops and businesses were damaged.
What is the other $60 million going towards? I’ve pulled out some details for you below:
- $10 million to help commercial fishermen and shellfish producers
- $5 million for small business loans
- $18.5 million to draw down federal matches
- $1 million to refurbish courthouses that sustained damage
- $1.5 million to repair and renovate school cafeterias, labs, etc.
To read SB 823 in its entirety, click here.
NCGA members also included language in the bill that would require Governor Cooper and his staff to submit a plan to them by March 1 as to how they can replenish the “Rainy Day” fund, which was the source of the majority of the disaster relief funds.
Speaking of Governor Cooper, he has been hard at work lobbying DC for $8.8 billion in federal aid to help with North Carolina recovery efforts.
With a portion of the appropriations yet to still be assigned, sounds like a trilogy is in the making. Stay tuned for details as the special session advances.
2018 Midterm Recap
It’s two days after the 2018 midterm election and I’m sure we’re all still on the struggle bus from staying up late to watch the results come in. But there’s a lot to talk about, let’s just jump right in. North Carolina showed up to the polls in historic numbers, more than we have for a nonpresidential race in nearly 30 years.
After eight years in solid control of the NC General Assembly (NCGA), the Republicans lost their supermajority in both the House and the Senate. This means that any vetoes from Governor Roy Cooper will not be able to be overturned by the legislature along partisan lines. However, the NCGA will remain widely red, with 66 republicans and 54 democrats in the house and 29 republicans and 21 democrats in the senate.
Concerning the hotly contested amendments, a majority of North Carolinians voted in favor of expanding crime victims’ rights, the right to hunt and fish, voter ID requirements and reducing the maximum state income tax to seven percent. In contrast, amendments to create a judicial vacancy commission and the allowance of legislative appointments to elections boards were voted down by 66.9% and 61.6% of North Carolina citizens.
What does this mean for rural North Carolina? There will be 15 new legislators when the legislature convenes in January. We will be working hard to help those new legislators – and all our leaders – understand both the challenges rural NC faces and some of the best ideas out there to move our whole state forward.
To learn more about the NC midterm election, check out this great breakdown from WTVD or visit the State Board of Elections site and explore the results both locally and federally. With that being said, we’ve got a lot of work to do in the 2019 long session. But for the rest of the week, we rest.
Here’s what you missed!
Historic Response for a Historic Crisis: The General Assembly’s Disaster Relief Fund
Monday, October 15, members of the North Carolina General Assembly (NCGA) reconvened for a special session to finalize disaster relief legislation aimed at helping communities rebuild and restore themselves in the aftermath of the destruction caused by Hurricane Florence.
This was the second time in less than a month that legislators gathered to Raleigh to address the many needs of their citizens who were affected by Florence. The first session focused primarily on compensation for school employees and how to best handle the missed school days for K-12 students. The total appropriation of that first session was $56 million.
I walked into the Legislative Building last Monday for the latest session filled with optimism, a priority list of disaster relief policies for rural North Carolina developed by the Rural Center and shared with both the General Assembly and the Governor’s office, and, of course, snacks (sadly, to my consternation, not enough snacks). As the day quickly turned to night, due to meeting delays and various questions from the committee, the resulting Senate Bill 2 was passed and has since passed both House and Senate floors and signed into law by Governor Cooper.
Some notable moments from the meeting included the State Budget Director, Charlie Perusse, stating that the economic impact of Florence was $12.7 billion. $12.7 billion. Yep, let that sink in… But also remember that even the $800 million appropriation from the GA won’t completely address the various needs of communities from across North Carolina’s declared disaster areas.
Senator Tommy Tucker also posed a question about the issue of Matthew funding and how much of it still hasn’t been dispensed. Representative John Bell clarified that due to the guidelines of Community Development Block Grant-Disaster Recovery (CDBG-DR) funding, monies assigned for Matthew recovery cannot be used for Florence relief as they come from different funding sources.
Okay, so let’s tackle MAJOR legislative takeaways:
- Because of the due diligence of the NCGA’s leadership, this appropriation bill will be funded through three sources, the “rainy day” reserve fund which had amassed $2 billion, $65 million from the state’s Highway Fund, and $25 million from the lottery. This is important to mention because it means the NCGA’s disaster relief response won’t result in any budgetary interruptions or cuts to current state programs/services nor will North Carolinians see any tax increases.
- The package totaled $800 million, and the first $400 million will be dispersed immediately. Once the legislature reconvenes in November, they will determine how to best spend the remaining monies.
Alright, alright, I know what you’re thinking, “What EXACTLY is in this bill that is plastered all over local news?” I realize that most of you are not policy managers, so legislation might not be near the top of your reading list. But don’t you worry, this policy manager has got you covered.
- $5 million towards mental health
- $500,000 to NC Hospital Foundation to directly aid rural hospitals
- $20 million for local government infrastructure
- $5 million for small business recovery loans
- $50 million for agricultural recovery
- $23 million for disaster relief housing
- $65 million to draw down federal disaster recovery dollars that will go to victims of the storm, plus another $23 million for a homeowner repair and rehabilitation fund
- $10 million to help develop new affordable housing
- $65 million to draw down federal transportation funding
- $2 million for mosquito spraying programs
- $20 million to help local governments make repairs and replace vehicles or other equipment
As the new policy manager for the NC Rural Center, October 15 was the first of many long nights for me at the NCGA and as strange as it may seem, I found it exhilarating. I look forward to making real change for those at the core of what we do here at the Rural Center. Stay tuned, folks! I’m sure there’s way more to come.
Short Session in Short
The General Assembly convened in May (May 16) with a focus on revising the state budget for the upcoming state fiscal year (July 1, 2018 to June 30, 2019). The budget the legislature enacted was vetoed by Governor Cooper, but his veto was overridden. The General Assembly also enacted legislation to make multiple technical corrections to the budget bill and those corrections became law without the Governor’s signature in the final week before the legislature adjourned on June 29. The legislators are scheduled to return November 27, although the agenda for that session has not yet been established.
The budget creates a new Growing Rural Economies with Access to Technology (GREAT) program to provide $10 million in grants for the development of broadband infrastructure in rural areas. Preference is to be accorded to economic tier one areas and the emphasis is to be placed on serving unserved and underserved areas. Communities will need to partner with private providers, and a match is required, although it is reduced for economically distressed areas.
We applaud the NC General Assembly, and in particular Senator Harry Brown and Representative Dean Arp, for championing this approach to expanding rural broadband infrastructure.
This type of grant program has been one of the top advocacy priorities for the Rural Center since the launch of our Rural Counts advocacy program. In fact, the only dollar amount cited in our original platform was $10 million for just this type of program. That suggestion was for a $10 million recurring annual allocation, but we believe that this initial funding will help the state test the model, make adjustments for maximum effectiveness, and prepare this pilot program to be scaled and institutionalized.
UNC Rockingham Health Care is slated to receive $500,000 to match funding for a primary care rural advancement program.
An appropriation of $4.8 million is provided for surgery and family practice residencies and facility improvements at the Southern Regional Area Health Education Center.
Language in the budget bill directs the Department of Health and Human Services to seek permission to set Medicaid coverage for family nurse practitioners to provide home visits for pregnant women and families with young children.
First responders in Anson, Moore, Richmond, and Scotland counties will be able to use $10,000 per county to purchase naloxone. Grants of $10,000, each, will go to sheriff’s departments in Ashe, Brunswick, Cleveland, Columbus, Rockingham, Rutherford, and Swain counties to fight opioid abuse.
Vaya Health will be granted $1.4 million to help construct a facility-based mental health crisis center in Wilkes County.
Appropriates $4 million to pay for inpatient behavioral health beds in Harnett County.
NC State’s Innovation in Manufacturing Biopharmaceuticals will add $2 million to draw down federal funding targeted to accelerating development of products.
Emergency Response/Disaster Relief
The budget includes a number of actions and appropriations related to the state’s continuing response to disasters and also creates a reserve to address future events. The legislature directed dollars to these items:
- $14.5 million will be available to match federal funds for future disasters
- $3.7 million will be used for landslide mapping
- $250,000 goes to NC 2-1-1
- $2.83 million will be used for flood warning and dam assessment
- $2.3 million is directed to search and rescue (includes $100,000 specifically for equipment and training)
- $700,000 will aid the Forest Service’s emergency response
- $10 million goes to Golden LEAF for infrastructure grants
- $24.99 million is for housing-related actions (such as elevation, mitigation, acquisition, relocation)
- $700,000 is provided to aid Princeville and Fair Bluff in using and managing disaster recovery funding
Rural Small Business / Downtown Development
Of the 46 grants totaling $3,084,100 targeted for downtown revitalization, $2,493,000 will go to 32 rural communities.
There are 12 additional state-assisted community development grants totaling $1.024 million.
The majority of those grants (10) will go to rural towns and counties providing a total of $744,000 to aid their activities.
Community facilities will receive separate funding with 15 local governments receiving grants that total $1,324,500. Of those grants, 12 will go to rural communities and provide $959,000.
EMS and volunteer fire departments that serve rural areas also received funding. A total of $185,000 was appropriated for EMS grants for Haywood, Jackson, and Rockingham counties, plus Lake Waccamaw.
Fire departments in 34 communities received grants that were provided by $1,125,807 in the state budget. The majority of the grants were small and went to rural communities.
The One NC Small Business Fund received a $1 million appropriation.
The Carolina Small Business Development Fund received a $2.5 million appropriation
State matching funds were provided for the Clean Water and Drinking Water state revolving loan funds. Both loan funds received additional funding to draw down additional federal dollars.
An additional $1 million was provided to draw down an extra $5 million in federal funding for the Clean Water State Revolving Fund. Plus, an additional $2.7 million provided to the Drinking Water State Revolving Fund will permit the state to add $14 million in additional federal funds. These funds provide loans for local governments to construct sewer and water infrastructure.
Additional infrastructure investments were provided through eight grants to specific systems. The grants totaled $2.327 million, and six of the grants, worth $2.235 million were designated for rural systems.
The Job Development Investment Grant (JDIG) program will have several additional provisions that may assist large economic development projects. The program will have $60.9 million available.
Funding for the other major economic development tools remains available – One NC Fund is expected to need $6.8 million and JMAC (Job Maintenance and Capital Development) is expected to require $7.1 million.
Two changes were made to the calculation of economic development tiers. The budget bills removed the exemption for small counties and phase-out of designation for counties that no longer qualify as tier one. (The small county adjustment automatically made any county with fewer than 12,000 residents a tier 1 county and any county with fewer than 50,000 citizens could not rank higher than tier 2. In addition, any county that had been a tier 1 county would automatically remain a tier 1 county for another year, even if the factors would have moved it to tier 2.)
The Department of Commerce also has been directed to examine the county development factors used for the tier system, and aid counties in improving their performance in areas in which the county lags behind the state performance values.
The Agricultural Development and Farmland Preservation Trust Fund received $14.7 million.
Carteret Community College will receive $75,000 to create the Shellfish Aquaculture Demonstration Center.
The Healthy Foods Small Retailer program received $250,000 funding for the second year of operations. This program increases the availability of fresh agricultural products in food deserts.
Public school teachers will receive a pay increase that averages 6.5%. Principals are to receive an increase that averages 6.9%. Teachers with 25 or more years of experience will get an additional $70/month.
The budget increases the percentage of lottery profits going to school capital projects. (The budget bill will increase the percentage that is devoted to school construction from the current 16.9% in effect this year to 40% by the 2028-2029 fiscal year.) This change will increase the Needs-Based Public School Capital Fund from $30 million this year to $117.3 million next year. The amount for the upcoming year includes $42.3 million that is a direct appropriation in this year’s budget. Administered by the Department of Public Instruction, preference for use of the money in the Needs-Based Public School Capital Fund is directed to counties in the economic development Tier 1, to counties with greater need and less ability to finance their needs, and to counties with high debt to tax revenue ratio. (All the tier 1 counties are rural.)
Funds for the UNC system operations increase by 1.9%. The university system also will receive $20 million to provide pay increases, but those dollars do not have to be used for across-the-board raises.
Community colleges operating funds increase 3.8%, including about $15 million for short-term workforce training. Community colleges also will receive $1.8 million (one-time funds) to offset declines in enrollment related to Hurricane Matthew. The budget includes $24 million for pay raises for personnel, but those dollars do not have to be used for across-the-board raises.
The budget expands the tuition reimbursement program for teacher assistants to 19 counties (18 of which are rural). Rural schools also will receive a significant portion of the $9.8 million provided in grants to schools and school programs. Among the grantees are school programs in Avery, Burke, Cherokee, Clay, Columbus, Edgecombe, Franklin, Graham, Halifax, Harnett, Johnston, Lee, Robeson, Swain, Transylvania, and Wayne.
Specialized community college programs will receive $14.9 million in the coming year. Community colleges in Carteret, Johnston, Richmond, Surry, Wilkes, and Yancey counties are among the recipients for these funds.
Other Budget Provisions of Interest
Raises for state employees will be allotted at 2% for most non-education (not teachers or college) employees. Corrections employees will get an average increase of 4%, and state troopers will be awarded an 8% increase.
State retirees and retired teachers are slated to receive a 1% bonus in the fall, but there is not COLA for state or local retirees.
Beyond the Budget
Very few public bills moved through this session, which truly was a “short session” of the legislature. Among the bills that would advance the Rural Counts priorities, two pieces of legislation were ratified.
- Improving Rural Health (H 998) is a multi-part bill that seeks to improve access to medical and dental care in rural areas. The bill directs the Department of Health and Human Services (DHHS) to study incentives for medical education in rural areas and assist rural hospitals in becoming designated as teaching hospitals. It directs the Office of Rural Health to ensure the loan repayment program is targeted to benefit health care providers in rural areas in order to recruit and retain providers. Rural Health also is to identify the need for dentists in rural areas and improve access to dentists in rural areas.
- Heroin and Opioid Prevention and Enforcement (HOPE) Act (S 616) amends laws related to controlled substances and expresses the legislature’s intention to appropriate funds for the 2019-2020 fiscal year for community-based substance use disorder treatment and recovery. The bill further states the General Assembly intends to provide funding for opioid antagonists for law enforcement and for Medicine Drop. As part of the bill, the Office of Rural Health is directed to oversee establishing a program for telepsychiatry.
Build NC Bond
In addition to those bills, the General Assembly passed the Build NC Bond Act of 2018. This act authorizes $3 billion in bonds for highways. About half of the funds are to aid projects that are Division Needs within the Strategic Transportation Investments category. The remainder of the funds must be used for Regional Impact Projects. The bonds will be repaid from the Highway Trust Fund and no more than $300 million in the bonds may be issued in any year. The bonds may not be used for non-highway projects or toll roads. Although specific projects have not been designated to receive the bond funds, the availability of money is expected to advance projects to aid rural areas prior to the original scheduled construction time.
In the final weeks of the session, the General Assembly adopted six constitutional amendments that will be on the ballot in November. The amendments propose to:
- Provide that the maximum tax rate on incomes cannot exceed 7.0% (S 75) (the current constitutional limit is 10%)
- Protect the right to hunt, fish, and harvest wildlife (S 677)
- Require photo identification to vote (H 1092)
- Provide a nonpartisan judicial merit commission to nominate and recommend nominees to fill judicial vacancies (S 814)
- Establish a bipartisan Board of Ethics and Elections Enforcement (H 913)
- Provide better protections and safeguards to victims of crime (H 551)
Two of these amendments – the nonpartisan judicial merit commission and the bipartisan Board of Ethics and Election Enforcement – were recently blocked by a panel of Superior Court judges. A special session of the General Assembly may be called to clarify the language of these amendments to meet the demands of that panel. Additional details about all of these proposed amendments may be better defined when the legislature re-convenes in late November, after the vote to decide which ones are enacted.