Category Archives: Budget

Shifting sands under Jones Street

Update: According to a tweet by WRAL’s NC Capitol, Bill Ownes says he’s going to vote for the override.

Sometime on Tuesday, we’re very likely to know the outcome of the vote to override Governor Bev Perdue’s veto of the state budget this past Sunday. Even if you’re a damn good at counting noses, you wouldn’t want to predict the outcome, but it’s safe to predict, maybe, that after briefly complaining about Perdue’s unwillingness to compromise, the GOP is intent on ramming through its plan.
The rule is three-fifth of those present. The Senate is a slam-dunk. With everyone attending, Democrats have a four vote margin in the House. If the so-called Party of Five – five Democrats who voted in favor of the budget – votes to override the veto, then as long as the GOP holds together the budget clears the last hurdle.
The reason so much of the above is conditional is because time and time again there have been strange moments in the North Carolina House of Representatives. If, for instance, three members of the Party of Five, return to the loving bosom of their party, then we go back to a negotiated solution. If two switch and one walks, then it gets complicated.
Already today, we’re hearing about a possible primary challenge to Rep. Jim Crawford and and the potential wavering of Rep. Bill Owens and Tim Spear. Reps. Dewey Hill and William Brisson have checked in as ‘yes’ votes on the override.
As always, ahead of the vote look for signs of sudden illnesses or family emergencies. This time around one thing not among the murmurs is word of any defecting Republicans, a sign of the change in the political landscape and the fact that redistricting, an effective tool in legislative arm-twisting, is still in flux.
My gut says that long and short term, an override is a win for the Governor. In the long run, she’s stood her ground, underlined the cuts and their impact and more effectively pinned the blame for them where they belong. (Nobody is buying that idea the GOP added state jobs.)
In the short term, Perdue has shored up her base and helped everyone forget for a moment the cuts she proposed earlier this year.
There’s a new poll out from PPP this morning showing that the budget is not a winner. Even Republicans are divided on it.

Cuts to education are at the center of voter opposition to the budget. Statewide only 36% of voters think that it’s most important to end the temporary one cent sales tax compared to 50% who think it’s more vital to minimize cuts to education spending. The numbers are similar in Berger’s district where 53% of voters think it’s more important to protect education vs. 36% who think it’s more important to roll back the sales tax and in Tillis’ where 51% side with education to 41% for reducing the sales tax.

Also stirring the pot is a well-timed visit by the POTUS and the Sunday N&O story of hefty raises handed out by House Speaker Thom Tillis to his top staff. Kinda surprising since the speaker has been around long enough to understand how that’s going to play. Hypocrisy resonates, always has.

The veto is effective because its gives more time for the impact of the cuts and the nasty little bits tucked in here and there in the budget to rise to the surface. Still, I expect the GOP to go for the double-down and stick to their current spin. You can imagine the commercials now about how many teaching jobs their budget created. A negotiated solution may be in their best interest and is undoubtedly in the best interest of the state, but it seems like this General Assembly leadership is either being guided directly by the same strategists as the national party or are desperately trying to mimic their ‘no prisoners’ strategy. Either way, you and I lose.

A shabby moment

I happened to be in the Senate gallery yesterday to witness the brief discussion on the state budget compromise worked out between the Senate and House leadership and the Gang of Five Democrats in the House.

The debate on the bill kicked off with a move by Democrats to sever a section that would extend the unemployment benefits that have been held hostage since early April by the GOP leadership.
The use of the now 47,000 people as a bargaining chip is awful enough, especially since there is no cost to the state to extend these benefits. The number of people losing their payments keeps increasing while this shameful behavior continues. During discussions, derision of the unemployed has been an unfortunate aspect of the rhetoric. During the debate yesterday, there was a particularly appalling example of the lack of respect shown to the unemployed and their families.

In a back and forth between Senator Malcolm Graham, who called for quick passage of a standalone bill on the benefits extension, and Rules Committee chair Senator Tom Apodaca, who insisted it stay in the budget, Graham noted the uncertainty faced by families. He listed their worries and among many was a concern about how they might be able to afford to send a child to a summer camp. In a truly callous display of hubris Apodaca said people who are unemployed shouldn’t even consider such a thing.

There are no doubt hundreds of thousands of North Carolina families whose breadwinners are employed, under-employed and unemployed that are struggling to make ends meet and trying to budget for summer camp. In recognition of the positive impact some of these camps have on children, many churches, schools and non-profits provide scholarships and subsidies to low and moderate income families. To say that the children from these families – including those having their lives turned upside down through political gamesmanship – don’t deserve access to camps is another example of the crass class warfare embraced by the current leadership.

The following two-minute exchange was captured by the folks at NC Policy Watch. Apodaca’s comment about camps is at the end. His office phone number is (919) 733-5745.

DENR cuts — a receipts-supported agency?

One aspect of the budget proposal that is troublesome is a move to require most of DENR’s workforce to be supported by either matching federal grants or receipts, such as licensing and permit fees or funds that certain industries pay into for monitoring.
Reading the budget and related documents you see references in the budget to “match and no-match positions” and “receipts-supported positions.”
The regional offices – about 600 positions – are threatened with massive cuts. Before the department was given some flexibility in a later version, most of those offices were due to be either closed or drastically cut. Still, those offices are under a justification review and their funding has gone from recurring to non-recurring pending that review.
Some screen caps from the budget and the Money Report (click to enlarge):

DENR and its supporters are in an all out fight for saving the offices. While there are many reasons to make sure the offices and the work their doing continues, the main case being made is that eliminating them will slow down air and water permits, which would be unfriendly to business. It seems to be the only selling point that might work given the anti-regulatory climate in Raleigh.
While the regional office cuts are the focus, there’s some real cause for alarm in how they’re being cut.
In an interview last week Grady McCallie, policy director for the North Carolina Conservation Network, told me that in addition to concern about the regional offices and important monitoring, inspection and research work they do, the idea of a mostly “receipts-supported” environmental agency is worrisome.
For starters, the philosophy is awkward. Does it mean the state is not willing to pay for environmental protection? Or that it is only done in relation to business and industry and not for its own sake?
To me it implies a reversal of a forward-thinking environmental policy and the return to a reactive one. That’s a considerable shift in philosophy. Moreover, it ignores everything we’ve learned – often the hard way – about how to protect our natural resources.
Secondly, we know from various financing scandals, the federal minerals and mining agency scandal and just about every other scandal what happens when the watchdog gets to cozy with the industry it’s supposed to be watching. Making the agency reliant on payments from the industry it’s regulating will no doubt over time create a symbiotic relationship that invites trouble.
The big reason not to follow this receipts-supported path is that it doesn’t make sense on the ground. There are people doing some vital work throughout the state whose jobs would go away under this plan.
Dan Crawford, director of government relations for the League of Conservation Voters, said it’s not a reasonable way to judge the work someone is doing. “It doesn’t take into account the urgency and value of the work being performed.”
Going this route to judge whether to keep of cut a position means a lot of the research work, cutting edge pilot projects and environmental education programs at DENR are at risk as well as most of the efforts to better understand the state’s natural resources and how best to protect them.
This shift in policy is not only about returning to the past, it’s about ignoring the future.

Budget cuts hampering firefighters at Alligator River

An infuriating bit of information this morning courtesy of a Virginia Pilot story about the wildfire in the Alligator River National Wildlife Refuge, which has burned 20,000 acres so far.
Apparently an aircraft that could have doused the fire was sold off a month ago.
The “Super Scooper,” which can scoop up 3,000 gallons at a time, was deemed too costly to repair.
From the Outer Banks Sentinel:

But one very important piece of equipment used to fight large fires that isn’t available is the state-owned CL 215 “Super Scooper,” said Tom Crews, incident commander on this fire, but Fire Management Officer for Alligator River National Wildlife Refuge complex. The plane has the capability to scoop up 1621-3000 gallons of water and drop it on fires.

The North Carolina Forestry Service is great at its job and “we are very appreciative of their efforts,” said Crews. But state budget cuts have reduced personnel and have caused the loss of the use of the CL 215 thus creating a real blow to their fire-fighting capabilities. This important fire-fighting tool is unavailable because it was deemed too expensive to maintain.

Here’s some footage of what that deferred maintenance cost us.

Elon Poll says NC says ‘Tax Me’ — Really?

I find this poll result strange because that’s not what voters around the state – even liberal Orange County voters – have been saying when asked to approve local option 1/4 cent sales tax hikes. Maybe this is a framing thing. Maybe county leaders should have said not having the hike meant cutting jobs.
The General Assembly won’t have to seek the voters approval if they want to raise the sales tax, but it’s hard to see the smaller government crowd signing on to it.
Here’s the data link (pdf).

From the Elon Poll release:

North Carolina State Budget Situation

When told of the state budget shortfall and asked on how they would address it, only 15 percent of respondents were unwilling to increase existing taxes, but a majority of North Carolinians oppose the idea of creating new taxes where none currently exist.

If faced with a tax increase, half the respondents would prefer to increase the sales tax. Twelve percent would prefer an increase in property tax, while 16 percent would prefer an increase in the income tax.

In a separate question, the poll found 62 percent of citizens would support an increase in the sales tax by one cent on every dollar spent.

“These results indicate that North Carolinians are cognizant of the situation facing the state and, apparently in lieu of making things worse for others, are willing to shoulder their share of the budget burden,” said Hunter Bacot, director of the Elon University Poll.

Citizens are also opposed (51 percent) to equal cuts across state programs, as well as eliminating current state employee jobs (56 percent).

PACing the legislature

This lovely reminder of how things work from Bob Hall and our friends at Democracy NC: (link to report)

SPECIAL-INTEREST PACS GUARD TAX LOOPHOLES

A new analysis shows that three dozen of North Carolina’s biggest political action committees (PACs) donated $7 million to state candidates and political parties in the last election — and now many of the groups are scrambling to make sure their interests, including tax breaks worth at least $1 billion a year, are not harmed in the new budget being hammered out in Raleigh.

The list of top PACs includes groups of developers, attorneys, university patrons, doctors, auto dealers, state employees, teachers, and beer wholesalers, as well as executives with blue-chip firms like Progress Energy, Wachovia, Blue Cross, AT&T, and Nationwide Insurance.

The analysis by the watchdog group Democracy North Carolina shows that legislative winners in 2008 received 94 percent of the $5.7 million the big PACs donated to all legislative candidates. The PACs also gave $770,000 to gubernatorial and other statewide candidates, as well as $590,000 to political party committees, much of which gets funneled into legislative races.

On September 16, 2008 the NC Realtors Association PAC sent 106 legislative candidates a total of $169,500 in donations. The same day, the NC Telephone Cooperative’s PAC sent $66,800 to 75 legislators. The next day, the Blue Cross PAC sent $42,200 to 45 candidates and two weeks later, Bank of America’s PAC gave 84 legislative candidates $118,250. And on and on it went.

But now the budget crisis is forcing elected leaders to make hard choices that affect big donors and pit one powerful lobby against another.

Teachers are holding rallies against cuts in the education budget, and the NC Beer & Wine Wholesalers Association is running full-page ads against proposals to increase the tax on its products. Both groups have PACs that gave more than $100,000 in direct contributions in 2008, plus at least another $100,000 through affiliated groups and individuals. . . .

How this game is played

2009: Can’t raise revenue because it will jeopardize Democrats chances in the 2010 election. A strong majority will pay dividends during redistricting.
2010: Status quo during the short session. Can’t rock the boat, but there will be a few crumbs here and there in tight races.
2011: No, can’t do nothing yet – still have to win that big majority thanks to all those new districts.
2012: No, not yet. Gotta consolidate these wins.
Rinse. Repeat.