Weekly Legislative Update
Overview
Committees met frequently this week as review of the State Budget and research on the Federal Stimulus legislation dominated discussion at the North Carolina General Assembly. In the first week of a full schedule of committee meetings, Appropriations subcommittees, Finance committees, and briefings were focused on the State Budget and the impact of the Federal Stimulus. The Senate has advanced legislation that will confirm appointments to the Utilities Commission made by former Governor Mike Easley (D-Brunswick), while the House worked to accommodate Governor Perdue's appointment to the Board of Education. Also in the House this week, the Health Committee began deliberation on legislation to ban smoking in public and work places.
Subcommittees of the House and Senate Appropriations Committees met jointly this week to review the structure of Executive branch departments' budgets and to discuss Federal Stimulus legislation. During budget reviews, cuts to agency budgets are the main focus. While Governor Perdue has ordered immediate cuts during the current fiscal year, lawmakers are coping with the challenge of institutionalizing those cuts during the coming fiscal year that runs from July 1, 2009-June 30, 2010. While these reviews are underway, more details are emerging on the Federal Stimulus legislation. Governor Perdue's (D-Craven) "Stimulus Czar," Dempsey Benton detailed the State's expectations at a meeting on Tuesday. While, North Carolina stands to gain $6.1 million, much of that money is obligated to certain spending categories. More importantly, State budget and accounting law may preclude use of the one-time stimulus money to pay for recurring expenses such as salaries and general operations of government. Lastly, the requirements for reporting to the Federal government are strict and are set out in a detailed timeline running through July 15. The first reporting will begin next week and the entirety of Federal Stimulus spending will be detailed on a new website: www.recovery.gov.
The Finance Committees of the House and Senate also met jointly this week to review the Stimulus legislation. The meeting brought better than expected news. Last week's report by the Department of Revenue had lawmakers concerned that tax cuts in the Stimulus package would hurt the state almost as much as spending would help it. On Wednesday, however, Fiscal Research staff told the Finance Committees that the impact would be a loss of $585 over two years if state law was conformed to the tax changes passed by Congress and signed into law by President Obama. It will now be left up to the General Assembly to decide whether to enact the changes.
The State Senate unanimously approved legislation (Senate Resolution 90) that will confirm Brian Beatty and Susan Rabon as Commissioners on the Utilities Commission. The Utilities Commission oversees regulation of electric power generators and retailers, telephone and water utilities, among other regulated monopolies. Appointments to the Commission are among the most sought after non-elective positions in State Government. Mr. Beatty and Ms. Rabon, who were appointed in the waning hours of Governor Easley's term, served in Easley's Administration. Mr. Beatty was Secretary of Crime Control and Public Safety and Ms. Rabon was a top advisor in the Governor's Office. The appointment resolution will now go to House for consideration.
This Session of the General Assembly continues to gain momentum. The next major waypoint anticipated is the release of Governor Perdue's recommended budget, which could come as early as next week. More likely, the announcement will be in mid-March, followed by the Governor's first address to a joint session of the General Assembly. Governor Perdue's budget recommendation will also be her first and the formal beginning of the budget process at the Legislature.
The articles published in this newsletter are intended only to provide general information on the subjects covered. The contents should not be construed as legal advice or a legal opinion. Readers should consult with legal counsel to obtain specific legal advice based on particular situations.