Womble Carlyle Legislative Update - August 7, 2015
By Unknown
Angel and Laura worried all week about what we could tell
you about in our weekly update, but then yesterday happened. Lo and behold this week has written itself. Silly
us!
New Senate Budget
Strategy: truce, sort of.
In a conversation with Sen. Apodaca early Wednesday, we
learned he had a plan to kick-start the stalled budget negotiations and start
to wrap this session up. Sure enough, later that morning the Senate took the
first step at ending the budget standoff using the time-tested strategy of….
removing obstacles. At Wednesday’s press conference the Senate announced the
following departures from their own budget
proposal in order to bring the House to the table:
·
Removal of many controversial policy provisions
that can be passed in stand-alone legislation.
·
Take out Medicaid Reform and handle in a
separate bill.
·
Take out the proposed sales tax redistribution
and run separately.
Remember that lawmaking is part policy, part politics and
part personality. Hats off to Senate Leadership; they’re on to something here.
Medicaid Progress
The current continuing budget resolution expires on August
14th. Sen. Berger, leader of the Senate, believes they can pass a state
budget in time. But Senior House Appropriations Chair Dollar is less
confident, saying there is “plenty more work to do.” (Rep. Dollar is the main drafter of the House
Medicaid Reform plan – one of the big obstacles to passing a budget. The new Senate
Medicaid Reform Plan makes several compromises, and passed the Senate Health
Care Committee the day after the Senate announced its new strategy.
The House-passed Medicaid Reform plan bill was gutted and
the new Senate language was substituted. Now, HB 372 –
Medicaid Transformation/HIE/Primary Care/Funds – does several things that
the House bill didn’t do, including changing the operational structure for the
Medicaid program and allowing private commercial insurance companies to
participate alongside provider-led entities.
The plan would create a new independent agency, the Department of Medicaid, which would oversee the transition to
full-risk capitated plans and become the single state agency responsible for
Medicaid. The new department would be a cabinet-level agency with a
secretary appointed by the governor but requiring confirmation by the
legislature.
The plan also calls for three state-wide contracts that
would likely go to commercial insurers, and up to twelve regional contracts for
provider-led entities. The inclusion of private commercial insurers in
the plan is a sticking point between the two chambers. We think that issue will
be decided by but, yet again, it seems that neither side is willing to budge on
that issue.
The Senate Appropriations Committee will vote on the bill
Monday afternoon, then it will be considered by the full Senate on Monday
night. We expect the House to not concur with the Senate changes, and a
conference committee will be appointed to work out the differences.
Economic Development
The Senate’s economic development plan is the new language
in HB
117 – NC Competes Act. The bill passed Senate Finance yesterday and has
been referred to Appropriations. The proposal includes the phase-in of a single
sales factor, the creation of an additional sales tax exemption for datacenter
equipment and electricity, and an extension of sales tax breaks for commercial
airlines that buy jet fuel in the state -- all things that the House agrees
with! But right before everyone started holding hands and singing Kumbaya, the Senate gummed up the moment
by adding a provision that provides for the redistribution of the sales tax,
which House members and the Governor oppose. (As in “I’ll veto that.”)
Senate Majority Leader Harry Brown, who represents a rural
district, has been touting his plan for the redistribution of the sales tax but
it hasn’t gained much traction in the House or among legislators representing populous
and destination counties. Under current law, there is a 2% local sales
tax that is divided among the counties. For every sales tax dollar
currently raised, 75 cents stays in
the county where a purchase is made, and 25
cents is distributed to counties across the state based on their
population. The current plan was enacted
in 2007 as part of the “hold harmless” provisions included in the state’s
Medicaid Swap. However, Sen. Brown argues that this formula puts
smaller, more rural counties at a disadvantage because so much money is spent
in large counties with big shopping areas. Originally he proposed a
formula that would distribute 80 cents of a sales tax dollar to counties based on
population and 20 cents based on sale location. But after the Governor
threatened to veto any bill containing his plan, Brown compromised to a 50-50
split for sales tax distribution, with 50
cents being distributed based on population and 50 cents based on sale location. A breakdown by legislative
staff showed that 80 counties would gain money under the plan, while 20 counties
would lose money. Senator Jeff Tarte from Mecklenburg County wasn’t
comfortable with the plan, even with the 50-50 split, pointing out that large
counties would have little time to adjust to newly created holes in their
budgets.
Loser counties: Avery, Brunswick, Buncombe, Cabarrus,
Carteret, Catawba, Currituck, Dare, Durham, Forsyth, Guilford, Iredell,
Jackson, Macon, Mecklenburg, Moore, New Hanover, Surrey, Wake, Watauga.
Representative Bill Brawley, a House Finance Chair from
Mecklenburg County, said that he will fight the change to the distribution
formula. And that veto threat is out there. The bill will be considered
by the Senate Appropriations Committee and then by the full Senate on Monday
night.
Silver Anniversary
This is Laura’s shout out to Rep. Mickey Michaux. This week
marks the 50th anniversary of
Voting Rights Act. For those of us
born in the late 1960’s the Civil
Rights movement was important recent history in our southern state, but we learned
it in school. It wasn’t until I occasionally joined Rep. Mickey Michaux for
breakfast at the Legislative Building that the history came to life. Michaux and
his family lived the struggle that we study in school and are entertained by at
the movies; he marched at Selma. He has fought and won, and fought and lost. He
was discriminated against in obvious and subtle ways that defied my imagination,
and made him who he is today. That’s why
he became a lawyer, a US Attorney, and a legislator – in fact, the longest
serving legislator currently in office. At 85 he’s not ready to quit. Most of us will
never walk a mile in his shoes. Whatever your position on the Voting Rights Act
and whether it’s still relevant today, or the current pending litigation, you
have to admire this man even if you don’t agree with him. The folks we lobby
who don’t agree with him, respect him. You can read more about The Voting Rights Act
and NC’s pending litigation in the NYT
Sunday Magazine.
Constitutional
Amendments: TABOR
The Senate is considering three new Constitutional
Amendments. The Taxpayer Bill of Rights,
commonly called TABOR, would limit the growth of the state budget to the growth
of the economy plus population growth. It also provides a new maximum state income
tax rate of 5% -- halving the current maximum rate of 10%. And it establishes a
Rainy Day Fund that can only be accessed by a 2/3 vote of the House and Senate
thereby skirting the Governor’s Budget Emergency powers. SB 607
is calendared for full Senate consideration Monday night. The ballot questions
would be put to the people on the March 15th Presidential Primary
ballot – which will be separate from our other primary elections held next May.
Remember that in order to place a Constitutional Amendment
on the ballot each chamber of the General Assembly must approve the bill
containing the amendment language by a 3/5 vote of all members. Then the ballot
must receive a majority of votes cast in the election.
ABLE Act
This week HB 556 –
Achieving a Better Life Experience Act was ratified. The Governor will sign
the bill with much fanfare at the Mansion next Tuesday. This new law conforms
with federal law enacted last year allowing families to set up tax protected
savings accounts – much like 529 College Savings Accounts – for supporting individuals
with disabilities.
Cabinet Change-up
Nick Tennysen,
longtime deputy at NC DOT, was named Secretary after the abrupt departure of
Tony Tata. And Rick Brajer, former
biotech executive, will replace the departing Aldona Wos as Secretary of Health
and Human Services later this month.
On Jones Street we’re
really all just one big family some of the time
DeleteBloodCancer.org held a donor registration event
in the Legislative Building this week in support of Kevin LaCount, a well-liked
lobbyist for the State Employees’ Association – not Dana Cope who is under
indictment – was diagnosed with acute myeloid leukemia in June. This cancer is
treated with a stem cell transplant using donor cells. Kevin’s diagnosis comes
after Superior Court Judge Carl Fox was diagnosed with myelodysplastic syndrome
– both need bone marrow matches for transplants. We watched as lobbyists, staff, legislators,
elected officials, and folks off the street swapped their cheeks to join the registry
– Angel did it. If you are matched you will be asked to donate either through a
bone marrow donation or through apheresis (which I’ve done). Sometimes
something beautiful that transcends politics is happening on Jones Street.